2022 Business Growth Report

Adapting to Grow

The ScalePad report on drivers of growth among IT Managed Service Providers
Headshot of Eric Torres

On behalf of ScalePad, I am excited to announce our 2022 Business Growth Report - Adapting to Grow. The goal for this report was simple, to find out what growing MSPs are doing to find success, so we can share those insights with you.

We also aimed to discover the concerns of the community today. We are in the midst of many challenges, from the pivot to pandemic policies, to the uneasiness of today’s economy. As belts tighten, what can Managed Service Providers expect?

I think we can learn from the past. Over the last three years, one thing has become evident — businesses rely on the expertise of MSPs. You jumped into action to normalize hybrid working environments and keep businesses afloat.

For the next 6-12 months, we predict MSPs will have a similar impact. As many businesses pull back on spending, MSPs will be ready to ensure their technology continues to support their business and enable them to prosper.

Let’s take a look at the numbers from this year as we continue on a journey of growth, together.
  • Our Survey Group

    Over 300 MSPs executives, technicians, account managers, and other roles weighed in on the top drivers of growth.
  • Scale of Business

    While most were from larger, 100+ employee enterprises, some responses came from 1-4 person operations.
  • Their Location

    Most are located in the US south and Pacific regions, including Florida, Texas, California and Washington. We also heard from a few Canadian MSPs.

The pains and gains of COVID-19

It’s no surprise that 49% of MSPs say COVID-19 pandemic policies slowed the growth of their business. Workplace restrictions, staff isolating, and reducing in-person meetings meant MSPs needed to be flexible to survive.

Even ones that planned for situations like this couldn’t have planned for it, like Luis Alvarez: “I think back to prior to the pandemic, we did a lot of testing, tabletop exercises with some of our clients who are in banking and financial services and it included pandemic testing. And one of the lessons we learned is that nothing that we put on the tabletop really prepared us for what really happened.”

Fortunately many MSPs found ways to harness the pandemic policies and actually grow during this time. For some, that meant increasing cybersecurity or figuring out how to manage hardware in clients’ homes. For others, it was enabling clients to use new tools for communicating, helping them transition to remote and hybrid work and leverage the Internet of Things (IoT).

Purely the ability to flex what you're doing as a business and scale it up and down. The businesses that can scale down as well as up are the ones that will survive, or did survive through COVID.”

Nick DaCosta-Greene
Operations Director, Curatrix Technologies

49%
of MSPs say COVID POLICIES are hindering growth
50%
of MSPs see growth from REMOTE AND HYBRID working
54%
of MSPs say INTERNET OF THINGS is driving growth

All hands on deck

Having the right people in place can make a big difference. That’s why hiring and retaining talent were considered a growth factor for many MSPs.

Carrie Green explains why the employee experience is important, “It helps you drive to growth because if you don’t have happy employees, they’re not gonna put out that same level of service as a happy employee is.” Giving employees a good experience gives them an incentive to stay and grow with the company. MSPs are doing this by offering hybrid or remote work options, creating growth and training opportunities, and providing a good work-life balance.

Reducing the mundane manual tasks can also improve an employee’s experience at your MSP. Paul Riedl of River Run sees it as win-win for both employees and clients, “we’re saying let’s automate as much as we can so that we’re spending the time and the value with the client.”

49%

of MSPs say
HIRING is driving growth

48%
say EMPLOYEE RETENTION is driving growth

If you've got a revolving door and people are coming and going and coming and going well it's hard to build that trust, because trust is built over time. Trust is destroyed in a minute, but it's built over time.”

Paul Riedl
CEO, River Run

Leading clients through strategic planning

As the pace of technology advancement continues to race ahead, keeping clients ahead of the curve has been instrumental for many MSPs. It’s no longer just about fixing their existing technology. The leading MSPs are becoming trusted advisors for their clients as they lead them into digital maturity.

Guiding clients through strategic planning, project management, and hardware deployment projects are opportunities to grow, according to the responses from the majority of MSPs.

The growth from strategic planning isn’t rooted in sales — it’s about client experience. You’re building trust with your clients because you’re working with them and supporting their growth over a longer term. A good client experience can make or break a client relationship, so ensuring you’re being the trusted, collaborative leader they expect is essential for MSPs today.

56%

report STRATEGIC PLANNING
is driving growth

55%
report PROJECT MANAGEMENT is driving growth
52%

report HARDWARE DEPLOYMENT
projects are driving growth

What got us through the pandemic and allowed us to normalize and maintain our revenues was going deeper with our clients.”

Joe Markert
CEO, TransformITive

Getting what you need

While supply chains took a hit early in the pandemic, they’re now closer to the stability we’re used to. The fluctuations made it difficult for MSPs to decide if the current conditions are favorable or not, as responses were fairly even across the board.

