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  • The HMX Group

SaaS: How MSPs & VARs Can Navigate This Giant Opportunity


With SMB’s increasingly looking to outsource non-core activities, the Managed Services Market is recruiting heavily, which is inline with it’s projected CAGR of 12.44% (2018-2028). In parallel, the enterprise SaaS market is expected to grow to $135 billion in 2023 which many IT managed services providers and value-added resellers are increasingly leveraging.


The additional revenue from SaaS sales is just one side of the opportunity. Companies adopting these solutions also require help with selecting, managing, and securing the right solutions from a crowded marketplace. Generating additional services sales that can grow in tandem with their SaaS adoption.


But with so many companies to potentially partner with, and so many different solutions, it’s hard to navigate this segment effectively. Here are 3 things that could influence the direction you take and the talent you’ll need to recruit!


Churn:

The rate at which customers choose to stop subscribing to a service (churn rate) is vital to monitor along side the cost to acquire a new customer. The recurring revenue model can easily realise losses when this isn’t managed! The industry’s average monthly churn rate is between 3%-8%. Which is an annual churn rate of 32-50 percent.


Segments:

The largest functional software market in the world is customer relationship management (CRM). SuperOffice reports the CRM market is projected to reach $80 billion in revenue by 2025. Human capital management (HCM) is the next largest market, estimated to reach $24.64 billion in 2026.


Security:

Many clients will incorrectly assume that the cloud provider has complete responsibility to secure their cloud data. Gartner predicts that between now and 2025, 90% of companies failing to meet public cloud security standards will be sharing sensitive data. Whilst a McAfee study reported 10% of cloud services, in business networks, are considered high risk. It also found that the average company now uses 1,935 cloud services, whilst believing it only uses 30. Avoiding any cloud misconfiguration is vital for any chance at a sustainable cloud services offering.

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