The global managed services market is expected to reach $595 billion this year, growing at a rate of 13%. This presents a massive opportunity for MSPs. However, it also introduces increased competition. According to Canalys, the number of MSPs worldwide will reach 341,000 by the end of 2025.
To remain competitive, MSPs must differentiate themselves. This can only be achieved by evolving offerings and embracing new technologies. With so much choice in the market, customers demand the best services at the lowest prices.
What’s driving market growth?
Businesses, and SMEs in particular, are increasingly reliant on MSPs to navigate the challenges of IT management and cloud infrastructure. The main trends fuelling the MSP boom are as follows:
- Cyber security concerns: The rise of AI-driven cyberattacks has made security a top priority. SMEs lack in-house expertise, making MSPs a critical partner in securing IT environments.
- Regulatory pressures: Compliance with frameworks such as NIST, Cyber Essentials, and DORA is becoming more complex, forcing businesses to seek expert guidance.
- Cloud-first strategies: More organisations are adopting hybrid and cloud-first solutions, increasing demand for cloud migration, backup, and disaster recovery services.
- Mergers and acquisitions: Consolidation in the MSP market is creating instability, leading customers to seek long-term partners.
Finding a competitive edge
The MSP market is becoming more agile, security-focused, and service-oriented. Trying to stand out in such a competitive environment is no small task. However, there are several key strategies that MSPs can adopt to gain an advantage.
Businesses today expect MSPs to offer more than just IT support – they want strategic partners. This means offering cyber resilience, business continuity, and compliance expertise. They also expect a seamless cloud experience with scalable infrastructure management and easy-to-deploy, cost-effective solutions that reduce their teams’ administrative burden.
How to stay ahead
Adopt a security-first approach
The rise of ransomware, phishing attacks, and AI-driven cyber threats means MSPs need to go beyond basic IT support and provide end-to-end security solutions. This includes backup and disaster recovery, immutable storage, and identity and access management.
Build recurring revenue with a comprehensive offering
To increase margins, MSPs should look beyond one-time service contracts and focus on recurring revenue models. For example, bundling Microsoft 365, Azure VM Backup, and Entra ID protection can lower customers’ total cost of ownership while offering complete cloud security. Multi-tiered managed service plans that scale with client needs also offer the flexibility and certainty that clients are looking for.
Streamline IT operations for scalability
To manage a growing customer base, MSPs must adopt platforms that offer centralised, intuitive management. Doing so will ensure faster deployment, reduced complexity, and better resource allocation, minimising the need for additional staff while improving service delivery.
Stay ahead of compliance trends
Helping clients navigate complex regulatory requirements will give MSPs a valuable competitive advantage. Compliance frameworks like DORA and NIST 2.0 require organisations to develop robust data protection and recovery plans. By aligning with compliance mandates through a single backup, recovery, and security solution, MSPs can position themselves as essential partners.
The road ahead
For MSPs that invest in security-first services, cloud-native solutions, and automation, the future is bright. By embracing flexible, cost-effective data protection solutions such as those offered by Redstor, MSPs can position themselves as valuable partners and thrive in the intense competition to capture the new customers flooding the market.
By contrast, MSPs that rely on outdated service models, neglect security enhancements, or resist cloud-first approaches risk being left behind. As competition intensifies, MSPs must continually reassess their value proposition to ensure they offer proactive, scalable solutions that address the growing complexity of IT management.
Contact us today to get started.