Businesses are increasingly relying on Managed Service Providers (MSPs) for expert cybersecurity support amid rising cyber threats. According to Canalys, managed services revenue is expected to grow by at least 14% in 2024, highlighting the escalating demand for MSP expertise.
In response to this burgeoning market, MSPs have significant growth opportunities. The MSP Perspectives 2024 report by Sophos identifies key challenges and growth avenues for MSPs, while emphasizing the potential for MSPs to enhance business operations while bolstering client defenses against ransomware and breaches.
Cybersecurity is a central focus for MSPs, with a majority working closely with select cybersecurity vendors. 53% collaborate with one or two vendors, while 83% engage with up to five vendors. Larger MSPs tend to work with more cybersecurity vendors, aligning with their organizational scale.
There is substantial potential for efficiency gains and cost reductions through the consolidation of cybersecurity platforms. MSPs currently using multiple platforms estimate potential savings of 48% in daily management time by consolidating these tools onto a single platform.
The demand for managed detection and response (MDR) services is rapidly increasing due to the complexity of cyber threats. In the U.S., 94% of MSPs already offer MDR services, compared to 70% in Germany, 62% in the U.K., and 58% in Australia. Globally, nearly all MSPs without current MDR offerings plan to incorporate them soon, with 32% of U.K. MSPs planning to do so in 2024.
MDR services are typically delivered through three primary models: via the MSP’s own security operations center (SOC), through third-party vendors, or a combination of both. As per the survey, 66% of MSPs utilize third-party vendors for MDR, while 20% operate their own SOC, and 15% utilize a hybrid approach.
Choosing the right MDR provider is critical for MSPs, as these vendors act as extensions of their services. Essential capabilities such as 24/7 incident response are particularly crucial while selecting MDR provider, with 36% of MSPs highlighting it as indispensable, rising to 49% among smaller MSPs.
The report also identifies significant challenges faced by MSPs today. Keeping pace with evolving cybersecurity solutions and technologies emerge as the foremost concern. Securing adequate cybersecurity analyst resources, particularly for providing round-the-clock coverage and meeting growth demands, ranks as the second major challenge.
The survey also explored the biggest cyber risks perceived by MSPs for themselves and their clients. Both groups identified stolen access data and credentials and a shortage of in-house cybersecurity skills as their top concerns. Despite advances in cybersecurity technology and artificial intelligence, skilled professionals remain central to effective cybersecurity. The shortage of these professionals is well-known, and many organizations rely on MSPs to fill this gap, further compounding the challenge.
MSPs have numerous opportunities to grow and improve profitability amidst inevitable cyberattacks. Strategies include reducing overheads through platform consolidation, optimizing engagement with third-party MDR vendors, and aligning services with cyber insurance needs. By leveraging these insights, MSPs can enhance their services and capitalize on future opportunities in this competitive market.
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