Managed Service Providers optimistic about growth in 2025

Managed Service Providers (MSPs) are demonstrating optimism for the future as they prepare for growth in 2025, according to the recent Kaseya 2025 State of the MSP Industry Look Ahead: Trends, Growth and Strategies for Success report. A significant finding of the report is that more than 90% of MSPs consider profitability to be their main goal for the year ahead, reflecting a strategic shift towards ensuring sustained financial success amid a competitive landscape.

As MSPs navigate the challenges of a tight economic environment, customer acquisition, revenue increases, and profitability have emerged as top concerns for 43%, 37%, and 36% of providers respectively. The report indicates that many MSPs are revisiting their business models and pricing structures to better align with customer expectations while maintaining profit margins.

Despite the previous year’s difficulties—marked by clients reducing spending and deferring projects—64% of MSPs reported revenue growth in 2024. The survey suggests this momentum is expected to continue, with 67% of providers anticipating further growth over the next three years. Gary Pica, founder of TruMethods and part of Kaseya, stated, “Small and medium-sized businesses are becoming more and more tech savvy – and MSPs are reaping the rewards. They’re seeing revenue growth and want to continue that momentum long into the future.”

Competition remains fierce within the industry, particularly as smaller MSPs frequently carve out a niche by focusing on specific areas of expertise, often outpacing larger competitors. Many MSPs are increasingly offering co-managed services, providing internal IT teams with additional support in areas such as disaster recovery (38%), cloud infrastructure solutions (37%), and data protection (36%).

The report sheds light on the dual nature of artificial intelligence (AI) in the industry. Many MSPs are automating repetitive tasks and harnessing AI-driven tools to boost operational efficiency. However, the use of AI also presents risks, with over two-thirds of MSPs reporting an increase in attacks powered by AI technology last year. Alarmingly, 32% of MSPs have faced AI-enabled attacks, outperforming other cyber threats like supply chain or endpoint attacks. Pica further explained, “While educating clients is important, it’s pivotal for MSPs to invest in platforms and tools that allow their customers to be better protected without breaking the bank.”

For those MSPs generating $10 million or more annually, success appears to derive from a proactive attitude towards emerging technologies and exceptional customer service. The report indicated that high-earning MSPs frequently migrate customer workloads to the cloud and, notably, 97% offer managed security services, aligning their offerings closely with market demand.

Looking towards the future, the strategies described in the Kaseya report suggest that adopting automation and AI tools, alongside focusing on customer service, will be essential for MSPs aiming for significant growth and differentiation in an evolving marketplace. The insights offered point towards an industry poised to capitalize on technological advancements while addressing inherent security challenges.

Source: Noah Wire Services