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.

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MSP Pricing Survey – Increased Hourly Rates

Worldwide Average Standard Hourly Rates Increased from 2013

The overall average standard hourly rates MSPs charge for their engineers and technicians went up by about $10 per hour between 2013 and 2014 according to the results of the last two Kaseya MSP Pricing Surveys. In our 2014 survey we asked about pricing for three tiers of technician support – level 1, level 2, and level 3 – whereas the previous survey simply asked about “average” hourly rates. However, despite various differences in the number and size of respondents between this survey and the previous one, the results were generally consistent. Rates in the United States and Australia were the highest followed by rates in Europe, Canada, New Zealand and South Africa. Hourly rates were lowest in India – see the table later in the post that highlights the differences on a regional basis.

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MSP Pricing Survey – Growth Leaders Sell Value

Strong value pricing trend

The fourth annual Kaseya MSP Customer Pricing Survey was conducted in September and October last year and it attracted almost 700 responses from MSPs around the world. One of the strongest results to come out of the survey is the significant movement towards value-based managed services pricing and away from cost-based or market-based pricing. The chart below contrasts the differences between the 2013 MSP pricing survey results and the more recent responses. the trend towards value-based pricing is clear. The results support the notion that managed services customers are increasingly interested in business value and linking their purchases to key performance indicators (KPIs), such as system availability, or performance levels, or business outcomes.

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MSP Pricing Survey – Sticky Bundles, Higher Fees

Bundling strategy increases value and stickiness

The message is clear, small and medium businesses are very interested in bundled services. A recent newsletter from AMI-Partners, I-Signal*, which reports findings from their research programs, indicates that SMBs are 3 to 4 times more interested in bundled services than in single services. They gain more value from bundled services and are loath to switch service providers unless they can do so without disrupting their existing business. The strong interest in bundled services supports the notion that SMBs are indeed more interested in value than price, despite their insistence to the contrary.

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Kaseya Connect: Come for the Conversations!

Register for Kaseya Connect!

Every year Kaseya holds its premier user conference, Kaseya Connect. If you are a Kaseya customer, you have probably seen the promotions, and are asking yourself, “Should I attend?” As you might expect, the Connect event features all of the right components:

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MSP Pricing Survey – MSPs Grow but Size Matters

The Kaseya 2014 MSP Pricing Survey results clearly demonstrate that the managed services market is a significant growth opportunity. Almost 100% of the customer survey respondents had experienced positive monthly recurring revenue (MRR) growth over the past three years. We asked respondents to select from a range of MRR growth rates starting with less than 0% and ending in greater than 20% growth. The results were fairly evenly spread across all ranges – see chart below – except for a very small negative growth segment, suggesting that there could well be key differences in approach taken by faster growing MSPs. To examine these differences we split the responses into two, roughly equal groups, one for MSPs who had experienced MRR growth at greater than 10% per annum and one for MSPs whose MRR had grown at less than 10%.

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The Managed Services Market is Evolving – Fast!

High growth forecast for key managed services

Many key elements of the global managed services market are forecast1 to grow at double-digit rates. For example, Mobile (MDM) and BYOD managed services are expected to grow at around 27% per year through 2016. Private cloud services – where a service provider offers managed co-location or dedicated instances – are expected to grow at 22%. Public cloud services, as a whole, seems to be growing at around 17 to 18%, but within that, SaaS is growing at 19.5%, managed security services at 22%, and systems infrastructure and IT Ops management at over 40%. One of the fastest growth areas is office suites in the cloud, which is approaching a growth rate of 50% per annum. All of these represent significant opportunities for MSPs to support their small and medium size business (SMB) clients’ cloud migration plans and their IT service deployment, management, mobile computing and security needs.

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Augmenting Active Directory to Manage Mobile Devices

Active Directory Blog Graphic

For more than two decades, IT admins have relied on Active Directory (AD) or LDAP to broker network access to users, to control user access privileges for various sensitive company assets, and to apply security policies across the organization. But with cloud-based business applications now an integral part of the enterprise IT application landscape, Active Directory (AD) integration becomes a stumbling block for many. But make no mistake, AD/LDAP is still widely regarded as the central source of enforcing security policies on users and entities within an organization. AD is not getting displaced to accommodate cloud applications, but there is a need to have better and transparent integration between them. This is achieved by single sign-on (SSO) through an Identity and Access Management (IAM) solution such as Kaseya AuthAnvil. However, IT applications are just one piece in the IT security puzzle.

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IAM Profitable: Get Your Piece of the IAM Market

IAM is Profitable

If you’re an MSP or an IT service provider, then you’re involved in a business model that’s always looking to improve its offerings and increase its bottom line. With the global IAM (Identity and Access Management) market increasing at an explosive rate, being able to offer authentication and password management isn’t just a smart move, it’s also a safe move!
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IT Management Community Participation Extends Knowledge and Adds Value

Waltham Community Meetup

This week I attended a Kaseya “Local Meetup” event in Waltham, Massachusetts, and it struck me again just how important it is to have a strong IT community. In the Meetup evaluation forms, virtually everyone who attended said that sharing ideas with like-minded people was a key benefit to attending the event. Without exception, everyone left the meeting with new contacts and friendships in the IT management community.

A few things about the meeting really hit home:

Tips and Tricks:

Kirk Feathers, a leader in the Kaseya technical community, led a “Tips and Tricks” session, sharing interesting and innovative approaches to maximize the usage and benefit of IT management tools, both from Kaseya and its partners. Everyone in the room chimed in, asking questions and offering their own insights. Copious notes were being taken. And more than once, two or more people set up follow on conversations on particular topics.

Collaboration Groups:

Establishing collaboration groups is a great way to stay in touch and share information. Chris Anderson, Director of Managed Services for Infranet Solutions in Quincy Massachusetts, shared a great story about collaboration groups. I met Chris earlier this year at “Kaseya Connect,” our annual user conference. During his three days at the event, Chris made it a point to build out his community contacts to the point where he is now part of a formal group which is sharing automation scripts. Using existing scripts and creating new ones is key to efficiently and effectively managing large numbers of endpoints. Chris tells me that the collaboration group’s sharing of ideas and actual scripts is substantially improving their speed-to-automation.

Feedback and Input:

Mads Srinivasan, product manager for Kaseya’s mobility management solution, shared the latest mobility management development work, complete with a demonstration. The purpose was to obtain feedback and input from the group on the features and presentation layer. The session had a good 30 minutes of excellent feedback and suggestions. Mads had an ulterior motive in that he wants 100 beta customers to test out the latest work; virtually everyone in the room signed up.

Time before and after the event was reserved for networking and everyone took advantage. People had a chance to meet the many Kaseya leaders who were present, but more importantly, they built out their IT management community connections. By the end of the event, business cards were swapped, and emails were exchanged all around.

This experience also reinforced the importance of the “Kaseya Community” program, which includes sponsoring these local Meetups, forums for sharing, event postings, etc. All Kaseya users should join to share information and learn about the latest happenings.

Author: Tom Hayes

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