Published on November 21, 2023
Technology never stands still, and each year Managed Service Providers (MSPs) must adapt to accommodate new trends and keep up with the changing needs of their clients. 2024 will be no different.
There’s no disputing the fact that 2023 has been a challenge. MSPs have had to navigate emerging cybersecurity threats, a talent shortage, cost pressures and an ever-evolving technology landscape. In such a competitive environment, MSPs are in a race to stay ahead. However, as well as challenges, there are also vast growth opportunities in the next 12 months.
The future looks bright, and the year ahead promises to be a fruitful one for those MSPs willing to embrace change. Here, we discuss five trends for 2024 that will help MSPs optimise efficiency, reduce costs and ensure clients receive a more seamless customer experience.
- Mergers and acquisitions to bounce back
2023 saw the number of mergers and acquisitions (M&A) in the sector fall due to the challenging economic climate. According to a recent report, 47% of dealmakers expect this to change in 2024 and suggest the UK and Ireland will enjoy the highest growth in M&A activity across Europe.
When two companies come together, aligning IT infrastructure and integrating partners is a priority, as teams need to follow a more unified approach for it to be successful. With increased consolidation over the next 12 months, MSPs will look to maximise the efficiencies of scale associated with M&A activity.
- The rise of the Transformation Director
The importance of digital transformation in the ICT Services sector is significant, as tech service providers are engaged in digitisation projects across multiple levels of their businesses. Although the CEO is often leading from the top, the day-to-day responsibilities will need experienced and skilled people to run such initiatives and get down into the detail. Every business will have its own way of doing this, sometimes with the COO or CTO taking the reins or dividing the responsibilities to a combination of C-level executives. Mckinsey research suggests when such projects are led by digital-savvy leaders, they are twice as likely to be successful than those that aren’t but just having good technical people isn’t usually enough.
One trend we see increasing is the rise of the Transformation Director, to help steer projects through the maze as they impact people, processes and technology. Having someone on the team who understands how the culture of a business may be impacted and indeed enhanced to help ensure successful outcomes is highly desirable. Service providers who understand that digital transformation require a degree of organisational development, as staff roles and ways of working change, will always get ahead of the curve.
Marrying the technical ability of a COO with a dedicated individual whose full-time focus is on delivering digital transformation outcomes, aligned to the objectives of the business, is what is required. Sometimes this could be the same person, but increasingly we are seeing this as a complementary and dedicated role with extensive knowledge in change management that will help MSPs to remain agile in an evolving marketplace.
- Changing perceptions of AI and Automation
Twelve months ago, most of us had not heard of ChatGPT but as 2023 comes to a close, it's a household name and used by millions. Why has its adoption been so rapid? Simply put, perceptions of AI and automation are changing and any hesitation around adoption will decrease further in 2024.
There’s huge potential for AI and automation in ICT Services. As service providers become more familiar with the subject, they also become more open to investing in these technologies. For example, according to Gartner, by 2025, 30% of outbound messages from large organisations will be from generative AI. Both AI and service management automation will be integral to improving efficiency, maintenance and security in the coming year. The quicker MSPs recognise their benefits, the less they risk falling behind the competition.
- Outsourcing the Support Desk
MSPs continually search for new ways to enhance customer service and optimise their offerings. That’s why we expect to see growth in the number of MSPs outsourcing their frontline support in 2024, as they attempt to streamline operations, reduce costs and improve the quality of service.
The shift to remote working and the need for 24/7 support is driving this trend as MSPs look to provide seamless and cost-effective support for clients. Outsourcing some support desk functions may deliver significant benefits, such as improved response times, more time for staff to focus on more complex tasks that add value to the business and in-depth analysis to improve overall efficiency.
- Rising demand for self-service platforms
B2C organisations, such as Amazon and Uber, have made our lives easier and introduced consumers to a level of customer service that they’re now grown accustomed to. These expectations transfer into every aspect of life, including working with technology as part of the day job. Self-service facilitates a faster and more consistent experience for customers with fewer mistakes. It enables users to fix simple issues, freeing engineers from mundane, time-consuming tasks.
As a result, clients are becoming more tech-savvy and we’re seeing a growing trend for self-service platforms that empower end-users to resolve common IT issues themselves. This is great for improving efficiency and customer satisfaction, as well as deflecting the unnecessary volume of support tickets that take up so much of an MSP’s time. In 2024, those service providers that deliver high-level self-service experiences that reflect those we see in the B2C sector will have the most to gain.
The future is bright for MSPs
Martin Ford, CEO at POPX concludes: “The next twelve months promise to be a transformative year for MSPs, in more ways than one. As the sector matures and innovation accelerates, there will be significant growth opportunities through M&A, offering vertical platforms and the creation of new solutions, like AI. Adopting a digital-first approach, helps with speed to market and allows for efficient scalability, outpacing others. Forward-thinking MSPs that are open to running with these projected trends, ensure their clients get the best products and customer experience to drive success in 2024 and beyond.”
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