IT and Business Insights for SMB Solution Providers

Top Areas for MSP Profits and Growth in 2023 According to Channel Pros: Page 2 of 5

Economic headwinds and an increasingly complex marketplace are not deterring channel pros from focusing on strategic business growth. By Samuel Greengard

This optimism extends to customer spending in the IT space, though again, it is somewhat tamped down from last year when 73% expected higher spending compared to  55% this year. One-third (32%) believe it will remain about the same in 2023 and just 13% predict a decline.

Channel pros are taking note of the impact of an uncertain economy. “We do see headwinds in 2023…so we are taking steps to enhance client retention while, counterintuitively, raising prices due to the level of inflation and general increase in operating costs,” says Wade Yeaman, CEO of Plano, Texas-based Fluid IT Services. The firm has responded to a more challenging business and economic environment by upping investments in marketing and sales in order to “aggressively target specific verticals or use cases.” It also has added to inventory levels to reduce supply chain risks.

Among survey respondents who have a vertical focus, the top service areas are manufacturing (69%), followed by healthcare and scientific (66%), legal/professional services (63%), insurance and financial (63%), and retail/hospitality (53%).

Channel pros are expecting growth in these vertical segments: eSports (84%), higher education (75%), K-12 education (72%), government (64%), transportation/logistics and energy (60%), insurance and financial (54%), and home/SOHO (53%), though their expectations for growth for their own firm serving companies in these verticals are much lower.

Opportunity Knocks in Both New and Traditional Areas

Channel firms continue to focus on a wide array of products and services. Leading areas include networking (78%), backup and disaster recovery (77%), security services (72%), break-fix services (69%), work from home/remote work connectivity (68%), IT integration services (68%), managed services (67%), and PCs and peripherals (66%).

Amid a shifting business and technology landscape, where do channel pros see the biggest future opportunities? Top answers include desktop virtualization (28%), training (26%), IoT (25%), custom app development (22%), biometrics associated with authentication services (22%), managed security (21%), cloud consulting/deployment/migration services (19%), and Google Apps licensing, videoconferencing, and analytics/big data (all also at 19%).

This should be taken as a positive sign. Many channel pros have recognized the need to shift their business focus away from traditional offerings to products and services with growing demand and often higher profit margins. For example, 34% anticipate higher profits for managed security in the year ahead, with 32% predicting the same for both cloud consulting/migration and security services, followed by managed services (30%) and work-from-home solutions (28%).

About the Author

Samuel Greengard's picture

Samuel Greengard, a business and technology writer in West Linn, Ore., is the author of The Internet of Things (MIT Press, 2015) and Virtual Reality (MIT Press, 2019).


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