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It’s critical for managed service providers (MSPs), like any service provider, to keep their finger on the pulse of their clients. Understanding how they think, make decisions, and approach their relationship with you is key to retaining them and bringing on new business.
Recently, JumpCloud surveyed over 600 IT professionals working at small- to medium-sized enterprises (SMEs). Among many topics, we asked them about how they approach and work with MSPs. On a positive note, the survey found that 76% of SMEs work with MSPs on some level, and 67% plan to increase their investment over the next six months. However, the survey also found that the percentage of SMEs fully outsourcing their IT to MSPs dropped from 42% in early 2024 to 29% in Q3 2024.
While this trend displays SMEs’ continued investment in MSPs, it also highlights a shift in how SMEs approach their IT needs. This presents opportunities for MSPs to examine their client relationships and offerings to strengthen their partnerships and adapt to client expectations. In this blog, we will explore the ways that SME relationships with MSPs are changing, and how MSPs can adapt. By focusing on areas like cost management and security, MSPs can position themselves as invaluable allies for SMEs.
Note: all data cited in this blog is sourced from JumpCloud’s eBook, Your Route to Positive Client Interactions, unless otherwise cited.
Adapting to Cost Pressures
One of the biggest challenges in the future of SME-MSP relationships is managing costs. Three-quarters of SMEs have reported rising costs from their vendors (that includes MSPs and other vendors), which puts additional pressure on them as they struggle to balance budgets with ever-increasing tech needs.
From an MSP perspective, the rising cost pressure on SMEs is significant: 28% have ended their partnerships with MSPs because of cost. Additionally, cost is one of the most common reasons that SMEs choose not to use MSPs, second only to a preference for handling IT internally.
39% of SMEs that don’t work with MSPs say it’s because MSPs are too expensive. [Source]
How to Adapt
To strengthen future partnerships, MSPs might consider tweaking their pricing models. Offering a range of service packages that include low-cost, flexible options as well as higher priced offerings can help meet the needs of various SMEs, particularly those feeling the squeeze of rising expenses. Creating flexible, lower-cost options can help you keep clients who might otherwise look elsewhere (or internally).
In addition, consider looking to new technologies as a means for lowering prices. Improved remote support technology, for example, could help you reduce your number of in-person client visits, lowering your operational costs and widening your margins.
Making Security a Priority
Security is another key factor that will shape the future of SME-MSP relationships. While over half (56%) of SMEs believe their security has improved with an MSP, 39% still worry about whether MSPs can effectively protect them. This uncertainty presents both a challenge and an opportunity for MSPs.
39% of SME IT professionals have concerns about the way MSPs manage security. [Source]
How to Adapt
To be seen as trusted partners, consider making security a core part of your service model. This means being open about security practices and demonstrating to clients how you keep their data safe. Regular security check-ups, training for your clients’ staff, and strong security messaging can also help build confidence. You might also consider adding new security-focused packages or services to your list of offerings.
Addressing security concerns directly and proving your commitment to protecting clients can help you strengthen trust and deepen your relationships with SMEs. As cyber threats continue to evolve, maintaining a clear focus on security will help you stand out from the competition.
Improving Customer Experience
The customer experience will be vital in shaping the future of SME-MSP relationships. Nearly a quarter (23%) of SMEs that have stopped working with MSPs did so due to poor customer service or a bad experience with their account or sales teams. This highlights the need for MSPs to focus on how they interact with clients.
For SMEs that have recently stopped working with MSPs, cost was the most common reason, clocking in at 28%. [Source]
How to Adapt
Investing in training for your customer-facing employees and creating a responsive culture can significantly improve client satisfaction. Prioritize the customer experience and routinely seek feedback from clients to understand what you’re doing well and where you can improve.
In addition, consider encouraging happy customers to leave positive reviews to help build your reputation as a trustworthy company that’s easy to work with. As potential clients increasingly rely on feedback from others, showcasing excellent service will be a powerful way to attract new business.
Conclusion: A Collaborative Future
The future of SME-MSP relationships is filled with potential, and SMEs continue to voice their belief in MSPs’ ability to add value to their organizations. Changing expectations and priorities among SMEs present MSPs with a chance to adapt and grow alongside their clients. By addressing cost concerns, focusing on security, and improving the customer experience, MSPs can outshine the competition and strengthen their role as essential partners for SMEs.
This collaborative future calls for alignment between MSPs and SMEs. By understanding and responding to SMEs’ needs, MSPs can build lasting relationships that support growth and success. As SMEs continue to invest in IT support, those MSPs that embrace these opportunities will thrive in the industry.
To dive deeper into these stats and learn more about how SMEs approach their MSP relationships, download the full eBook, Your Route to Positive Client Interactions.
