Q2 2025 MSP Report: Consolidation, Complexity, Cyber & 5 Priorities Defining this $300+ Billion Market

The MSP sector is large and growing rapidly, fueled by IT complexity, rising cybersecurity demands, and AI-driven transformation. And strategic acquirers are moving aggressively to consolidate through M&A and capture this opportunity.

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Highlights here:

The Managed Service Provider (“MSP”) sector recorded 92 announced M&A transactions in Q2 2025, demonstrating continued momentum in one of tech’s most actively consolidating segments. While disclosed deal values were limited this quarter, the strategic intent behind these acquisitions is clear: expand cybersecurity capabilities, automate operations, and solve for growing IT complexity.

IT Services accounted for 83% of total M&A activity, as acquirers sought to bolster service delivery and scale across fragmented client environments.

Cybersecurity & compliance also took center stage, with 84% of MSP clients now expecting cybersecurity management as part of the core offering (up from 65% last year).

Compliance-as-a-Service is also rising fast as regulatory demands increase (GDPR, HIPAA, PCI DSS), creating new growth lanes for MSPs with deep regulatory expertise.

“The leading MSPs are doubling down on five core levers: operations, talent, security, automation, and compliance,” said Sam Levy, Partner at Drake Star. “This integrated approach is how firms differentiate, scale, and win in an intensely competitive landscape.”

Key Market Drivers

• $305B Global MSP Market → Forecast to hit $571B by 2033
• Top 10 consolidators have completed 4+ deals each in the past two years
• 35% of MSPs cite competition (including AI) as their top challenge, up from 29% last year

Select Notable Transactions – Q2 2025

• Comcast acquired Nitel to expand secure connectivity and enterprise services
• NWN Carousel acquired InterVision Systems to scale AI-driven modernization
• TELUS Digital acquired Gerent, deepening capabilities in agentic AI and CX tech
• Integris acquired TechMD to boost U.S. cybersecurity and SMB market presence
• Allurity acquired Onevinn, strengthening regional cyber reach

The Bottom Line

Managed Service Providers are essential infrastructure for the digital enterprise — but the model is being reshaped.

• Buyers are targeting firms that reduce complexity, deliver cyber strength, and scale efficiently.
• The winners are platform builders, not point solutions.

Get the Report to dive into full deal analysis, market segmentation, and strategic insights from Drake Star’s global tech M&A team, including an outline of 5 strategic priorities MSPs need to tackle effectively to drive growth.

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