IT and Business Insights for SMB Solution Providers

Top Areas for MSP Profits and Growth in 2023 According to Channel Pros

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

IT’S AN INTERESTING yet challenging time to be a channel pro. On one hand, there has never been greater demand for information technology and professional services. Work models continue to shift to hybrid and remote—thus creating entirely new networking, communications, and cybersecurity requirements.

Further, clouds, Internet of Things, artificial intelligence, machine learning, analytics, and automation are rapidly redefining the business landscape—and SMBs are in desperate need of expertise and guidance.

On the other hand, connecting all the technology dots en route to business value can prove incredibly difficult, especially given today’s backdrop of rapid technology change, geopolitical instability, supply chain disruptions, a post-pandemic workplace, and a teetering economy.

Despite these uncertainties, channel pros are generally optimistic about their own prospects for 2023, according to ChannelPro’s annual State of the Channel survey. Their optimism is tamped down somewhat from last year’s exuberance, however, by the recognition that a well-defined business strategy and an ability to cut costs are essential as budgets and margins are getting squeezed.

It’s a point that solution providers and MSPs are tuning into. As Daniel Velez, CEO of Suffern, N.Y.-based MSP Unique IT Pro puts it: “2023 will continue to be a strong financial year for the MSP space, with growth, mergers, and acquisitions. The challenge is finding proper tools and solutions in order to get the job done for clients at a fraction of the cost.”

The Economic Outlook

Revenue and profit growth slowed somewhat in 2022, but overall channel pros are still doing well. Last year, 38% of channel firms witnessed a rise in revenues, down slightly from the 40% who saw revenue growth in 2021, while 45% saw little change and only 18% witnessed a decline in revenues. Not surprisingly, profits tracked at nearly equal levels; 37% grew their bottom lines, down slightly from 42% the previous year.

It’s a trend that will likely continue. Altogether, 87% of respondents believe that revenues will remain stable or improve over the course of 2023. Just over half (52%) expect the number of employees to remain the same (again, up by about 8% from the previous year), while an impressive 43% are predicting a need to hire additional staff. Only 5% say that their employee count will likely drop.

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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