You can’t read three sentences about the channel nowadays without encountering “fast-changing,” “rapid evolution” or some other such term referring to the whirlwind pace of change happening in the sector. As oft-used as these phrases are, they aren’t over-used. The indirect IT sales channel is, in fact, growing, changing and evolving at a rapid clip, and there’s no point in sight when it might slow down.
The world runs on the software solutions, connectivity and cloud applications that managed service providers (MSPs) wheel and deal in, and it isn’t just enterprises that need the channel’s services anymore. No matter the industry, the size or the geography, it’s indisputable that today every company is a tech company. And that means every company is fair game for an MSP.
Need proof? Look no further than the companies that make up the 2018 Channel Futures MSP 501. Collectively, these channel stars amassed more than $14.56 billion in revenue, a 7.1 percent increase over what they reported for last year ($14.48 billion). That includes a total of $2.95 billion in managed services recurring revenue, which rose 8 percent from their reported figures for fiscal year 2016 ($2.79 billion). Those are just the figures for 501 of the industry’s best and brightest, out of tens of thousands of channel players. It’s no wonder the managed services space is growing by leaps and bounds and maturing into a powerful market force.
Three years ago, Channel Futures established a new methodology for evaluating the growth strategies, market positioning and overall business health to arrive at our final ranking of the top MSPs in the world (see Appendix 1). That means for the first time, we’re able to hold three years’ worth of data up side-by-side to identify historical trends in the managed services space. The insights those metrics hold tell the story of an industry that’s leading the way into a world that’s constantly connected, data-rich, automated and, yes, rapidly-evolving.
We went a step further this year and also analyzed the gaps between applicants that made this year’s MSP 501 and those that did not, hereafter referred to as aspirants. What business strategies separate those managed service providers that have landed on a formula for sustained success and those that are still finding their way? You’ll find some answers in this report, though it’s important to keep in mind that while our applicant pool was the largest and most diverse we’ve ever seen, it still represents only a sliver of the channel as a whole.