IT and Business Insights for SMB Solution Providers

2019 State of the Channel Survey: Managed Services in the Majority at Last: Page 4 of 4

There’s plenty of upside ahead for both mature markets like managed services and up-and-coming ones like cybersecurity and the Internet of Things, according to our latest channel opinion study. By Rich Freeman
Reader ROI: 
THOUGH IT FEELS LIKE MSPs are yesterday’s news, this is the first year more respondents offer managed services than break-fix.
MANAGED ENDPOINT and network providers are adding more as-a-service offerings and venturing into fields like telco and print.
LARGE PORTIONS OF THE CHANNEL offer cloud solutions, but much smaller numbers are making serious money from them.
MOMENTUM FOR THE INTERNET OF THINGS is building fast, as is demand for security services.

Cashing in on IoT

Those aren’t the only margin opportunities many channel pros are missing out on. For instance, though global spending on big data and analytics will grow at a nearly 12 percent CAGR through 2022 to $260 billion, according to IDC, just 18 percent of channel pros deliver services in those areas currently and just 23 percent more plan to do so.

The outlook for another large and rapidly growing technology segment—the Internet of Things—is brighter among our readers, however. Worldwide outlays on IoT solutions and services will jump 15 percent this year to some $745 billion, says IDC, which expects that figure to top $1 trillion by 2022. Eager to cash in on that opportunity, fully 30 percent of participants in our latest poll earn at least some revenue from the Internet of Things now, and 35 percent of them say they’ll eventually do the same.

Count Jimmy Zehner, CEO of Sarasota, Fla.-based managed service provider IT Network Solutions Group, among them. Though he’s not making money on anything IoT-related today, he fully expects that to change as the healthcare businesses he serves put growing numbers of internet-enabled devices on their network. “It will come,” Zehner says of IoT income. “It’s just not here within our industry right now.”

Security’s on the Upswing

The security market, on the other hand, is a big opportunity today. Close to 66 percent of respondents to our poll provide anti-virus, spam filtering, or network cybersecurity services at present, and 12 percent more say they will in the future. Though 48 percent of people we surveyed call margins on security offerings average, a robust 35 percent expect security profits to rise in 2019.

Cooper is a member of that optimistic cohort. “It’s growing dramatically,” he says of his company’s security business. There’s lots of room for further growth too, he continues, noting that despite the seemingly endless torrent of headlines about mass breaches and ransomware epidemics, many SMBs give little thought to protecting themselves. “You’d be amazed how many small businesses we go into that don’t have anything,” Cooper says. “It’s crazy.”

According to Weaver, regulations like HIPAA and California’s Consumer Privacy Act should fuel demand for managed security in particular, even among businesses that haven’t yet hired an MSP. “There’s no law that says that someone has to manage your router,” he notes. Numerous laws, however, impose stiff penalties on organizations that fail to safeguard their data. “You can’t do that yourself,” Weaver says. “You need an MSP to help you.”

Though the need for security assistance may be getting bigger, concern about security risks has actually gotten smaller in the last year. When asked to rate their concern about security threats on a 1 to 10 scale, with 10 being highest, precisely half of this year’s poll respondents answered 9 or 10. That’s significantly down from 64 percent in our 2018 study.

Partial credit for that increased confidence goes to wider use of better tools, but Peters thinks the bigger issue is simply that end users exposed to all those news stories about successful attacks are slowly becoming more aware of the dangers they face. “They know more,” he says. “It tends to make them investigate and ask questions.”

We know how they feel. We like asking questions here at ChannelPro too. If you share our passion for number crunching, you’ll find additional answers and insights about the State of the Channel on our website.


About the Author

Rich Freeman's picture

Rich Freeman is ChannelPro's Executive Editor

ChannelPro SMB Magazine

Get an edge on the competition

With each issue packed full of powerful news, reviews, analysis, and advice targeting IT channel professionals, ChannelPro-SMB will help you cultivate your SMB customers and run your business more profitably.