GFI MAX revealed today the results of a recent survey, which explored the agility, utilization and profitability of software solutions used by managed services providers (MSPs), as well as the business challenges facing the MSP community.
According to the survey, nearly two-thirds of respondents said that demand for managed services has increased over the last year, revealing a growing need for the services that MSPs provide to address their customers’ current and future requirements.While some respondents suggested they are using a majority of the features of their managed services platform, others revealed they do not utilize the features available to their fullest. The independent, blind survey of 185 managed services providers was conducted by MSP University and GFI MAX.
Key findings are included below:
Utilization and Profitability
43% of MSPs are using less than half of the features available in their software solutions, indicating the solutions are not being utilized to their maximum potential.
Nearly one-quarter of managed services providers said their businesses would be more profitable if the software solutions that they’re currently using were more agile and better fit the evolving needs of their customers.
About one-in-five (22%) respondents said they sometimes buy more licenses up front in order to get a good deal and then don’t utilize them. An additional 6% said they often or always purchase more licenses than necessary.
Contracts with Software Providers
Nearly half (47%) of MSPs surveyed said they would consider breaking their contracts with their current software supplier to move to another vendor.
The top reasons for making the switch included cost savings (72%) and the ability to offer better software or better service (78%).
Of those who would not consider changing vendors, the majority indicated the biggest barrier to switching vendors is that the limitations of their in-house software are not sufficient to justify the effort to change.
Training and Retraining
The majority (55%) of MSPs spend less than $1,000 a year (re)training staff on internal systems. 26% said they spend between $1,000 and $2,500.
When it comes to time spent on (re)training staff, 38% of managed services providers spend less than 10 hours a year, while another 34% spend between 11 and 20 hours on that activity each year.
18% of respondents said they sometimes or frequently are forced to turn away business due to not having the right solutions to handle prospective customers’ specific needs.
Of those who prefer not to turn away business, many MSPs end up incurring additional costs in order to provide customized service and support. According to the survey, 42% of respondents will sometimes pay more to customize offerings so they don’t have to turn down new business, while an additional 12% will frequently or always incur additional costs.
Challenges Facing MSPs Now – and in the Future
More than half of the MSPs surveyed (55%) said, throughout their growth, they’ve experienced the need to perform critical business functions (i.e. sales, employee management, recruitment, etc.) even though they would prefer to focus on the service provided to their customers.
Other challenges MSPs have faced throughout their growth include: finding experienced staff and retaining them (44%), getting customers to pay for services offered (44%), and needing to remain as agile now as when the company first started (36%).
So what will be the challenges of the future? Nearly half (45%) of MSPs believe adapting to their customers’ evolving needs (i.e. BYOD, cloud services, etc.) will be the biggest challenge their business will face in the next two to three years.
41% of MSPs believe a shortage of skilled employees will impact their ability to grow their business.
Still others said the greatest challenge their business will face in the next few years will be: reducing necessary internal costs (i.e. staff, software, etc.) without impacting their business (32%), reengineering their business to modernize it (29%), staying in business during tough economic times (29%) and having less on-site infrastructure due to cloud adoption (24%).