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REPORT

Datto’s European State of the MSP Report Follow us on Twitter: @DattoEMEA Subscribe to our blog: www.datto.com/uk/blog

2018 MSP Challenges and Trends, Stat-by-Stat Datto surveyed nearly 400 European managed service providers (MSPs) worldwide all about their day-to-day lives. The result: a wealth of statistics all about the state of today’s MSPs, including everything from basic demographics and media consumption preferences to business goals and challenges.

With Datto’s European State of the MSP Report, we aim to provide an accurate profile of managed services today, the good, the bad, and the ugly. By sharing these insights with the channel, we aim to spread awareness about the struggles of today’s IT service providers and offer the community a variety of resources and solutions for mitigating these common pain points.

3 | datto.comA21-29 - 12% A30-39 - 30% A45-54 - 32% A55-64 - 19% A65-74 - 6%

A21-2914%

A30-3932%

A40-4934%

A50-5917%

A60-692%

A21-29 - 14%

A30-39 - 32%

A40-49 - 34%

A50-59 - 17%

A60-69 - 2%

DEMOGRAPHICS OF MSPs

SEX

AGE

EDUCATION

Takeaway The average MSP is male, college-educated, and between the ages of 40 and 49. No major surprises there.

Male

93%Female

6%

4 Year College

35%

Graduate School

24%

2 Year College

6%

High School

15%

3 Year College

7%

1 Year College

4%

Some Graduate School

6%

A21-29 - 12% A30-39 - 30% A45-54 - 32% A55-64 - 19% A65-74 - 6%

A21-2914%

A30-3932%

A40-4934%

A50-5917%

A60-692%

A21-29 - 14%

A30-39 - 32%

A40-49 - 34%

A50-59 - 17%

A60-69 - 2%

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THE BUSINESS OF MANAGED SERVICES

CLIENTELE

ANNUAL REVENUE *Survey respondents answered in USD: $1 = £0.76 $1= €0.86

Takeaway Half of MSPs serve more than 100 clients, most offer 1 year contracts, and more than half still offer break-fix services in some shape or form.

1-100 Clients

50%101-200 Clients

23%

1 year

49%5 years

2%

Other

31%

3 years

18%

201-300 Clients

8%301-400 Clients

4%401-500 Clients

3%501+ Clients

12%

STANDARD CONTRACT LENGTH

$1 - $100,000

10%

$100,001 -$500,000

26% $500,001 - $1M

15%

$1M - $5M

37%

$5M-$10M

7% $10M-$20M

2%$30M-$40M

2%$50M+

1%

STILL OFFERING BREAK-FIX SERVICES?

78% OF MSPs SAID, “YES.”

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Healthcare33%

SPECIALIZED SERVICES

Takeaway More than 50% of MSPs specialise services for the Manufacturing industry.

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TOP INDUSTRIES TARGETED BY MSPS

“Focusing on a specific vertical can be efficient from an operations standpoint because you’re providing similar services for all or most of your clients.” -Dale Shulmistra, Invenio IT

Manufacturing55%

Finance49%

Legal 42%

Non-profits 37%

Construction 40%

Education34%

Real Estate29%Government

23%

Startups28%

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GO-TO MSP BUSINESS RESOURCES

TakeawayTo keep on top of industry trends, MSPs subscribe to a variety of channel publications, including The Channel Co, Channel Futures, and Channel Partners.

“I start each day reading tech, marketing, and business articles to keep up with everything. I pass the good articles to my staff to keep them informed.” -Dale Shulmistra, Invenio IT

2. Referral (colleague) 19%

3. Industry Forum 11%

4. Other 5%

65%

Top Channel Sites for Staying Up-to-Date on Industry Trends:

Datto Downtime Blog

Other favourites:

Tweakers,

The Register,

CompTIA

Top Resources for Evaluating a New Product/Service:

1.

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MSPs AND THE DAILY COMMUTE

HOW DO YOU COMMUTE TO WORK?

Personal Vehicle

77%

Work from Home

7%

Bike/Walk

5%

Train/Bus

7%

Other 5%

Takeaway The majority of MSPs experience a short commute (less than 30 minutes) and rely on their own vehicles to get them to and from the office.

HOW LONG IS YOUR DAILY WORK COMMUTE (ONE-WAY)?

<30 mins 69%

30-45 mins

17%

45min-1 hour 8%

1 hour+ 5%

<30 mins: 67% 30-45 mins: 20% 45 mins - 1 Hour: 8% 1 Hour +: 5%

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TOP 10 MSP CHALLENGES IN 2018

Takeaway In 2018, the majority of managed service providers are struggling with Marketing and Sales efforts.

Marketing/Sales

47%

Staffing/Training

37%

Growing Pains

18%

Ransomware/cyber security

33%

Internal Operations

25%

Pricing Services

17%

Customer Service

31%

Changing Tech Landscape

16%

Vendor/Tech Issues

9%

Selling BCDR*

8%

*Business Continuity & Disaster Recovery (BCDR)

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MSPs AND SCREEN TIME

TakeawayThe channel has spoken. For the majority of MSPs, the force is very much with Star Wars.

