Kaseya: Profitability Top Focus for MSPs in 2025

MSPs all concur on the need to ensure profitability in 2025 over all other demands, according to new data about the state of the MSP in the marketplace.

Ninety-one percent of MSPs stated that profitability was a moderate priority for them in the upcoming year, according to Kaseya's State of the MSP Industry 2025 Look Ahead, while 63% stated that it was a top priority for them. The shift reflects a desire among MSPs to move from just growing their businesses in size to ensuring that they are financially in the coming months and years. This survey questioned more than 1,000 executives across the globe, with the vast majority (78%) residing in North America.

TruMethods' Gary Pica

Profitability isn't a new focus for MSPs, of course.

"After all of this time and all the progress that we have made as MSPs, profitability and new client acquisition is still first and foremost on the minds of MSPs," Gary Pica, founder of Kaseya partner TruMethods, told Channel Futures. "And if you're not growing and profitable, your clients aren't as secure as they need to be."

MSPs' concerns are also shifting as we move into 2025. Forty-three percent of recipients stated that new customer acquisition was a top priority, followed by revenue growth (37%) and profitability (36%).

That data, however, isn't implicative of a struggling market. Sixty-four percent of respondents reported revenue increases in 2024, while 67% said that they expected growth over the next three years.

Related:MSPs Struggle to Add Customers in 2024

The offerings have grown a bit more diverse. Eighty-three percent of MSPs offer co-managed services, helping internal IT teams with business continuity and disaster recovery (38%), cloud-based infrastructure design and management (37%), and data backup and protection (36%).

MSPs report that security threats are adapting as malicious actors are learning to use AI to attack their security systems. More than two-thirds of respondents said that they experienced an increase in AI-driven attacks in the last twelve months. In fact, AI-supported attacks affected MSPs more than either supply chain attacks or endpoint threats.

What MSPs Can Learn from Kaseya's State of the MSP

A lot of that data can be overwhelming for many early MSPs. But Pica believes that the collective data may make selling their suite of products easier.

"If I'm an MSP, and I'm looking at this report, it's quite clear that I'm not alone if I'm struggling with growth and profitability," Pica said. "But maybe I'm starting to see that a lot of MSPs are figuring it out, and I'm coming to the conclusion that I need to be a better business person. First, I need to be better at understanding my cost, my value proposition and sales process as opposed to just what many of them like as a technology. And they can see that our market is growing, and that there's a better opportunity to sell more recurring revenue at a higher price now than ever before, but they should be concerned about cybersecurity. That should be a higher concern, and how to keep getting better at it than growth and profitability."

Related:Kaseya’s Fred Voccola Hints at Huge News in 2024