Singapore managed service providers (MSPs) are shifting from project-based customer support to a recurring services model, which they expect to account for a third of their revenue this year, according to a new report from Barracuda Networks, Inc.
Taking in 700 MSP organisations across North America, Europe, and Asia-Pacific, Barracuda’s seventh annual MSP report, The Evolving Landscape of the MSP Business 2024, shows how MSPs in Singapore are embracing marketplaces and artificial intelligence (AI) to better meet customer needs, but worry about their lack of knowledge around AI and its applications.
According to the report, Singapore MSPs expect 37% of their revenue to come from recurring managed services in 2024, up from 29% in 2023. All Singapore respondents believe that businesses are scaling back their in-house IT and relying more on MSPs, and this is likely to be a key driver for the rise in recurring services.
The report highlights how customer demand is greatest for security products and services, with security awareness training (40%), security operations centres (38%), and network security (32%) being the top-selling offerings for Singapore MSPs. Singapore providers also expect to expand their portfolio with an average of three new services during 2024.
Other key findings include:
- Singapore MSPs believe that cloud marketplaces will simplify operations: 98% of respondents identified cloud marketplaces as a crucial tool for their organisation. In addition, 52% of Singapore MSPs are using cloud marketplaces already, and 48% of the remaining respondents are exploring the option.
- Appetite for AI knowledge: Nearly all Singapore MSPs surveyed (98%) say they need either significant or notable improvements in their knowledge and application of AI products and services. In addition, 82% of Singapore MSPs feel under pressure to offer customers AI insight and tools.
- Concerns about their own security: 94% of Singapore MSPs believe they need to improve their security hygiene, while 98% believe they need to get better at keeping up to date with security trends and capabilities.
- Realistic while being optimistic: While growth is expected in 2024, Singapore MSPs cited their top challenges as increased competition in the MSP market (58%), and lack of ability to help customers comply with government regulations (86%).
“The MSP landscape in Southeast Asia is highly fragmented, with local and global firms vying for market share amid a climate of evolving cyber threats and the rising adoption of AI and automation,” said Philippe Cazaubon, Director, Barracuda, Southeast Asia & Korea.
“The report highlights a shift in the Singapore IT services landscape, with revenue from recurring managed services expected to rise. As MSPs in Singapore and across the wider region start to expand their offerings in line with market demand, building strong vendor relationships is crucial.
“Engaging with partners who can offer a wealth of expertise and experience in security and AI integration can enable MSPs to overcome challenges and stay one step ahead of the competition in this increasingly dynamic marketplace.”