Driving MSP Growth in 2025

The past few years have been a boon to the IT channel. Economic and social changes have driven more SMBs and enterprises toward outsourced IT solutions. New technologies have pushed IT profitability higher. 

Businesses are more focused on digital transformation than at any other point in history, while simultaneously, everyone with a networked device is concerned about the growing threat of cyberattacks. 

Operations of all types know that the IT department is becoming the key to staying competitive. As you would expect, that’s driving considerable new business to MSPs. 

All of that action is changing the landscape, however. Only MSPs who can adapt to those changes will thrive, and staying ahead of trends has never been more crucial. In this article, we’ll discuss the MSP trends in 2025 and beyond, what service providers should expect, and how they can be prepared.

What this article will cover:

• Trends that will guide the MSP market in 2025
• How MSPs will use technology internally to create growth
• How client relationships shape modern MSP success
• Which growth strategies are becoming essential and which are obsolete

Top trends driving the managed services market in 2025

Consolidation

In 2024, consolidation swept through the MSP market last year. Larger MSPs aren’t shy about swallowing up smaller rivals to acquire talent and accelerate growth. According to a Greenwich Capital Group report, 71 M&A transactions were reported in the MSP market in Q4 2024 alone.

This consolidation trend continued well into 2025, with Drake Star reporting 92 announced M&A transactions in Q2 2025.

Multiple factors are driving this M&A movement in the market, including improvements in automating cybersecurity and operations. This leaves smaller MSPs struggling to keep pace and attract the attention of those seeking acquisition opportunities.

Adding to the challenge is the impact of higher interest rates in the M&A market, which forces cautious investors to invest more in larger MSPs than in their smaller counterparts.

New competitors

The growing need for outsourced IT services isn’t all sunshine and roses. A fertile hunting ground always attracts new carnivores and we’ve been seeing aggressive encroachment into the IT channel from outside sectors. 

One particular segment to keep your eye on is printer/copier companies. In the wake of the pandemic, many enterprises needed fewer printers and copiers due to remote work, these successful companies had to pivot into a new revenue stream. They’re often large, generational businesses with deep pockets, and already have inroads into potential MSP clients. 

Specialization

Specializing will be a trend among MSPs in 2025. It’s not only challenging to be everything to everyone, it’s typically unsustainable. As more competitors hit the scene, the MSPs who “speak to” their ideal audience most effectively will win out. All but the largest MSPs will find greater success by adopting a more specialized, boutique approach. This means cultivating more relatable images, standing out from other providers, and potentially leaning hard into one industry.

Inflation

If inflation persists, MSPs may struggle to remain profitable in 2025 due to rising expenses. One of the most significant operating costs for any MSP is related to the data center, which includes the ever-higher costs of storing data in public clouds.

Thanks to inflation and rising energy costs, public cloud prices are expected to increase by more than 30% in Europe and approximately 20% in the U.S.

MSPs will likely transition away from the big cloud services and seek more cost-effective storage solutions closer to home. The trend may even create new opportunities for MSPs to provide their customers with on-premises storage and data-backup solutions.

Economic recession

This isn’t as bad as it sounds. MSPs can actually thrive when businesses tighten their belts and cut labor and operational costs. Why? Because this usually means outsourcing IT and security services.

When it’s time to get lean, enterprises often find it more beneficial for their bottom line to trust an MSP for business continuity and disaster recovery (BCDR) services rather than handling them in-house. The vast majority of MSPs remained stable post-COVID, even as countless other businesses were forced to close. Similar market forces will come into play during a recession, and MSPs can get ahead of the demand and prosper.

Data tiering

As data storage costs rise, there will likely be a shift toward the idea that not all data is equally valuable. In an effort to lower costs, redundant or replaceable data will likely be separated from the data that actually requires protection, backup, or encryption.

MSPs can get ahead of this by offering storage solutions with data-tiering capabilities. Data tiering enables organizations to move nonessential data to less-expensive storage levels. This means a reduction in costs while still protecting what matters most.

Emerging tech

Emerging technologies, such as 5G, IoT, RPA, 5G wireless private networks, edge computing, and AI automation are likely to have a significant impact on the future of the IT channel. All of this tech is leading toward greater mobility and will further facilitate the remote workplace concept.

The forward-looking MSP will want to identify high-growth markets that can leverage this technology and proactively support their adoption and utilization thereof. In other words, they want to become true technology leaders and leverage this emerging tech as an entry point into specific market segments.

