7 channel predictions for 2024

Succeed Together is one of our core values here at Barracuda, and we want to help our channel partners set themselves up for a successful 2024. So, as 2024 gets underway, we’re looking ahead to the key developments and trends channel partners need to be aware of this year.

To help you prepare for 2024, we recently spoke to two Barracuda channel leaders, Jason Beal, Vice President of Worldwide Partner Ecosystems, and Patrick O’Donnell, Senior Vice President of MSP Sales, to get their insights on what channel partners and MSPs should be thinking about to succeed in the year ahead.

Jason Beal, Vice President of Worldwide Partner Ecosystems

Prediction #1: Hyperscalers will significantly expand routes to market.

In recent years, there has been an acceleration in the growth of hyperscalers, with AWS making significant investments in the channel. Partners are increasingly paying attention and getting involved in these marketplaces, while an increasing number of end customers now prefer to purchase the private offerings that are being made available. This has led to an increase in transactional revenue from marketplaces. While the past few years have been about understanding and demystifying this trend, it is now poised for growth with AWS putting more money and momentum into distribution. Partners are also leaning in and witnessing notable volume increases in terms of their sales through hyperscalers, as they use them to expand their routes to market.

Prediction #2: Embracing hybrid business models will be the key to success for channel partners.

Over the past few years, the IT channel has undergone significant transformations, marked by two major trends — a diversification of partner business models and a rise in hybrid business models. As a result, it has become crucial for partners to remain agile and offer a program that caters to the diverse needs of modern buyers. Today's buyers have a wide range of service requirements, including project and professional services and managed or co-managed services. Moreover, they may also need to procure services from cloud marketplaces, and partners must be able to facilitate these transactions seamlessly. 

In 2024, the channel has an opportunity to gain more influence by being agile and flexible in meeting the evolving needs of the buyer. This approach should emphasis the power of choice by prioritizing consumption, procurement, and management and encourage customers to purchase through cloud partners. 

Prediction #3: Partners growing their security practices will seek offerings that provide a lower barrier to entry.

Microsoft was very successful in driving the widespread adoption of cloud services. With security becoming a top priority for businesses, Microsoft's strong focus on security is expected to motivate its partners to prioritize security as well. This is likely to result in resellers looking for security vendors to add to their product portfolio. Partners who have not yet ventured into security will be seeking out SMB-friendly offerings, which offer a lower barrier to entry, when compared to enterprise-level security platforms. 

Patrick O’Donnell, Senior Vice President of MSP Sales

Prediction #1: AI technology, threat intelligence, and cyber hygiene will become essential and mandatory components of service delivery.

Beyond helping their customers find ways to utilize AI to expand their businesses, MSPs should take steps to ensure AI is coupled with the cybersecurity measures they are putting in place to mitigate increasingly sophisticated cyber threats. The collaboration of these two powerful tools helps to identify and respond to potential threats in real time, providing a proactive defense against attacks that could otherwise have devastating consequences.

Furthermore, to minimize the risk of cyber threats, MSPs must prioritize implementing standard best practices for cyber hygiene. As cyber hygiene and network visibility become increasingly crucial, more businesses are expected to adopt XDR and other solutions. This will help them minimize noise fatigue and receive alerts in case of any issues. 

Prediction #2: MSPs will be critical in enabling businesses to adopt generative AI and automation technologies securely.

Automation, including generative AI, is becoming increasingly prevalent, and various tools are available now to help businesses improve efficiency and save time. While the benefits of automation and generative AI are clear, businesses must ensure platform security when using these tools. As such, many companies are creating their own internal engines to maintain control over information access, while others rely on SaaS and tool vendors for the underlying technologies that drive these engines.  

MSPs will play a crucial role in enabling their clients to successfully integrate generative AI into their businesses in the coming year. They should prioritize enhancing their knowledge and technical skills around generative AI, particularly securing these platforms. By educating their clients on implementing and utilizing generative AI's transformative capabilities in their organizations, they can find new avenues to expand their businesses. 

Prediction #3: Threat feeds will emerge to help MSPs combat bad actors.

We are observing the recurrence of the trends we saw five years ago. MSPs are acquiring other MSPs, while some businesses are moving towards reducing the number of vendors they work with, specifically concerning security tools. For example, they consolidate their security tools to avoid dealing with multiple vendors. At the same time, the FBI advises using multiple products that look at different things and have different feeds to gain better protection. In other words, businesses are urged to diversify their security portfolios to gain more comprehensive threat coverage.  

However, it's not just about the security products being consolidated but the need for a platform that can consolidate views and analyze with a threat feed path. This concept of consuming different threat feeds is important, something we will hear more about in the coming year and something that MSPs need to become familiar with. Threat feeds will become a crucial element in combatting cyber threats as they provide businesses the visibility recommended by the FBI.

Prediction #4: SMEs will rely on multiple MSPs to meet their technology needs.

The global managed services market is projected to grow from $283.90 billion in 2023 to $671.14 billion by 2030. And, a recent survey estimates that nearly 88 percent of small and medium enterprises use or plan to use MSPs to manage their infrastructure. As more and more businesses are using MSPs, the market is expanding rapidly. Many companies now require multiple partners to assist them, and their managed services needs are also expanding. As a result, instead of relying on just one partner who can do everything, they are using different MSPs to complete different tasks. MSPs that continue to add more services like AI, automation, and cybersecurity, will be able to tap into this growing market.