Barracuda report shows providers are embracing marketplaces but continue to worry about competition
Highlights:
- Barracuda’s new global MSP report shows that Australian IT service providers expect 39% of revenue to come from recurring managed services in 2024.
- Most are planning to introduce around 6 new services on average, and their most successful products are security-related.
- 80% of Australian MSPs feel under pressure to offer customers AI insight and tools.
- 94% of Australian MSPs say cloud marketplaces will be crucial for their organisation.
SYDNEY, Australia., June 11, 2024 — Barracuda Networks, Inc., a trusted partner and leading provider of cloud-first security solutions, today published The Evolving Landscape of the MSP Business 2024 report, which shows how managed service providers (MSPs) around the world are embracing marketplaces and artificial intelligence (AI) to better meet customer needs, but worry about their lack of knowledge about AI and its applications.
Barracuda’s seventh annual MSP report, undertaken together with Vanson Bourne, features the findings of an international survey of 700 MSP organisations. The report is being released alongside Barracuda’s Global MSP Day, which includes virtual and live events for MSP partners in North America, Europe, and Asia Pacific.
The findings show that MSPs continue to shift from project-based customer support to a recurring services model. This year, Australian MSPs expect 39% of their revenue to come from such recurring services. According to 96% of respondents in Australia, businesses are scaling back their in-house IT and relying more on MSPs, and this is likely to be a key driver for the rise in recurring services.
Customer demand is greatest for security products and services. According to the survey, the top three solutions Australian MSPs offer and support are network security (51%), security awareness training (50%) and security operations centres (49%).
Other key findings include:
- MSPs believe that cloud marketplaces will simplify operations: 94% of Australian respondents identified cloud marketplaces as a crucial tool for their organisation. In addition, 46% are using cloud marketplaces already, and 53% of the remaining respondents are exploring the option.
- Appetite for AI knowledge: 9 in 10 of the Australian MSPs surveyed (94%) say they need either significant or notable improvements in their knowledge and application of AI products and services. In addition, 80% feel under pressure to offer customers AI insight and tools.
- MSPs have concerns about their own security: 90% of Australian MSPs believe they need to improve their internal security posture.
- MSPs are realistic while being optimistic: While growth is expected in 2024, Australian MSPs cited their top challenges as increased competition in the MSP market (43%), up from 44% in 2023; and lack of ability to help customers comply with government regulations (77%).
“MSPs must navigate constant change as they contend with rising competition and evolving market strategies, while new technologies and digital transformation broaden the potential for cyberattacks,” said Paul Crighton, Regional Sales Director, Barracuda. “Managing all of this is challenging, with the survey indicating that 66% of Australian MSPs are seeking additional support from vendors when it comes to AI expertise and guidance as one key example. Overall, the data underscores the importance of strong vendor partnerships, which will help MSPs overcome hurdles and succeed in the competitive environment of 2024 and beyond.”
“In 2024, MSPs are strategic partners to their clients, helping them to address technology complexities and manage the security challenges of digital transformation,” said Richard Tubb, MSP growth consultant and MSP Day speaker. “The research shows that many MSPs are responding to shifting client needs by actively embracing new opportunities that will benefit clients as well as their own operations and business growth.”