How MSPs will use technology to increase profits and growth

For MSPs to capitalize on the opportunities ahead in 2025, they need a streamlined operation and a reliable tech stack that maximizes profitability. All-in-one solutions designed with lower-skilled technicians and automation in mind reduce your operational costs while increasing margins and boosting profitability.

Integration is also key. Reducing the number of tools your technicians have to master increases technician productivity and retention. An MSP doesn’t want to be juggling vendors, replacing talent, and figuring out which clients are actually profitable as they roll into 2025.

As is always the case, the right RMM solution is critical to achieving your growth goals in 2025. The right combination of an MSP-focused solution, excellent support, and valuable integrations can give you a competitive advantage.

Client relationships and MSP success

As consumers are given more options (i.e., your competitors), it becomes more important than ever to cultivate great client relationships. Of course, this has always been the case, but business owners tend to think about it more as the ocean gets bloodied.

Research shows that 68% of consumers would leave their current provider simply because they feel the company treats them indifferently. On the other hand, a mere 5% boost in loyalty can lead to profit increases in the double digits.

Here are a few suggestions for fostering those great (and profitable) relationships:

Let your personality show through

Your clients want to know that they’re not just a contract. Send personalized emails, talk with them in person, and treat them like a human, not a client.

Check in and be appreciative

If you only talk to your clients when they have a problem, the sheer act of talking to you will have a negative association in their minds. Send them your best wishes on holidays, proffer a gift from time to time, and check in even when you know everything is running as it should.

Understand their unique needs

Clients are looking for an MSP that will help them beyond their service agreement. By learning more about their business, processes, and what actually bothers them on a day-to-day basis, you can truly understand their needs.

Be proactive

This is always a good idea in the IT business, as you know. But aside from being proactive in managing their technology, it’s a good idea to be proactive in your communications and recommendations. A client appreciates when you can anticipate their needs and are always one step ahead.

MSP growth strategies: what’s working and what isn’t?

Sales

Sales enablement remains a growing priority among MSPs. The idea that every department in the organization should support sales in any way possible is intuitive, considering how much an MSP’s sustainability depends on continued growth, as discussed in our blog on key strategies for MSPs to expand their businesses.

This mindset extends into and through the entire customer experience, and more IT providers are accepting that it’s easier to keep and upsell existing clients than it is to find new ones. As such, there is a growing focus on profit potential and Average Client Value — an exploration that often leads the MSP to define its most profitable customers.

The smart MSP then devotes its sales and marketing energy towards securing more of those types of clients, rather than defining its audience as “any business with computers.”

Marketing

In line with the above trend of specialization, there is already a growing desire among MSPs to produce more targeted marketing.

This makes sense, as “going wide” is generally a less effective marketing strategy than “going deep” into a singular market segment — but this is no more true than in a troubled economy. MSPs who are slow to adapt and continue to blast generic marketing messages will likely have a frustrating 2025.

On the other hand, providers who adopt the principles of targeted marketing, specialization, and verticalization will begin to see improvements in lead generation.

We’re also seeing more MSPs (finally) taking brand development seriously, and unless the IT channel plays out differently than every other business sector in the history of commerce, those with an effective brand strategy will come out on top.

Operations and Technology

We don’t need to remind you that the cloud has redefined the IT sector. It’s also becoming a driving force toward MSP growth.

According to Gartner’s latest forecast, public cloud spending is expected to increase to $723.4 billion in 2025, up from $595.7 billion in 2024 . More importantly, by 2027, over 90% of organizations will adopt a hybrid cloud approach (i.e., adopting multiple cloud solutions).

MSPs are taking a cloud-first approach when making decisions for clients’ technology. They’re also using the same calculus when choosing their own solutions. Cloud-based, integrated software solutions for managed services providers are helping MSPs grow their profitability by reducing workload and software costs across the board.

Stick with NinjaOne and grow your MSP in 2025

Many managed service providers consider NinjaOne the best RMM tool available today, consolidating their most important tools into a single, easy-to-use platform. By reducing labor costs and streamlining operations, NinjaOne is an MSP-focused solution that will help you tackle the challenges — and seize the opportunities — of 2025. To learn how managed service providers are driving business growth through effective sales strategies, watch the video Selling Managed IT Services: Key Strategies for MSPs to Expand Their Businesses.

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