Opportunities Abound for MSPs in 2023

Opportunities Abound for MSPs in 2023

By Arti Loftus

It’s the time of year when we balance closing out the current calendar year with planning for the year ahead, even as we also begin to wind down to enjoy the holidays.

2022 has been a record year for managed service providers (MSPs), and players in the channel have seen more and more SMBs and an increasing number of large enterprises turn to experts for help.

Businesses are more focused on digital transformation than ever, fueled by cloud capabilities and faster networks, and challenged by more sophisticated, pervasive cyberattacks, while finding new ways forward in an era of remote working. Businesses know that to remain competitive and even viable, they will benefit from better communications and computing tools and applications. They are turning in droves to MSPs. The MSPs, themselves, have adapted how they operate and what they offer, and they are winning. There’s no reason to expect that growth not to continue in 2023.

We caught up with Ryan Walsh, Chief Operating Officer at Pax8, to get a read on the most significant trends shaping the world of cloud for business in the coming year.

“2022 brought new security challenges, growth in cloud computing and the mainstreaming of such technologies as Artificial Intelligence (AI), 5G and the Internet of Things (IoT),” Walsh said. “I see five trends that will shape the year ahead, based on what we are seeing on the ground already, and what our MSP partners and the vendors on our marketplace envision as cloud infrastructure and distribution continue to grow.”

Economic conditions will be uncertain and challenging in 2023, but smart MSPs and SMBs will find opportunities to grow and defy macroeconomic forces. The latest statistics show that there are 32.5 million small businesses in the United States, which account for 99.9 percent of all U.S. businesses (SBA, 2021). The SBA defines a small business as a firm with fewer than 500 employees.

“2023 will continue to be influenced by ongoing pandemic impacts, supply chain issues, inflation, and uncertainty in Ukraine, just as in 2022,” Walsh noted. “But, these influences don’t necessarily have to hamper MSPs that are focused on transforming their own businesses by leveraging cloud technologies, improving their sales and support operations, maintaining a laser focus on revenue growth and profitability and, above all, focusing on the needs of their SMB clients.”

Many SMBs are starting to look more like larger enterprises, as organizations of all sizes flock to MSPs because they cannot afford to keep up with new technologies. According to Walsh, this especially applies to rapidly changing categories, including cybersecurity and AI, making it impossible for enterprises to not tap into managed services.

“Growth in 2022 for Pax8 has been incredible, and we are preparing for even more growth in 2023. MSPs will help unleash small- and medium-size business growth by finding ways to gain efficiencies for their own operations as well as their customers,” he said.

Walsh also predicts that cloud computing will become even more important, enabling efficiencies, faster go-to-market plans, improved security, better decision making and work-from-anywhere.

“B2B online marketplaces and cloud marketplaces will continue to change, and the hyperscalers, including Microsoft Azure and AWS, will reboot their business models,” Walsh noted. “With more adoption of cloud computing, cloud services, and real-time cloud communications, the economics of cloud will come under scrutiny. This will lead to cloud optimization techniques that enlist a new level of AI and automation and will help all participants in the cloud ecosystem improve operationally and financially.”

Forward-looking SMBs know that digital transformation can help them become more adaptive and competitive, especially in a downturn, and digital transformation is an area in which they say they are willing to invest.

“We believe channel partners should plan now to embrace cloud solutions to accomplish these business outcomes in response to this challenge,” Walsh said. “Pax8 is investing in machine learning and advanced data analytics to help partners find next logical products to suggest for their customers.  Not investing in cloud technologies will leave partners behind those that do.”

Finding and procuring the right technology is only part of the solution for MSPs and, as Walsh pointed out, “Technology alone won’t produce great cloud results; it is key for MSPs to upskill their enterprise and take advantage of education opportunities, networking and developing peers to help solve business and technology challenges.”

The way work happens will continue to transform in 2023, enabled by technology and the ongoing need for employee recruitment, retention, education and advancement. One of the biggest blockers to growth for any enterprise continues to be attracting and retaining talent.

“For MSPs, this can slow cash flow and the ability to take on new SNB partners,” Walsh added. “Labor market dynamics also provide a great opportunity for MSPs and, by extension, their SMBs, to leverage technology to take on some business tasks and enable efficiencies.”

Another key trend will revolve around emerging technologies, such as 5G, IoT, RPA, and the growth of edge computing and faster networks, including 5G wireless private networks, which will untether businesses and unleash more truly mobile working.

“Vertical industry cloud-first applications will bring even more value, for example advancing healthcare with more telemedicine capabilities and robotic surgeries,” Walsh said. “MSPs can lead in innovation, and take advantage of high-growth markets, including supporting manufacturing processes with advanced automation, made more precise through layers of AI, Machine Learning, and augmented reality. MSPs can do more than traditional Internet access, voice, data, collaboration, and general computing support.”

Finally, Walsh believes globalization is not slowing down, but will accelerate in the new year, powered by investments in digital infrastructure. That same infrastructure, though, will lead to new cybersecurity risks that go along with moving so much information through the networks that connect the cloud infrastructure.

“MSPs, wherever they are located and whatever their market, are increasingly affected by global economic forces,” Walsh concluded. “That may be supply chain issues, inflation, or one of any number of security threats circling the globe. But there is great upside for those MSPs that continue to innovate, invest, and bring the services and applications their customers need to grow. Businesses need the expertise, support, and ideas for improvement that they are coming to rely upon in true partnership.”
Arti Loftus is an experienced Information Technology specialist with a demonstrated history of working in the research, writing, and editing industry with many published articles under her belt.

Edited by Erik Linask
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