Leading MSPs collectively saw annual recurring revenue climb 11% in 2024, growing from $2.2 billion to $2.5 billion, underscoring the profitability of targeting niche markets in an era where generalist IT services are no longer sufficient, according to ChannelE2E’s 2024 Top 100 Vertical Market MSPs report.
Driving the remarkable 11% surge in MSP revenues are three powerhouse verticals—healthcare (28%), financial services (18%), and manufacturing (11% )—each demanding deeper specialization and cutting-edge cybersecurity strategies.
While the importance of vertical specialization was emphasized in both the 2023 and 2022 ChannelE2E reports, it's clear from the 2024 data that this strategic approach has finally taken root and is blossoming, delivering tangible growth.
Over the past year, healthcare MSPs remain at the forefront, seeing revenues grow nearly one-third among the ranked names on this year’s Channel E2E's 2024 Vertical Market MSP Report. Growth is credited to the vertical market’s need to tackle complex regulatory compliance and digital transformation challenges.
MSPs like Medicus IT specialize in navigating stringent regulations such as HIPAA, ensuring healthcare providers securely manage sensitive patient data while simultaneously deploying telemedicine platforms, digital patient record systems, and cloud migration solutions to modernize patient care delivery.
Other leading healthcare MSPs making this year’s list include Anatomy IT, All Covered, and Creative Technology Solutions.
The increasing complexity of the regulatory landscape also boosted revenues for MSPs specializing in financial services. Firms such as Thrive and Integris have excelled by implementing advanced cybersecurity frameworks that comply with PCI DSS, GDPR, and other financial data protection standards while also supporting digital initiatives such as mobile banking apps, real-time financial analytics, and secure fintech integrations.
Those MSPs focused on the manufacturing sector, including Nuspire and Net at Work, saw revenue grow 11 percent in 2024. These MSPs are helping manufacturing clients comply with international supply-chain regulations, ISO standards, and data privacy laws, alongside spearheading digital transformation via industrial IoT deployments, smart factory integrations, and advanced operational technology (OT) cybersecurity solutions.
Bureaucracy Drives Business
In fact, this year’s most striking revelation, according to the 2024 Vertical Market MSP Report, is that 95% of ranked MSPs now provide governance, risk, and compliance (GRC) solutions, reflecting a market urgently pivoting toward rigorous cybersecurity standards and regulatory adherence.
According to the 2024 Vertical Market MSP Report, besides the widespread adoption of GRC solutions, several other underlying trends contributed significantly to vertical specialization and revenue growth, driving the overall market from $2.18 to $2.46 billion.
Going Beyond Bureaucracy
Robust cybersecurity solutions emerged as a critical driver of MSP revenue growth, reflecting the market's urgent need for advanced security amid increasing digital threats. Top-ranked MSPs such as Nuspire and Integris have significantly expanded their cybersecurity capabilities, including the widespread adoption of backup and disaster recovery (BDR) and endpoint detection and response (EDR). These offerings provide defenses against escalating risks and enable the secure management of their networks.
MSPs ' cultivation of strategic technology partnerships is another key factor fueling revenue growth and vertical specialization. Providers like CoNetrix and CompassMSP have notably leveraged relationships with major technology vendors, including Microsoft, AWS, Cisco, and Ingram. These alliances equip MSPs with powerful tools and platforms essential to helping customers deliver tailored, sophisticated solutions efficiently, enabling them to meet the increasingly complex needs of vertical industries.
Looking Back at Previous Reports
Compared to 2022 and 2023, when MSPs urgently adapted to pandemic-driven shifts and surging cybersecurity threats, 2024 marked a definitive turning point where strategic vertical specialization and proactive cybersecurity emerged as essential market requirements.
Unlike prior years, when impressive but reactive growth dominated—such as the notable 42% revenue surge in 2021 driven by emergency digital transformations—the more moderate yet strategically significant 11% growth in 2024 reflects MSPs maturing into targeted experts rather than generalist responders.
Additionally, the emergence of near-universal GRC adoption at 95% in 2024 signals a market transformation that was only hinted at in previous years. This extensive integration of GRC underscores MSPs' clear transition from merely managing IT infrastructure to deeply embedding themselves into clients' strategic risk and compliance frameworks. Therefore, 2024 was the year MSPs fully embraced their evolving identity as specialized, compliance-driven partners essential to their clients' long-term security and success.
