Top Managed Service Provider Trends to Watch in 2020 and Beyond

It's 2020, and the way businesses handle their tech is changing fast. Lots of companies are looking outside for help to keep their IT systems running smoothly and safely. This look at managed service provider trends 2020 covers what was driving these changes and what people were talking about in the world of managed services.

Key Takeaways

• Cloud adoption really took off, making companies need more help managing it all.

• Keeping data safe became a huge deal, pushing more businesses to outsource their cybersecurity.

• Companies wanted to focus on what they do best, so they handed over IT tasks to experts.

• New tech like AI and automation started showing up in managed services, making things more efficient.

• It was a competitive market, and finding good IT people was tough, but opportunities were definitely there.

1. Cybersecurity Imperatives Drive Outsourcing

Cyber threats just kept getting worse, didn't they? It felt like every week there was a new, more complicated way for bad actors to try and get in. For most businesses, keeping up with all the patches, the latest defenses, and being ready to jump on a problem at 3 AM was just too much. The potential fallout from a data breach – not just the money, but the hit to their reputation – was a huge wake-up call. This is why so many companies started looking to managed service providers (MSPs) to handle their security. It was about getting people who really knew their stuff to watch over things constantly.

Think about it: the cost of a breach can be astronomical. Juniper Research found that cybercrime cost businesses trillions globally, with losses around $2 trillion in 2019 alone. That’s a massive number that makes cybersecurity a top priority for everyone, no matter the size of the company.

So, what are MSPs actually doing to help?

• Constant Monitoring: Keeping an eye on systems 24/7 to spot unusual activity.

• Automated Patching: Making sure software is up-to-date to close known security holes.

• Threat Identification: Using tools to find potential risks before they become actual problems.

• Incident Response: Having a plan and the people ready to deal with a security event if it happens.

Many businesses realized they couldn't build and maintain a top-tier security operation entirely on their own. Outsourcing to specialists became a practical way to get expert protection without the massive overhead of hiring a full internal team with all the necessary, constantly updated skills.

It’s not just about stopping attacks, either. MSPs also help with things like making sure data is encrypted, both when it's moving and when it's stored, and setting up secure ways for people to connect remotely, like using VPNs and multi-factor authentication. It’s a more proactive approach to keeping digital assets safe.

2. Cloud Computing Adoption Fuels Demand

It feels like every business is talking about the cloud these days, and for good reason. Companies are moving more and more of their operations and data to cloud platforms. This isn't just a small shift; it's a major change in how businesses function. The cloud computing market itself is huge and keeps getting bigger, expected to jump from around $676 billion in 2024 to over $2.2 trillion by 2032. That's a massive increase!

So, what does this mean for managed service providers (MSPs)? It means they're in high demand. Setting up, managing, and keeping cloud environments secure isn't simple. Many companies just don't have the in-house skills or the time to figure it all out. That's where MSPs step in. They can help with everything from moving to the cloud in the first place, to making sure everything runs smoothly day-to-day.

Think about it:

• Migration: Helping businesses move their existing systems and data to cloud services like AWS or Azure.

• Management: Keeping an eye on cloud resources, making sure they're running efficiently, and handling updates.

• Security: Protecting cloud data and applications from threats, which is a big concern for most companies.

• Optimization: Finding ways to use cloud resources more cost-effectively.

With so many organizations adopting cloud solutions, the need for specialized management and support has never been greater. MSPs are stepping up to fill this gap, offering the expertise that businesses require to succeed in the cloud.

Many businesses are also using more software applications than ever before, with the average company now using around 110 different software-as-a-service (SaaS) applications. This complexity further drives the need for expert management, which MSPs are well-equipped to provide. Partnering with an MSP can help companies reduce costs and boost productivity, especially when using flexible pricing models. It's all about making sure businesses can adapt to the changing IT landscape without getting bogged down in the technical details.

3. Artificial Intelligence and Machine Learning Integration

It’s pretty wild how much AI and ML are changing the game for managed services. Think about it: instead of just reacting to problems, providers can now use these tools to predict when something might go wrong. This means they can fix it before it even becomes a real issue for your business. It’s like having a crystal ball for your IT infrastructure. This proactive approach not only saves a lot of headaches but also cuts down on downtime, which is obviously a big win. Plus, AI can automate a lot of the repetitive tasks that used to take up so much of a technician's time. This frees them up to focus on more complex problems or strategic planning. It’s a big shift from the old way of doing things.

