News Article

MSP Report: IT complexity & cost efficiency driving market to reach $552 Billion by 2032

Written by DrakeStar | Apr 24, 2024 2:06:01 PM

Our inaugural MSP Market Report analyzes M&A activity and key market dynamics, deal counts in the US and Europe, the most active strategic consolidators, private placements, and other important trends. Download the full PDF below for more insights.

The report shows overall strong market traction despite economic uncertainty, including 125 MSP transactions in 2023, an overall market value of $283 Billion and a ~7.7 % expected CAGR until 2032. Our key takeaways on the MSP market also include:

  • In Q4 of 2023, there was a 54% increase in mergers and acquisitions within the managed services market compared to the previous quarter, spurred by companies aiming to expand their service offerings.
  • The larger MSPs continue to consolidate the market and drive M&A activity, with the most acquisitive MSPs closing 4+ transactions in the past 2 years each.
  • The global managed service market value was $283 billion at year-end 2023. It’s expected to reach $552 billion by 2032 as IT complexities and cost efficiency drive demand for MSPs.

This activity is being driven by various factors including:

  • Increasing complexity: The swift advancement of technology, varied software environments, and the integration of numerous platforms are driving the need for managed services.
  • Cost efficiency: Managed services improve cost efficiency by optimizing resource utilization and reducing operating expenses, thereby enhancing overall profitability. Businesses are increasingly choosing to outsource to MSPs for infrastructure and tools at a predictable monthly fee, rather than investing in costly hardware and software.
  • Cybersecurity challenges: The rising incidence of cybersecurity threats is fueling the need for MSPs, who provide specialized solutions such as 24/7 monitoring and threat detection. These services are vital for safeguarding sensitive data and ensuring compliance with regulations.
  • Enhanced business agility: Managed services offer the flexibility to promptly adapt IT resources to changes in the market, customer requirements, and emerging opportunities. This capability allows for swift responses without being constrained by fixed infrastructure.

For more insights on the MSP market, click below to download the full PDF.