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Managing to Win: MSPs that Succeed in 2022 Will Capitalise on These 4 Industry Trends by Richard Massey, VP Sales for EMEA at Arcserve

As we step into 2022, MSPs are putting together their plans. The smart ones are doing so with a focus on the vital industry trends that are emerging now and will gather force in the year ahead. So, what are these trends? Here are four major shifts that will shape the MSP market in 2022.

More MSPs will transform into MSSPs

In 2022, traditional MSPs will increasingly realize more value and money in the security market. Many will expand their offerings to deliver cybersecurity management rather than focusing exclusively on IT support services.

Becoming a managed security service provider makes good economic sense. A recent study of more than 5,000 IT professionals found that 70% of them plan to outsource at least a part of their security operations to an MSSP or an MSP, according to Kaspersky’s Global Corporate IT Security Risks Survey.

An influx of new MSSPs will undoubtedly increase competition in the sector. But the market still has plenty of room to grow. There are more than 40,000 MSPs in North America, and only 17% of those are MSSPs.

Another reason for the shift to security is that MSPs are reckoning with the massive threat posed by ransomware and their need to protect against it. If they don’t, they risk losing customers and, potentially, their entire business. MSPs that can effectively manage the ransomware problem will be at a significant advantage in 2022. Not only will they have their own house in order, but they will also grow their business by helping their customers combat attacks and protect their critical data.

Immutability will be the next industry buzzword

Ask the typical IT worker what immutability is, and you’ll often get a blank stare. But that’s about to change. Immutability will rise to the top of tech buzzword charts in 2022. Why is that? Because immutable data backup is kryptonite against cyberhackers. It safeguards information continuously by taking snapshots of the data every 90 seconds. This means that organisations can quickly recover their data even if disaster strikes.

These snapshots provide point-in-time data recovery. Organisations can use the snapshots to roll back to the latest, not corrupted file state in downtime, natural disaster, or ransomware attack. Immutable snapshots can’t be altered, overwritten, or deleted, so they safeguard data integrity from loss due to human error, hardware failure, or ransomware attack. With immutable backups, organisations can ensure the smooth and uninterrupted delivery of services and operations—even during a disaster or ransomware attack.

The immutability message is starting to resonate not just with companies but with many nations, which are increasingly mandating immutable backup storage for their government agencies. In 2022, we will begin to see more and more mandates around immutability.

Cyber insurance will be harder to get

Cyber liability insurance is a type of insurance designed to cover losses and penalties associated with a data breach or other cyberattack. But this kind of insurance will be harder to get in the year ahead. For the first time, ransomware has hit a level where the payout by insurance companies is now exceeding the premiums paid.

That means large insurance providers will start limiting the amount of business they book and be very selective when underwriting new cyber policies. Some cyber insurance providers will begin excluding ransomware coverage when they renew customers. Companies will have to increase their investments in cyber tools and processes to prove they are a worthwhile risk to insurance providers.

This is both bad and good for MSPs. On the one hand, MSPs must demonstrate greater accountability and transparency to insurance providers or risk losing their cyber liability coverage. On the other hand, MSPs that can provide a higher level of security for themselves and their customers will set themselves apart in 2022 and gain a real competitive advantage.

Greater consolidation will hit the MSP market

Many entrepreneurs started an MSP company 20 or 30 years ago and have been very successful over the years. Now many of them are ready to sell their business and cash out. As a result, in 2022, we will continue to see a lot of larger MSPs on the acquisition trail as they seek to enter new markets and accelerate their growth. The winners in 2022 will be those MSP that have the ready capital to swallow up smaller players and grow their footprint.

The global managed IT services industry is growing and changing. The MSP industry can expect a CAGR of around 8% in 2022; according to ChannelE2E, the MSSP market will grow at nearly double that rate, up to 15%. MSPs that win will identify trends like this and capitalise on them. They are the providers that will be in the strongest position to overcome challenges and seize opportunities in 2022 and beyond.

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