MSPs Focusing on Improving Profitability in 2025
The managed service provider MSP industry trends is optimistic about 2025, with a strong focus on improving profitability and exploring emerging technologies. Insights from Kaseya’s 2025 State of the MSP Industry report highlight key trends, challenges, and strategies that MSPs are adopting to ensure sustainable growth.
Profitability as the Primary Goal
A remarkable 90% of MSPs surveyed in the report identified profitability as their top priority for 2025. Beyond profitability, attracting new customers and increasing revenue remain significant objectives. To achieve these goals, many MSPs are reassessing their business models and pricing strategies to align with evolving customer demands while ensuring profitable growth.
Although 2024 was challenging due to tightened budgets and delayed projects, 64% of MSPs reported revenue growth last year. This momentum is expected to carry forward, with optimism high for continued growth over the next three years.
Specialization as a Competitive Edge
Standing out in a crowded market is another challenge MSPs face. Smaller MSPs often gain a competitive advantage by specializing in niche areas, attracting clients seeking tailored solutions.
“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. “By streamlining their operations and leveraging automation, MSPs are positioning themselves to capitalize on significant opportunities in 2025.”
The Role of AI and Automation
The integration of artificial intelligence (AI) and automation continues to reshape the MSP landscape. Many providers are automating repetitive tasks to enhance efficiency and boost margins. However, with the benefits of AI come risks; a third of MSPs reported being targeted by AI-driven cyberattacks in 2024.
This dual-edged nature of AI has reinforced the importance of cybersecurity as a critical area for investment. MSPs are working to educate clients about evolving threats while implementing tools and platforms that provide robust protection at cost-effective rates.
Security and Client Awareness
Despite efforts, many small and medium-sized enterprises (SMEs) fail to grasp the importance of cybersecurity. “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,” added Pica. MSPs are prioritizing education alongside investing in user-friendly tools to protect their clients without overextending budgets.
Success Factors for Leading MSPs
Kaseya’s report outlined the common attributes of high-performing MSPs generating over $10 million annually. These top performers excel in several areas:
•Adopting Emerging Technologies: Leveraging tools like AI and automation to optimize operations and improve service delivery.
•Exceptional Customer Service: Building strong relationships and maintaining client trust through consistent, high-quality support.
•Cloud Migration and Security: Migrating client workloads to the cloud and providing robust managed security services, with 97% of top earners offering advanced security solutions.
Outlook for MSP Industry Trends for 2025
MSPs are entering 2025 with a clear focus on innovation and customer-centric strategies. By embracing new technologies, addressing cybersecurity challenges, and fine-tuning their operations, MSPs are preparing to navigate a dynamic market and capitalize on the growth opportunities ahead.
