Managed service providers (MSPs) have become more critical to the overall success of small and medium-sized businesses (SMBs) than ever.
Outsourcing cybersecurity to a trusted third party is the ideal approach for SMBs that may not have the technical expertise in-house (or the budget to hire the right personnel). With a partner handling their cybersecurity, the SMB owner can turn their attention back to the things that matter most. These benefits make managed security a major business opportunity for MSPs.
In April 2023, Analysys Mason prepared a report, "Succeeding in the Small and Medium-sized Business Cybersecurity Landscape: Guidance for Managed Service Providers,” to explore how MSPs can leverage this opportunity to build a more successful business.
The report is based on various studies conducted independently by Analysys Mason on the SMB and MSP markets. Using this data, Analysys Mason explores the state of the cybersecurity industry today, including both top challenges and opportunities for MSPs offering cybersecurity services.
About Analysys Mason
Analysys Mason is the world’s leading management consultancy focused on TMT (telecoms, media, and technology). The firm's SMB practice leverages over 20 years of tracking the space, providing unparalleled insights and know-how that global vendors and operators rely on to create impactful go-to-market strategies, drive channel growth and improve market leadership.
Key takeaways from the report
Analysys Mason explains that the share of SMB cybersecurity spending through MSPs was 41% of the total spend in 2022 and is expected to reach over 48% by 2027. SMB spending through MSPs across all security solutions has been rapidly increasing and is expected to outpace all other channels in the next five years.
The report examines this relationship between managed service providers and small and mid-sized businesses and offers three ways that MSPs can succeed in the rapidly expanding SMB market.
Here are a few key takeaways from the report.
The state of the cybersecurity industry for SMBs
SMBs are optimistic about the future of their businesses and are looking to maximize their chances of success by protecting themselves from cyber threats.
According to Analysys Mason research, 73% of SMBs worldwide expect their revenue to increase in the next 6–12 months compared to the previous 6 months, despite news of economic headwinds.
These businesses are looking for IT solutions to help them to grow while navigating a business landscape that is in flux. SMBs are more aware of the security challenges ahead than they've been in the past.
According to a recent survey from the Canadian Federation of Independent Businesses, 45% of Canadian small businesses experienced a random attack in 2022, and 27% were victims of targeted attacks.
The trend of malicious actors targeting SMBs is on the rise, partly because large businesses typically have strong cybersecurity measures in place. SMBs are viewed as low-risk, high-reward targets because they often lack the ability and time to establish robust cybersecurity measures.
Complete tools make it easy to offer complete cybersecurity
SMBs are getting serious about cybersecurity and are poised to make meaningful investments to protect their infrastructure, networks, and data. While budget constraints are still a concern, SMBs are willing to invest in cybersecurity solutions that offer high value for the cost to get the peace of mind they need.
SMBs in the U.S. and Canada spent $27 billion on cybersecurity in 2022. This spending is expected to reach $39 billion by 2027. SMBs are looking past traditional antivirus and email security solutions, shifting their focus to and investing more in sophisticated solutions.
Analysys Mason asked SMBs which solutions they plan to start using or upgrade in the next 12 months and endpoint detection and response (EDR) and managed detection and response (MDR) solutions were the top two on the list at 41% and 32% respectively.
Not only were EDR and managed security (which includes MDR) the top two on the list, they are among the fastest-growing cybersecurity solutions among SMBs.
Work with vendors that offer true partnerships
MSPs are in a unique position to help SMBs improve their cybersecurity posture. But MSPs face challenges in selling cybersecurity to MSPs. The average MSP is using 12 different tools to provide managed services to its end customer.
76% of MSPs say they use tools from different vendors to take advantage of unique features and functionalities. However, using disparate products can increase complexity for MSPs and make it more difficult to meet their clients’ cybersecurity needs. Using multiple dashboards from different vendors leads to alert fatigue, increased operational costs, and extra hours spent on integration, implementation, scripting, and remediation.
MSPs can continue to gain traction by offering cost-effective and impactful solutions, and by improving their marketing and sales strategies with the help of vendors. Having a true partner will help MSPs to meet the needs of today's SMBs.
However, 62% of MSPs stated that maintaining strong relationships with vendors is a key challenge that they face. Read the Analysys Mason report to learn three key attributes MSPs should look for to ensure they're signing on with a partner-centric vendor.