The Impact of COVID-19 on MSPs: Addressing New (and Old) Challenges with Better Solutions

January 6, 2021

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Managed service providers (MSPs) are an integral part of the IT ecosystem. They provide core services to organizations of every size. This support enables their customers to have peace of mind and worry less about their IT needs. However, just like every other industry, MSPs are facing new challenges due to the coronavirus. The impact of COVID-19 on MSPs puts them in a unique position, requiring better solutions.

To come out of the pandemic stronger, you’ll need to address these new (and old) issues to remain profitable and streamline services.

MSP Market Will Continue to See Growth

According to a market report, the MSP vertical expects to see an 8.1 percent CAGR (compounded annual growth rate) through 2025. Expectations are that it will hit $329.1B by this year. What’s driving the growth? There are several factors, including:

  • Mounting fear and concern over cyberattacks.
  • Redistribution of IT budgets.
  • Adoption of the cloud and other advanced technologies.
  • Organizations refocusing on core competencies and outsourcing what’s not.

The impact of COVID-19 on MSPs doesn’t change many of those drivers. It does add another, the need for remote work access. As the pandemic continues, many companies are keeping workers home, adapting to new ways to work, which requires new technology solutions.

Challenges of MSPs

Before the pandemic, MSPs certainly had challenges. Now these challenges have a new context. Priorities are shifting due to conditions, and you’ll need to develop ways to accommodate this.

Reducing costs

MSPs have always been price-conscious. The tools and software you use to manage customers’ IT needs must represent real value.

Specifically, UCaaS (unified communications as a service) and CCaaS (contact center as a service) software should be affordable to maintain profit margins. Budget trimming is happening in every organization, so having access to top tier, cost-effective platforms is critical.

Decentralized workforce

This issue for MSPs has two facets. First, as an MSP, you may have people working remotely. Second, the clients you’re serving may have as well. Your network must be accessible for your remote employees while you enhance your offerings to clients moving away from an exclusively in-office culture.

Timelines are shortening

There is currently a great deal of urgency in the world of MSPs. Organizations that were slow to adopt the cloud for communications and file sharing now don’t have a choice. Any company that was strictly on-premise for phone, email, and file storage must evolve quickly.

Further, you may have less staff due to layoffs. You have to do more with less more rapidly. For this to possible, you should be able to deploy UCaaS and CCaaS platforms quickly and easily.

Limiting customer churn

MSPs have legitimate concerns about customer churn. A survey of MSPs found that the priorities changed after COVID. The issue of customer churn quickly grew as a major challenge. It’s hard to fight this kind of revenue loss because many customers may be unable to pay. The economy is a recession, but IT services are essential to any organization. It’s not something that can be completely cut.

Image: ITGlue

To mitigate the economic impact, you can take a few steps:

  • Reinforce that security is a priority and requires professional support.
  • Find opportunities with current customers that require new tools to empower a remote workplace.
  • Explore the emerging concerns of customers around IT and develop plans to support them.
  • Use a PRM (partner relationship management) system to save time and money.
  • Engage with new buyers urgently seeking cloud and remote technology adoption.

Delivering Solutions for the Future of MSPs

With these new and old challenges, MSPs are rethinking their business models. Looking to a PRM is important now and in the future. Intermedia is proud to partner with ConnectWise. We deliver a private label and co-branded partner program for UCaaS and CCaaS, joining the ConnectWise Invent Program in 2019.

The Invent Program combines a host of resources for MSPs and integrates our communication solutions. Our platforms deliver efficient, effective, compliant, and secure products. Post-pandemic, these tools will remain important because they emphasize mobility, productivity, and accessibility.

Using your time and resources optimally is a best practice, no matter the environment. You can achieve this by working with ConnectWise and Intermedia.

Intermedia is now a certified integrator with ConnectWise Manage. Learn more about our partnership with ConnectWise here. Then explore our reseller program designed to empower and propel MSPs.

Mark Sher

Mark is the Senior Vice President of Unified Communications, Product and Marketing at Intermedia.

January 6, 2021

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