By Andy Cormier, Channel Chief, Syncro

With technology advancements, changing client expectations, and cybersecurity needs increasing, managed service providers (MSPs) are experiencing significant changes. As I look ahead to 2025, I've identified several trends that I believe will influence how MSPs operate and deliver value to their clients. Whether it is outsourcing security operations or leveraging artificial intelligence as a revenue growth tool, these developments will allow MSPs to stand out from their competitors.

Cybersecurity is growing more complex, outpacing many MSPs' ability to manage security threats in-house. Today some MSPs are implementing security measures without completely understanding their implications and best practices. The shortage and high cost of skilled cybersecurity professionals also make it difficult for MSPs to bring qualified security professionals in-house. 

As a result, many MSPs have started to outsource their managed security operations through a Security Operations Center (SOC) using Managed Detection and Response (MDR) services. MDR provides the platform and expert personnel needed to detect and mitigate cybersecurity threats 24/7/365 with actual humans. This allows MSPs to offer comprehensive protection without the need for full-time, in-house specialists.

By 2025, MDR services will be a standard part of MSP service offerings. As security threats evolve and talent costs rise, outsourcing security needs to a SOC will enable MSPs to maintain robust security capabilities and avoid operational disruptions. MSPs that offer advanced outsourced security services will stand out in a market increasingly defined by security concerns, allowing them to qualify a subset of customers unwilling to move forward without a strong security posture.

2.  AI for Revenue Generation, Not Just Efficiency

Today, many MSPs use AI to improve efficiency-i.e., speeding up response times, automating repetitive tasks, and supporting technicians by offering solutions to common problems. However, the potential of AI goes far beyond operational improvements. While efficiency gains are valuable; they typically only lower costs or save time-not directly increase revenue. 

Yet AI can drive revenue directly by enhancing sales, pricing, and customer retention strategies. For example, since AI can analyze thousands of data points across your customer interactions, MSPs can identify which clients may need additional services and even those that have a high probability of being receptive to an upsell. AI can also analyze customer behavior and historical data to suggest ideal times for renewal negotiations and other services based on usage patterns, previous conversations, and support ticket data. This data-driven approach allows MSPs to anticipate customer needs and respond with tailored offerings that generate increased revenue opportunities or entirely new income streams. In 2025, the use of AI for revenue-generating activities will start to become more of a standard practice among MSPs. Rather than focusing solely on time and cost savings, AI will provide actionable insights to drive profit.

3.   Vendors Leveraging Aggregated Data to Boost MSP Performance

Vendors that support MSPs collect large volumes of operational data, such as ticket patterns, billing trends, and performance metrics. While MSPs use some of this data for internal optimization, vendors have yet to fully harness this aggregated information to deliver strategic insights back to their MSP clients.

In 2025, vendors will start to use the vast amounts of anonymized, aggregated data from MSPs to provide actionable insights that help MSPs optimize their business practices when compared to other MSPs. For example, vendors can analyze data across thousands of MSP clients to identify industry benchmarks, revenue leaks, or underperforming contract elements. They'll deliver personalized reports that show MSPs where they could increase revenue, adjust pricing, or reduce inefficiencies based on peer performance. This value-added intelligence will position vendors not just as software providers but as strategic partners invested in the MSPs' success.

4.  Insurance-Driven Compliance: The New Normal for MSPs

MSPs are being pushed by clients today to meet specific compliance standards, which are often driven by insurance requirements due to the rise in ransomware incidents.  Currently, MSPs have the flexibility to choose compliance frameworks, service offerings, and products based on clients' needs. However, this dynamic is shifting, as insurance companies are starting to require compliance standards that their clients must adhere to, meaning the MSPs that service them must now support these compliance standards as well.

By 2025, we'll see a widespread shift where MSPs must align with strict insurance-mandated compliance standards. Customers will vet MSPs based on compliance adherence-not necessarily because the clients prioritize compliance but because their insurance coverage mandates it. This will force MSPs to deepen their compliance expertise and ensure all components of their technology stack align with these new standards. Instead of compliance being an MSP differentiator, it will now be a requirement, and only MSPs that meet these standards will be considered for hire. 

It is clear from these trends that MSPs need to be adaptable and strategic as we enter the new year. By embracing outsourced security, harnessing the revenue potential of AI, leveraging aggregated data, and following compliance mandates, MSPs can position themselves for long-term success. 

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ABOUT THE AUTHOR

Andy Cormier is Channel Chief at Syncro, where he leads strategic initiatives with Syncro's partners, ensuring their needs are met through innovative, AI-driven solutions that maximize profitability. With a deep understanding of the MSP landscape, Andy has built, grown, and successfully exited his own MSP business, consulted for hundreds of others, and helped shape leading MSP platforms. He is also the author of So You Want To Be An MSP, offering actionable insights for thriving in a sales-driven model. Andy is passionate about helping MSPs succeed and is committed to driving value and growth for Syncro's partners.