70% of MSPs saw increased revenue as companies work from home

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70% of MSPs saw increased revenue as companies work from home

2020 was a year that will go down in history as a difficult one for most of us, but in the MSP world, there were some silver linings, according to a survey we conducted in February. As it was an unprecedented year, we’ve seen many changes in the MSP market, with some MSP’s finding opportunities for growth. The biggest driving factors for this growth have been remote work and increased adoption of Microsoft 365 tools.

Here’s a summary of the positive discoveries from  our MSP survey:

  • 60% of MSPs increased cross-selling 3rd party apps to manage Microsoft 365
  • 87% of MSPs growing their Microsoft Office 365 business thanks to the pandemic.
  • 2 in 3 MSPs found that Microsoft 365 helped them and their clients work better remotely

The most interesting discovery we’ve found is that 87% of the 325 Managed Service Providers (MSPs) surveyed told us that they saw increased Microsoft Office 365 business last year. See the sources of this extra revenue below:

87% MSP increased microsoft 365 business

Sources of increased revenue in 2020 for MSP’s

We conducted the survey between February and March to gauge the effect of COVID-19, and the subsequent shifts of employees increasingly working from home, on MSPs’ Microsoft Office 365 business.

But before we dive in any deeper into the data – a bit about you guys. Who answered our survey? Most of our respondents are located in North America (47.7%), Europe (46.5%) and Australia (3.7%). The vast majority of the people who answered have been in business for a significant amount of time, with nearly three out of every four (72.6%) having been in business for over 11 years. Talk about staying on top of your game. The fact that a similar percentage (75.4%) has 10 employees or fewer, might be a contributor to the success of these MSPs.

Here are more interesting discoveries from our survey:

Do you offer your clients email security services?

Altaro MSP Survey Microsoft 365 Data 1

As a substantial chunk of the workforce of many companies moved to work remotely from different home offices, the need for email security increased, and the vast majority of MSP’s surveyed jumped on the occasion to offer email security services to their clients.

Microsoft 365 is a great platform to earn more recurring revenue. Do you do any of the following for your clients on Microsoft 365?

The majority of MSP’s have found new opportunities for revenue growth from Microsoft 365. Offering solutions for email security was the most frequently quoted source of recurring revenue, followed by offering help with email inbox management and training.

The increase in remote working gave my business more support volumes

Altaro MSP Survey Microsoft 365 Data 12

More implementation means more work to support them, right? Well, according to the respondents, it does, but perhaps not as overwhelmingly as you’d think. 67.1% have said they either agree or strongly agree that support volumes have increased, while 27.4% declare that the volume of requests hasn’t changed that much.

70% of MSPs reported increased revenue from remote working

As organizations scrambled to move their teams to remote working, and as some industries were being decimated by the recession that came along with the pandemic, there were other sectors that just shifted gears to ensure business continuity for all, thriving through the chaos. Our industry was clearly one of them – in fact, 70% of MSPs said that they saw an increase in business when their clients shifted to working remotely.

Revenue from remote working in MSP

Remote work impact on MSP revenue

This might sound obvious to most, but other industries that should have seen their budgets remain the same went the other way, such as the 52% of UK companies who said that they were reducing marketing budgets.

MSPs working with Microsoft Office 365 were paramount in facilitating this shift to remote working, in fact over half of the MSPs who answered our survey (55%) said that they saw an increase in implementation business for Microsoft Office 365.

MSPs increased their business with the help of Microsoft Office 365

Two thirds of MSPs surveyed felt that Microsoft 365 helped them (and their clients) transition smoothly from office-based working to remote working, and they largely agreed that this transition gave them increased business opportunities, matching the findings of our survey last year, in which 76.6% of respondents had predicted that remote working would be the biggest generator of revenue during the pandemic.

Impact of Microsoft 365 on remote work

Overall MSPs agreed that remote working made it easier for them to upsell extra solutions to their clients. Support volumes increased, too. Over two thirds of respondents told us that they had increased support volumes over the course of the pandemic.

Overall the survey showed quite a rosy picture for MSPs. Over the course of 2020 MSPs implemented more Microsoft 365 solutions than ever before, with clients flocking to collaboration tools like Teams, OneDrive and SharePoint (Cloud).

Most popular tools depoloyed by MSPs

Most popular tools deployed by MSPs

Revenue streams around Microsoft 365

We also tried to understand some of the ways in which MSPs can generate recurring revenue from Microsoft 356 deployments. This is the holy grail of most businesses, so we’re hoping that you can take a look and get inspired by what you see. 91% of the people who answered the survey told us that they offer email security solutions.

Email security solutions are also used by two thirds of MSPs to generate recurring revenue, whereas around half of MSPs who answered told us that they earn recurring revenue on email inbox management. Some other services that you could think about offering your clients should include training services, process automation, setting up databases and help with specific tools, such as programming in Excel and project management in Planner.

Increased revenue opportunities from third-party tools

MSPs also saw increased revenue opportunities from the availability of third-party tools to manage their clients’ Microsoft Office 365 deployments, such as Altaro’s Office 365 Backup for MSPs.

These tools help both MSPs and their clients to have increased peace of mind, and it is clear that businesses are seeing the value in them: 85% of MSPs use secondary tools to enhance clients’ 365 setup, and 84% of MSPs who chose to go with third-party email security solutions also set up third-party backup solutions for their clients, showing that the opportunities for cross-selling these two services is very high.

How MSP's manage Microsoft 365

How MSP’s manage Microsoft 365

Microsoft and MSPs throughout the pandemic

We also surveyed MSPs about how they felt that Microsoft reacted to their increased needs during the pandemic. The general sentiment was neutral. MSPs felt that their relationship with Microsoft didn’t really change last year, which is actually just what a brand would want to hear, as it shows consistency. MSPs were, by and large, satisfied with the support quality and response times they received from Microsoft, too.

Full data access to MSP Survey Results

If you’re interested, you can see the full data here.

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Frequently Asked Questions

As a substantial chunk of the workforce of many companies moved to work remotely from different home offices, the need for email security increased, and over 90% of MSP's surveyed jumped on the occasion to offer email security services to their clients. 
When moving your work fully online, workflows become more complex. This complexity requires more tools to manage work successfully, with over 80% of MSPs saying this translated into clients needing more tools from the Microsoft 365 suite. 
When moving your work fully online, workflows become more complex. This complexity requires more tools to manage work successfully, which for MSPs translated into clients needing more tools from the Microsoft 365 suite. The most popular one by far has been Teams, with 80% of respondents saying that more clients required it. Sharepoint, OneDrive, Exchange, Core Office Suite and Outlook have been requested by clients quite often as well. 
The majority of MSP's have found new opportunities for revenue growth from Microsoft 365. Offering solutions for email security (65.8%) was the most frequently quoted source of recurring revenue, followed by offering help with email inbox management at 47.1% and training at 37%. 
More implementation means more work to support them, right? Well, according to the respondents, it does. 67.1% have said they either agree or strongly agree that support volumes have increased. 
We also surveyed MSPs about how they felt that Microsoft reacted to their increased needs during the pandemic. The general sentiment was neutral. MSPs felt that their relationship with Microsoft didn’t really change last year, which is actually just what a brand would want to hear, as it shows consistency. MSPs were, by and large, satisfied with the support quality and response times they received from Microsoft, too.

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