DattoCon 2024 in Miami Beach, which drew over 5,000 attendees, showcased Managed Service Providers (MSPs) ‘ crucial role in supporting Small and Medium-sized Businesses (SMBs). The conference highlighted the growth and importance of SMBs, which account for 53% of the workforce and contribute 52% to global GDP. Fred Voccola, CEO of Kaseya, delivered a keynote that emphasized how MSPs are essential partners for these businesses as they navigate the complexities of digital transformation.
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The SMB market is evolving, with a projected fivefold increase in technology spendingg, mirroring GDP growth. This trend presents a lucrative opportunity for MSPs. However, to be successful in the long run, MSPs must act as technology partners and build sustainable businesses. Today, many MSPs struggle with low-profit margins, averaging around 10%, which can be risky if they lose customers. It also does not make them very attractive from an investment standpoint.
To boost profitability, MSPs must manage operational costs more effectively, especially labor and software expenditures. The goal is to raise margins toward the 35% range seen in professional services like CPA and legal firms. Achieving this shift would give MSPs a more secure financial foundation and the ability to invest further in their offerings.
Cybersecurity emerged as a central topic, with an alarming 70% increase in cyberattacks targeting SMBs. I want to emphasize the need for improved cyber resilience, as many SMBs lack larger enterprises’ resources. Kaseya has introduced new technologies to enhance security and integrate solutions to help MSPs meet the NIST cybersecurity framework. This includes advancements in cloud detection and response capabilities. More details on recent announcements are here. In the future, I expect to cover Kaseya’s SaaS strategy in more detail in light of the recent acquisition of SaaS alerts.
Lastly, consolidating services is vital for streamlining operations. Many MSPs currently manage an average of 3.7 software products, complicating their workflows. Kaseya proposes simplification by providing tools that help MSPs enhance their margins and operational efficiencies, allowing for seamless and effective service delivery for SMBs.
Wrapping Up
This dual approach of improving cybersecurity while simplifying processes could strengthen MSPs’ competitive foundation and further establish Kaseya as the go-to platform. It will be interesting to see how these new market dynamics play out in the next few quarters and how Kaseya 365 continues to evolve and get adopted. Stay tuned!
