If the coronavirus pandemic has taught small to midsized business (SMB) anything, it’s that they have no choice but to cross over to the cloud. The workplace is no longer defined by cubicles, walls, and windows — or lack thereof. It’s a virtual space defined by cloud-based software for video meetings, chat, and file sharing. 

But as SMBs transition to remote and work-from-home deployments, they face larger security threat landscapes and network demands that they have to accommodate with fewer staff and less resources compared to their enterprise counterparts. Because of these challenges, SMB IT departments are relying more on managed service providers (MSPs) to reduce risk and costs. 

“MSPs are helping small and mid-sized businesses navigate the COVID-19 disruption by helping them stay connected and secure as many of them increase their adoption of cloud solutions or implement them for the first time,” said Joseph Bertran, senior research analyst at Analysys Mason.

SMBs are the lifeblood of economies around the world, representing 90% of all global companies and accounting for roughly 48% of the U.S economy. At the same time, SMBs drive economic growth and will contribute as much as $2.3 trillion to market’s overall GDP in the U.S., Canada, Mexico, Brazil, Chile, UK, Germany, and France by 2024, according to Cisco’s 2020 Small Business Digital Maturity Study conducted by IDC.

Yes, economic recovery is crucial. However, it is equally important that organizations act now to harden their business against future shocks, and having the right technologies in place is critical. From automated control of sprawling mobile assets to increased cybersecurity support and protection, SMBs stand to gain much from the resources and experience of MSPs.

Four in five economists surveyed by the National Association for Business Economics said they see at least a 25% chance of the coronavirus fueling a second economic downturn, or a "double-dip" recession. 

In the face of a looming recession, the key to weathering the economic storm is preparation. And taking into account that “most SMBs do not have dedicated internal IT employees,” Bertran explained, many of them are looking for IT assistance more than ever.

Building resilience will require SMBs to invest in digital transformation, and partnering with an MSP is a good business strategy to address the immediate challenges of remote work and constrained budgets, Bertran added. In fact, 28% of U.S. SMBs adopted collaboration tools for the first time due to COVID-19, according to Analysys Mason’s SMB Technology Forecaster for collaboration.

Despite pandemic paranoia putting a pause on SMBs’ IT spending, findings from the research firm suggest that “collaboration tools have become essential, not just to enable remote employees to remain connected to one another, but also for remote sales and customer service.” 

Remote-work setups also increase potential entry points for cybercriminals. A 451 Research survey from June indicates that the shift to remote work has shone a spotlight on security and collaboration. 

“After ensuring that employees are connected, business decision makers are going to want to ensure that their devices and data are secure,” Bertran explained. 

Likewise, the 2020 Cost of a Data Breach Report from IBM Security and Ponemon Institute found that, along with lost and stolen credentials, misconfigured cloud servers tied for the most frequent initial threat vector in breaches caused by malicious attacks. This report found that breaches involving cloud misconfigurations cost, on average, $4.41 million.

Unsecured Wi-Fi connections, out-of-date software, and human error offer about as much protection as an unlocked door in a home invasion. But tight budgets and a lack of resources can make it difficult for SMBs to execute any formidable security strategy. 

“Large enterprises have the means to hire SWAT teams of infosec professionals,” said Anurag Agrawal, founder and chief global analyst for Techaisle, an SMB ICT market research and industry analyst organization. “But what can and should smaller businesses do to grasp the potential of technology without opening themselves up to cyber threats?”

The answer, he says, is to partner with an MSP.

When SMBs choose a MSP, they’re hiring a third-party vendor with on-demand access to high-level expertise in all aspects of cybersecurity to install, manage, audit and assess their network connections. Not to mention MSPs have an obligation to protect their clients. A hacked client can be catastrophic for an MSP’s reputation, so implementing strong controls is critical. 

SMBs are moving more quickly than enterprises in their adoption of public cloud, according to Flexera’s 2020 State of the Cloud report. It found that 70% of SMB workloads and data will reside in a public cloud within the next 12 months. 

At the same time, however, Agrawal says SMBs are struggling to rein in IT-related expenditures, including staff-related costs. 

“Their businesses are complex enough to warrant dedicated IT groups, yet lack the resources to manage everything asked of them. Teams are stretched to cover PC fleets, servers, networks, software and security — all while being expected to contribute to business growth, reduce costs and improve employee productivity,” he explained. “This combination of increased reliance on technology as a key element of business success, burgeoning complexity, and cost constraint has created a ‘perfect storm’ for use of managed services.” 

The best bet for MSPs as the pandemic stretches into the new normal will be to foster long term relationships by “offering temporarily free or lower cost services," Bertran said.

Analysys Mason’s study found that 36% of small businesses and 51% of medium businesses in the U.S. started or increased their use of managed services in response to COVID-19. “Once an organization takes an initial step into cloud and managed services, they are likely to move more of the workloads off premises, which calls for additional guidance and support from MSPs and other IT experts,” Bertran said. 

And while both parties will benefit from the overall shift to cloud, he added, MSPs will reap the biggest benefits thanks to the rapid growth in demand for managed services. Analysys Mason forecasts cloud collaboration spending will surpass its pre-COVID-19 forecast in 2022 by $300 million and reach $43.2 billion in spending.

But, in order to reach that return, Agrawal says MSPs need to adjust their messaging to address the needs of the mass market rather than early adopter customers. Once the veil of the pandemic has been lifted, “SMBs will eventually come to see the cloud and managed services as a necessity for their business,” Agrawal wrote in a blog post. “SMBs will pay for quality and customer support.”