Insights into the State of the MSP and the Cybersecurity Challenges They Face in 2025

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Managed service providers (MSPs) are essential to keeping businesses humming across the globe. In a recent survey, Datto set out to explore the changing landscape of these tech leaders by connecting with over 1,000 MSPs worldwide to gain insight into their experiences, challenges and future aspirations. State of the MSP Industry 2025 Look Ahead: Trends, Growth, and Strategies for Success, delivers data exposing key findings and emerging trends that will shape the MSP industry in the year ahead. The report includes an exploration of the major cyberthreats MSPs face as well as the cybersecurity challenges and opportunities that they’re contending with today. A look at some of the highlights can help bring clarity to the state of the MSP space.

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4 central themes emerged

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MSPs face a wide variety of evolving challenges from business management concerns to cybercrime developments. However, some areas of concern are more prominent than others right now. Here are four central themes that emerged as the predominant issues that MSPs expect to contend with throughout 2025.

1. Growth and competitiveness in the MSP market

As demand for advanced security and IT expertise surges, the MSP market is expanding at an unprecedented pace. Growing demand for their services is both a win for MSPs and a blocker. To stay ahead of the competition, MSPs must evolve with increasing client expectations, deepen their client relationships and establish themselves as essential technology partners.

2. Unlocking hidden revenue

In today’s shaky economy, it can be challenging for MSPs to find the capital to improve their business. That makes increasing their profitability a top priority. Examining many areas of their business with an eye to improving efficiency and tightening up their operations is a fast way for MSPs to find fresh sources of revenue.

3. Diversifying your portfolio pays off

Another way that MSPs can unlock new revenue streams while enhancing client value is by diversifying their managed services portfolio. By offering clients new technologies and enhanced security services, MSPs can quickly boost revenue from existing clients. Plus, offering a thoughtfully chosen stack of innovative solutions is a smart way to impress potential new clients.

4. Driving growth through innovation

The most successful MSPs, including nearly 200 respondents generating over $10 million annually, are capitalizing on cloud solutions, automation and an expanded service portfolio to achieve sustained success. Their strategies provide a roadmap for others aiming to build a future-proof business.

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5 Top cyberthreats today’s MSPs face

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MSPs are grappling with a combination of traditional cyberthreats like phishing and novel attacks enhanced by artificial intelligence (AI). Remote access security and phishing prevention are the most pressing concerns for over one-third of MSPs (38%), driven by ongoing shifts in work environments and the effectiveness of social engineering tactics. AI-supported attacks are also a growing area of concern, reflecting the widespread adoption of AI-enhanced tools by bad actors. Endpoint security is still vital, but less of a priority compared to more targeted or systemic threats like remote tool attacks and phishing.

5 Top Cybersecurity Challenges for MSPs

Top MSP cybersecurity issues	% of respondents
Attacks on remote tools	38%
Phishing messages	36%
AI-supported attacks	32%
Supply chain attacks	29%
Endpoint threats	29%

Source: Kaseya

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Cybersecurity challenges and opportunities abound

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Cybersecurity is both a major growth area for MSPs and a major source of challenges. With 64% of MSPs identifying phishing as their clients’ top cybersecurity issue, it remains the most worrisome attack vector. This underscores the critical need for security awareness training, a proactive user protection strategy and advanced email security solutions to combat the problem. More than half of respondents (61%) of respondents noted Business Email Compromise (BEC) as the second most concerning attack vector, followed closely by viruses and malware (59%). However, it is important to note that no single challenge is dominant. MSPs must take a proactive, multi-layered defensive approach to protect their clients from a wide array of current cyber risks and ensure that their defenses are future-ready.

5 Top Cybersecurity Concerns for MSP Clients

Top cybersecurity issues of MSP clients	% of respondents
Phishing messages	64%
Business Email Compromise	61%
Viruses & Malware	59%
Password Compromise	56%
Endpoint threats	51%

Source: Kaseya

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Revenue is rising

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MSPs are shifting their focus from external growth inhibitors to internal concerns. In last year’s survey, the most frequently cited challenge was competition, an issue for 35% of respondents. This survey’s results indicate a turn toward internal priorities like profitability and operational efficiency, areas that are critical to sustaining long-term success. When participants were asked how important profitability would be for them over the next 12 months, 91% identified it as a priority. MSPs are looking at every angle as they work to balance rising operational costs with sustainable growth.

The MSP industry continues to demonstrate resilience, meeting evolving challenges head-on. MSPs are often faced with adapting to fast-moving challenges like surging cybercrime, rising competition and economic uncertainty while still maintaining profitability. That entrepreneurial expertise is reflected in the biggest spot of good news from the survey: 64% of MSPs reported increased revenue in the past year and 67% expect that growth to continue over the next three years.

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What’s keeping MSPs up at night?

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A variety of concerns prey on the minds of MSPs, but there is a dominant theme: money. The top three concerns that the survey respondents cited related to business revenue, with just under half of respondents (43%) pointing to new client acquisition as their biggest challenge, followed by revenue growth (37%) and profitability (36%). In a challenging economy, it is no surprise that MSPs are deeply concerned about ensuring that their stack covers all the bases to drive revenue growth.

7 Challenges That Keep MSPs Up at Night

Challenge for MSPs	% of Respondents
Acquiring new customers	43%
Revenue growth	37%
Profitability	36%
Managing internal operations	32%
Company culture	31%
Cyber insurance	30%
Cybersecurity issues	29%

Source: Kaseya

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MSPs face a wide array of business challenges

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Each MSP faces a unique set of challenges, but some loom high on the list for everyone. When asked to identify their most pressing issue, 16% of MSPs cited customer acquisition as their top concern, followed by revenue growth (10%) and profitability (9%). Concerns around cybersecurity, managing internal operations and customer churn each ranked at 7%. This data makes it easy to see that no single issue is dominant. Instead, MSPs must pursue a multipronged success strategy that includes targeted customer acquisition strategies, process optimization and proactive cybersecurity and regulatory management.

5 Biggest Business Issues for MSPs

Top overall issue for MSPs	% of respondents
Acquiring new customers	16%
Revenue growth	10%
Profitability	9%
Cybersecurity, managing internal operations, customer churn	7%
Cyber insurance, technology issues	6%

Source: Kaseya

As cyberthreats evolve, MSPs and their clients will face more complex cybersecurity challenges than ever before. However, those challenges bring major opportunities for MSPs to stand out, expand their services and boost revenue. Learn more about the difficulties and opportunities MSPs may encounter in 2025 in State of the MSP Industry 2025 Look Ahead: Trends, Growth, and Strategies for Success.

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