How Big Is The MSP Industry?

MSP industry

Managed services help businesses improve their operational efficiency while reducing functioning costs. The increased tendency of IT services outsourcing has facilitated the expansion of the MSP industry.

The global MSP market was evaluated at USD 239.71 billion in 2021. It is estimated to reach USD 354.8 billion by 2026. The estimation also states that the market will grow at a CAGR of 13.4% from 2022 to 2030.

Managed services refer to outsourcing management processes to a third-party service provider. It helps organizations enhance business operations with improved coordination between different units.

The evolution of cloud-based technologies and their technical accumulation have led to the rise of managed services. The biggest segment in this service is the managed data center, which accounts for 16% of the market share.

The easy integration of the latest technology into existing and new corporate frameworks makes managed services more facilitating for businesses. It is the main reason behind the growth of MSP help desk services.

Managed services help optimize corporate procedures by enabling business automation. It mainly supports business management in a remote IT infrastructure. We will discuss here everything about the MSP industry and its predicted growth in the coming years.

MSP Industry and Market Trends

A market analysis of the MSP industry indicates that the growth focuses on different segments. The fastest growing segments of the managed services are:

1. Cloud-Based Management

The adoption of cloud-based services by the organization has become a boon to the MSP industry. As per a research study, the cloud-based IT services market exceeded $23 billion in 2016 and reached $80 billion by 2020. The key elements behind this growth are cloud migration and adoption.

Amazon Web Services and other large, influential bodies have initiated associate agendas for cloud-based services. This initiative has made the adoption process of cloud-based services more convenient. It has also facilitated managed service providers to focus on cloud-based services by joining these associate programs.

2. Cybersecurity

A new cyber security threat is coming every day. It leads businesses to obtain cybersecurity support from MSPs. Thus they can ensure safety at a cost much lower than funding for a full-time, in-house team.

The attack of WannaCry ransomware in 2017 costed businesses billions of dollars. It also infected many thousands of computers. All these incidents have driven the growth of the security services market size.

Cybersecurity pairs with cloud migration to offer more effective results. Besides, today’s business processes demand more and more online operations. This trend creates more exposure to cyber threats.

A research study in 2019 revealed that 9 out of 10 small and medium businesses would hire an MSP. It will help them ensure the right cybersecurity solutions. The below statistics will help understand how the cloud-based MSP market will grow in the coming years:

  • According to Forrester, businesses will spend $12.6 billion on cloud security tools in 2023, which is $7 billion up from 2018.
  • Spending on cloud security solutions was $636 million in 2020 and would touch reach $1.63 billion in 2023 with a 26.5% CAGR.
  • According to Kaspersky, global cyber security spending will reach $460 billion by 2025.

3. Managed Networks

An efficient IT infrastructure is considered a baseline for a company to stay connected in the industry. However, to be in a competitive advantage, you will need to opt for MSP outsourcing. A survey by Spiceworks reveals that small and medium businesses spend about 19% of their total funding on managed IT help desk services.

Businesses want to ensure that networks are secure, fast, reliable, and connected. If a network goes down, it potentially brings the entire business to a halt. This issue further causes a big loss of revenue.

The above situation clarifies why businesses spend a large amount of IT services allocation on infrastructure protection. Gartner says infrastructure protection spending will increase from $18.3 billion in 2020 to $24.6 billion in 2023 at a 7.68% CAGR.

Factors Behind the Rise of the MSP Industry

Scalable systems and flexible services models are particularly making the MSP, as well as, after hours call center industry grow. It helps businesses to respond to technological refinements quickly. All such factors are driving the MSP market size over the predicted measure. Here are the key reasons behind the MSP market growth.

1. Result-based Services

With the continuously changing industry conditions, norms, and consumer demands, businesses of the present age seek result-based services. They need real-time, pre-defined, and clearly documented measures. Hence the MSPs now use cutting-edge analytics and reporting to explain the impact of technologies executed and current accurate data.

2. Cutting-edge Technology

The advanced technologies are creating better prospects for managed service providers. Further, businesses require expertise to implement new technologies. Hence, the MSPs continuously obtain vital skill sets to work on innovative technologies like AR, VR, and AI. It enables them to grab these opportunities and stay relevant to keep up with the competition.

3. COVID-19 Outbreak

Since the outbreak of COVID-19, enterprises have adopted remote working models. This trend led to the increased demand for cloud-based solutions resulting in its significant growth.

IT decision-makers prefer to take advantage of current cloud-based conditions. They are increasingly driving into longer project models that need larger budgets. And MSP outsourcing offers cutting-edge technology services at a lower cost.

About 48% of the US and the UK IT decision-makers say they need 1-2 months to successfully finalize the migration of one multi-cloud application.


Managed services support enterprises to improve operating efficiency while reducing expenses. It allows businesses to concentrate more on core strategies. Besides, the increasing need for cyber security in the remote work model has opened new prospects for MSPs. The global MSP industry has seen a growth of USD 27.42 billion from 2019 to exceed USD 235.67 billion in 2022. For more information, you can read GLOBAL MANAGED SERVICES MARKET – GROWTH, TRENDS, COVID-19 IMPACT, AND FORECASTS (2022-2027).

Frequently Asked Questions

How Big is the MSP Industry?

The global MSP market was evaluated at USD 239.71 billion in 2021. It is estimated to reach USD 354.8 billion by 2026. The estimation also states that the market will grow at a CAGR of 13.4% from 2022 to 2030.

Do MSPs Make a Profit?

Research by Service Leadership INDEX reveals that the MSPs make an average profit of 8 percent, while in the case of top MSPs, the profit margin is 18 percent.

benefits of a managed service provider

What Are The Benefits Of A Managed Service Provider?

Difference Between An MSP and MSSP

What’s The Difference Between An MSP And MSSP ?