MSP sector shows 'dramatic growth': Ingram Micro

The Australian managed services sector has experienced "dramatic growth", according to new research commissioned by Ingram Micro Cloud. 

The distributor commissioned Vanson Bourne to conduct the research into Australia’s booming managed services provider (MSP) sector. 

CRN breaks down all the major findings so click through to see all the important facts on the Australian MSP landscape from the report.

The company surveyed 130 senior decision-makers who worked in client-facing roles in October and November 2021 for Australian MSPs with global annual revenue of between $10 million to $40 million. 

The report found 91 percent of MSPs in Australia saw demand for managed services grow in the past 12 months, with 37 percent seeing dramatic growth.

The quantitative results published in Ingram’s “Cloud technology: The State of MSPs Report - Australia” suggest that Australian MSPs thrived in the pandemic mostly because of organisations’ abrupt need to transition to remote and hybrid work environments. 

This created a spike in demand for digital transformation, which Australian MSPs served. 

The report predicts that the global managed services market will rise from $243 billion in 2021 to $557 billion in 2028, at a compound annual growth rate of 12.6 percent. 

The findings of Ingram’s report shed light on the causes of growth, reasons organisations outsource IT operations, the services generating the most revenue, the greatest opportunities for MSPs, and the biggest roadblocks to increasing customer engagement, over the last 12 months.  

The companies surveyed listed the top reasons they think organisations look to outsource their IT operations.

49 percent cited improving scalability, 41 percent said security and compliance support and 40 percent said clients wanted access to the latest technology solutions.

MSPs reported the most common services they offered were managed security, 61 percent, followed by an internal IT department, 57 percent, managed detection and response, 55 percent and tech support at 54 percent. 

MSPs were surveyed on the biggest roadblocks to increasing engagement with clients.

 44 percent reported that clients are often unavailable or unwilling to meet more frequently. 

22 percent said that sometimes clients don’t have enough resources within their organisation to engage more with them.

And 19 percent said sometimes MSPs don’t have a clear enough template to package their engagement to cleints. 

The purpose of researching why clients are unwilling to engage more with MSPs regularly is to help MSPs develop more customer-experience-focused practices. 

MSPs were also asked the challenges they focused on most.

Of the surveyed MSPs, 35 percent said revenue growth, 32 percent said profitability, 28 percent said acquiring new clients and 28 percent said internal operations and systems billing.

The respondents also revealed the communications strategies they have taken to expand their client base over the previous 12 months. 

These included marketing automation tools and digital advertising, 45 percent, paid searches 45 percent, social media/online communities and 43 percent and content marketing came in at 39 percent. 

Ingram advised that “in order to become partners to their clients, MSPs will need to use channels most appreciated by their clients – perhaps one being eCommerce.”

MSPs were asked to list the most common structural changes they made over the last year.

Of the surveyed MSPs, 52 percent cited launching new services and support, 48 percent said they had reviewed pricing structure, 46 percent said they had enhanced their security offerings, 42 percent said they had automated their billing process, 40 percent said they focussed on building stronger client relationships and 38 percent said they worked on removing inefficiencies within their organisation.