With a rapidly evolving market, managed service providers are facing a range of challenges, but there are also plenty of opportunities out there to be taken too, which was one of the take-home messages from Barracuda Networks Inc’s recent survey, as Jason Howells, VP, international MSP sales at Barracuda Networks Inc, explains.
Every year, Barracuda surveys managed service providers (MSPs) from around the world to understand the challenges they face and their hopes for the future. The results of the latest survey reveal a landscape of change for MSPs and their customers. From this, Barracuda has identified five broad areas of challenge and opportunity that UK-based MSPs are faced with, and these are below.
1 Meeting evolving customer needs
Recurring managed services and security offerings will fuel growth for UK MSPs in 2024. Our survey found that UK respondents expect 45% of their revenue to come from recurring managed services this year, up from 35% in 2023. This reflects the evolving needs of customers: 88% of respondents believe that businesses are scaling back their in-house IT and relying more on MSPs for support instead.
There is high demand for security related products and services, and this is an area where MSPs can provide specialist support, services and expertise. For UK MSPs, the most widely offered services include security awareness training – offered by 53% of respondents – and security operations centres (40%).
2 The skills challenge
Many companies are turning to managed security services because they are struggling to recruit security talent in-house. The UK’s cybersecurity skills shortage has risen by 29% since 2022, which represents a shortfall of around 75,000 cybersecurity professionals – and there is no quick fix to it.
However, MSPs themselves are not immune to these skills challenges, with 39% of UK MSPs reporting difficulties in attracting and retaining talent within their organisations. This may be a factor in why 91% of UK MSPs say they are outsourcing more security functions than they did the previous year.
3 Pressures and opportunities around AI
Artificial intelligence (AI) is everywhere and cybersecurity teams – and cyber criminals – are using it to their advantage.
Attackers are using generative AI tools to scale their attacks and increase the chances of success. Meanwhile, cybersecurity vendors are harnessing AI to help security teams to bolster their defences against all threats, from detection, prevention and response through to remediation.
We found that 79% of the UK MSPs surveyed believe they need to improve their understanding and application of AI products and services. This is not surprising when you consider that 69% say they feel pressured to offer AI insights and tools to their customers.
Partnering with vendors that offer advanced AI-powered security products as well as related training and sales enablement tools can help MSPs to address this challenge and harness the significant business opportunities presented by AI.
4 Keeping pace with security trends
From evolving cyber threats to new advancements in technology, the cybersecurity industry is undergoing constant change. MSPs rarely have the time to dig deep into the evolving cyberthreat landscape. This is another area where vendors can help, educating MSPs on emerging threats and providing advice and guidance on the cybersecurity tools that will provide the best possible protection for their customers.
5 Growing compliance demands
Regulations are important for ensuring that businesses have the right measures in place to protect their systems and data. But for many organisations understanding and achieving regulatory compliance can be complex and resource intensive. As measures become more stringent and the penalties for transgression more severe, it’s an increasingly critical area of business risk.
The UK MSPs we spoke to recognise this customer need, but many find this a tough area to navigate, with 72% saying that they’re not sure how to help customers comply with government regulations and 29% struggling with their own compliance obligations.
Conclusion
The role of MSPs as strategic partners looks set to increase as businesses downsize
their own internal IT operations. This presents opportunities and the research shows there are areas where MSPs can support their customers through the complexities of cybersecurity from managing new threats to implementing the latest technologies.
But MSPs face their own challenges too. They’re on the frontline of helping clients to address and manage security threats while facing their own struggles in areas such as getting to grips with AI, managing the increasing amount of industry regulations and in recruiting and retaining staff – especially those in areas with a shortfall of skills.
Vendors that can deliver specialist experience in the field of security and AI integration can help MSPs address these key challenges and ensure they thrive in this competitive landscape.
