The Canalys MSP Tech Stack is built around the five core technologies used by managed services providers:

1. RMM and PSA
2. Backup and disaster recovery
3. Cloud SaaS applications
4. IT service management
5. Cybersecurity

For vendors it is difficult to access both quantitative and qualitative information which provides a holistic view of the MSP landscape. Canalys is addressing some of the key challenges facing vendors in their MSP strategies with analysis of competitive dynamics and alliances, managed services opportunity, MSP programs and as-a-service business model transformation.

Partners expect managed services to grow as a proportion of their total revenue. However, not all partners are MSPs. Hundreds of thousands of partners sold managed services in 2021, the majority of them making less than 10% of their revenue from managed services. The most in-demand and high growth areas are also the most technically complex, such as cybersecurity, cloud migrations and automation.

Vendors struggle to address such a diverse landscape, with partners at different levels of maturity and investment. This is why it is so important to build dedicated MSP programs with new metrics which address and reward partners, no matter their size, for their dedication and value to the end customer.

The number of technologies used by MSPs in their stacks might seem broad, but it is the need of the end-user, the customer, which unites them. Customers need stronger security postures, and they want to consume applications and infrastructure from the cloud where it is economically viable. But they also expect their MSPs to make these things work and be on hand if they do not. It is one of the reasons why vendors should invest in delivering services to the channel where partners struggle the most. This is why SOC-aaS and MDR-aaS are seeing such high growth, as vendors provide complex (and expensive) monitoring and remediation services to their partners.

This approach helps combine managed services businesses of the channel partners with the vendors in their quest to deliver value to the end customer. It should also provide a better sense of true partnership. Far from splitting the channel up into siloes, managed services can bring all parties closer together, as long as they are driven by that core philosophy of partnership.

Canalys is seeing high growth in managed services investment globally by US-based vendors looking to diversify their channel reach and grow in less well-established regions such as Europe, the Middle East, Africa, Asia and Latin America. However, there needs to be a shift in the attitudes of vendors if they are to help the end-user find that value.

The biggest problem will be seeing the MSP, not the vendor, as the most important part of the value creation process. From there, vendors will see the MSP business model, bringing together multiple technologies in their stack, as the guiding principle for their own go-to-market strategies. If they are able to do this, vendors should promote their alliances with other vendors to their channel organizations, and help those partners find the best 'solution' (in the truest sense of the word) to the customer's business problem.

Canalys MSP analysis service clients can read our latest MSP Tech Stack research which looks at backup and disaster recovery vendors around the world that offer these technologies to managed services providers (MSPs) and aims to benchmark their performance and momentum in areas such as revenue, product strength, MSP feedback and reach, support, training and program maturity. Do get in touch if you'd like more info on Canalys MSP research.