The year 2024 was a page turner—but not in the ways that would make you beg for a sequel.
You know the storyline: Economic uncertainty, inflation, election year plot twists, extreme weather, war in several countries, and for some managed services providers, a slowdown in MSP sales—a phenomenon that has happened the past four election cycles, according to data from industry bench marker Service Leadership.
So as we turn the page on 2024, we asked MSP Success readers to weigh in on their 2025 predictions in our annual reader survey. Will it be a brand-new story, or just another chapter in a turbulent cycle? To help us interpret the results, we turned to some members of our MSP Success Advisory Council, a voluntary group of MSP owners and decision makers from around the globe, Here’s what they have to say about the 2025 predictions.
MSPs Are Optimistic About Revenue and Profit Growth
While 2024 did present challenges, a majority of survey respondents did increase both revenue and profit (63% and 65%, respectively), with just 15% experiencing a decrease in revenue and just 13% reporting that profit decreased.
In contrast, a whopping 98% of MSPs expect revenue to increase in 2025, with 96% expecting profit to increase.
Matt Rose, CXO of Tech Rage IT, an MSP in Winter Springs, Florida, says leads did slow in 2024. Still, he expects to end 2024 up about 10% in revenue, but short of the 20% he had hoped for. Profit, he adds, is up “a couple of ticks.”
He says the company spent a good deal of time reorganizing its marketing and sales processes this year. “We took advantage of the fact that the leads weren’t kind of coming in on a regular basis to fix what we could control.” Even if leads are flat in 2025, however, he believes that now “we’re going to be able to do better with them.”
Natalia Scheidegger, CEO at 3rdmill, an MSP in Melbourne, Australia, says her company experienced increases in both “absolute” revenue and profit, but net profit decreased.
She is optimistic that both revenue and profit will rise in 2025, but notes challenges of labor and hiring, back-end price increases, and more competition.
Conversely, Tito Huynh, vice president of Business Data Services in Overland Park, Kansas, calls 2024 “a rough year” after losing a flagship client. However, he expects 2025 profit to increase because of a switch to Kaseya 365 Endpoint and other components of the IT Complete platform, which is already driving efficiency. “We’re saving time and making decisions quicker,” he says.
Huynh does expect revenue to increase, too, from a mix of project work, including Windows 11 upgrades, as well as some net-new clients. But he notes, “We’re not pushing the gas pedal a lot on the net-new clients right now as we try to solidify our [new] foundation and profitability.”
2025 Predictions On Overall Economic Outlook – MSPs Feel Needed
On the overall economic outlook and business climate for 2025, 95% of readers are optimistic.
Ann Westerheim, founder and president of Ekaru, an MSP in Westford, Massachusetts, says, “I’m definitely optimistic for the new year. I just think there’s a lot of need out there for what we do in terms of IT and cybersecurity. Whether the whole economy looks rosy, I don’t know, but I think we’re going to be an essential service to businesses and they will invest.”
Scheidegger shares that optimism: “What an industry to be in right now! All the trends are moving towards people picking up the phone and calling their technology advisor to help with business transformation.”
Particularly with the cyberthreat landscape, SMBs will need MSPs more and more, says Esteban Blanco, chief geek officer of Blanco I.T., an MSP in Arlington, Texas. Engaging with an IT company or an MSP “is no longer a nice to have, it is a must have,” he says. Between the need for cybersecurity solutions, the opportunity to resell or partner with cyber insurance providers, and the Windows 11 migration, “there are a lot of new doors that are going to open,” Blanco says.
In addition, he says, “The election created a lot of optimism on the economic part of things for a lot of people and a lot of companies.”
Similarly, Rose believes that with the election settled, stalled projects and new customer opportunity will start to open up. “It seemed like people were just kind of waiting on the election to be over. With that said, I can’t help but be a more optimistic than what we had this year.”
Show Me The Money! The Most Lucrative Solutions for 2025
Among their 2025 predictions, survey respondents expect to see the most revenue and profit growth in 2025 in cybersecurity, managed services, compliance, and co-managed IT.
“Without a doubt, the highest margin services remain the cybersecurity stack, not just in terms of margins on products, but the services we put on top,” says Scheidegger.
The regulatory and legal climate is also helping to drive cybersecurity sales, notes Blanco. “Judges are awarding money now to companies that were affected by a compromise. So more and companies realize, man, we could be liable if we don’t have industry standard security.”
In addition to selling in-demand services and solutions, Rose expects to drive more profit from automation. “The more we automate, the more profit we get from our managed services [revenue].”
Marketing Strategies – The Big Shift?
While referrals drove most business in 2024, 50% of respondents expect digital marketing to take the lead in 2025.
