IT Glue recently released our 2018 Global MSP Benchmark Report, rich with insights from an extensive survey we conducted earlier this year with over 600 MSPs. When we set out to create the Report, we knew a couple of things. One, we knew that a lot of companies in the channel produce something similar. Two, we wanted to be different. So we thought about what interests us, and MSPs, the most. The conclusion we arrived at was that what the channel wants to know is what the best-performing MSPs look like.
That is, after all, the essence of competitive benchmarking. In the MSP space, most companies are doing well. This has been a growth industry for several years now, driven by increasing demand from small and medium-sized businesses for someone to help them manage an increasingly complex IT environment. Security threats alone are driving more companies to managed services, and our findings indicate that managed services is the most profitable business model for IT service providers, on average.
We were able to meet our goal of identifying the top performers in the MSP space. Around 205 of MSPs are doing 10% annual growth and 20% net margins. We call that group the Golden Quintile. Those are pretty good numbers, and there’s a lot of successful companies outside of that 20%, but now we know what the best of the best look like.
There were some other really interesting findings as well. The first one is that size doesn’t matter in terms of being a top performer. The Golden Quintile contained some robust, rapidly-scaling companies 100 employees and over, but it also included a substantial percentage of small shops, one or two employees only. Success in the MSP space is determined more by a company’s approach to doing business than by its size.
Another key finding, of interest to our channel partners, is that many MSPs utilize a fairly complex stack, with multiple RMM and BDR solutions. There’s some specialization within those tools, so this is not necessarily a huge surprise, but that so many MSPs work with so many vendors is a neat insight.
We also learned that your clients have terrible password hygiene. Ok, I think everybody in IT already knows that, but the reality is that more than half of the survey respondents indicated they didn’t really know how their customers managed their passwords. That’s a bit scary, actually, but even the ones who do know how their customers manager passwords tell frightening tales of sticky notes and password123.
The Global MSP Benchmark Report contains over 30 pages of insights, some of which surprised even seasoned industry observers. It’s available for free download, and you’d be doing yourself a big favor by checking it out.
Download the Global MSP Benchmark Report here.
SOURCE: IT Glue