Report: The Changing Role of MSPs in a Post-COVID World

COVID-19 now ranks amongst the worst epidemics in history, the latest in a long list of health crises the likes of which many of us have never experienced. As COVID-19 continues to rage on, there are two assertions we can take some comfort in— 1) It will eventually end; and 2) We will recover from the devastation it has caused.

As we all look to an uncertain future, we must now focus on ways to adapt. The ways we interact with each other and conduct business are changing, and the Managed Service Provider (MSP), is playing an ever-increasing, pivotal role.

Along with the many difficulties facing MSPs in 2021, there are also many opportunities to be had. There is a greater responsibility, as organisations have begun to rely on the MSP more than ever before. In this article, we seek to examine some of the most daunting challenges MSPs are facing, how they are rising to meet those challenges head on and what advantages have come to light during the pandemic.

The findings from this article are a product of one of our CEO round-tables, where we brought together some of the brightest and most forward-thinking minds from around the UK virtually to discuss the overwhelming impact of COVID-19.

Panel members included:

  • Tim Walker, Managing Director and Co-founder of the Aura Technology Group
  • Matt Takhar, CEO of Inbay
  • Mike Jenkings, Chief Commercial Officer of Cybrid Solutions Ltd.
  • Chris Morrell, Operations Director of Pro Drive IT
  • Pete Matheson, MSP Specialist, and Andrew Dickinson, CEO of Jola.

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The Report

The Greatest Challenges Facing MSPs in the Post-COVID Era

According to an IT Glue 2020 Global MSP Benchmark Survey, before COVID-19 hit, the most pressing challenges facing MSPs were:

  • Lack of time (54%)
  • Finding good technologies (53%)
  • Changing technologies (32%)
  • Lack of information sharing (27%)
  • Cybersecurity threats (26%)
  • Price pressure (21%)

Now, after spending a full year in the throes of the pandemic, most of the MSPs surveyed indicated that the fear of additional lockdowns was one of their greatest concerns. Changes in technologies and the lack of time have understandably become less important on that list, while cybersecurity issues, mounting pressure to increase prices, and customer attrition have all garnered new relevance and importance.

Three main topics were focused on:

How MSP Businesses Are Adapting in Response to COVID

Overwhelmingly, communication was a key issue. As companies changed from a tactile environment to a virtual one, the way people communicated understandably had to change as well. Furthermore, the need to implement those changes quickly was imperative, as many companies were in a panic as they were left scrambling to make an immediate switch to remote working for most of their staff.

Some clients, such as the hospitality industry, face greater or different challenges than others. The impact from COVID varies from region to region and country to country, so customer engagement is crucial. Managed service providers must reach out to their clients to make sure that they know they are still open and, even more importantly, that they are there to help them find solutions to the unique problems they are dealing with.

“I think initially the main one was really around communication … We also have to adapt our business continuity plan to allow everybody to work remotely throughout different stages of different lockdowns.” – Matt Takhar, Inbay

Talking to clients who are experiencing downtime and seeking ways to help them rearrange their priorities has become a critical focus. The MSP can also help struggling clients move forward by turning their attention to items on the corporate to-do list, such as installations and upgrades that could be done during that inactive period.

Like many MSPs, Inbay has shifted their sales and marketing strategy by ramping up communications as well as releasing additional services that were needed to accommodate many of the new requirements that had arisen, one of them being a business continuity of knock, which is the minimum level of monitoring to make sure servers remained up and running.

There has also been a substantial increase in the demand for security, which makes this an ideal time for MSPs to bring out their own security offerings. One of the greatest shifts we are seeing is the sudden mass outsourcing of IT, and the opportunities that provides to the MSP are substantial.

From an internal perspective, most MSPs are finding that they need to be more flexible overall, and particularly in the way they require their employees to interact. For example, rigid meeting schedules and working hours may need to be more relaxed to accommodate all the challenges of working remotely.

