In this podcast episode, Robin from Canalys joins the show to discuss the MSP sector. Robin provides an overview of Canalys, an independent research firm focused on the channel, and explains their role in gathering and analysing data to present trends and insights. The conversation delves into the classification and growth of MSPs globally and in the UK, the different models MSPs use, and the financial metrics crucial for MSP success. Robin also shares valuable advice for MSPs on customer selection, optimizing service offerings, and future growth projections, particularly in cybersecurity services.
00:00 Introduction and Welcome
00:39 Overview of Canalys
02:03 Geographic Breakdown of Partners
03:50 Classifying MSPs and Revenue Breakdown
12:12 Kaseya’s Impact on the MSP Market
20:41 Trends in the MSP Marketplace
27:33 Future Projections and Growth Areas
33:29 Call to Action and Conclusion
Listen on Spotify or Apple Podcasts
Connect with Robin Ody on LinkedIn by clicking here – https://www.linkedin.com/in/robin-ody-b410a730/
Connect with Daniel Welling on LinkedIn by clicking here – https://www.linkedin.com/in/daniel-welling-54659715/
Connect with Adam Morris on LinkedIn by clicking here – linkedin.com/in/adamcmorris
Visit The MSP Finance Team website, simply click here – https://www.mspfinanceteam.com/
We created It’s a Numbers Game Podcast to help MSP owners learn and understand how to build and maintain a financially healthy MSP business. In this podcast series, MSP business owners like you will learn the fundamental steps, the tips and tricks, the dos and don’ts to achieve MSP financial growth.
We look forward to catching up with you on the next one. Stay tuned!
Transcript;
Dan: Welcome to the show, Robin. Great to have you with us.
Robin: Thank you very much. Very nice to be here. Thanks for inviting me.
Dan: We couldn’t not invite you after we met, well, a month or two ago. And, for, for any listeners out there that areare in the, VAR space that they’ll actually be quite familiar with, C CANALIS generally, and, for those that have only ever been in the MSP space,like, like me, they may have heard of you, but not quite understand exactly what you do, and,and, from our initial conversation, we just had to have you on the podcast and share,and share with our audience because there’s a lot of value here.
Dan: So, perhaps you could kick us off just with a quick, summary of,of,of Canalys
Robin: Yeah, sure. Canalys is really a, an independent research firm. So if you think of kind of the IDCs and Gartners of the world, but we’re really that kind of thing, but focused around the channel. and we were started in the late nineties by Gartner analysts who understood that there was a lot of information around the channel that didn’t exist at the time.
Robin: And it really wasn’t something that people delved into. And really our purpose is to be an independent voice of the channel. So we gather information from channel partners. We aggregate information and we present information on latest trends and what’s going on in the channel. There’s data, there’s estimates, there’s all kinds of things that we provide, not only to vendors who sign up to our subscription services, but also to channel partners for free through a platform called Candefero.
Robin: And essentially that’s, you know, that’s a platform we have about 22, 000 partners on there now globally. it’s been running for over 15 years. And it’s really a place where channel partners sign up and then for free, they get access to the reports by answering polls and surveys in an anonymized fashion, and they get access to it, to all our reports and our trends and our data.
Robin: so we kind of sit in between the vendor and the channel partner community. but our purpose is to be an independent voice for partners to represent partner interests when it comes to kind of vendor strategy.
Dan: fascinating. And of the 22, 000, globally, do you have like geographic, breakdown, like how many in the UK, for example?
Robin: Yeah, so I would say that, our legacy strength is really EMEA and APAC region. So we have about 40 percent of the partners are in EMEA. Probably I would say 35 percent will be in APAC and the rest are in the Americas region. we’ve had a North America, business for a long time, but I think really we brought, Jay McBain on as a famous U.
Robin: S. analyst, came over from, another analyst firm. A couple of years ago and really the channels North America side of things has exploded his profile is obviously Much wider and so that’s really helped that candor ferro grow candor ferro community grow a lot more in the u. s but yes, I would say that, you know Obviously we started very much in western europe and expanded globally and we have offices everywhere from you know Reading to shanghai to portland in the u.
Robin: s. and singapore as well and analysts all around the world
Dan: And dependent on who you talk to in the UK. And this is one of the reasons I was interested for us to speak originally, that there’s quite a, there’s quite a broad opinion on how many MSPs there actually are, well, globally and in the UK for the purpose of, for the purpose of this conversation.
