Will Managed Service Providers Can Recover Soon From The COVID-19 Slowdown?

As per a new survey, Managed Service Providers (MSPs) consider disaster recovery, password management, and cybersecurity as a service and dependable way of new revenue opportunity.

Even before the COVID-19 hit, MSPs were having difficulty hiring skilled employees and finding the adequate time.

The most critical IT industry problems in the current situation are cyber attacks, remote work IT issues, and customer churn.

Post COVID-19 MSP Challenges

The report of IT Glue 2020 on Global MSP Benchmark demonstrates the analysis of pre-and post-COVID-19 of the way MSPs are dealing with the pandemic.

As per the MSPs survey, data from February shows that companies were operating from their offices. But the data of the following two months shows that almost every company was working remotely from May after lockdown.

Before the lockdown, the chief concern was lack of time to complete work, lack of information sharing, following technology changes closely, and not finding skilled technical employees.

Whereas during the initial months of the lockdown, the chief concerns were cybersecurity threats, customer churn, and price pressure.

According to the survey, 74% of respondents noted a possibility of another lockdown as their topmost concern in 2020.

The new concerns emerging during the pandemic are cybersecurity threats, customer churn, and price pressure.

Businesses need to hire proactive and dependable Scottsdale IT managed services providers like Blue Fox Group.

The MSPs deploy a purpose-built process to update, find, defend, and monitor endpoint warnings and irregular behavior.

They manage alerts by providing workforce and expertise to counter the problem and remediate it instantly.

Comparative MSP Economic Condition To Other Sectors

MSPs industry is faring well in comparison to other sectors.

The MSPs have taken a meager hit than the several economy segments, and soon MSP leaders expect to rebound.

In a brief duration of a few months, about 51% of MSPs have decreased monthly revenue due to the COVID-19 pandemic.

Approximately 29%, more than a quarter, have observed an increase in account receivable, implying that many clients were delaying payments for the services.

Comprehensively, MSP leaders have a similar economic vision after lockdown as most respondents anticipate a swift recovery in the second quarter's financial hit.

The survey uncovered that the churn didn't change since 2019, so the revenue was unaffected.

The authors of the report recommend it as an indication that new consumers were coming on board, quickly lowering the acquisition cost and the clients were let go by MSPs that were no more valuable.

The survey also looked into the correlation of the net margin and churning rate showing that MSPs utilized client churn tactically to increase the bottom line.

The year 2020 data from 2019 exhibits that MSPs focused on a vertical had better margins than those with a general approach.

The verticals most correlated with greater profitability are legal as 43% of MSPs in that vertical reported profits of about 20%.

The government vertical MSPs have a 40% profit margin, 39% profit in finance, and 38% in professional services.

Other Necessary Survey Results For MSP Sector

The survey explored the tools that MSPs use to manage businesses comprising password managers, remote monitoring and management, and network diagramming software.

There has been an extensive rise of about 78% in MSP client numbers in 2020, utilizing devoted password managers compared to about 40% in 2019.

With almost 60%, the most popular solutions in 2018 to manage passwords are Word & Excel.

According to the study, about 60% of MSPs still practice the above method to manually document client networks.

About 8% of MSP use an API, and 48% of MSPs utilize network monitoring. The survey respondents also stated network diagramming is not a priority.