The jury’s still out on digital marketing results for our advisory board members, however.
“I think the ROI is still difficult to prove, particularly in our industry where it’s a complex sell,” says Scheidegger. “For us it’s still very much referrals, but also associations and co-selling with other partners. I think we’re going to see different models where MSPs partner together with others in adjacent industries … and those partnerships will actually be quite lucrative.”
Rose says Tech Rage IT is trying some digital marketing but still expects referrals to drive more business in 2025, so he’s focused on developing relationships through a board of Florida businesses he joined.
Huynh is following a similar tactic with joint venture activities. “I think you see a lot of people doing well with digital marketing and you feel like, ‘Oh, I should be able to produce those results too.’ The thing with digital marketing is, it can be quite costly. And when those calls come in, people are calling when their hair is on fire. So you have to have a lot of things in play before you can do digital marketing.” Plus, he notes, it can take months to see results.
Will Higher Revenue and Profits Spur More Hiring? Maybe
According to our survey respondents, 83% plan to hire next year. Westerheim is one of them. “We’re really working hard on our operations, so I expect to be able to take on some new clients without initially adding headcount,” she says, but adds that they eventually expect to need another level one and another employee dedicated to cybersecurity.
Rose says they always have a level one tech position open, “and we expect with growth we will need to hire another level one.”
Blanco says he’ll be moving a part-time tech into a full-time role next year. And Scheidegger says they’ll be hiring in 2025, “but probably not by much. “I want to be very strategic.” This includes offshore techs and advanced solution architects and business analysts “who are able to go into customers and identify their needs and transcribe them back into the business.”
Biggest Opportunities and Challenges for 2025 – They May Be The Same
Our survey respondents’ opportunity list for 2025 includes compliance, cybersecurity, automation, co-managed IT, nontraditional MSP services (video surveillance/access control), Windows 10 migration projects, AI consulting, and acquiring smaller MSPs.
For Blanco and Westerheim, the challenge and the opportunity are one in the same—cybersecurity. “These black hat hackers, are really, really good at what they do, and so being able to keep up with them is going to be a challenge and also an opportunity,” Blanco says.
Adds Westerheim, “I view it as an opportunity, but it’s the thing that stresses me out the most as well.”
Compliance, of course, goes hand in hand with cybersecurity, “and if we as MSPs can offer it and help the company be compliant, there’s a huge amount of money there,” says Rose.
Huynh says there’s almost too much opportunity, “so I have to be very targeted. I think our opportunity for 2025 is leaning into best-in-class account management and creating that best-in-class service for our clients, making sure that they are happy and we are profitable. If we’re able to do that and replicate that across our client base, then we really step on the gas pedal for our marketing.”
For Scheidegger, the biggest opportunity “is going to be getting a seat at the table with customers” and providing tailored consulting services rather than cookie-cutter IT. “I think that’s where we’ll win.”
As for key challenges, respondents point to low-priced competitors, staffing, cyberthreats, third-party risk and lawsuits, larger competitors due to M&A, and lead gen/new client acquisition.
Rose says he gets frustrated that “anybody could start an MSP tomorrow with no anything and ruin someone’s business” because of poor practices and experience. “We know what our margins are and we know how much it costs to keep the company secure. If someone’s coming in and charging a fraction of that, it worries me.”
While that’s a concern, Blanco is confident his “white glove” service will win out. “I think there is enough meat on the bone for everybody to be able to eat and do things honestly and fairly with pricing. And so if people low ball, well, you may get what you pay for.”
Huynh expects client retention to be his company’s biggest challenge. “We haven’t raised prices in a long time, and we will see clients leave because they don’t like the new prices and that’s OK. We are gearing our services towards a very specific client.”
For Scheidegger, it’s hiring skilled employees. “As we shift towards more cybersecurity or even AI/automation style advisory services to customers, it requires a very special skill set that I think the market hasn’t yet caught up with.”
In addition, Scheidegger anticipates a continual evolution toward advisory and consulting services, particularly with adoption of artificial intelligence. “Customers are really looking to their IT providers to provide advice as well as more tailored solutions, and that requires consulting and advisory services. It’s a muscle that MSPs don’t know how to flex. As an industry, we need to learn how to charge for that advice.”
No Crystal Ball, But Good Vibes
Our reader survey is, of course, a small representation of the $500 million-dollar global MSP industry. But there’s no doubt that MSPs will play an essential role in the digital transformation of small and medium businesses. And with the election year behind us—and barring any catastrophic events—2025 looks to be filled with growth opportunity for MSPs that can differentiate from competitors and deliver business outcomes to customers.
