Business of Tech: Daily 10-Minute IT Services Insights MSSP Pricing Trends: Key Takeaways from the Latest Benchmark Report
Host Dave Sobel engages in a lively discussion with seasoned technology journalist Jessica Davis and veteran industry writer Howard Cohen. The conversation kicks off with an exploration of the recent trend of CEO changes in the tech industry, particularly focusing on notable shifts at companies like Kaseya and ConnectWise. The trio delves into the implications of these leadership changes and speculates on the potential reasons behind them, including possible mergers and acquisitions, as well as the evolving landscape of managed services.
A significant portion of the episode is dedicated to the MSSP (Managed Security Service Provider) benchmark pricing report, which Jessica recently published. She highlights key findings, such as the opportunity for MSSPs to offer Virtual Chief Security Officer (vCSO) services, which are currently underutilized. The report reveals that while 100% of MSSPs provide security operations center services, only 57% offer backup and disaster recovery services, raising questions about the foundational services that should be included in security offerings. The discussion emphasizes the need for MSSPs to better define their services and explore pricing strategies to remain competitive in a rapidly evolving market.
The conversation shifts to the growing trend of mergers and acquisitions (M&A) in the managed services sector. Jessica notes that while the M&A market for MSPs surged in 2021 and 2022, it has since slowed due to rising interest rates and a limited supply of quality MSPs available for acquisition. This has led investment firms and organizations like Evergreen and The 20 to create their own events to build a pipeline of potential acquisitions. Howard adds that many MSPs are wary of selling to private equity firms due to concerns about employee retention and company culture, which has prompted alternative acquisition strategies focused on preserving the existing workforce.
As the episode wraps up, the panelists share their predictions for the first half of the year. Howard emphasizes the importance of professionalism in the industry, advocating for a shift from viewing managed services as a trade to recognizing it as a profession. Jessica highlights the increasing relevance of artificial intelligence (AI) in managed services, noting that MSPs are beginning to explore its applications for both customer use cases and internal operations. The discussion concludes with a call for the industry to embrace these changes and leverage new technologies to drive growth and innovation.
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