MSPS ARE BINGING: STAR WARS OR STAR TREK?

Star Wars 66%

Star Trek 34%

Game of Thrones

Stranger Things

Black Mirror

Peaky Blinders

</>Mr. Robot Vikings Blacklist

The Crown

Walking Dead

Big Bang Theory

DesignatedSurvivor

Blade Runner

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MSPs GET SOCIAL

TakeawayThe majority of IT service providers are active on social networks every single day (Facebook + LinkedIn especially). But when it comes to socialising with industry peers, Reddit is the go-to forum of the channel.

Number of Hours Spent (Per Day) on Social Media:

1. Reddit 2. Spiceworks 3. Autotask4. CompTIA5. Experts Exchange

6. Facebook Groups7. Microsoft Technet8. The Register 9. Tweakers10. Slashdot11. Robin Robbins

Are you using Social Media? YES 90%

NO 10%

less than an hour 64%

2-3 hours23%

4-5 hours3%

Don’t use social Media 10%

Which of the following Social Media networks do MSPs use on a daily basis?

65%

56%

29%

8%

4%

9%

21%

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MSP PAIN POINT #1: MARKETING/SALES

TakeawayThe majority of MSPs struggle with a strong lead generation strategy in their marketing plan.

“Role-playing allows you to get more comfortable with the act of cold calling and work out any kinks. It also enables employees to bounce ideas off one other and share strategies that work best for them. It may feel silly, but it truly works..” -Eric Torres, Datto (and Former MSP)

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1. Lead Generation 3. Cold Calling

2. Hiring Sales Talent 4. Market Differentiation

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MSP PAIN POINT #2: STAFFING/TRAINING

TakeawayThe #2 pain point for MSPs? Recruiting quality technical, sales, and marketing candidates.

“The majority of our employees come from relationships we have in the community. We’ve built a good reputation over time, so people are talking about us —that attracts candidates.”

- Jordi Tejero,

CRS Technology Consultants

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1. Recruiting Tech, Sales, Marketing

2. Employee Training

3. Employee Retention

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MSP PAIN POINT #3: RANSOMWARE/CYBER SECURITY

“Ransomware is a big problem, but it’s also a big opportunity to educate clients and give them the tools they need to protect their data. I usually start the conversation with ‘I don’t want to scare you, but ransomware is something you need to think about. Just politely preface the subject. It’s not a hard sell—once you educate, they get it” -Frank Slattery, TeamLogic IT

TakeawayRansomware is a global cyber security problem that isn’t going away anytime soon. For MSPs, it can be a massive opportunity to be the hero as long as you pitch it the right way.

REPORT

Datto’s State of the Channel

Ransomware ReportEUROPE

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1. Lack of cyber security Awareness 3. Justifying the Cost of BCDR

2. Increase in Ransomware Attacks 4. Sophisticated Phishing Scams

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MSP PAIN POINT #4: CUSTOMER SERVICE

“We have to make sure we are resolving their issues and following up afterward to guarantee they are satisfied. If we can prevent an issue from escalating and getting worse, that’s our goal.” - David Tidwell, RIgidnet LLC

TakeawayAbove all else, the quality and speed of service an MSP provides is key to maintaining strong customer relationships. Clients should always feel like they’re you’re number #1 priority.

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1. Timely, High Quality Service 3. Onboarding New Customers

2. Integrating Client Management Software 4. Billing

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TAKEAWAYS• The average MSP is male, college-educated, and between the ages of 40 and 49.

No major surprises there.

• Half of MSPs serve over 100 clients, offer 1 year contracts, and still offer break-fix services in some shape or form.

• The majority of MSPs today focus their business efforts for a specific vertical (or verticals). More than 50% of MSPs specialise services for Manufacturing companies.

• To keep on top of industry trends, MSPs subscribe to a variety of channel publications, including The Channel Co, Channel Futures, and Channel Partners.

• The majority of MSPs experience a short commute (less than 30 minutes) and rely on their own vehicles to get them to and from the office.

• The majority of MSPs are active daily on social networks, particularly Facebook, LinkedIn and Reddit.

• MSPs are across the globe are watching Game of Thrones, Stranger Things, and Black Mirror.

• When it comes to Star Wars versus Star Trek, the channel has spoken. For the majority of MSPs, the force is very much with Star Wars.

• The top business challenges for global MSPs: Marketing/Sales, Staffing/Training, Ransomware/cyber security, and Customer Service.

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ABOUT THE REPORTDatto’s 2018 European State of the MSP Report is comprised of statistics pulled from a survey of roughly 400 managed service providers across Europe. To learn more about the results, please reach out to Katie Thornton, Senior Manager of Content Marketing at Datto, Inc.

ABOUT DATTOAt Datto, our mission is to empower the world’s small and medium sized businesses with the best in enterprise-level technology. We do it by equipping our unique community of Managed Service Provider partners with the right products, tools and knowledge to allow each and every customer to succeed. It’s an approach that’s made us the world’s leading provider of MSP delivered IT solutions. Datto is headquartered in Norwalk, CT, with offices worldwide. Learn more at www.datto.com.

Copyright © 2018 Datto Inc. All rights reserved.

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