The slow supply chains are now coupled with inflation, so while we’re seeing more availability of product, the same hardware may not be within budget. This is leading MSPs to offer clients warranties to extend the life of their hardware until they can get the equipment they need.

Other MSPs are looking for ways to do the same jobs with equipment that might not be at the same standard they’re used to. By going for a model that’s a step down they’re able to save some extra cash, either for their own business or their clients.

Are hardware supply chains affecting your business growth?

We're still not completely out of the the supply chain woods yet. I think that's gonna happen probably first part of next year.”

Luis Alvarez
CEO, Alvarez Technology Group

Adapting to automation

Manual processes like ticket checking, inputting data, and building reports are a drain on resources and hindering their growth. That’s why many MSPs are looking for ways to automate their workflow, and those that have implemented more automation found that it’s helping them grow.

But automation can be a double-edged sword. Go too far, and you’ll lose the human element of the customer experience entirely. It’s essential that your business is able to connect with your clients, so look for automation tools that can strengthen that connection.

Strategically implementing automation into your workflow doesn’t mean employees are becoming redundant — it’s allowing them to put their focus on other tasks. Now they can be proactive, upskill, and deliver a better customer experience.

31%
are hindered by MANUAL PROCESSES
51%
report growth from TASK AUTOMATION

Our whole world is gonna change dramatically because the things that soak up so much time right now that are manual are going to be automated processes.”

Joe Markert
CEO, TransformITive

Backups for a cloudy day

Backup management and disaster recovery remain some of the core services that MSPs provide to their clients. Many clients are focused on the here and now, but proactive MSPs are also educating and preparing them for what could happen in the future.

As businesses continue to modernize their IT infrastructure, more MSPs are capitalizing on the shift from traditional server backups to cloud services. Educating clients on how to effectively use cloud services is just as important as implementing it.

Additionally, more clients are working to meet cybersecurity requirements, so their MSPs need to ensure backup and recovery strategies are rock solid. Having those plans readily accessible, along with reports on the assets and backup history, will help your clients meet the increasingly strict requirements.

58%

say CLOUD SERVICES
are driving growth

52%

say BACKUP MANAGEMENT
is driving growth

42%

say DISASTER RECOVERY
is driving growth

What we’re watching

This year has put a highlight on cybersecurity and the importance of cyber liability insurance. While some clients have already seen the importance of cybersecurity, others are only just beginning to realize how essential it really is.

Working from home, new requirements from insurance companies, and past attacks are all reasons why clients may be asking their MSP to help them with cybersecurity. What they used a few years ago isn’t going to protect them from the threats of today, so there will always be an opportunity to enhance their security strategy.

55%

of MSPs say CYBERSECURITY
is driving growth

43%

say clients' CYBER LIABILITY
INSURANCE PROCUREMENT
is driving growth

The security piece became so much bigger and better or changing faster because the bad guys were getting more sophisticated.”

Paul Riedl
CEO, River Run

30%

say GREEN TECHNOLOGY and
ENVIRONMENTAL POLICY  are driving growth

As OEMs face consumer and political pressures to focus on sustainability, MSPs are already exploring the impacts of green technology and environmental policy. There’s no one way to do this, but the first consideration is often with hardware. Recycling programs help ensure equipment is disposed of properly or reused to extend its life.

Other MSPs have more holistic sustainability programs involving their employees and suppliers. Aside from being good for our planet, these programs could help your business stand out from the competition. We anticipate green policies will continue to impact the MSP industry in the coming years.

Continued Growth

The last few years pushed many businesses to adapt. Almost every MSP had to evolve: how they worked, the availability of employees, procurement, planning, and the type of services they offered to their clients.

As we move out of the pandemic, many of these changes are here to stay. Fortunately, supply chains are strengthening, Covid restrictions have ended, and remote work is here to stay, if only in a hybrid capacity.



Looking to the future, it’s clear that cybersecurity will continue to play a large role in the relationship between an MSP and their clients. Whether that’s by ensuring backups are secure, assisting in acquiring cybersecurity insurance, or providing accurate asset reporting in the event of an attack.

The IT managed service industry has proven to be both resilient and adaptable. Moving forward, these qualities will help MSPs continue to grow.

ScalePad creates software that helps IT managed service providers work more effectively internally and with their clients. From wrangling hardware and software assets to monitoring vital backups, our platforms give MSPs the tools they need to succeed. Lifecycle Manager and Backup Radar continue to evolve to meet the needs of our Partners.

This report was created by the ScalePad Content Team:
Cheryl Stewart, Content Writer
Evan Pappas, Content Writer
Andrew Brethauer, Manager

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