Dan: And the,the British government actually released,a report. stated, I think 12, 000 or 11, 000 and something,MSPs. I’d always had a number of three to 4, 000 in, in my mind. But if you to then include, file system integrators, you could probably get 20, 000 plus, I would guess.
Dan: what’s, what’s your sort of, well, Opinion or facts around how many there are
Robin: Yeah, I mean, it’s a, I mean, the first thing to look at is classifying the MSP, which is the kind of obvious perspective, I suppose. But the way that we classify MSPs is partners that make more than 50 percent of revenue from managed services. And really that’s the way we classify and have always classified any channel partner, be they a reseller, a systems integrator, service provider, whatever it might be.
Robin: If your majority of your business comes from that particular practice, then that’s how we classify you. I think that when we look at it from a global perspective, before we kind of get down into the UK view, it really, you know, globally, there are about 335, 000 partners that sell managed services.
Robin: Now, you know, really, when we look at the number of pure MSPs out of that number, it’s only about 43, 000. Now, what we do is, for the purposes of a lot of, you know, vendors and also other partners and distributors as well. We classify the partner revenue by the percentage they make. So we’ve either got partners that make one to 10%, 11 to 30%, 31 to 50%, and then over 50% of revenue from managed services.
Robin: If we assume that anyone over 30% of revenue from managed services, that business is really driving a lot of what they do, and is very important to them. That number opens up to about 86,000 globally. Now, if we put, boil that down into the uk. Our estimates for the total number of partners that are selling managed services in the UK is about 12, 600.
Robin: Now, obviously there are many more channel partners as a whole. but that’s not, you know, they’re not all, they’re obviously not all MSPs in that space. really there’s really only, a few hundred pure MSPs. And if you. Add in the kind of over 30 percent then you’re absolutely right.
Robin: We’re really ending up at, you know, a couple of thousand max, but there are many partners that have hybrid models. And that’s really, the point is the vast majority of partners, the cell managed services have hybrid models. They’re, they don’t have a majority from any one particular practice. and I think that’s to do with, you know, with simply with demand, but also, you know, being diversified in where your revenue streams come from.
Robin: Even though you can be specialists in a particular area, can protect you from being too reliant on needing one thing.
Dan: absolutely. And, thinking back to my original business,we were,just before the sort of the current,Microsoft 365 or Office 365,you know, very much the sort of on prem,era and, and we deliberately didn’t sell, you know, products, we only sold services, so we’d have been like right in the far reaches of your,you know, nearly 100, well, 100 percent of,of, of services, although debatable whether you call it managed,but, but yeah, 100 percent of services and,and today I certainly wouldn’t advise anyone do that because,now if you own the,the Microsoft tenant subscription and all of the other services, then that improves your connection to the client as well as the ability to manage their, their environment for them.
Dan: And, and so, yeah, I guess, I guess probably the pure managed services providers are going to, are going to be, 50 to 70 percent maybe,is that about right in terms of services?
Robin: Yeah, I think that’s about right. And usually there’s always professional services mixed in and there’s always some resale in there. Usually it’s to do with if you’re really pure into managed services, It’s usually to do with incidental requirements from a customer. So for example, if you do infrastructure managed services, you may provide servers and networking equipment, but really just to do with the purpose of wrapping services around that it may be your own, but you may also provide it to the customer, particularly in a kind of three, two, one backup scenario, for example, where you’re trying to provide somebody with a risk management strategy and you’re trying to be secure, you can provide them on premise backup, you’ll have your own backup and then an offsite secured backup elsewhere.
Robin: So you can provide them with those, those tools as well. but it’s, you know, it is true that when we look at those that are kind of over 50 percent in our community in the UK, you know, it’s really only about, it’s just under 2000, the way that we calculate it in the, just in the UK out of the kind of 12, 600 sort of channel partners that sell managed services.
Robin: So if the growth in those partners that are in kind of over 10 percent is quite high. The number of partners in the one to 10 percent band, for example, is actually going down. Mostly that’s to do with consolidation of VARs, but also because a lot of those partners that are in that band are growing their managed services revenue faster than anything else.
Robin: And so in a kind of fiscal drag effect, that’s pulling them into the higher revenue bands of managed services because it’s just growing faster than anything else.
