How MSPs can manage their revenue better
Managed service providers (MSPs) provide essential IT and technology services in a fast-growing market. Many smaller and medium-sized companies in particular have come to rely heavily on their MSP partner, who is fundamental to how they run and secure their business.
In fact, a recently published report from Grand View Research underlined the increasing reliance on managed services, forecasting a growth rate of 13.6% from 2023 to 2030. But, while it certainly looks like market demand will continue to rise, many MSPs find they are constantly having to adapt their services to their customers’ changing needs and challenges. Staying profitable can be a struggle in this fast-evolving sector.
What is driving the shifting markets?
The ongoing digital transformation has been one of the biggest drivers of market change for a few years now. Almost all larger enterprises are digitalizing their business processes, and many see this transformation as non-negotiable – the key to survival.
Smaller organizations are following suit, adopting cloud infrastructure and implementing new technology solutions that replace older IT components traditionally managed by an MSP. This means service providers can no longer rely on the regular cycle of updating and upgrading physical infrastructure to maintain a steady stream of income.
Alongside this, businesses are confronted with a surge in constantly changing cyber threats. Keeping up with and reacting to new threats as they emerge is a complex challenge as numerous risks and vulnerabilities have to be juggled at once. Think of a patient who arrives in the A&E department with multiple serious injuries – even though all of them require urgent attention, it’s the life-threatening problem that must be dealt with first while everything else moves down the list of priorities.
In this analogy, it’s the MSP’s responsibility to correctly triage the client’s needs and to address them in the right order. Right now, access to cloud tenants takes priority for many organizations. So, switching from an on premises, device-based security approach to an application-based approach is the most pressing issue, as not being able to access critical applications could be the injury that eventually grinds a business to a halt.
SaaS applications are rapidly on the rise, with many businesses relying on dozens of them. If a cybercriminal gains access to a user’s corporate Microsoft or Google account, then device-based security will no longer contain the attack or stop the damage. Consequently, MSPs and their clients need to shift their focus to where they are most vulnerable right now.
Another factor affecting the market is the speed at which technology is evolving, and the pace at which new solutions are being adopted by businesses. In their quest to stay ahead of the competition, many organizations feel the need to jump on the bandwagon, embracing the latest trends as quickly as they can. Generative AI has promised to be a real game changer, and almost every business is hoping to ride this wave and use the technology to its advantage.
Of course, this also presents fresh attack points for malicious actors seeking to exploit the vulnerabilities in every new technology advancement. Don’t underestimate how quick hackers are to capitalize on an opportunity. During the recent global Crowdstrike outage, for instance, fake landing pages appeared within mere hours of the news breaking, in an attempt by cybercriminals to pilfer corporate credentials. The learning? MSPs, and their customers, have to be as nimble and as diligent as the bad guys.
The pathway to increased revenue
The good news is that there are meaningful steps MSPs can take to not only improve their services, but at the same time also open new revenue channels.
- Create an inventory of which cloud applications your clients are actually using. Many MSPs have never before been in charge of overseeing and protecting SaaS applications. So, the first step is finding out what apps your clients use and why. Having this reliable information helps manage the shifting nature of security risks.
- Understand your clients’ current security measures. Investigate how, or if, those applications are currently being secured. Perhaps the most critical step is finding out who in the company has access to each app. Your clients probably don’t realize the full range of cloud applications being used in their environment and the extent to which staff, including former employees, have access to them.
Armed with this information and taking their industry into account, consider the full scale of cyber risks your client may be exposed to. For example, one of the biggest threats businesses are likely to face is token hijacking. Closing any gaps will ensure you boost security for your clients.
- Build truly secure environments. This is the crucial final step in bringing your clients up to current security standards and must not be missed. Technology such as comprehensive cloud detection and response (CDR) extends across an organization’s key operational tools and helps MSPs create a solid foundation that constantly monitors their clients’ environments for new cyber threats.
Once an MSP has selected the right software partner to secure their clients’ SaaS application needs, they will uncover new revenue opportunities. Offering secure cloud solutions to your customers through software partners can fill in any missing gaps left by their digital transformation and help accelerate your clients’ transition to the digital era.
Small businesses are undoubtedly the backbone of the UK economy, and the MSPs supporting them play a role that is just as critical. As business requirements continue to change and MSPs grapple with a fast changing market, there are solutions that can replace missing revenue lost to digital transformation and advancing technology.
Not losing sight of the bigger picture and identifying the path forward will be crucial for MSPs as customer demands, IT needs, and new cyber threats continue to emerge. By helping their clients understand their full SaaS application landscape, identifying any possible security issues and offering tangible solutions, MSPs will continue to not just grow but thrive.
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