This is the first part of a series of articles diving into how MSPs can improve cybersecurity for small and midsized clients through stronger relationships. Read Part 2 here.
Most MSPs are well aware that cyberattacks are more frequent — and more sophisticated — than ever. As a result, small and midsized businesses (SMBs) are nervous. Without large budgets or tenured teams, SMBs are wrestling with a record number of cyberattacks, and record levels of damage when those attacks are successful.
Remote work, cloud transformation, and the explosion of smart devices have all contributed to the modern IT environment’s complexity. To manage this, many SMBs have turned to MSPs. The relationship is mutually beneficial. SMBs benefit from an MSP’s technical ability and operational improvements. Meanwhile, the MSP and its resulting revenue stream grows, thanks to demand from SMBs.
But as enmeshed as SMBs and MSPs are, new pressures threaten to upend the relationship. MSPs should take this as a warning. Adjusting your strategy now offers an opportunity to cement your role as a critical partner for shared success with SMBs. Not doing so may threaten the stability of existing accounts and jeopardize potential new business.
The State of SMBs and MSPs
Largely, the MSP-SMB relationship is strong and significant. Recent research conducted by JumpCloud found that 76% of SMBs use an MSP for some functionality. Plus, 67% of SMBs plan to increase their investment in service providers over the next 12 months, survey results showed.
Antoine Jebara
SMBs report many benefits of their MSP relationships, including:
- Enhanced Security: 56% of SMBs reported that working with MSPs led to better security. In an era where 45% of SMBs fell victim to cyberattacks in the first half of 2024 alone, this advantage is critical. Security is a growing concern and significant driver of MSP adoption: Gartner recently reported that spending on security services rose to 10% year over year.
- Increased Efficiency: 57% of SMBs reported increased effectiveness in managing their IT infrastructure because of their service provider partners. This efficiency is particularly valuable given the complexity of modern IT environments. Consider the average SMB needs support for a diverse mix of Windows (63%), macOS (24%), and Linux (18%) devices, along with a complicated ecosystem of SaaS apps, on-premises hardware, and legacy systems.
- Cost Savings: 37% of SMBs reported that service providers helped them save money. For smaller businesses operating with limited budgets, every penny counts. Saving on a license or new application because you’ve outsourced to an MSP makes operational and financial sense.
- Expertise and Resource Support: With 49% of SMB IT teams feeling understaffed and under-resourced in their efforts to manage and secure their organizations, MSPs provide critical expertise and more resources.
MSPs Cannot Rest on Their Laurels
Despite the overall positivity, MSPs are also facing some headwinds that affect how they interact with SMBs. A few red flags:
- Security Management: Nearly 40% of SMBs, including those working with service providers, have concerns about how their partners manage security. MSPs must recognize that the efficacy of their security initiatives can provide a competitive edge.
- Costs: The primary reason SMBs stopped working with an MSP was cost (28%). They’re willing to invest in MSPs, but MSPs must ensure that the expense of their services deliver value to their SMB customers.
- Scalability: 26% of SMBs outgrew their MSP’s service offerings. Growth, a mark of success for the SMB, may mean customer churn for the MSP. Adapting to the growing demand of clients would help mitigate graduation churn risk.
- Customer Service and Sales Experience: 23% of SMBs cited poor customer service or sales team experiences as reasons for terminating relationships with their service providers. At the end of the day, an MSP is a business like any other, where the customer is — or should be — the focus. MSPs must always keep this in mind. Deliver the attention and care that you’d want to receive.
Relationship at a Crossroads
The MSP-SMB relationship is at a critical juncture. While MSPs have become indispensable partners for many SMBs, they must address these emerging challenges to support and strengthen these partnerships.
Antoine Jebara is general manager of MSP business and co-founder at JumpCloud.
Featured image: iStock