Adam: and can I just check, is that independent of size or revenue?
Robin: Yes. So there are a number of different amounts of what we would calculate as dollar bands within that as well. So we also break those partners down by the amount of revenue they make from managed services. So, for example, there’s a crossover, where you could have, we break it down again into dollars.
Robin: So the most we track is the kind of over 10 million in managed services revenue. Now there’s obviously a lot of vans that make that money. kind of multi hundreds of millions of dollars in managed services around you, but there’s specific areas of managed services and their practices are very different to
Adam: So can I, could I put you on the spot and ask for an estimate perhaps that tells mehow many MSPs are there under that, in that 2000, bucket are greater than 1 million. In revenue.
Robin: Yeah, so, if I look at the spreadsheet here in front of me, I would say we have probably 400 or so.
Adam: Okay. Now that’s really interesting. 400. Okay.
Robin: that’s our estimate. Now,
Adam: And is that size growing, shrinking, staying about the same year on year?
Robin: No, it’s growing. So, our estimate generally for those, partners that are MSPs is actually growing. and what I find very interesting is there’s often a, there’s often talk around consolidation in the MSP space. And I think everyone always talks about consolidation in the partner space generally.
Robin: Okay. We do see MSPs being acquired, but we also see new MSPs entering the UK market from abroad. We see some small new MSPs being created, not as many as we might expect, but we do. We also certainly see channel partners who are growing that managed services revenue. We’re getting over that 30 percent where it starts to become mature business really for them.
Robin: So there’s a confluence of all those different things. And I think that Whilst we all see MSP selling every day and we see even people we know, you know, sold up in the last year, there are more people coming online kind of every week, every month, either from abroad, either organically, or just from existing channel partners who are growing that managed services room.
Robin: So the number of larger MSPs is actually kind of getting bigger. And I think that’s also to do with customer demand, customer awareness.The way that I, the way that I look at it when I talk to partners is that they’ll tell, they’re telling me at the moment, there are more customers now aware of what an IT managed service actually includes, and therefore the price necessarily goes up because they understand the value of it generally.
Robin: Now there may be a difference between what the partner is looking to charge and what the customer is looking to buy for, but that’s true of any transaction. And so, you know, I think that what’s encouraging to me is that number of overall, the number of MSPs is going up, but the customer awareness is going up and that’s allowing that, that number to grow.
Dan: and of course, We are in a growing economy, so there are more businesses, more customers that need to buy and as well as, of course, then the increased, services around security in particular, that’s driving that and, One of the things, well, I’m just shy of 30 years in the, in the industry.
Dan: And,it, it amazes me, how,we can,keep inventing, new things that people need to buy. And, and no matter what you buy, it seems to only last three years or five years or something of that nature. So, so you’re not only refreshing,or in the case of say Microsoft 365.
Dan: tendencies today, you’re reconfiguring, as,as they keep,keep developing the platform,refreshing certainly product as well as then the additional security,and actually,as we’ve landed on security, I, one of the, one of the things that popped up on my radar this week was,yours and, Jay’s,observation of the recent, Kaseya, announcement.
Dan: and,and that for me was sort of, again, bringing you very much into the MSP,the MSP Ra on the MSP radar basically. so, can you tell us just, a little bit about,what you and Jay were observing and,and what your thoughts around that are.
Robin: Yeah. So, you know, I mean, I’ve been in the MSP space for about six years now as an analyst. and I’ve been a channels analyst overall for about nine years and MSP has always been really The area that is, it’s my specialization, but even before we started that the MSP analysis service has been my, has been an area which attracted me to it.
Robin: The reason I think is because I tend to find the human nature of MSPs to be something I enjoy more than the kind of, you know, massive multi billion dollar vase that it’s difficult to get your head around what their business really is and the companies they work with and so on. So with MSPs. You know, a lot of them are still run by the people that founded them.
Robin: Their personal businesses is something that to me is generally more appealing when it, and when I come to speak to those companies, they generally operate, they’re generally smaller in the operating in SMB spaces. And so that’s why it’s always appealed to me. And one of the things that we see in the Kaseya announcement, for example, which was, I think that anyone who’s familiar with Kaseya, anyone who’s familiar with the MSP space, We all kind of know the narrative around Kaseya.
