Canalys Predicts Strong Growth and Optimism in the MSP Sector: A Detailed Study

Global software company N-able (NYSE: NABL), known for its remote monitoring, data protection as-a-service, and security solutions, has released its MSP Horizons Report. This ground-breaking study was carried out in partnership with channel analyst company Canalys, and aims to provide significant insights into the growth and dynamics of the MSP industry.

The MSP Horizons Report provides key statistical data and qualitative insights drawn from discussions with industry experts. It comes at a critical time for the MSP sector. Leading the initiative are N-able’s President and CEO John Pagliuca and Canalys Chief Analyst Jay McBain. Their aim is to equip MSPs with relevant information and resources to negotiate potential opportunities and challenges. At a time when the managed services industry is on the cusp of drastic changes, this research could serve as an essential guide and inspiration for MSPs looking to capitalise on emerging trends and foster innovation.

The study was carefully executed from October to November 2023 and it garnered perspectives from 354 B2B channel partners across various geographical areas including EMEA, North America, APAC, and Latin America. The results highlight a sector that is not only experiencing strong growth, but also remains hopeful about its future prospects. An astonishing 97% of respondents reported revenue growth in managed services, with global IT channel partners together generating a staggering $419 billion in revenue for the fiscal year 2023. This growth is buoyed by an optimistic outlook, with 65% of respondents anticipating double-digit growth in 2024 and a projected compound annual growth rate of 11% through to 2027.

The report indicates key growth areas and challenges that MSPs must navigate. Foremost among these is the rise of cybersecurity managed services, with over 80% of respondents reporting significant expansion in this area. This rise reflects the growing importance of Managed Detection and Response (MDR), network security, endpoint security, and vulnerability scanning. The study also highlights the continuous importance of on-premises solutions, with a majority of respondents adopting a hybrid model that combines both cloud and on-premises infrastructures.

Additionally, the MSP Horizons Report provides insights into the transforming tech stack of MSPs. While the conventional Remote Monitoring and Management (RMM) remains vital to the MSP model, there’s mounting demand for further integrations, including built-in Endpoint Detection and Response (EDR) and additional security services. This suggests a wider trend towards a more consolidated approach to monitoring and management, demonstrating the industry’s flexibility and robustness.

The implementation of artificial intelligence (AI) surfaces as a crucial trend, with 88% of survey participants currently using AI as an inherent feature in their toolsets. The growing interest in additional built-in AI services emphasizes the tech’s capacity to transform content creation, cybersecurity, backup, and data analytics within the MSP system.

As the MSP market keeps evolving, the MSP Horizons Report 2024 paves the way for a future where MSPs are not simply contributors but pioneers of tech innovation and business reform, as per the report.

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