Rising MSP spending buoyed by demand for refurbished IT tech

Managed service providers (MSPs) are on the rise, with their spending increasing by as much as 70% to meet growing enterprise needs, according to a new report from ETB Technologies.

The report, 'A changing tide – booming MSP budgets and the role of refurbished IT', unveils that 80% of MSPs have significantly increased their IT budgets due to broad growth in the demand for enterprise IT. The report analyses the trends MSPs are observing in terms of expenditure, sustainability, and IT strategy. It also examines the cost of and preference for refurbished technology.

While the majority – 80% of MSPs – have increased their budget allocation overall, two-thirds, or 67%, have doubled their budget size, and 27% claim to have pushed up their budget by between 60% and 70%.

The report also highlights the popularity of refurbished IT equipment among MSPs. Almost a third of the respondents, or 30%, revealed that they currently buy refurbished devices, while a striking 84% confessed to having purchased refurbished tech in the past.

An interesting shift in IT strategy noted post-pandemic towards a hybrid cloud strategy is echoed in the report. Over three-quarters, or 80%, of respondents acknowledged an increase in demand for more enterprise IT equipment. With more entities bringing data management back in-house, a shift towards a hybrid cloud strategy is becoming more common. An impressive 62% of MSPs have already considered, or started the process of declouding.

Nick Stapleton, Managing Director at ETB, said: "The past few years have been particularly challenging for the IT industry. The impact of the pandemic, Brexit, geopolitical and economic turbulence, climate change, and supply chain disruptions - to name a few - have created a challenging business environment for the industry. Despite these hurdles, spending is on the rise, but budgets have to reach further than ever, making maximising value for money vital."

"Several reasons have contributed to an increase in spending, including growing industry costs, heightened security threats, and structural changes. Despite the significant change in budgets, it's evident from our research that cost-efficiency, quality, and service remain key strategic considerations. Refurbished technology, which is cheaper, more eco-friendly, and equally as reliable as brand-new equipment, can play an enormous part in the development and implementation of these strategies."

"As conventional misconceptions about refurbished equipment start to diminish, it's encouraging to see so many MSPs embracing this technology in today's climate."

The research was commissioned by ETB Technologies and executed by Censuswide. It surveyed 250 managing directors, CEOs, business owners, senior managers, and senior directors at managed service providers across the UK. The research was conducted from August to September 2023.