MSP, Channel markets, Channel partners, Content, Content

Service Leadership Report Shows Third Straight Year of MSP Growth

Male hand supporting the top step in staircase of wooden pegs with a glowing light bulb above it.

Service Leadership, Inc., a ConnectWise solution, today released the findings of its Service Leadership Index 2023 Annual IT Solution Provider Industry Profitability Report.

The report reveals another impressive year of revenue and profitability growth with average approximate valuations being the highest on record. This is the third consecutive year that best-in-class managed service providers (MSPs) had over 20% adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) which is unprecedented and speaks to the high performance of the industry since 2020. This was also the sixth consecutive year that best-in-class VARs improved their profit performance (16.1% adjusted EBITDA).

“2022 was an impressive year for TSPs across all Predominant Business Models™ continuing the trend for the third straight year with record revenue and profitability growth,” said Peter Kujawa, VP & GM, Service Leadership, Inc. “Both best-in-class MSPs and VARs have continuously improved their profitability for three or more years. The TSP industry is healthy, despite recessionary fears.”

The report also includes three new special sections:

  • Financial performance for three geographic regions – APAC, EMEA and North America
  • Profitability correlation of five key Operational Maturity Level™ Traits
  • Declining services gross margin trend and recommendations for improvement

These special sections, and the report overall, will help TSPs worldwide understand how to drive better financial performance.

To receive a complimentary executive summary and learn how to purchase a full copy of the report, click here.

About Service Leadership

Service Leadership, Inc.®, a ConnectWise solution, is dedicated to providing total profit solutions for IT Solution and Service Providers, directly and through industry consultants and global technology vendors. The company publishes the leading vendor-neutral, IT Solution Provider financial and operational benchmark: Service Leadership Index®. This includes private diagnostic benchmarks for individual IT Solution Providers and their business coaches and consultants. The company also publishes SLIQ™, the exclusive web application for partner owners and executives to drive financial improvements by confidentially assessing and driving their Operational Maturity Level™. For more information, visit service-leadership.com.

About ConnectWise
ConnectWise is the world's leading software company dedicated to the success of IT solution providers (TSPs) through unmatched software, services, community, and marketplace of integrations. ConnectWise offers an innovative, integrated, and security-centric platform—Asio™—which provides unmatched flexibility that fuels profitable, long-term growth for partners. ConnectWise enables TSPs to drive business efficiency with automation, IT documentation, and data management capabilities and increase revenue with remote monitoring, cybersecurity, and backup and disaster recovery technologies. For more information, visit connectwise.com.

Jessica C. Davis

Jessica C. Davis is editorial director of CyberRisk Alliance’s channel brands, MSSP Alert, MSSP Alert Live, and ChannelE2E. She has spent a career as a journalist and editor covering the intersection of business and technology including chips, software, the cloud, AI, and cybersecurity. She previously served as editor in chief of Channel Insider and later of MSP Mentor where she was one of the original editors running the MSP 501.