MSPs continue to dominate the channel, but competition is heating up: XChange MSP recap, part 1

MSP growth trends and diverse hiring – here are some of the key highlights from XChange MSP 2024

MSPs are set to dominate the channel landscape, but they may need to broaden their managed services portfolios, invest in automation and consider their pricing models to continue scaling.

This is what attendees at XChange MSP heard in the first morning session at London’s swanky Sofitel venue on Tuesday.

Day 1 of CRN’ s conference and networking event for channel professionals kicked off with a presentation of recent research on MSP growth trends, conducted by The Channel Company’s IPED Consulting division.

Stuart Sumner, chief content officer at TCC, started the presentation with some good news for MSPs, as attendees heard that managed services now dominate the channel landscape, making up over a third of the space.

They are also the fastest growing subset of the partner community, it turns out. 70 per cent of the partner community now have some sort of managed services capability, the research suggests, with 33 per cent boasting this as their primary business model.

This comes as little surprise, considering that managed services continually generate some of the highest profits across delivery models (35 per cent on average), second only to the owned and managed model with 45 per cent.

Mature MSP practices are also the driving force behind a significant chunk of tech M&A (40 per cent), followed by cloud sales and service (38 per cent) and vertical solutions or skills (30 per cent).

This growth is driven by a continued need for outsourcing across end-users, Sumner told the audience.

44 per cent of respondents singled out cost savings as the main driving force behind their businesses’ growth, with 41 per cent singling out simplified IT operations across their clients’ businesses.

In terms of the core services that MSPs are offering, these vary widely, but server management, network management and endpoint security emerged as the top three in the research.

In a not-so-surprise twist, MSPs surveyed by the IPED team singled out technical talent recruitment, economic uncertainty and price competition from emerging or expanded MSPs as their biggest challenges.

Diverse recruitment can be make-or-break for channel businesses

The afternoon rolled on with a panel on improving diversity and inclusion across the channel.

Lisa Roberts, Rubrik and Cisco veteran and founder of vendor incubator Colition, opened by acknowledging the issue of unconscious gender bias.

“It feeds into everyday recruitment, promotions internally, culture, and how people generally feel about their confidence,” she said.

Roberts noted that despite recent progress, biases still affect hiring decisions and leadership opportunities across tech companies and the channel.

She stressed the importance of leadership living out inclusion principles, saying, “It’s not just about delivering a training programme.

“It’s about actually doing what you say you’re going to do across the whole hierarchy of your organisation.”

Katie Sloan, marketing director at Core Technology Systems, shared her own journey, highlighting the scarcity of inclusive environments early in her career.

She expressed how vital it is to provide role models and leadership opportunities for women.

"The statistics show that less than 20 per cent of senior leadership roles in the UK channel are held by females."

Sloan believes that an inclusive culture helps both attract and retain talent, mentioning that at Core, “we've had people go from our customer success team into more technical roles... because we encourage people who have that passion and drive.”

Both panelists discussed how unconscious bias often leads to the hiring of people who are similar to those in power.

“You tend to hire people like yourself,” Roberts noted, stressing the need for active awareness and training.

Sloan added that most women are hired based on proven experience, whereas men are often hired for potential, leading to a disparity in requirements based on gender and worsening existing gaps.

“Men tend to be hired more for their potential, and women are hired more for proof of their experience and credibility,” she said.

Roberts highlighted proactive solutions, such as early education and outreach to young talent: "It’s the younger people of tomorrow that we need to ensure that we are educating around that this is a female-friendly industry."

She shared her work as part of Tech Channel Ambassadors, presenting at schools to encourage young girls to consider tech careers: “There are so many opportunities in tech, and so many different roles and skill sets we’re looking for – the opportunities go well beyond technical skills.”

Both Roberts and Sloan emphasised that small and medium-sized enterprises (SMEs) can take steps toward DEI without needing extensive resources.

"There’s loads you can do," Sloan said, offering suggestions like mentorship, creating safe spaces for discussions, and offering external programmes like the 30 per cent Club to support women in leadership.

When the conversation turned to the impact of allyship, both panelists highlighted its critical role. “The magic happens when you have male allies in senior positions,” Roberts noted, citing her experience running the Women of Meraki group and observing the cultural shift when allies actively participated.

The panel concluded with a discussion on quotas. Roberts supported the need for measurement but cautioned, “Don’t hire a female because you have to meet a quota. You hire because you want to find the right candidate.”

Sloan agreed, stressing the importance of accountability and creating the right culture: “Diversity breeds innovation and different thinking, and more success.”