1. Managed Service Providers Have Become Strategic Growth Partners, Not Just Outsourced Vendors
One of the clearest trends in the report is that organizations now see MSPs as integral to their growth and security strategy, not simply a convenience or cost center.
- 52% of surveyed organizations state they rely on managed service providers to help manage a proliferating suite of disconnected security tools and vendors.
- 51% turn to MSPs to evolve their security strategies as their business scales.
- Nearly 48% use managed service providers to ensure 24/7 security coverage (round-the-clock monitoring and response).
These figures reflect a fundamental shift: customers now expect managed service providers to be co-pilots in securing growth, not just reactive support.
Implication for Managed Service Providers: To thrive, managed service providers must expand beyond tactical support into advisory and architectural roles, helping customers design resilient security roadmaps, rationalize toolsets, and maintain continuous protection.
2. Almost All Organizations Want or Already Work with a Managed Server Provider
The survey shows that working with a managed server provider is now mainstream:
- 73% of respondents say they already partner with a managed service provider.
- When including those evaluating or considering managed server provider engagement, the share rises to 96%.
This is a striking signal: very few organizations are content to manage all security in‑house. Even among those currently without managed service providers, almost all are exploring or planning a partnership.
Implication for Managed Service Providers: The addressable market is enormous. Managed dedicated servers\ must differentiate themselves (through specialization, service quality or domain expertise) rather than assume demand alone will drive business.
3. The Client Base of Managed Service Provider Is Expanding Upmarket
Traditionally, managed service providers were strongly associated with small and mid‑sized businesses. This report shows that managed service providers are increasingly serving larger organizations:
- 85% of organizations with 1,000 to 2,000 employees depend on managed service providers for security support.
- By contrast, only 61% of smaller firms (50–100 employees) use managed service providers in that way.
This suggests that as organizations grow, so do their demands for external expertise, complexity, regulatory pressure, and the scale of threats all increase.
Implication for Managed Service Providers: Managed service providers must develop the infrastructure, processes and talent to scale their services. Serving larger clients involves stronger service level agreements, multi-layered security architecture, compliance support and perhaps "co-managed" models where managed service providers and internal teams share responsibilities.
4. Demand for AI / Machine Learning and Advanced Network Security Is Rising Fast
Over the next couple of years, organizations expect their managed service prvoiders to bolster capabilities in advanced security domains:
- 39% of organizations expect needing managed service provider support for AI and machine learning tools or applications.
- A similar demand is emerging for network security, zero trust and managed security operations.
Managed service providers will no longer be asked only to host firewalls or monitor logs, customers expect help with forward-looking initiatives: threat modeling, predictive analytics, anomaly detection and zero-trust architecture.
Implication for Managed Service Providers: Investing in AI/machine learning capabilities, threat intelligence and next-generation network defense will be critical. Managed service providers that stagnate with legacy toolsets may lose relevance.
5. Customers Are Willing to Pay More But Expectations Are Also Higher
The report reveals that organizations are ready to pay premiums for better managed service provider services but that raises the bar for performance:
- 92% of respondents say they would pay extra for advanced support in integrating security tools.
- Some customers are willing to pay up to 25% more for that extra level of service.
Yet, payment willingness does not guarantee loyalty:
- 45% of customers say they would switch managed service providers if their provider fails to demonstrate the necessary skills, 24/7 support capability or resilience.
Implication for Managed Service Providers: It is not enough to price services higher, managed service providers need to justify the premium continually, with measurable outcomes, clear dashboards and demonstrable reliability.
6. Tool Sprawl and Integration Challenges Are a Major Trigger for Managed Service Provider Engagement
Perhaps the most frequently cited reason organizations seek managed service provider support is management of a fragmented security landscape:
- 52% of organizations turn to managed service providers when the number of security tools becomes unmanageable.
- Many tools come from different vendors and lack integration, which multiplies complexity, false positives and gaps.
In many organizations, overlapping or poorly integrated tools lead to alert fatigue, configuration drift and blind spots.
Implication for Managed Service Providers: Offering a consolidated platform, unified dashboard, automated orchestration and interoperability is a strong differentiator. Managed service providers that can ease the burden of tool sprawl will win trust.
7. The Stakes Are High — Poor Performance Risks Customer Churn
The report underscores that many clients are unforgiving of underperformance:
- 45% would switch providers if performance fails on core expectations.
- Key failure modes cited include lack of 24/7 support, inability to remediate or recover from attacks, failure to demonstrate security expertise and weak resilience of the MSP's own security posture.
Clients are now judging managed service providers not just by uptime or responsiveness but by strategic attributes: trust, resilience, insight and proactivity.
Implication for Managed Service Providers: To retain customers, MSPs must elevate operations: invest in continuous training, internal security posture, strong incident response, service reliability and transparent metrics.
Strategic Recommendations
These seven takeaways paint a compelling picture: managed service providers today are under both opportunity and pressure.
Here is how managed service providers should respond:
- Evolve to strategic partnership models. Don't wait for customers, actively propose architecture, roadmap, advisory services.
- Build for scale. Ensure you can support larger organizations via SLAs, compliance readiness and robust processes.
- Invest in AI, analytics and future-forward security. Offer truly differentiated services, not just "monitoring with alerts."
- Simplify toolsets. Promote integration, orchestration, dashboards, vendor consolidation to reduce friction for customers.
- Demonstrate value continuously. Use dashboards, reports, KPIs, ROI metrics to justify higher price tiers.
- Strengthen internal resilience. Be able to showcase your own security maturity, clients will expect proof.
- Prioritize reliability and responsiveness. Being available 24/7, responding swiftly and having a mature incident process are table stakes today.
Source: https://www.hostnoc.com/baracudas-msp-customer-insight-report-2025/