The global managed services provider (MSP) market remains in growth mode. But MSP market forecasts sometimes raise more questions than they answer.
Consider these two forecasts:
- Overall Managed Services Market Forecast: The worldwide managed services market will reach $557.1 billion by 2028, which represents a 12.6% compound annual growth rate (CAGR) from 2020, according to Fortune Business Insights research.
- Cloud Managed Services Market Forecast: The worldwide cloud managed services market will reach $237 billion by 2032, which represents a 9.6 percent CAGR from 2022, according to market research firm Fact.MR.
Reread those two forecasts, and something doesn't add up.
Cloud MSPs: Where the Action Is?
Specifically: How can (1) the overall MSP market be growing faster than (2) the cloud managed services market? After all, the cloud managed services market is newer, growing from a smaller base and generally hotter than the overall MSP market.
Other than the two forecasts above, every stat we've seen suggests public cloud and multi-cloud MSPs -- those focused on AWS, Microsoft Azure and Google Cloud Platform -- are growing more rapidly than more traditional MSPs that offer SMB-type IT services.
Still, we confess: We're not making an exact apples-to-apples comparison, since the two research sources -- Fortune Business Insights and Fact.MR -- use different timeframes within their CAGR forecasts.
MSP Market Forecasts And Your Business
Nevertheless, we offer up the two example reports above as a timely reminder:
- Research reports are forecasts that may or may not come true.
- The general consensus suggests that the MSP market will continue to grow faster than the traditional IT market for years to come.
- Your MSP's performance ultimately hinges on one thing: Your leadership, strategy and execution.
Remember, 25 percent of MSPs are roughly break-even or money-losing businesses, according to Service Leadership Inc. benchmark research. In stark contrast, top-quartile MSPs generate EBITDA profit margins of roughly 18% or more, Service Leadership research also finds.
Bottom line? MSP market forecasts may provide a baseline from which to measure your business performance. But ultimately, you control your MSP business's fate...
