Resilience and recovery: How MSPs saved businesses worldwide during crisis
This is an excerpt from the Service Leadership Inc.®, a ConnectWise company newsletter, "Five Years Since MSPs Saved the World".
On March 11, 2020, the World Health Organization (WHO) declared the coronavirus (COVID-19) outbreak a global pandemic.
No one knew what to expect or how long it would last.
One thing was certain, managed service providers (MSPs) were about to play a pivotal role in saving the world. While largely unrecognized, they were about to embark on the role of a lifetime—helping small and midsize businesses (SMBs) adjust, withstand, and then rebound from the effects of COVID and the lockdowns.
The MSP industry responds
MSPs were deeply impacted in ways no one could have foreseen. They were experiencing the same anxiety, uncertainty, and risk in their own lives and businesses. They were on the front lines, keeping businesses in business and were deemed by most governments as essential workers. At the beginning of the pandemic, most SMBs were woefully unprepared for a disaster of this magnitude, it is estimated that only 6-12% of SMBs with employees were capable of working from home.
Rapid transition to remote work
Without the luxury of time to develop and implement strategic plans to prepare for an event of this magnitude, MSPs hurried to address the challenge of enabling tens of millions of their clients' workers to work from home in rapid succession. This included issuing new laptops, getting them connected and set up with VPN solutions to allow access.
To complicate matters, supply chain constraints meant laptops and other essential hardware were in short supply, forcing MSPs to make do with available resources to ensure employees could continue working.
In addition, MSP owners and employees were experiencing the same anxiety, uncertainty, and risk in their own lives and businesses.
This transition also brought about:
- Unprecedented cybersecurity risks, which MSPs were needed to help mitigate.
- Extensive use of collaboration and communication tools such as Zoom, Microsoft Teams, and Slack.
- Assistance in end-user training and other client support to address communication gaps resulting from the significant shift away from the traditional in-office environment.
This massive effort, conducted simultaneously by thousands of MSPs globally, enabled their clients to transition from in-office to work from home, allowing millions of businesses and their employees to maintain their economic stability amidst extraordinary personal and professional challenges compounded by continued uncertainty.
Impact on the industry
The impact on our industry was substantial, including, for example, dramatic growth in cloud adoption. In Q2-2020, MSPs cloud resale was 44.2% higher than in Q1-2019.
By May 2021, the impact of what MSPs had accomplished was able to be seen in the Service Leadership Index® (S-LI) data, shown in the Service Leadership Index® 2021 Annual IT Solution Provider Industry Profitability Report™:
Figure 1: MSP workload to “airlift” customers' employees to work from home
- In Q2-2020, this rapid shift to work from home had driven MSPs' support ticket volume up to 135% of 2019's average volume and kept it there through Q3-2020.
- During this time, the average MSP engineer saw their ticket workload increase to 130% of their 2020 average, in both Q2 and Q3, while they were no doubt taking care of their own families and challenges.
- Because MSPs commit to a flat fee, these massive increases in workload came with no increases in revenue; MSPs were granting many of their clients' discounts and even deferments of invoices. As a result, by Q2-2020, the average MSPs' revenue per support ticket had declined by 6%, adding financial stress to the MSPs' anxieties.
At the time, we used the phrase, “Echoes of Dunkirk and the Berlin Airlift” to describe the scale and the benefit of this massively successful effort by the MSP community worldwide to make sure their clients' business infrastructure continued to operate. Five years later, this does not seem like hyperbole.
The impact on MSPs
Meanwhile, the MSPs themselves were facing their own challenges:
- Helping employees cope with COVID and the lockdowns' effects on their own families, including illness, children schooling from home, limited shopping, community, and worship activities
- Likewise dealing with their own shift to a work from home model, for which some MSPs were more prepared than others
- Reducing the number of employees if financial pressure required it
- Managing wage and other inflationary trends
These remarkable external factors meant many MSP owners and executives felt tremendous stress. The demand on their interpersonal and management skills ramped steeply and, reaching deep, they responded extraordinarily well.
Reflection on resilience and future preparedness
Thankfully, and not without tragic personal and professional damage, the MSP industry, the IT industry as a whole and the global community they helped, survived and begun to thrive again.
Moving forward, all IT solution providers need to be ready for the next emergency. We will focus on those actions and preparations which specifically provide safety and leverage when major disruptions occur.
This is an excerpt from the Service Leadership newsletter, "Five Years Since MSPs Saved the World". Read the full article for operational maturity lessons learned and how to be prepared for the next emergency.