GFI MAX has announced the results of a recent survey exploring the agility, use 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 use 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 include:
Use and Profitability
•43% of MSPs are using less than half of the features available in their software solutions, indicating the solutions are not being used 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 use 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 £650 a year (re)training staff on internal systems. 26% said they spend between £650 and £1,650.
•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 customised service and support. According to the survey, 42% of respondents will sometimes pay more to customise 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 modernise it (29%), staying in business during tough economic times (29%) and having less on-site infrastructure due to cloud adoption (24%).
“Now, more than ever, managed services providers need to be agile,” said Dr. Alistair Forbes, general manager of the GFI MAX business unit at GFI Software. “As the needs of customers evolve, MSPs must be agile enough to adapt to their changing needs. Long-term vendor contracts with a specified minimum number of devices will no longer be acceptable to customers. They want accessible technologies that can be up and running in a day and which are easy to learn. Finding and retaining the right calibre of staff is an issue for many MSPs and the overhead of training them to use complex tools is a barrier to their growth and efficiency. Furthermore, time spent configuring, maintaining and updating systems is time that would be better spent serving customer needs, a need that cloud-based services address very directly. Most importantly, MSPs should not be forced to turn away or incur additional costs to take on new business, but rather should be flexible enough to handle the individual needs of their customers.”