5 MSP Trends to Track in 2023

Many managed service providers (MSPs) are making strategic plans for the upcoming year as we enter 2023. These strategies must account for significant present and future developments. Keeping this in mind, here are the five most important trends expected to shape the market this year.

1. Consolidation Will Be Priority No. 1

In 2022, a consolidation trend emerged in the MSP market. Indeed, the major firms have begun to acquire their competitors in order to speed their expansion. This consolidation trend is expected to continue in 2023, as MSPs shift away from organic growth and toward acquisition as a means of expanding their business. These developments will be accelerated by a scarcity of IT talent. As managed service providers struggle to attract and retain staff, mergers and acquisitions provide a quick option to acquire new teams.

It is difficult to adapt to each client’s particular needs and provide every service they require. As a result, MSP specialisation will become more common in 2023. A generalist MSP, for example, may be unable to provide effective cybersecurity services due to the intricacies involved and the high level of knowledge required to deal with them. By concentrating in one field, MSPs can deliver higher-quality services that attract consumers.

2. The Impact of Inflation on Data Centre Business Models

Inflation complicates MSPs’ ability to reach earnings targets. This means companies must re-evaluate every area of their organization, including whether their business model is viable and how they may expand in an environment where IT investment is unpredictable. One point that stands out is the rising cost of data centres, particularly public cloud data storage.

Rising energy costs are causing huge data centres to boost their fees dramatically, challenging the common knowledge that shifting to the cloud is inexpensive. According to Canalys, due to rising energy prices, public cloud pricing in Europe is predicted to rise by more than 30% by 2023.

As a result, MSPs may be more likely to abandon public clouds in favour of more cost-effective and high-performance storage solutions closer to home. Rising energy prices may also prompt some SMBs to reconsider their strategy, pushing them to repatriate their data on-premise. This development will give MSPs with a new chance to supply on-premise storage and backup solutions to these customers.

3. Data recovery and restoration will be more critical than ever before.

Every business can back up its data. The true test will be if they can recover their data following a cyberattack or another event. Too many MSPs—and their customers—believe that catastrophe readiness begins and ends with data backup, without understanding that this is insufficient. Companies will spend more effort into ensuring that their data can be promptly restored in the event of an incident in 2023. For MSPs, this presents an opportunity to assist clients in developing an efficient disaster recovery and data restoration plan.

Data storage can be compared to a puzzle. Attempting to restore data without a good plan is akin to putting together a puzzle without a picture of the finished product to refer to. It takes an inordinate amount of time. If a data disaster strikes, systems must be restored swiftly, not in days or weeks. MSPs and their clients will have all the pieces of the puzzle in place to enable quick recovery if a disaster recovery plan is frequently evaluated.

4. CRaaS Will Become a Lucrative Business Opportunity

Cyber recovery as a service (CRaaS) is a growing sector for MSPs. According to IDC, CRaaS is a service whose time has come, particularly as ransomware threats continue to proliferate. According to IDC, CRaaS provides MSPs with a high-growth opportunity with excellent margins—for those with the know-how to recruit clients for these services.

Companies use CRaaS because it relieves them of the time-consuming chore of data backup. More crucially, by taking snapshots every 90 seconds, it gives clients with immutable, unalterable versions of their data. Snapshots allow you to go back in time to a specific point before an intrusion and recover whole file systems in minutes. Even if a ransomware strike is successful and the current data is overwritten, clients can easily and rapidly restore their recent data.

5. Data Prioritization Is Critical

Businesses must reconsider how they keep data considering rising energy costs. However, not all data is created equal. So, if the purpose is to save money, some data does not need to be saved. Images and unneeded files are examples of redundant data that should not be preserved in long-term storage. This is especially true for remote workers who frequently combine personal and professional data. There is no need for a company to squander money storing all data equally.

By offering storage systems with data tiering capabilities, MSPs can gain a substantial competitive edge. This allows their clients to migrate less frequently used files to lower-cost storage tiers while still guaranteeing vital data is safeguarded and backed up. Another advantage of data tiering is that it saves energy by requiring consumers to use less computer power for storage. As storage costs continue to rise, data tiering will become increasingly important in 2023.