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In October of 2023, Kaseya CEO Fred Voccola took the stage at the company’s annual DattoCon conference to deliver a keynote address to an audience of more than 3,500. Among the highlights of his address were key points for Managed Service Providers (MSPs) to consider in 2024 including the significant opportunities that lie ahead and ways to tackle the industry’s ongoing profitability challenges.

The Landscape of Opportunities for MSPs

Voccola highlighted three main opportunities that MSPs can capitalize on.

According to Voccola, small and medium-sized businesses (SMBs) are expected to continue to invest more in digital transformation. While the COVID-19 pandemic was initially responsible for accelerating digital transformation for SMBs, the trend has continued and SMBs are now focused on becoming tech-first and are spending more and more of their revenue on technology thus creating significant opportunities for MSPs to offer their services and expertise in this field.

Additionally, as organizations strive to optimize their resources, Voccola pointed out the growing trend of businesses adopting a co-managed model for IT noting that this approach allows MSPs to work together with internal IT teams to provide specialized support and guidance. The co-managed IT model is attractive to SMBs as it combines the benefits of outsourcing their IT management [to MSPs] but provides the control of in-house IT administration giving SMBs more time to focus on business strategy while also having reliable IT support.

Voccola also stressed the importance of cyber resiliency in light of continuously evolving cyber threats. MSPs have the opportunity to establish themselves as trusted partners by offering robust security solutions and proactive measures to safeguard their clients’ digital assets.

Obstacles Encountered by Managed Service Providers (MSPs)

Voccola also recognized the difficulties that Managed Service Providers (MSPs) encounter in the present environment, such as:

Increased Competition: The market is becoming more competitive for MSPs. In fact, Kaseya’s recent Global State of the MSP Report found that more than a third (35%) of MSPs globally cited competition as the biggest challenge, up from 29% last year. Stiff competition requires that MSPs distinguish themselves through unique value propositions and exceptional service.

Rising Labor Expenses: The cost of skilled labor is steadily increasing, impacting the profitability of MSPs. Voccola advised MSPs to utilize automation and integration to optimize their workforce and deliver greater value without having to increase staffing proportionately.

Limited Utilization and Integration of Tools: Many MSPs rely on multiple tools and platforms, resulting in limited integration and underutilization of these resources. Voccola stressed the importance for MSPs to demand deep workflow integrations between the tools in their “kit” to streamline operations and maximize efficiency.

Complexity and Cost of Tools: Voccola states that on average, MSPs use 17 different products and allocate approximately 20% of their recurring revenue towards software. Voccola acknowledged the challenges posed by tool complexity and high costs, and urged MSPs to adopt comprehensive solutions like Kaseya’s IT Complete platform to simplify operations and increase profitability.

According to Voccola, Kaseya’s IT Complete platform stands out for its abundance of features and cost-effectiveness. Compared to its rivals, implementing the entire range of IT Complete modules allows MSPs to utilize advanced integration and automation functions, leading to enhanced profit margins and service delivery capabilities without requiring extra engineering resources.