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MSP Market Growth Rate: Worldwide Managed Services CAGR Forecast Reality Check

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The global managed services provider (MSP) market remains in growth mode. But MSP market forecasts sometimes raise more questions than they answer.

Consider these two forecasts:

  1. Overall Managed Services Market Forecast: The worldwide managed services market will reach $557.1 billion by 2028, which represents a 12.6% compound annual growth rate (CAGR) from 2020, according to Fortune Business Insights research.
  2. Cloud Managed Services Market Forecast: The worldwide cloud managed services market will reach $237 billion by 2032, which represents a 9.6 percent CAGR from 2022, according to market research firm Fact.MR.

Reread those two forecasts, and something doesn't add up.

Cloud MSPs: Where the Action Is?

Specifically: How can (1) the overall MSP market be growing faster than (2) the cloud managed services market? After all, the cloud managed services market is newer, growing from a smaller base and generally hotter than the overall MSP market.

Other than the two forecasts above, every stat we've seen suggests public cloud and multi-cloud MSPs -- those focused on AWS, Microsoft Azure and Google Cloud Platform -- are growing more rapidly than more traditional MSPs that offer SMB-type IT services.

Still, we confess: We're not making an exact apples-to-apples comparison, since the two research sources -- Fortune Business Insights and Fact.MR -- use different timeframes within their CAGR forecasts.

MSP Market Forecasts And Your Business

Nevertheless, we offer up the two example reports above as a timely reminder:

  • Research reports are forecasts that may or may not come true.
  • The general consensus suggests that the MSP market will continue to grow faster than the traditional IT market for years to come.
  • Your MSP's performance ultimately hinges on one thing: Your leadership, strategy and execution.

Remember, 25 percent of MSPs are roughly break-even or money-losing businesses, according to Service Leadership Inc. benchmark research. In stark contrast, top-quartile MSPs generate EBITDA profit margins of roughly 18% or more, Service Leadership research also finds.

Bottom line? MSP market forecasts may provide a baseline from which to measure your business performance. But ultimately, you control your MSP business's fate...

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.