UK IT service providers expect 45% of revenue to come from recurring managed services in 2024, up from 35% in 2023, according to research from Barracuda. This will be driven by businesses scaling back their in-house IT and relying more on MSPs.
While the survey showed that growth is expected in 2024, MSPs cited their top challenges as increased competition in the MSP market (56%), and 72% of respondents are concerned about helping customers comply with government regulations.
Barracuda also found that most UK providers are planning to introduce around 5 new services on average, with survey respondent stating that their successful products are security related.
These included security awareness training (53%), Cloud-based applications, e.g. SaaS (44%), and security operations centres (40%).
Conversely, MSPs have concerns about their own security as 81% of UK MSPs believe they need to improve their internal security posture. This may be a factor in why 91% of UK MSPs say they are outsourcing more security functions compared with last year.
Jason Howells, VP, MSP International Sales, Barracuda, said “The impact of the cyber skills shortage is being passed from companies on to MSPs. Although providers are well placed to help, the findings show they face their own struggles to recruit and retain staff.”
The survey also found an appetite for AI knowledge with 79% of MSPs saying they need either significant or notable improvements in their knowledge and application of AI products and services.
Howells added: “The need to adapt to customer demand for AI products and services such as SOCs places additional pressures on MSPs but also offer immense potential.”