as business owners are ‘ holding their breath ’ to see what is going to happen with the election before making any decisions .”
The TMT data also shows that the number of inbound leads has dropped by 40 %. In January , the average MSP in the TMT program was generating 25 leads per month . By June , that number had dropped to 15 leads on average .
Winners Still Win
In every economic climate , there are some businesses that don ’ t just survive but thrive .
For example , Oli Thordarson , CEO of Alvaka , Irvine , California , says he has noticed some nervousness among CEOs and CFOs who are “ sitting on their wallets ” during the political antics . But sales remain unaffected , he says .
Mike Bloomfield , president of Tekie Geek , an MSP in Staten Island , New York , isn ’ t seeing any slowdown in his business . “ Our sales are up , and we are having our best year yet ,” he says . “ We attribute this growth to the ongoing demand for robust cybersecurity measures and managed IT services as businesses continue to navigate the post-pandemic landscape .”
The same goes for 3rd Element Consulting , an MSP in Mechanicsburg , Pennsylvania . “ So far this year , sales are up for us . The political climate hasn ’ t seemed to affect spend or sales ,” says cofounder and CEO Dawn R . Sizer .
Market Data Points Up Too
Canalys , an IT industry research firm , has data that points to healthy growth in the MSP market . “ Managed services is growing at 12 % this year and cybersecurity at 12 % as well . When combined , managed security is growing at near 15 %,” says Jay McBain , chief analyst , channels , partnerships and ecosystems , at Canalys .
“ These are really strong growth rates for MSPs , and the general sentiment is high that these numbers will be achieved even more profitably than last year ,” he says .
In its 2024 edition of The Future of IT Survey , Kaseya reports that customer budgets are looking stable , as companies invest in AI , automation , and cybersecurity . The stability suggests “ companies feel better equipped to handle economic challenges and are more optimistic about navigating the uncertainties ahead ,” the report says .
While some companies have made slight reductions , Holly Pateman , Kaseya senior vice president of product marketing , attributes this to efficiency . “ They ’ re becoming more efficient with the budget . I think they ’ re a little more competent with how far their budget will go .”
AI and tool consolidation are the main contributors to increased efficiency , she says . Organizations have dozens of tools available to them to handle cybersecurity , networking gear , endpoint management . and other functions . They can simplify IT management by integrating the tools , she says .
But Economic Concerns Linger
The Kaseya report does note that economic concerns are affecting budget planning for nearly a quarter of organizations ; therefore , it ’ s extremely important for MSPs to get profitable with what they have now versus trying to sell their way out of a slump . This aligns with Kaseya ’ s mission to make MSPs more profitable by providing a single platform at a fraction of the price .
Even Thordarson , who is reporting his sales are unaffected so far , admits a market softening may be on the horizon : “ I am seeing indications that the financial health of our clients and prospects are not as strong right now as in the recent past . Balance sheets and income statements don ’ t seem to be as robust , and confidence appears to be waning .”
Greg Crabtree , a financial and profitability expert and author of Simple Numbers , paints a grimmer picture based on the financial metrics his CPA firm , which is a top 25 firm in the US , is seeing in the real-time financial metrics for small and midsize businesses .
Crabtree predicts there is pent-up demand for MSP services right now and does expect an IT spending surge in the first quarter of 2025 once the election is settled . However , he believes that bubble of sales activity will be temporary and that MSPs should brace for a “ street fight ” economy where they ’ ll need to metaphorically “ punch their competitor in the face to take their client .”
“ The market in total is not going to grow ,” he says , “ which means everybody is going to need to up their game .”
To Access The Election Year MSP Market Forecast Report For FREE , Instantly Download A Free Copy Here .
www . MSPSuccess . com / marketreport
Pedro Pereira is a writer in New Hampshire who has covered the IT channel for two decades . Pedro has worked for a variety of media companies , including Ziff Davis , CMP Media , The Nielsen Company , and daily newspapers .
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