Automation is another huge piece of the puzzle. We're seeing managed service providers (MSPs) use automation for everything from routine maintenance and software updates to customer support ticketing. This isn't just about making things faster; it's about making them more reliable and consistent. When you automate a process, you remove the chance of human error, which can be a real lifesaver for critical systems. For businesses, this translates to smoother operations and often, lower costs because the MSP can handle more with fewer resources. It’s a win-win, really. The goal is to streamline operations so that the IT environment runs like a well-oiled machine.

Generative AI has revolutionized automated processes like ticketing and billing. It eliminates the repetitive grind and saves valuable time for MSPs. This efficiency isn’t just about speed but about enhancing the overall workflow. It’s a glimpse into the future of managed services, where automation takes center stage in driving better outcomes. Templates were a great start, but they’ve reached their limits. AI steps in with dynamic, adaptive solutions that outperform one-size-fits-all approaches. The prowess of the AI tool you use evolves with each task, ensuring that systems remain precise and efficient. This is one of the key MSP trends shaping the industry, enabling businesses to deliver customized solutions without constant manual adjustments. AI isn’t just a time-saver; it’s a precision tool. By analyzing massive datasets, it spots issues and patterns that might otherwise go unnoticed. This leads to fewer errors and more informed decision-making. Adopting AI technology means teams can shift focus to strategic initiatives, letting smart systems handle the heavy lifting. AI truly shines in proactive monitoring. Imagine a system that predicts and resolves issues before they escalate. This foresight not only minimizes downtime but also enhances user experiences. Moreover, multi-cloud strategies paired with AI create robust, scalable infrastructures that adapt to evolving business needs. The future of Service-Oriented Architecture (SOA) is intrinsically linked to the integration of Artificial Intelligence and Machine Learning. This evolution allows organizations to develop more sophisticated and adaptive systems by leveraging AI and ML capabilities within their SOA frameworks.

4. Everything as a Service (XaaS)

It feels like everything is becoming a service these days, doesn't it? From software to infrastructure, companies are moving towards this 'as a service' model, and managed service providers (MSPs) are right in the middle of it. This trend, often called Everything as a Service or XaaS, means businesses can get pretty much any IT function they need without having to buy and manage all the underlying hardware and software themselves.

Think about it: instead of buying servers, you rent them through Infrastructure as a Service (IaaS). Instead of buying software licenses, you subscribe to Software as a Service (SaaS). This approach is really catching on because it makes IT more flexible and easier to pay for. Companies can scale up or down as needed, which is a big deal when things change fast.

MSPs are stepping up to offer these bundled services. They're not just fixing things when they break anymore; they're providing a whole package. This often includes:

• Cloud management: Handling your cloud environments, whether it's one cloud or many.

• Security services: Keeping your data and systems safe, which is a huge concern for everyone.

• Data backup and recovery: Making sure your important information is protected and can be restored if something goes wrong.

• Help desk support: Being there to help your employees when they have IT issues.

The big win here is that businesses can focus on what they do best, rather than getting bogged down in IT details. It’s like hiring a specialist so you can concentrate on your main job. This shift means MSPs need to be good at managing a lot of different technologies and providing a really smooth experience for their clients. They're becoming more like strategic partners than just IT vendors.

5. IoT and Blockchain

The world is getting more connected, and that means more devices talking to each other. We're talking about the Internet of Things (IoT), and it's growing fast. By 2025, estimates suggest around 22 billion devices will be online. That's a lot of data and a lot of potential points for things to go wrong.

This is where blockchain technology comes into play. Think of it as a super secure way to share that IoT data. It makes the information hard to mess with, speeds up how quickly data can be exchanged, and generally makes things more secure. For businesses, this can mean smoother supply chains and lower costs.

But managing all these connected devices and making sure the data is safe isn't simple. It requires specific skills that many companies just don't have in-house. Trying to learn about and implement both IoT and blockchain on your own can be a real headache – it takes a lot of time and money, and you might not even get it right.

This is exactly why managed service providers (MSPs) are stepping in. They have the know-how and the infrastructure to help businesses adopt these new technologies.

• Tamper-resistant data sharing: Blockchain makes IoT data more trustworthy.

• Faster data exchange: Less waiting around for information to move.

• Enhanced security: Protecting all those connected devices and the data they generate.

• Supply chain efficiency: Making it easier to track goods and materials.

MSPs can help businesses figure out what they don't know about these technologies and provide the support needed to get up to speed. It's about staying relevant in a rapidly changing tech landscape.

So, if you're looking to get into IoT and blockchain, an MSP can be a real lifesaver, helping you navigate these complex waters without the steep learning curve.