Robin: We know that they’re, you know, they’re one of the big bads. They’re one of the vendors that MSPs generally don’t like to transact with. There are issues around billing platforms. There’s issues around all kinds of things with Kaseya over the years. And since they acquired Datto, which was a very well liked, vendor from certainly from a technology perspective, but also from the way they did business.
Robin: there’s been a sense of, well, how do they consolidate those platforms? And there are many different models at the moment for how vendors are operating what we call the platform play. And it’s kind of everywhere. You have the closed shop, which is what Casale is really doing. The Casale IT complete platform, really all their own products, their own services to the MSP, not prioritizing integrations or third party ISVs.
Robin: And then what you’ve got on the other side are probably more of the enable side of things. And they’ve got their eco verse strategy, which is kind of a, you know, some enable products, but really with third parties coming in being the integration side. Kaseya’s announcement was Kaseya 365. And that was essentially their way of taking remote monitoring and management technology, which is the kind of core of what they do and what they’ve been known for.
Robin: Backup technology, which they’ve really got through. acquisitions, but also, you know, primarily the largest chunk of revenue of backup in that company is Datto, the old Datto portfolio. And then some cybersecurity portfolio as well, again, through acquisitions that they’ve made. And they wanted to bundle that together into one easy kind of monthly per user price.
Robin: And I think what I found very interesting was Not so much if we get away from the, perhaps the disappointment around the scale of the announcement, because it had been hyped up for about a year that this was going to be the greatest thing that hit the MSP community since, well, well, since forever, the, if we take away from that, the point we’re really looking at is what does the idea of bundling these products together actually MSP community in terms of how they view value and how they view how their customers view value.
Robin: I think that there’s, I don’t think there’s anything necessarily wrong with the idea overall of having bundled products. And we’ve actually had them for a lot longer than this announcement’s been out. Vendors have been bundling these things for a long time, usually implicitly and usually in the background and they offer bundles and, you know, to incentives to partners to bundle things.
Robin: I think the difficulty is when you start adding monitoring, of, detection and response. So the MDR side of things. MDR is not product. It’s a service and you have to define who is responsible for what in MDR. And the reason why I say that is because in the MSP community, a lot of partners want to provide cyber security services to their customers.
Robin: But MSPs generally tend to be relatively small companies and they don’t necessarily have the budget, the size or the capability right now to build a security operations center. Now, what they want is really, and there are increasing number of vendors who offer SOC analysts to provide the detection and response capability of MDR.
Robin: So that the customer ends up with essentially a full service for less than it might cost one company to provide it. Now, if you’re bundling MDR into something, you’re, to some extent, you’re immediately commoditizing it. And it’s not something that’s really there to be commoditized. It should be a next level to help customers get much more than what just antivirus and endpoint detection capabilities do.
Robin: It’s to do with the R bits, to do with the response bits, to do with getting you back up online, making sure that you have all the products as quickly as you need them, all your data in a breach occurs. And the question is, MSPs that are getting involved in BXA365 or anything else. Make sure that you know exactly what the vendor’s responsibilities are when you sign up to something like that.
Robin: Don’t buy it as a bundle. Scrutinize it. Make absolutely sure that you know that the vendor is providing SOC analysts in the background to help you 24 7, 365. And if they’re not, why? Or are they depending on you to do that? And so on. And There’s many layers about why this could be an issue, particularly if you start including cyber insurance, which is more prevalent in North America than it is in, in, in Europe and Middle East and Africa right now.
Robin: But these are issues. Compliance issues also get involved as well. So you should always scrutinize what you buy as an MSP and what service you sign up to. But things like Kaseya 365, you have to be really careful when it comes to who’s responsible for what and what you’re getting in that SLA.
Dan: well, quite right. And,I guess ultimately, this is the challenge that most MSPs have with CU customers in turn,an MSP may struggle to,dissect the complexities of what it is they’re buying and, commercially taking risk for, and figuring out entrepreneurial, how they actually make a margin and, and reduce the risk for their business.
Dan: And, and to, and to then,to then communicate that to the, to their customer who’s gonna have even, an even lower. comprehension and ability, and in truth, desire to,to understand it. So I guess, I guess for me,I,I quite liked. the principle and, and I think as with all things, the devil is in the detail,distilling it down to, to a single price.
