Growth Outlook and Five Mechanisms for MSP Success
The 2025 MSP Horizons Report reveals strong optimism across the managed services industry, with 49% of surveyed MSPs expecting more than 20% revenue growth this year—significantly above industry analyst projections of 12-13%. This optimism is driven by five distinct growth mechanisms: go-to-market strategy improvements, mergers and acquisitions, expansion into new verticals, development of new channels, and introduction of new services. MSPs achieving the highest growth rates are those who strategically select one or two mechanisms to focus on, build accountability structures around them, and give themselves space to test, fail, and iterate. The report emphasizes that growth doesn't happen by accident—it requires deliberate planning, internal alignment, and willingness to invest in capabilities that may take time to mature.
Cybersecurity and Compliance as Primary Revenue Drivers
Cybersecurity emerges as the dominant growth opportunity, with 90% of MSPs believing significant revenue will come from security services over the next three years. Notably, this group splits evenly: half already derive meaningful revenue from cybersecurity, while the other half are just beginning their journey. The report warns that MSPs delaying their security positioning will face increasing difficulty catching up as labor becomes scarcer, compliance grows more complex, and threat actors become more sophisticated. Compliance represents an even newer frontier, with MSPs at varying maturity levels—from those requiring baseline security standards as a condition of service, to those offering full compliance-as-a-service with ongoing reporting, board presentations, and certification management for regulations like HIPAA and PCI. Verticalization is recommended as the most effective path into both cybersecurity and compliance, allowing MSPs to develop deep expertise in specific industries and their regulatory requirements.
Co-Managed Services and New Channel Opportunities
The report documents a dramatic 17-percentage-point increase in MSPs moving into co-managed services, with 37% now targeting this model. This shift is driven by two market forces: increasing technology complexity that makes it difficult for single IT professionals to maintain expertise across all domains, and labor scarcity that creates redundancy risk for mid-market companies relying on small internal teams. Co-managed arrangements allow MSPs to provide specialized expertise and redundancy while being more cost-effective than hiring additional full-time staff. New channel opportunities are emerging around this specialization, including partnerships with incident response companies, cybersecurity insurance brokers, and industry-specific membership organizations. The report emphasizes that channel strategy must follow focus—MSPs should first determine their specialization, then identify partners who serve the same target market and can provide complementary referrals.
Differentiation Through Storytelling and Thought Leadership
With over 338,000 MSPs globally, commoditization represents an existential threat to profitability and growth. The report stresses that technical capability alone is insufficient for differentiation—MSPs must articulate their value through compelling stories and thought leadership. This includes moving beyond generic website language like "we're the best managed services provider" to specific narratives about industry expertise, customer outcomes, and specialized capabilities. Compliance and AI represent particularly strong opportunities for thought leadership content, as both areas involve significant complexity that small and mid-market businesses struggle to navigate independently. MSPs who host webinars, publish educational content, and demonstrate expertise in specific verticals or compliance frameworks position themselves as trusted advisors rather than commodity service providers. The report emphasizes that education wins clients, and MSPs must stop pre-objecting on behalf of customers who may be more willing to invest in advanced services than assumed.
