MSPs are optimistic and focused on profitability and innovative growth strategies for 2025, according to the just released Kaseya 2025 State of the MSP Industry Look Ahead: Trends, Growth, and Strategies for Success. The research, conducted by Datto, a Kaseya company, surveyed over 1,000 MSPs of all sizes worldwide. The findings shed light on key trends and priorities shaping the industry in the coming year.
Kaseya State of the MSP Priorities: Profits and Vendor Consolidation
In 2024, 64% of MSPs reported revenue increases, and 67% expect further growth over the next three years.
Looking ahead to 2025, 91% of MSPs cited profitability as a priority. Vendor consolidation is also a priority for 46% of MSPs, with 63% saying they prefer using fewer vendors to meet their technology needs.
“Small and medium-sized businesses are becoming more and more tech savvy—and MSPs are reaping the rewards,” said Gary Pica, founder of TruMethods, a Kaseya Company, in a press statement. “They’re seeing revenue growth and want to continue that momentum long into the future. MSPs are an essential service and they’re making the right moves to build sustainable, high-margin businesses. By streamlining their operations and utilizing automation, MSPs are preparing to capitalize on big opportunities in 2025.”
Still, MSPs have concerns, too. New customer acquisition (43%) and improving revenue growth (37%) top the list for many providers.
Clients Are Spending More
Small and medium businesses are increasingly reliant on MSPs, citing reasons such as the need for more technical expertise than what they have internally (61%), help with managing hybrid/remote workers (56%), and increasing concerns about cyber risk (44%). No surprise, then, that clients are investing more in managed services, with 56% spending $50,000 to $500,000 annually. The top services offered by MSPs include business continuity and disaster recovery (46%), data backup and protection (46%), and network, email, and endpoint security (46%).
In addition, 83% of MSPs offer co-managed IT services, including BCDR (38%), cloud-based infrastructure design and management (37%), and data backup and protection (36%).
Cybersecurity Is Both a Challenge and an Opportunity
Cybersecurity remains at the forefront of MSP offerings. Threats like phishing (64%), business email compromise (61%), malware (59%), password compromise (56%), and endpoint threats (51%) are impacting their clients. However, MSPs do face some barriers to offering robust cybersecurity solutions, such as customer apathy (49%), product complexity (38%), and insufficient staff training (36%).
The report notes that the rise of “customer apathy” as the top barrier this year—jumping from seventh place last year—underscores the urgent need for MSPs to educate clients about cyber risks through initiatives like security training and phishing simulations.
To address these challenges, MSPs plan to expand their cybersecurity services in the next 12 months, including security audits (45%), vulnerability testing (43%), security education training (42%), and creating internal security policies for clients (40%).
“It can be difficult to get small businesses to understand the importance of investing in security when they often don’t see themselves as a target,” said Pica. “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.”
The data also shows that the top earners (MSPs with annual revenue of $10 million-plus) are focused on advanced security as a continuing opportunity, with 97% offering managed security services such email security (49%), EDR (43%), and MDR (42%). The data shows that trend will continue over the next 12 months.
MSPs are also grappling with cyberthreats themselves, reporting rising AI-supported attacks (32%) and supply chain threats (29%).
Still Marching Toward the Cloud
When examining client workloads currently in public clouds, only 30% of MSP clients have all or nearly all their workloads in the cloud. Clients have a few reasons for keeping their workloads on-premises. For example, if the solution still works, small and medium businesses have limited financial incentive to switch. Others remain on-prem due to compliance-driven requirements, low-latency requirements, lack of adequate SaaS alternatives
However, within three years, the survey data shows that the percentage of MSP clients with all or nearly all their workloads in the cloud is expected to increase to 54%. This dramatic shift presents significant opportunities for MSPs to expand cloud-related services, particularly as clients increasingly adopt Infrastructure-as-a-Service (IaaS) for workloads like email servers, databases, and application servers, according to the Kaseya State of the MSP Industry Lookahead report.
Kaseya State of the MSP Shows Roadmap for Success
The practices of high-earning MSPs offer a roadmap to success and profitability for smaller MSPs. These top performers are embracing innovation and leveraging a growing portfolio of managed services, cloud solutions, and automation to secure long-term success.
For example, 59% of top-earning MSPs have migrated all client workloads to the cloud. The most widely used public cloud platforms among these top-performing MSPs are Microsoft Azure, Amazon AWS, and various SaaS applications
High earners are also leading the way in operational efficiency, with 48% saying their IT management tools significantly enhance operations, and 44% reporting that are satisfied with the automation capabilities of their tools.
MSP Industry Poised for Continued Growth
The Kaseya 2025 State of the MSP Industry Look Ahead shows an industry poised for continued growth and transformation. With a focus on profitability, innovation, and client education, MSPs are well-positioned to navigate challenges and seize opportunities. By adopting the practices of top-performing peers, smaller providers can unlock their potential and build a foundation for sustainable success. As MSPs embrace the future, the importance of strategic partnerships, streamlined operations, and cutting-edge solutions will remain at the heart of their journey.
For more insight on 2025 MSP economic trends and predictions, see the MSP Success annual reader survey.