6. Emphasis on User Experience (UX)

It’s not just about what managed service providers (MSPs) can do anymore; it’s about how easy and pleasant it is to work with them. Clients today expect intuitive tools and straightforward communication. Think about it: if the software you use daily is clunky and hard to figure out, you’re probably not going to use it to its full potential, right? The same applies here. MSPs are focusing on making their platforms simple to navigate, cutting down on the time it takes for new users to get up to speed. This means less training time and more productivity for your team.

Better user experience directly translates to higher client satisfaction and loyalty.

MSPs are also improving how they talk to clients. Centralized communication portals are becoming standard, making it easier to track issues and collaborate. This keeps everything in one place, reducing confusion and speeding up problem-solving. It’s all about making the client’s life easier.

Here’s what clients are looking for:

• Easy-to-use dashboards and interfaces.

• Clear and consistent communication channels.

• Quick resolution of support tickets.

• Personalized service based on their specific needs.

The shift towards a better user experience is changing how MSPs operate. It’s no longer enough to just provide technical support; the overall interaction needs to be smooth and efficient. This focus helps build stronger relationships and makes clients feel more valued.

Many businesses are finding that working with the right MSP can simplify their IT operations significantly. For instance, understanding cloud migration can be complex, but a good provider can guide you through it. Managed Services offer a way to get expert IT support without the hassle of managing it all in-house.

7. Managed Cloud Services Growth

It feels like everyone is talking about the cloud these days, and for good reason. Businesses are moving their operations there in droves, but actually managing all that cloud stuff can be a real headache. That's where managed cloud services come in. Companies are realizing they don't have the in-house skills or the time to properly handle cloud migrations, ongoing maintenance, and security. It's just too complex with all the different platforms and services out there.

The demand for providers who can expertly manage cloud environments is really taking off. This isn't just about lifting and shifting applications; it's about optimizing performance, controlling costs, and making sure everything is secure and compliant. We're seeing a big push for services that handle things like virtual machines, cloud storage, and making sure all the different cloud pieces work together smoothly. Plus, with the rise of things like generative AI, cloud infrastructure services are seeing even more expansion, creating a need for specialized management. You can find some good advice on how to protect your cloud data here.

Here's a quick look at why this is such a big deal:

• Complexity: Managing multi-cloud or hybrid cloud setups is tough. MSPs bring the expertise to handle it.

• Cost Control: Cloud bills can get out of hand quickly. MSPs help keep spending in check.

• Security & Compliance: Keeping data safe and meeting regulations in the cloud is a major concern that MSPs address.

• Focus on Core Business: Companies want to stop worrying about IT infrastructure and focus on what they do best.

Many businesses are finding that outsourcing their cloud management to experts is a much more efficient way to operate. It frees up their internal teams and ensures their cloud investments are actually paying off.

As more companies embrace cloud technology for digital transformation, the need for skilled MSPs to help them navigate this landscape will only continue to grow. It's a smart move for businesses looking to stay competitive and agile.

8. Managed Security Services Demand

Cybersecurity is a massive concern for businesses these days. With threats popping up all the time, it’s no wonder companies are looking to experts to handle their security. It’s not just about having a firewall anymore; it’s a whole strategy. MSPs are stepping in to provide services like constant network monitoring, managing security systems, and making sure everything is up to snuff with regulations.

The increasing complexity of cyber threats means businesses need specialized skills that are hard to find and keep in-house.

Here’s a look at what’s driving this demand:

• Evolving Threat Landscape: Cyberattacks are getting more sophisticated, targeting everything from small businesses to large corporations.

• Regulatory Compliance: Many industries have strict rules about data protection, and MSPs help companies meet these requirements.

• Cost-Effectiveness: Hiring a full in-house security team can be very expensive. Outsourcing to an MSP often makes more financial sense, especially for smaller companies.

• 24/7 Monitoring: Security threats don't stick to business hours, so having constant oversight is key.

Many organizations are finding it more practical to rely on managed security service providers to protect their digital assets. This allows internal IT teams to focus on other important projects instead of constantly reacting to security alerts.

MSPs are offering a range of security services, often bundled as Security as a Service (SECaaS). This includes things like endpoint protection, multi-factor authentication, and continuous threat detection. It’s a big part of why MSPs are so busy right now.

9. Key Industry Verticals and Applications

Managed service providers (MSPs) aren't just one-size-fits-all. Different industries have unique needs, and MSPs are getting really good at tailoring their services to fit. It’s not just about general IT support anymore; it’s about understanding the specific challenges and regulations each sector faces.