Dan: but then perhaps,so you’ve got the facility and then, and then there’s a way of then, enabling. as being the upsell, but it sort of, it feels like they’re trying to remove some of the barriers and some of the friction from the process. and,and so there’s bits about it.
Dan: I absolutely like, but yeah, like, like you, there’s,there’s a whole ton of questions and actually. Can you simplify this down to, like one, one, one thing, because perhaps it just isn’t, you know, it isn’t practical to do that,but, but yeah,Adam, are you,for or against,on the fence?
Adam: that completely depends on a multiple of variables. but ultimately, can I, is it a good product? Is it, does it have the backup from the supplier, the vendor? And can I make money on it? Is there a decent margin on it? And do they help me sell
Dan: what extent does the vendor help me sell it?
Adam: Those are things that I’d be looking at. if they can make my life easier, simpler, if the billing is easy. you know, if it’s transparent, if I can scale my business on the back of it,then I’m happy. I think that’s kind of my view. I’ve got a question here for you, Robin, around what you’re seeing out there as trends in the MSP marketplace today, and if anything sticks out in particular around those MSPs that are doing well, you know, what are they doing that, that, that’s, Better and helping them grow and become more profitable.
Robin: Well, I think the first thing that all MSPs, have to do is to decide what they want to be. So, for example,if you are, if your mission really is to scale up to a certain size and be an all conquering and all encompassing MSP, that, that is a valid mission. If you want to be a specialist and you’re going to essentially provide services that you believe aren’t necessarily being provided in a relatively local community, which is true of a lot of MSPs, then I think deciding where you add value and what your capabilities are based on your history and where you’ve come from is important.
Robin: So for example, we know that there are a lot of people that come from, internal tech backgrounds in healthcare or in defence or, you know, You know, even in legal and financial services and they’ll look at what’s happening in those spaces and say, well, actually, we’ve worked with MSPs before we’ve worked with VARs before.
Robin: We think we can do that better. We think that we can offer, for example, risk management or risk assessment. So we think we can provide, a better full 360 degrees cybersecurity service, for example. So deciding what you want to be is very important. The other thing I think is also just trying to work out from all of your peers in the market.
Robin: You know what the cost profit model really is and you alluded to it earlier Thankfully today there are lots of resources out there But the difficulty is sometimes getting started and where you go to and who you speak to so for example guys like you on msp finance team.
Robin: You’ve also got a whole bunch of entities like service leadership, which I think comes from connect wise You’ve got true methods, which is currently now, which was gary peeker’s company and Currently under the side of things. There’s information that comes out free from companies like Canalys and CompTIA.
Robin: There’s all different kinds of resources that you can use. and we’re all really supposed to be supporting people with getting some of those metrics. So for example, I know that there are a lot of MSPs now who are essentially driving towards offering one specific bundle tech stack and or maybe a good, better, best model.
Robin: So for example, you know, we’re talking about the Kaseya 365,announcement, they have kind of two options. They have a basic, kind of introductory option, which is around RMM backup. And then they’ve got one which got the cybersecurity on top. So that’s where some people are offering basic it support services.
Robin: And then they’ve got it support services plus with cybersecurity. And I think that’s, that’s a good way to go. Decide how you offer your service and what your service gross margin should be. We, I think that those have been in the space for a long time. We tend to understand that there are some general metrics and they’re not gospel, but there are general metrics that we can use.
Robin: You tend to want to look at over, ideally over 30 percent service gross margin on your deals. Now that’s not your EBITDA that, that, you know, that usually you’re kind of best in class EBITDA. At very best in the MSP spaces is early thirties, but tends to be actually early twenties when it comes to adjusted EBITDA.
Robin: Your service gross margin, ideally when we’re pushing over 30, if you can do over 40%, on, on, on each kind of, on each deal. And really what that comes down to is if you look at, let’s say for example, 100 per user per month, which is what you might charge a, you know, a typical MSP. Some will be less, some will be more.
Robin: And in the U S I think that the breakeven figures tends to be around 130 when it comes to making a decent profit. Really what you want to look at is a couple of key metrics. Can you hit the 40 percent service gross margin in that per user per month? You got generally a 40 percent of that will be, overheads and internal tech stack cost, and then another 20 percent will be external tech stack costs.
