Cloud Trends + MSP Opportunities are creating a perfect storm for profitability. Here’s why:
International Data Corporation (IDC) estimated that worldwide whole cloud revenues will reach $554 billion in 2021, more than double from 2016. Spending on managed and professional services around cloud adoption are, collectively, the second largest opportunity in the whole cloud market, accounting for 31% of all cloud-related spending in 2016 and 2021.
However, traditional MSPs are facing additional pressure with new entrants into the market. A CloudJumper survey of more than 1,000 MSPs, reported that, “Continued movement down market by Telcos and independent software vendors (ISVs) resulting in the erosion of MSP market share.” Many telcos are actively trying to make use of their existing scale and IT savvy to move beyond basic voice and data services in order to begin selling a managed service. Additionally, ISVs seeking to expand software availability, delivery, and reach, are augmenting revenue with service-based business units.”
In order to find out more information behind these trends Lead to Market (LTM) conducted a survey this spring regarding the Profitability of MSPs selling Cloud Services. The results validated some of the top trends facing the market today as well as some of the constraints that are impeding MSP cloud service profitability.