For instance, the healthcare industry has to deal with a lot of sensitive patient data and strict rules like HIPAA. MSPs working in this space need to be extra careful about data security and compliance. Then you have banking, financial services, and insurance (BFSI), which demand top-notch security for transactions and need systems that are always up and running. Manufacturing often looks for help with securing their operational technology and integrating their supply chains. Retail businesses, on the other hand, might need support for their point-of-sale systems, customer data, and online stores.

MSPs that can show they really get a specific industry's problems and rules often have a leg up.

Here’s a quick breakdown of how some sectors rely on managed services:

• Healthcare: Focus on HIPAA compliance, patient data security, and reliable system uptime.

• BFSI: Prioritizes transaction security, regulatory adherence, and high system availability.

• Manufacturing: Often involves operational technology (OT) security and supply chain management.

• Retail: Needs support for POS systems, customer data protection, and e-commerce platforms.

The ability to adapt services to meet the distinct requirements of various industries is becoming a major differentiator for managed service providers. This specialization allows them to offer more targeted and effective solutions, moving beyond generic IT support to become strategic partners.

As businesses continue to adopt new technologies, the demand for specialized MSPs will only grow. Companies that can demonstrate a deep understanding of a particular vertical's challenges and regulatory environment are often more successful in securing and retaining clients. This trend highlights the evolving nature of managed services, moving towards more niche and industry-specific solutions to address complex IT needs.

10. Talent Acquisition and Retention

Finding and keeping good IT people is a big deal for managed service providers (MSPs). The tech world changes fast, and you need folks who know about cloud, security, and all the new AI stuff. If an MSP can't get or hold onto these skilled people, their service quality can really drop.

It's tough out there. The cost to hire someone in-house can be too much, even for decent-sized companies. That's why more businesses are turning to MSPs – they get access to experts without the hiring headache. But for the MSPs themselves, building that expert team is the challenge.

Here's a look at why it's tricky:

• Skills Gap: The skills needed are always shifting. Keeping staff trained on the latest tech is a constant effort.

• Competition: Other companies, not just MSPs, are all looking for the same limited pool of talent.

• Retention: Once you find good people, keeping them happy and engaged is key to avoiding high turnover.

The demand for specialized IT skills, like cloud architecture and advanced cybersecurity, is high. MSPs need to offer competitive pay, good benefits, and opportunities for professional growth to attract and keep the best talent in this competitive market.

Finding the right people for your team is super important. We help businesses bring in great employees and keep them happy. Want to learn how we can help you build a strong team? Visit our website today!

Looking Ahead: The Evolving Role of MSPs

So, as we wrap this up, it's clear that managed service providers are really changing how businesses handle their technology. It’s not just about fixing computers anymore. We're seeing a big move towards providers offering more complete packages, especially around security and cloud stuff. Companies are realizing they can't keep up with every new gadget or threat on their own, so they're leaning on experts. This means MSPs need to keep learning and adapting, offering things like AI-powered tools and really user-friendly systems. The ones that can stay flexible and focus on what clients actually need are the ones that will do well in the years to come. It’s a dynamic field, for sure.

Frequently Asked Questions

Why are more companies using managed IT services?

Companies are using managed IT services because technology changes so fast. It's hard for businesses to keep up with all the new tools and security needs on their own. MSPs help businesses run smoothly, securely, and efficiently by handling these IT tasks for them.

How is cloud computing changing managed IT services?

Cloud computing means businesses can work from anywhere. This makes it easier for them to use services from MSPs. MSPs help companies move their data and programs to the cloud and make sure it all works well and stays safe.

What is 'Everything as a Service' (XaaS)?

XaaS means that businesses can get almost any IT solution they need as a service. Instead of buying and managing everything themselves, they pay a provider for it. This helps companies get exactly what they need, when they need it, and adapt to customer demands more easily.

Why is cybersecurity so important for managed IT services?

Cybersecurity is super important because there are many online threats that can harm businesses. MSPs provide expert help to protect companies' important information and computer systems. They watch for dangers 24/7 and help stop attacks before they cause big problems.

How do AI and machine learning affect managed IT services?

AI and machine learning help MSPs be smarter and faster. They can predict when computer systems might have problems and fix them before they happen. This means less downtime and smoother operations for businesses. AI also helps automate many tasks, making things more efficient.

What are the biggest challenges for managed IT service providers?

MSPs face challenges like keeping up with new technology, which requires constant learning and investment. They also struggle to find and keep skilled IT workers, as the demand for experts in areas like cloud and security is very high. Plus, the market is very competitive, making it hard to stand out.