Robin: So that’ll be things like your RMM cybersecurity backup and so on. And, you know, it depends where you want to put Microsoft in there, but that tends to be for most embassies, but a pretty big chunk of that. So if you start looking at 20, 40, 40, as it just a general background for how you look at some of your business, it doesn’t have to be that.
Robin: And certainly by all means, not everyone has that, but start breaking it down into that way and stop simplifying it and understanding, you know, what do I need to achieve that? How do I, offer these services to my customers? Do I have an annual contract, multi year contract month to month? That kind of thing.
Robin: What’s, what do I want to be? And if your plan is exit ultimately in five to 10 years, how do you need to structure your business to get to that point? And so therefore, again, lots of resources around what buyers are looking for, what MSP or other kind of larger MSP entities that sometimes often private equity backed, but not necessarily always what private equity companies are using to value MSPs and so on.
Robin: So, yeah, I think that you look it. What you can be, what you know, how you structure it, and then, and ultimately what your exit plan is if you have one.
Adam: Yeah. So Robin, thank you very much. and I really liked the simplicity of the 20, 40, 40 model, which we would concur with, as well. especially if we’re talking about 40 percent as gross margin total, leaving us with 20 percent adjusted EBITDA. So you’re in a great financial position if you can follow those ratios.
Adam: and. I guess, you know, why not start with that in mind, right? why not, you know, structure MSP saying, okay. You know, this is our target, these ratios. How do we make that happen? and if you’ve got these labor costs coming in over here and we’ve got these licensing costs coming over there, you know, how much do we need to charge for it in order to hit these numbers?
Adam: And I think that’s something that’s fundamental,and often missed. But with MSPs, you just take business on for business sake, then they realize they’ve got, you know, labor shortages and they have to hire people before you know it, there are 5 million MSP, but not making any money. So, I think it’s really fascinating what you’ve just said there.
Adam: And, kind of, you know, deep to what MSP finance believe in, and core to how we look to, to help businesses.
Dan: and,ho,ho. Hopefully there’s,some of that wisdom will help the 30% of, global MSPs that,that were mentioned in the, in the article, last week. actually not, and in brackets consistentlymaking money. and,yeah, you’re absolutely right. There’s, this is probably the best time.
Dan: up to now to be an MSP. not least because of the opportunity, but because of the, the information and the support that’s available to,to do that.
Adam: And. Robin, is there any projection or insight you can give us around what, how things might look say in three years? Are there kind of trends that you’re observing that, that you can, explain to help our listeners try and predict how to, or what type of MS to be in three years time?
Robin: Yeah. So, one of the things that, that we do a lot is, you know, as I was mentioning earlier, we do poll and survey partners a lot. So a lot of the data that we’ve talked about here today, that comes directly from the channel community and we aggregate that and we help to provide kind of estimates and averages.
Robin: But the way that we’re looking at 2024 at the moment is we anticipate about 12 percent growth in the overall managed services revenue globally. now the revenue growth in the MSP community will be higher than that. I think the revenue growth in the pure MSP community, will likely be, I hope, will be likely over 15% or possibly 18%.
Robin: now we’ll have to see how that goes because the back half of the year, there are some questions about how macroeconomically that’s going to pan out in terms of customer budgets. Terms of certainty, whether or not we’re going to see any interest rate drops in the UK. It doesn’t look like we will. So there are obviously questions about how that will pan out in each country.
Robin: but one of the things that, that I think is also useful to look at is from the technology perspective, where the demands coming from. So what are our anticipated growth areas in different technology spaces? So if we look at the cybersecurity services space, for example, which is obviously a hot topic for many.
Robin: Our overall projected growth of 24 is about 13 percent this year. Now, if we look at where the biggest growth rates are going to be, it will be in remediation in MDR. our anticipation for MDR growth globally at the moment is 50%. We’ve been talking about MDR for a very long time. In the, and that’s very interesting because actually, the knowledge of MDR.
Robin: Has been there before the actual capability deliver MDR to some extent, and I think that’s true of all acronyms in the cyber security space, but we look at MDR growing about 50 percent this year. One of the other hot topics at the moment is compliance as a service and how you’re helping customers to become more compliant with not just regulations and GDPR.
Robin: But also becoming compliant with their software supply chains, becoming compliant with new regulations that are coming in. We know there’s regulations around being an MSP in the UK now that MSPs have to kind of get their head around. There’s also, compliance requirements for international customers that you might have.
