between VAR and MSP, are nationwide with revenue near a billion. There are global ones such as Dimension Data. Mostly, any IT shop attaining 60 percent of its revenue from MRR is called an MSP. According to data from CompTIA and other sources, there are more than 40,000 MSPs operating in North America with almost 60 percent reporting less than $2.5 million in revenue. MSPs with less than $1 million in revenue account for 30 percent of them. The majority of MSPs (84 percent) reported serving businesses with 20 to 200 employees. What does all this mean? The MSP may be an attractive partner segment for vendors, but it has a lot of subsets. If a vendor is not targeting businesses with 20 to 200 employees – which is the sweet spot of the SMB market – then the majority of MSPs won’t move a revenue needle for them. These MSPs by their own admission do not target mid-market or enterprise. (It would help if vendors knew their target market and the partner profile.) One TSB claims 8,000 to 9,000 partners, depending on the press release. When speaking with industry veterans, most believe that there aren’t more than 6,000 active partners. If 10 percent of those are retiring or slowing down, where will the sales lift come from? Where are the replacement partners? There aren’t enough new partners entering the channel. More than 10 years ago, alternative providers including CLECs and IXCs not only recruited on college campuses but spawned new partners. Sales reps let go or who quit became partners. Today, there isn’t much recruiting going on. We still see some long-time vendor employees becoming partners. But is it enough to grow the channel out to fit the vendors need? One TSB discussed that there will be a new segment of partners. There will be at least two. The ISV segment is already a big part of the IT channel, especially around software ecosystems such as Microsoft and Salesforce. The other segment is the born in the cloud partner that is cloud first, selling software, digital transformation and customer experience. These firms can look like a digital marketing firm, a consulting shop or just about anything. There is a slew of them out CHANNEL MANAGEMENT What is your organization’s annual revenue? Managed Services Revenue by the Numbers Source: Datto’s Global State of MSP, 2020 Americas APAC EMEA 0 10% 20% 30% 40% 50% Less than $200k $200 to $499k $500 to $999k $1m to $2.49M $2.5M to $4.9M $5M to $7.49M $7.5 to $9.9M $10 to $19.9M $20 to $49.9M More than $50M Approximately how many clients does your company currently provide managed services to? Who MSPs Serve Source: Datto’s Global State of MSP, 2020 Americas APAC EMEA 0 15% 10% 5% 20% 25% 30% 35% 1-10 11 to 50 51 to 100 101 to 250 251 to 500 501+ CHANNELV ISION | JULY - AUGUST 2022 36
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