Could another lockdown derail MSPs in APAC for good?

As the economic headwinds brought about by COVID-19 continue to wreak uncertainty across the information communication and technology (ICT) landscape, most managed service providers () are worried about the potential financial impact of a second lockdown, or any sort of extended quarantine procedures.

A new survey of over 1,500 MSPs by leading IT documentation software company IT Glue found that as much as 74% of IT service providers believe that a second lockdown could seriously set back ongoing recovery efforts.

The new survey findings surface just as restrictions are being eased across Asia Pacific (), with countries like New Zealand and Australia, and more recently Singapore and Malaysia among others, following the earlier examples of South Korea and China in introducing more relaxed public movement policies, following months of strict restrictions around the region.

The easing of restrictions has allowed many organizations to resume somewhat regular, if not entirely normal business operations. But the dual part survey by IT Glue – where the first part was responded by MSPs in February, while the second part responses only came out in May – highlights the shift in market sentiment before and after the sternest pandemic measures were taken.

Before the coronavirus threat had firmly taken hold outside of China, the February survey results showed that 54% of MSPs found a lack of time to complete their work assignments to be the major issue facing them; coming in a close second major concern at 53% was an inability to source strong technical talent; the other concerns were adapting to changing technologies from 32% of MSP respondents, and a lack of information sharing at 27%.

This is a sharp turnaround compared with the follow-up survey from May, when less than 20% of MSPs considered these to be the top priorities. Instead, the post-pandemic survey cited cybersecurity, which over 50% of MSPs now considered as the greatest concern compared to just 27% in February. This is no doubt a reaction to the steep increase in cyber threats and COVID-related scams that were prevalent in recent months.

In addition, the prepost-pandemic surveys from Kaseya-owned IT Glue further highlights the changing priorities for MSPs in this ‘new normal’ environment. For instance, in February more than half (52%) of MSPs claimed that they were at least ‘somewhat interested’ to merge with or acquire another managed service provider, but in May only 37% are still considering merger and acquisition (M&A) activity.

It looks like MSPs will be paying more attention to servicing customers’ IT infrastructures and end-user systems in the short term, with the pandemic having driven many organizations to pursue remote working and other alternate arrangements that might be putting additional strain on IT systems and other applications.

“While no business is fully recession-proof, MSPs are uniquely positioned to drive value to customers and thrive during economic downturns,” observed Nadir Merchant, general manager of IT Glue. “This year’s survey shows that the shift in priorities to a now greater concern for cybersecurity, compliance and customer retention means MSPs have an opportunity to serve as a guide to their small business customers.

“They are the epicenter for delivering critical IT services that not only help to maintain the viability of many companies during times of uncertainty and volatility, but will enable businesses to emerge stronger from these trying times.”

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