Economic uncertainty driving business for MSPs

The current economic conditions are leading companies of all sizes to reassess their operations and business strategies to remain competitive and profitable. The key insights from this year’s survey are:

Impact of economic uncertainty. Businesses want to stay cost-efficient and productive, so they are looking to outsource more IT services to managed service providers (MSPs) amidst increasing economic uncertainty to optimize their capabilities and spending.

Essential automation and integration. Businesses are seeking to replace legacy tools with solutions that are faster and more responsive to evolving needs to stay competitive, tap into new markets and reduce operational costs. They also plan to allocate resources towards integration and automation capabilities to increase productivity and unlock growth.

Pressing cybersecurity concerns. Organizations are placing a strong emphasis on cybersecurity, and despite economic conditions, they are focused on acquiring talent in this area either through internal hires or outsourcing to MSPs who provide cybersecurity services.

IT professionals are overworked

Budgets and resources may be shrinking, but workloads are not. A staggering 62% of respondents reported having to frequently work on holidays or weekends. Nearly half of them confessed to pulling an all-nighter while about 40% admitted to working 50+ hour weeks consecutively.

Let’s talk about budgets

About 40% of respondents, around the same as last year, said their IT budgets increased. Yet, 18% of those surveyed cited a decrease in their 2023 budget – 8% more than last year. When it comes to budgets being slashed, 40% said software spending would be cut; 35% think it’s hardware spending; and 29% believe it will be training and certifications that get cut.

Achieving business growth tops the list of budget drivers, said 32% of respondents. Replacing outdated IT infrastructure was identified by 29% of respondents and security incidents or concerns by 28%.

Strengthening cybersecurity and upgrading legacy systems biggest challenges

Relentless cybercriminals pose continuous threats leading to 40% of respondents citing cybersecurity and data protection as the foremost IT challenge in 2023. It’s tough to be efficient when an outdated technology stack gets in the way of productivity. Legacy systems hampering growth and innovation were reported as the second biggest challenge by 24% of respondents.

Improving security and increasing productivity through automation are priorities

Businesses recognize the importance of having a strong defense against devastating cyberthreats with 45% prioritizing the improvement of IT security overall.  Automation boosts cybersecurity. By using an advanced endpoint management tool, technicians can monitor, detect and automatically resolve common security issues. Another benefit of automation is that it fuels productivity and alleviates technicians’ ever-increasing workloads.

Where will IT professionals invest next?

Not surprisingly, survey participants responded that automation and security products are the cutting-edge technologies they plan to invest in by 2024. In fact, 39% of respondents cited IT automation as technology in focus for investment, followed by 30% for email security – including phishing prevention, and 27% for endpoint detection and response (EDR). Nearly half of those surveyed – 48% – want to invest in security awareness training to empower their employees to become the strongest link to their cybersecurity strategy. Another 36% of respondents were interested in vulnerability scanning tools that detect and address weaknesses in the IT infrastructure before attackers can exploit them. Additionally, 47% of survey participants plan to add or change cybersecurity solutions this year, while 30% said backup and recovery solutions are on their radar noting the importance of a comprehensive data protection plan. About 22% of the respondents also anticipate staffing growth in cybersecurity.

MSPs stand to benefit

SMBs are outsourcing more IT services to MSPs. According to the report, almost 80% of respondents said they outsource one or more IT services to an MSP, up from 64% in 2022.  The top three functions that are being outsourced are IT security, network monitoring and cloud infrastructure management. Other services are endpoint management, compliance reporting and onboarding/offboarding of users and devices.

Other notable findings revolved around integration – about a quarter of survey participants reported the integration of IT documentation within the endpoint management tool as most beneficial. When it comes to IT management tools, respondents listed their top five as: help desk/ticketing, endpoint management, IT documentation/knowledge management, network management/network performance monitoring and endpoint detection and response (EDR).

In summary, overworked IT professionals are investing more in automation and integrations while many are also outsourcing more to MSPs, despite economic uncertainty. Meanwhile, budgets are being allocated to strengthening cybersecurity and updating legacy systems.