MSP Pricing Survey – Service Offerings Expand

MSPs are adding new service capabilities

One of the strongest trends in the managed services market, highlighted by our most recent Pricing Survey, is the increase in the number of different services (or bundled service components) now offered by Kaseya MSP customers. Our 2014 survey asked MSPs to identify which of a series of 17 services they offered. These responses were then compared to those from our 2013 survey which requested input on 11 categories of service. The results are shown in the chart below. The overall response indicates that more MSPs are offering more services. In fact, a greater proportion of MSPs are now offering all of the services we asked about in 2013. In addition, a significant number are offering the newer service capabilities we added.

services-offered-by-survey-year

Of course, it’s possible that respondents to the survey offer more than 17 services. The services chosen were those in which Kaseya solutions contribute to service delivery in some way.

Of particular note are the following results:

  • Over 96% of respondents indicated offering both desktop and server support services in 2014, up from 80% in 2013
  • Nearly 40% are offering guaranteed IT service levels and hosting services, up from the 2% who reported offering business service or service level monitoring (16% of US MSPs) in 2013
  • Almost 30% are now offering cloud application management and cloud monitoring, which is up from 4% (19% of US MSPs) who reported offering cloud monitoring services in the earlier survey.

We believe these results represent a significant trend supporting the idea that SMBs are very interested in bundled services, see more value in them, and are more interested in MSPs that deliver a broader range of service capabilities.

Higher growth MSPs are more likely to offer advanced services

Of greater significance still is the difference between the service offerings of higher growth MSPs – those whose monthly recurring revenues (MRR) grew at greater than 10% – compared to those whose MRR growth was below 10%. While more of the higher growth group offered almost every service, the difference for more advanced or specialized services was particularly clear. Cloud application management, mobile device and BYOD services, guaranteed IT service levels, and audit and discovery services are services offered by a much higher proportion of MSPs with faster growing businesses – see chart below.

More-Higher-Growth-MSPs-Offer-Advance-Services

Perhaps of even more import to MSPs are the opportunities that these newer services represent to both generate revenues and increase service differentiation. For example:

  • Over 80% of SMBs are now using cloud services of one type or another but only 32% of MSPs offer cloud application management or cloud monitoring services
  • The Identity and Access Management (IAM) Market is estimated to be worth in excess of $18B this year and is growing at around 15% per annum but only 28% of MSPs offer IAM managed services
  • Mobile device growth is exploding and the trend towards Bringing Your Own Device (BYOD) to work is increasing steadily yet few MSPs offer comprehensive mobility management services.

Highest growth MSPs go further

The above trends are even more pronouced for MSPs who exhibited the highest rates of growth. MSPs growing in our fastest MRR growth category of greater than 20% per annum offer almost every service, indicating that they are indeed able to maximize revenues derived from existing customers.

Highest-Growth-MSPs-Offer-More

The overall implication here is that SMBs who outsource IT services to MSPs are strongly interested in emerging and specialized capabilities where in-house skills are inadequate.

Pricing MSP services for growth and profitability

These topics and much more are discussed in detail in our webinar Pricing MSP Services for Growth and Profitability. The webinar highlights the results of the Kaseya 2014 MSP Pricing Survey which was completed in September 2014.

Author: Ray Wright

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