MSPs and the new IT landscape in the age of the pandemic: what now?

What does the IT landscape look like in the age of the pandemic for the typical MSP?

It’s understandable if several months of furious activity to support your clients’ transitions to remote work has left your team with little time to give it serious consideration. The mad rush has no doubt revealed your business’s strengths and weaknesses, perhaps even forced you to acknowledge hard truths that have been ignored for too long.

It’s time to ask: What could we have done better? What opportunities did we miss as a result? Can we afford to not do something about it?

The industry reports are already emerging that paint a picture of how MSPs must up their game like never before.

Let’s start with the We’re All in IT Together report from market research firm Vanson Bourne. About 49 per cent of the 300+ IT decision makers it surveyed said their IT infrastructure/systems needed to be more scalable, while 55 per cent said the way their organization works needs to be significantly more flexible. Most notably from an MSP perspective, another 25 per cent said their IT departments don’t have the resources to deal with the changes we have seen in recent months.

Vanson Bourne also reported that “investment across IT is holding up pretty well. In particular, many IT departments are looking to increase spending in areas that drive the ability of their workforce to work remotely.”

So, if an enterprise needs external resources to supplement its internal IT department, odds are, it has the budget available for it. This all paints a fairly rosy picture for any company provisioning IT tools and services.

But if your business is like the majority of MSPs, it’s a relatively small shop that only has one or a few larger enterprise clients. This may still leave you facing a lot of uncertainty.

Joe Panettieri at CHANNELe2e notes, for example, the issue for U.S. MSPs if their SMB customers decide to stop paying their bills once Small Business Administration Paycheck Protection Program funds run out.

Meanwhile, ITGlue’s 2020 global benchmark report finds that MSPs’ greatest challenges prior to the pandemic – lack of time and hiring good employees – have been replaced by cybersecurity threats, customer churn and fears of more COVID-19 lockdowns. Lack of time and finding good employees are of course not issues that have magically disappeared. They just have to take a number and wait their turn as MSPs scramble to adjust to this new reality.

The uncertainty is perhaps best demonstrated by ITGlue’s gauge of M&A sentiment, before the pandemic and now.  The percentage of MSPs either interested in acquiring or merging with another MSP has dropped from 52 per cent to 37 per cent.

“It’s harder to value a business effectively in this sort of uncertain environment,” ITGlue writes.

We would be very interested to hear from you, about how much of this is relevant to your business and what questions or concerns the past few months have raised for your team about what comes next. Whether you can relate with most of this or not, the simple truth is, it’s no longer business as usual.

How must your business change to cushion itself against risk and uncertainty, and elevate the conversation with clients about how you can deliver more value when they need it most?

In our next post, we will talk about opportunity.

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