Concerns for 2021

“The biggest concern is the unknown and that’s very hard to plan for.” – Mike Jenkings, Cybrid Solutions

As we venture into 2021, concerns over how the pandemic will continue to impact us are numerous. As we have already seen, many businesses are struggling and many have not survived—perhaps best epitomized by the incredible losses that we’ve seen in the restaurant industry. As those difficulties continue, companies will continue to fail, despite everyone’s best efforts, and customer loss is unavoidable. With this instability comes unpredictability and increased risks for the MSP.

“You just don’t know which way it’s going to go … the focus is again probably around the marketing side of things, making sure you’re still driving the new business, and you just don’t know which customers, if any, might struggle next year. It’s worth working to acquire new customers…” – Pete Matheson, MSP Specialist

Another issue on everyone’s mind right now is finding ways to maintain morale and the mental health of their workforce. This has become of paramount importance as we see discouragement, disengagement, and depression having a significant impact.

“The focus for me was on keeping employees happy and engaged and feeling like we were supporting them all the way through this very difficult period.” – Chris Morrell, Pro Drive IT

Another concern is the effectiveness of vaccines and the role that might play in the year ahead. Plus, there is the added anxiety revolving around reaching a deal with the EU, which could also be a critical factor in conjunction with the effects of COVID.

Finding Advantages in a Disadvantaged World

Despite the overwhelming issues and disadvantages brought on by the COVID epidemic, there are also opportunities to be had. There are definite advantages to being an MSP during this period, especially if you are a company willing to do things a little differently.

“… The highlight is that those MSPs that have sort of pivoted into recurring revenues are doing okay and some are doing spectacularly well … if you can focus on saving money and recurring higher margin recurring revenues, I think that 2021 is going to be okay.” – Andrew Dickinson, Jola

Like Jola, many MSPs are finding that their company’s flexibility, numerous strong partnerships, and a diverse base are all instrumental in their ability to adapt quickly and help their clients get through lockdown periods.

The ability to operate well remotely is perhaps the most important factor, and a positive takeaway from the experience was that it is indeed possible and would likely be something that continues on even after the pandemic subsides.

“Yeah, so it really did show that, as a business, we can fully operate remotely … Every single staff member had to work remotely, and we found that we’ve adapted, that we’ve provided additional equipment to allow them to do so, so it’s now saying we’re quite comfortable with doing so … It really has shown what can be different.” – Matt Takhar, Inbay

In Conclusion

The main concerns MSPs seem to be facing include communications, offsetting customer loss, and supporting the mental health of staff and clients. Adaptability and flexibility are key, as well as increased marketing in the fight against customer attrition. Additionally, customer outreach and support are more crucial than ever and the MSP must find new ways to do that.

It is clear that many MSPs are well positioned to fill the needs that the pandemic is creating and the most successful MSPs are pivoting to do so. The outsourcing of IT is a huge factor in the exploding shift towards remote working and that is a trend that is expected to carry on even as the effects of the pandemic recede. MSPs will need to bring new technologies, skills, security, and a higher level of expertise at finding solutions that would allow companies to achieve remote functionality.

5 Top Tips for MSPs in 2021

Based upon our discussion and conclusions, here are 5 tips for MSPs in 2021 that bear serious consideration:

  1. Embrace cloud technology. The efficiency, cost-effectiveness, and convenience of cloud storage will become irreplaceable in the years to come.
  2. Focus on cybersecurity. As communications continues to be one of the biggest concerns, security will be a must. Not only will this be a critical component of IT services, but it is an excellent way to diversify and gives you the ability to offer client a more all-inclusive experience.
  3. Strengthen your partnerships. As evidenced from the feedback we received from panel members, strong and diverse partnerships will give you invaluable support and resources and make you better positioned to meet the changing needs of your clients.
  4. Maintain ongoing communications with your customers. Reach out, stay in touch, and always be asking what you can do to help.
  5. Always keep looking for ways to grow your business. Stay focused on marketing. Never pass up opportunities. Use networking and all the resources at hand to grow your business.

 

A Few Final Words

While we’ve brought to light many of the challenges we are facing as MSPs, we’ve also found plenty of reasons for optimism and hope. Where will we be at the close of 2021? No one can say for certain, but one thing we do know—the only way to move forward is to embrace change. And as MSPs, we are uniquely poised to help usher in those many changes that will allow us to survive and once again thrive.

 

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