Talent gap could take five years to fill
The good news just keeps coming for MSPs. The latest instalment comes courtesy of Gartner. In an interview with CRN, VP analyst John-David Lovelock offered up another reason to be cheerful for MSPs: The IT talent shortage which, the market research company predicts, could last for another five years.
Many companies are having difficulties hiring and rehiring employees. Lovelock told CRN that many believed those difficulties in hiring employees were down to the Great Resignation which they assumed was merely a transitory effect.
“Once the Resignation is over, hiring patterns will normalise again. They’ll be back on top and be able to hire the people that they want and need. That’s not true,” he said.
He pointed out that enterprises could not attract and retain enough IT staff to meet their growing needs and would have to “turn to consultancies to do their work. That includes managed services to continue to run their ongoing operations”.
According to Lovelock, the answer lies with channel partners and the services they provide. “Get much more comfortable with consultancies,” he said. “They can’t hire people and can’t reduce their need for them. Which means do more with consultancies, because you have to.”
Gartner has predicted that IT expenditure will grow by 6.8% this year with IT services on track to become the largest segment, reaching $1.5 trillion.
If you’re an MSP, the continued growth and advance of IT services has to be good news. This is not an isolated incident. You may recall that way back in July last year, I highlighted research from Canalys that predicted managed services would generate worldwide revenues of $488 billion (€440 billion) in 2023, with EMEA expected to achieve revenues of just under $146 billion.
I quoted a LinkedIn post by Canalys chief analyst for channels, partnerships & ecosystems Jay McBain which stated that globally “82% of customers outsource some or all of their IT”.
It’s also worth noting comments from Nostra CEO Kevin O’Loughlin from a couple of weeks ago that IT staff were finding MSPs more attractive places to work because they offered greater variety and more challenges because they worked across a broader range of customers and a wider range of IT systems. This means they were less likely to feel that their work had become stale and uninteresting.
As I have written before, only half in jest: “You’d have to be mad not to want to be a MSP”. That was in connection with figures from the Datto State of the MSP 2023 Report, which found that only 1% of MSPs in Europe thought their revenues would decrease over the next three years. Yes, only 1%. And Europe was not an outlier. The figure was the same for MSPs in APAC and was a big fat zero for those in North America.
It helps to be in a market where even as competition increases, so too does revenue. In other words, there is no race to the bottom.
Can the good news continue? On the face of it, it’s hard to see why not. At this point in time, I’m inclined to believe that it would be more shocking to hear or read anything that could be construed as bad news for MSPs.
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