Robin: And you have to know what those compliance requirements in different countries are. If you’re large enough to be providing services to international customers. Our view on compliance as a service globally is that’s growing about 66 percent this year. So if you look at the fastest growing and least well penetrated areas in cyber security, MDR, compliance, monitoring constantly of those things.
Robin: And if you have customers that are building cyber insurance in, and ideally you probably want to make sure they are. Because we’re seeing more and more legal issues between MSPs and end customers are cropping up now, unfortunately. You do need to make sure that you’re selecting your customers very carefully.
Robin: So, back to what we were talking about before. There’s anticipated growth rates, but then where’s it coming from and why? One of the things that I find interesting is, and we’ve all heard this I think, is that MSP is now being much more selective about the customers they take on, but also the customers they keep.
Robin: So we’ve all got legacy customers that are perhaps more difficult. They’re not necessarily as high margin, and maybe they take up more of our time. More and more, we’re seeing MSPs deciding perhaps not to necessarily pursue renewals on those kinds of contracts. And I think that deciding to take the hit sometimes on a customer is Can be a difficult one.
Robin: It’s not something I advise that everyone should do, but sometimes you have to look at the long term. Talk about the three year projection over the next kind of couple of years. Where do you want your business to be in three years time versus where it is now? And I think having healthy customers, customers that are more aware of the service you provide that are willing to pay the price that you can afford to deliver that app and generate margin.
Robin: That’s really where you want to be. And ultimately it comes down to good customers, minimize. Employee churn and in the MSP space, that’s absolutely vital. So how you help your employees stay relatively happy, how you help your customers stay happy, where the growth rates coming in. And usually that’s coming in because customers don’t have as much knowledge as you do.
Robin: So make sure that you take advantage of making sure that you’re providing information they don’t have today and guiding them towards the right space. I think the final thing I’d say on that is one of the most probable things that MSPs can provide. Our support services that have, are never used or very little used.
Robin: An educated customer tends to be one that, uses your technology, support much less professional services upfront consulting services that design services properly, that select the right customers. You know, in a utopia, you would have customers that are very aware of what you can provide. They’re essentially looking to outsource a lot of issues and for you to be a backstop should there be a breach.
Robin: But they don’t need you for the everyday basic IT support services. Those are the kinds of customers that MSP is now driving towards wanting to provide services to. You’re there for them if they need it, but you don’t want them necessarily supplying, you know, dozens of tickets every week. and so that’s where using your professional services and leveraging them can help to get towards educated customers in the end.
Dan: Brilliant. I don’t think we could have said much of that better ourselves. So thank you. Thank you very much for that. we,we pro probably about, about time. but we can’t leave without a shameless plug. and, and your call to action to,to ho hopefully encourage,some more of those MSPs, those thousands of MSPs to come out of the,out the woodwork and, and subscribe to your platform and start interacting with this, with this information.
Dan: so, how should people,get, well get in touch or get, get involved.
Robin: Yeah,you know, I think that we’ll provide a link, after this, but essentially it’s pretty simple. you go to Candefero. com, you sign up as a partner. We verify that you are a genuine channel partner. We check you out. and really from there, that’s it. There’s no financial transaction takes place.
Robin: It’s free for partners to use. They get access to our reports and, and almost all of our data in, And the way they get that is really by, answering surveys and polls. they get points for the interactions. They can benchmark the vendors they work with, and then the points that they get, they can use to spend on, on, on buying the reports essentially.
Robin: But there’s no kind of, you know, monetary involvement. And we tend to find that, you know, those that are the ones that interact with us the most on the polls and the surveys, you know, you, they’re usually the ones that are. the most in touch with things like the things that we’ve been talking about today, like the finance of their businesses, they’re usually the ones that are the most in touch with the external forums, like some of the places that we’ve been talking about today about where people get information and how they meet up in peer groups.
Robin: And, you know, I think that things like they’re also the kind of companies that will be most likely involved in things like tech tribe and things like that. and that I think is really important. So yeah, if partners want to sign up, then it’ll be
Dan: Brilliant. That’s, that’s great. Thank you. Thank you very much for your time. And,yeah, we’ll look forward to what we’ll include the link and look forward to speaking to you again very soon, Robin.
Robin: Thanks very much, guys.
Adam: Robin.