Halfway through 2025, MSPs and MSSPs have numerous significant technology topics on their minds, including expanding their IT security offerings to further protect customers from cyberattacks, helping customers learn to work with AI, and introducing new management services and support to drive revenue and expand their businesses.
With these growing MSP and MSSP business realities in mind, ChannelE2E asked several channel and industry experts for their insights on what they view as the most significant and important market trends for service providers over the next six to 12 months.
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Colin Knox, the CEO and co-founder of billing services vendor Gradient MSP, the next 12 months will be a pivotal time for MSPs and MSSPs.
“Security continues to be a growth driver, and it is not going anywhere,” said Knox. But changes are afoot, he added.
“MSPs are being pushed to prove their worth in more tangible ways than ever … as clients are scrutinizing costs, asking deeper questions, and demanding clarity on the value they are getting,” said Knox. “This is leading to a major shift: successful MSPs are not just selling services – they are selling outcomes. That means benchmarks, business reviews, and analytics dashboards are becoming must-haves. Vendors who support that narrative are gaining serious ground.”
In addition, Knox said he sees MSPs and MSSPs that specialize in niches having a leg up on service providers that try to do everything.
“While generalist MSPs still have a seat at the table, the smart money is going niche,” he said. “Healthcare, legal, construction. Pick a vertical, understand its pain points, and build solutions that speak directly to those needs. Specialization is not just a differentiator anymore – it is a survival tactic in a crowded space.”
Continuing changes in the global economy, however, could bring further business plan changes, he said. “Economic shifts tend to put pressure on budgets and decision-making cycles, but they also force MSPs to double down on efficiency and innovation,” said Knox. “That is why MSPs should focus attention to tools and vendors that help them drive more revenue from existing clients, or reduce operational overhead, so they can thrive regardless of broader market turbulence.”
Evolving Market Segments Will Drive New Growth for MSPs
Anurag Agrawal, founder and chief global analyst of Techaisle, said that his research indicates that cybersecurity will continue to drive strong business for MSPs and MSSPs over the next 12 months but that customer spending on cloud, generative AI, customer experience, employee experience, user experience, and managed services are all expected to grow as well.
These are “critical areas where channel partners should be directing their attention and resources to meet evolving customer demands and drive growth,” said Agrawal.
“While security remains paramount, channel partners must strategically invest in capabilities around cloud optimization, practical GenAI applications, enhancing customer and employee experiences, and delivering robust managed services,” he said. “These areas represent the strongest currents of tech investment within the SMB and mid-market, offering fertile ground for partners to deliver significant value and drive their own growth.”
AI Will Challenge Smaller MSPs and MSSPs
Jessica C. Davis, principal analyst covering MSPs for research firm Canalys, told ChannelE2E that, in her view, the next six to 12 months will see AI dramatically changing the business model for MSPs, especially because IT vendors are already adding AI capabilities into their MSP management platforms.
“AI is already changing the economics of being an MSP by enabling these businesses to automate some Tier 1 support,” said Davis. “That makes MSPs who leverage AI more operationally efficient. Those MSPs who do not leverage AI will struggle to compete,” she said.
“Bigger MSPs will have an easier time getting up to speed with this trend and the new technology,” added Davis. “Their private equity owners are well aware of this trend. Indeed, it is likely that acquisitive private equity-backed MSP platforms will consider AI economies of scale when they evaluate potential targets.”
These things will further separate the big MSPs from the small ones, said Davis. “The barrier to entry for smaller MSPs will get tougher, and they will need to lean on their vendors for support here.”
Yet all of this could change over the next 12 months due to the global economy, she said. “While managed services and cybersecurity are areas that continue to outgrow much of the channel market, the macroeconomic conditions right now are causing a pullback on IT spending. We have revised our forecast for IT spending overall to a 7% growth rate, reaching $5.3 trillion globally by 2025. The previous forecast was growth of 8% to $5.4 trillion.”
MSPs Will Bolster Offerings Through Online Marketplaces
Shelly Kramer, the founder and principal analyst for Kramer&Co., said she sees the top channel market trends for the next six to 12 months being “exactly what you would expect, illustrating a continued focus on cybersecurity and all things AI, including agentic AI.”
Other growth trends she expects include a continued focus on online marketplace procurement for services “because it is easy, streamlines processes and just makes sense,” she said. In addition, Kramer said she expects “an increase in services and solutions that deliver on multi-cloud optimization, management by MSPs, and partnerships/collaborations between IT teams and MSPs on ecosystem models as a whole.”
More training from tech vendors to support their MSP and MSSP partners is also expected over the next year, said Kramer, as MSPs and MSSPs bolster their internal expertise to help differentiate themselves for customers.
One other trend that will continue during the period is the steady rate of mergers and acquisitions in the MSP and MSSP markets, said Kramer.
“We will absolutely see more consolidation and more M&A activity as vendors look to integrate more solutions into their offerings, scale, and expand revenue and growth opportunities,” she said.
