18 01732 759725 products and services, helping them with their top challenges, which year after year are to do with sales, marketing, growth. The biggest finding from our 2026 MSP report is that even though the market is expanding and SME spend has overtaken enterprise IT spend, which we saw for the first time last year, it is becoming harder for MSPs to win new business. They’re having to adapt, pivot, change the way they go to market, and how they deliver their services as well. The market is becoming much trickier.” This, Greg suggests, is in part due to changing customer expectations and a greater focus on outcomes and value, rather than technology per se and fixing things. “That change is being driven to a large degree by younger generations moving into management, leadership, the C suite – digital natives who have a different mindset and different expectations of technology. Whereas we might put up with something or accept its limitations, they don’t. They expect it to be always on, 24 hours a day, seven days a week. If they need something, they expect to be able to get it there and then, on demand. “That’s driving a lot of SaaS adoption of products and services, which is a concern for IT and MSPs because it creates shadow IT environments. If somebody buys a tool or a service online, how do we manage that? How do we secure that? How do we police it? So, they’re looking for guidance as well – consultancy around all the buzz words you’d expect, like AI and automation, but increasingly real case examples of how something has moved the needle, not just talking about it.” This is something MSPs can struggle to provide with an existing skill-set, exacerbated by the recruitment difficulties highlighted in Kaseya’s MSP report. But, as Greg points out, it is a need they have to address. They can’t just wish away the changes taking place in the market, which he describes as ‘colossal’. “They might not have the skill set in‑house to meet a customer requirement, but they still have to address it. The number one reason an SME leaves an MSP is not poor service, it’s because they’re not getting the service they need. So MSPs that in the past have been resistant to outsourcing now look at it in – more than half have automated only about a quarter of their workload. Another benefit of AI-powered automation, says the IT management and cybersecurity software provider, is that it enables MSPs to scale operations without a commensurate increase in headcount at a time when the proportion of MSPs citing recruitment and skills challenges has jumped from 9% to 16%, overtaking tools as as the primary growth bottleneck. Fierce competition Kaseya’s worldwide survey also shows that while demand for managed services remains strong, competition is fierce and growth is becoming harder to achieve, with 71% of MSPs citing winning new customers as their biggest challenge and the proportion of MSPs finding it harder to demonstrate their value to prospective customers doubling from 10% to 19%. Other troubling statistics symptomatic of wider economic challenges include: Smaller deal sizes – the proportion of MSPs with customers spending $25K or more fell from 75% to 41% year-on-year; Tighter client budgets – 24% of MSPs say customers are reducing their IT spend; A maturing market – 33% of new clients are switchers, not net-new demand; Cautious buyers – one-third of MSPs report slower new client acquisition. What these findings demonstrate, says Kaseya, is not a lack of demand but the need for MSPs to change how they convert that demand into revenue. The answer, it suggests, is not just to add more services but to simplify the technology stack, automate intelligently, package emerging capabilities like AI into measurable outcomes and tighten financial controls. Managing change To get a UK perspective on the report we spoke to Greg Jones, Senior Vice President MSP Success at Kaseya, who, as well as overseeing the company’s global partner program and running industry events in EMEA and North America, looks after the TruPeer community in EMEA. “The focus for me and my team is all around MSP success, everything away from AI has become the defining variable in the MSP market, reveals Kaseya in its 2026 State of the MSP Report, not only as the service clients want most, but as the operational lever MSPs need to scale their teams, protect margins and deliver higher-quality service in an increasingly competitive environment. For, while 48% of MSPs say AI is a top client need, ahead of security and backup, it is currently only a meaningful revenue source for one in ten (13%) of the 1,000 MSPs surveyed. For the time being, cybersecurity and backup continue to anchor the MSP revenue model: 71% of MSPs reported year-over-year revenue growth in cybersecurity, the highest of any service category, and 50% reported growth in business continuity and disaster recovery. MSPs have had more success using AI internally. More than half (53%) are already using it to automate ticketing, patching and monitoring, resulting in better first-response times, technician efficiency and reduced employee burnout. However, most still have a long way to go AI is key to scaling MSP operations, reveals latest Kaseya State of the MSP report Where’s the growth? MSPs Greg Jones
RkJQdWJsaXNoZXIy NDUxNDM=