If 2020 taught us anything, it’s that you just don’t know what tomorrow brings. But Liongard founders Joe Alapat, CISSP (CEO) and Vincent Tran, CISSP (COO) feel pretty confident making the following predictions for the MSP industry based on the transformations and trends we’ve seen this year. And for MSPs willing to meet new challenges head-on, 2021 looks like it will be filled with a number of opportunities.
Prediction #1: Digital transformation is now a lasting reality, not a far-off concept.
Our 2020 predictions included this little nugget: “Emerging technologies will drive MSPs to manage even more.” Well, did you have enough to manage this year?! The pandemic ushered in “digital transformation” in a matter of a few weeks, with mass global adoption of collaboration tools like Zoom, Teams, Slack, SharePoint and numerous other technologies that had been deployed but sitting dormant. As more companies commit to hybrid and fully remote business models, the accelerated adoption of Software as a Service (SaaS), Infrastructure as a Service (IaaS) and other technologies that support collaboration and get teams to operate at 10X will continue.
This transformation continues the evolution of the MSP from “tech mechanic” to “vCIO,” and the opportunity to increase monthly recurring revenue (MRR) by guiding customers to leverage digital technology for unparalleled growth.
Prediction #2: The security perimeter requires redefinition.
In 2020, we predicted that MSPs would need to prioritize security programs, and that became truer than we ever imagined during the pandemic. Securing an IT environment that has suddenly experienced a rapid change to a highly distributed model has been both a challenge and an opportunity for MSPs. We’re now dealing with amoeba-like boundaries that require constant adaptation and monitoring. With this enormous change, there are huge rewards awaiting MSPs that can solve the new security dynamic as it transitions from traditional offices to remote environments.
To do that, MSPs will need to adopt technology that helps them bring everything together and provide unified visibility, even with a perimeter constantly in flux. Redefining the perimeter means redefining the service offerings and MRR opportunities that MSPs can focus on. Those willing to adapt and adopt automation will be able to repackage their services for greater growth.
A subset of MSPs have moved to the Managed Security Services Provider (MSSP) business model to focus primarily on the security aspects of managed services. While security is top of mind for most businesses, at the end of the day, most customers hope to work with one service provider that can both manage and secure modern IT with confidence.
Prediction #3: The zero-footprint, cloud-only business stack will become the norm.
It’s almost 2021—in-house servers are no longer required to run a business, thanks to SaaS and cloud technologies. New businesses will be formed with this highly dynamic, scalable and security-first stack, while existing businesses will rapidly transform to reach this goal architecture and shed the traditional “heavy iron.”
For MSPs, that means a wide-open world of potential customers. No longer is geographic proximity a functional requirement (though it does help with relationship building). Chat- and video-based support provide end users what they really want from their MSP—instant service, support and troubleshooting. And MSPs are becoming exceptionally good at providing that when they automate the drudgery of IT so the good work that needs human attention can be done.
Prediction #4: MSPs will assess revenue concentration with a new perspective when looking at verticals/industries.
The pandemic has forced MSPs to reconsider how they will move forward in order to become more resilient to major unforeseen disruptions. Industries that have stood up to the pressures of 2020 and that will continue to thrive in a post-COVID world include delivery and logistics, remote communications and tele-medicine.
MSPs focused on only one or two industries—especially hospitality, travel, retail, food services, etc.—got hit the hardest by COVID-19 and showed the importance of continually assessing and restacking your revenue mix to avoid too much industry concentration. The ability to drive automation into different systems in different industries is necessary to make that transition. (As a company born in this advanced digital age, Liongard was built purposefully to be location, industry and solution agnostic and provide a seamless transition to automation for MSPs looking to grow and scale.)
That said, MSPs played a huge role in digital transformation work this past Spring, taking on the brunt of moving customers to secure remote environments when internal IT departments found themselves unprepared or overwhelmed, reaching out to MSPs for help. MSPs have proven to be not only a pulse on the SMB industry, but also a key piece of its functionality. That reliance and responsiveness further justifies the value of managed services, which will help fuel industry growth even if the general economy continues to struggle.
Prediction #5: The MSP industry as a whole will begin an era of expansion that it hasn’t seen before.
Speaking of growth, we predicted that mergers and acquisitions would continue full speed ahead in 2020, and indeed the increased activity shows they’ve been undervalued and flying under the radar—until now. But their efficient, highly repetitive business model, combined with customer reliance on tech and a lack of access to technical talent, makes MSPs sleeping giants invaluable to every industry. In 2021, we can expect to enter an era of massive growth marked by the infusion of attention and money into the MSP space.
Global in nature, these business-to-business professional services provided by MSPs fulfill a market need that most definitely exists today and has been put in the spotlight thanks to 2020.
Liongard is primed to help MSPs take on the challenges that 2021 will bring as the industry continues to transform and dominate. Ready to learn how Liongard can help you standardize, secure and scale to make your MSP a true 2021 competitor? Request a demo today.
Author Joe Alapat is CEO and Vincent Tran is COO at Liongard. Read more guest blogs from Liongard here.
