What's next for MSPs in 2023? Our top 5 industry predictions


The demand for managed service providers (MSPs) has been on the rise in recent years, as more and more businesses recognize the value of outsourcing their IT services, support, and strategy to specialized professionals.

In addition, various factors such as the increasing sophistication of hacker attacks, the complexity of IT systems, and the growing adoption of cloud-based infrastructure have contributed to this growing demand. 


The growing demand for MSPs has attracted more companies to the market and intensified competition within the industry. So the question is “How can MSPs remain competitive while becoming more profitable in an increasingly crowded and competitive market?"

Here are our top predictions for the MSP industry in 2023 that’ll help MSPs prepare for the future and thrive in the market.

Prediction #1: MSPs gain significance as more businesses shift to remote work

After the pandemic, a substantial section of businesses opted to continue operating remotely while some companies wanted their employees to return to the office. According to McKinsey's American Opportunity Survey, an impressive 58% of employed respondents indicated that they work remotely at least part of the time. This is good news for MSPs, as the trend toward virtual work makes having a managed service provider even more important for businesses. And, as businesses continue to operate in a hybrid model (remote + office), having the right mix of cloud-based and on-premise monitoring tools would be crucial.

Today, most MSPs provide Remote Management and Monitoring (RMM) software that helps proactively identify and resolve issues in client environments and ensure smooth operations and secure networks. Although remote work has many benefits, there are also risks involved, one of which is an increased likelihood of cyber threats. Gartner recommends “security leaders look beyond traditional approaches to security monitoring, detection and response to manage a wider set of risks” as remote work has exposed new and challenging attack surfaces. MSPs need to be well-equipped to tackle these cyber threats and provide remote workers with the tools and support they need to manage overall business integrity. 

Prediction #2: Artificial Intelligence opens up more opportunities for MSPs

Yes, that’s correct. Artificial intelligence (AI) isn’t a passing trend. It's a topic that’s being widely researched, debated, and implemented in various fields, from healthcare and finance to transportation and manufacturing. But, how is AI helping MSPs drive success? Here’s how. 

Artificial intelligence is not only fueling the growth of managed service providers (MSPs) but also enabling them to enhance client support and experience.

Today, many managed service providers (MSPs) are leveraging AI to quickly identify and mitigate risks in real-time, instantly spot malware on a network, speed up troubleshooting, and predict invasions before they affect end-users. Another common use case of AI is Chatbots. MSPs use chatbots to help clients with support tickets and facilitate prompt assistance during critical situations. 

In the coming years, AI will be beneficial in multiple ways. As we know, many businesses are moving their workload to the cloud, and it can be challenging for service providers to monitor and manage networks across hybrid clouds of every client. AI can act as an extra set of eyes and ears that continuously surveys these environments, and notify them of any potential problems.

Prediction #3: The ongoing recession is challenging and harsh. But, MSPs can thrive

Wonder how? To survive the recession, businesses, particularly small and medium-sized businesses (SMBs), will look at various ways to optimize their IT spending and derive maximum value from their existing tech stack. Due to higher labor costs, some businesses may not be able to afford to retain their tech talent or hire new employees. They’d instead prefer to rely on external service providers for IT and security services.

And, that’s where MSPs can come to the rescue. MSPs can provide their clients with tailor-made Business Continuity and Disaster Recovery (BCDR) and backup solutions. They offer reliable service at a fixed rate, no matter the extent of the technical difficulties. MSPs can also mitigate the administrative and cost burdens of employee retention. In addition; it can help businesses to cut tool costs for database management, security monitoring, patching, ticketing, alerting, code repositories, and more. 

Moreover, working with an MSP allows businesses to access the latest and most advanced technology, including the latest security and disaster prevention measures that could help protect the business. 

Another downside of recession is the increase in cyber attacks or increased activity by criminals. According to cyber-security research firm Cyber Ventures, cyber crimes are expected to cost the world $10.5 tn (£9.3tn) by 202., It is predicted that in 2023 there’ll be an increase in various kinds of threats including malware threats, business email attacks (BAC), crypto scams, and cybercrimes. MSPs who’d like to stay ahead of the game need to raise the bar by offering advanced solutions that are well-suited to assist customers facing unexpected problems.

Prediction #4: Consolidation as a solution for MSPs to maintain profitability

Managing an MSP business can be challenging in an environment of economic uncertainty. Naturally, there is a lot of pressure to maintain profitability, keep customers satisfied and attract and retain a skilled workforce. And, not to forget, there are new players entering the market every day offering similar services for cheaper prices. That's why, in the past two years, there has been a record-breaking trend of mergers and acquisitions (M&A) within the MSP space, and it's not likely to slow down anytime soon.

Consolidation can help MSPs to gain a competitive edge by enabling them to offer integrated and comprehensive service packages, rather than having to assemble them on their own. However, it is important for MSPs to strategically choose the right vendor to acquire or partner with and manage the transition effectively to ensure that it does not cause problems but adds to greater efficiency, better services, or specialization.

Prediction #5: Ransomware will continue to be the biggest threat to businesses

Security professionals believe that ransomware attacks will continue to pose a significant risk to organizations in 2023, particularly against small to medium-sized businesses (SMBs).


In recent times, criminals have shifted their focus to SMBs as they believe that targeting large corporations may attract too much attention. Also, SMBs typically do not have the technology or manpower budget as their enterprise counterparts and are more vulnerable. Although there is no guaranteed method for avoiding a ransomware attack, partnering with experienced managed service providers (MSPs) makes sense. They can assist you in implementing efficient strategies to decrease the likelihood of such attacks.

The battle will continue. MSPs have no other option but to rise up and continue investing their time and resources to find effective ways to fight ransomware attacks.

The year ahead is predicted to be difficult for almost every sector. But the MSP industry has an opportunity to thrive. One piece of advice we have for all MSPs is to work on an action plan that builds on and capitalizes on the above trends.

read moreicon


Mapping Your Calendar: 24 MSP Events to Attend in 2024

Discover key events for 2024, to unlock success in the MSP world! Mark your calendars to power your MSP journey with expert insights and networking.

7 minutes