Six Forces to be Considered for MSP Growth and Sustainability in 2026

Published: April 8, 2026

In 2026, managed services is a $608+ billion global market — 1.5 times larger than the global SaaS industry and all the hyperscalers combined, growing at 13% annually — nearly double the broader tech industry, six times faster than the world economy, and 50% faster than SaaS and cloud infrastructure. Channel Dive In Jay McBain's own words, the timing is nearly perfect for MSPs. 82% of organizations are already Channel Dive outsourcing some or all of their IT — and that number is growing.

The demand is expanding. Many MSPs have the opportunity and capability to effectively capture this market.

The following forces are the conditions separating MSPs who are positioned to capture this moment from those producing activity. Understanding these forces is a first step to building the motion that’s ensure opportunities are reaped.

Force 1: The Old Growth Formula Only Partially Captures the Opportunity

For years, MSP growth followed a familiar formula: hire more technicians, add more endpoints, expand into new territories, apply modest annual price increases. That model worked because labor scaled, pricing power existed, and geography created new surface area.

That formula can no longer absorb the opportunity at the pace it is growing.

With 82% of organizations outsourcing more IT than they did the year before, the ceiling is the MSP's capacity to capture what is already there systematically. In simple terms, this means organizing people, processes, and technology to handle more work efficiently and consistently, without dropping quality or burning out their team. Channel Dive Wage inflation for skilled technical talent continues to outpace the Consumer Price Index. In other words, salaries for experienced tech workers are rising faster than the overall cost of living.

Per-user and helpdesk models are increasingly commoditized. AI has automated much of Tier 1 support, restructuring the traditional staffing pyramid into a diamond — broader in the middle, dependent on senior talent at the top. In 2025 alone, 43.4% of IT solution providers trimmed headcount. (Service Leadership / ConnectWise, 2026 Annual Compensation Report, via Channel Dive)

Service Leadership has documented that service delivery ratios have remained largely flat since 2013. AI may finally shift that — but only for MSPs who have already built organized, repeatable systems.

Real growth now comes from leverage — systems that allow the same team to capture more of the expanding market without burning out.

Force 2: More Responsibility, Same Revenue

MSPs are being asked to deliver more outcomes without being paid more for them.

Security, compliance, identity management, and resilience planning are no longer premium add-ons. They are table stakes. AI has followed the same trajectory. Clients expect AI-enabled automation, insight, and guidance — but few are prepared to pay explicitly for it.

As KeyStone CEO Preston West put it: "It feels like you're drinking out of a fire hose." (Channel Dive) Tool sprawl, vendor demands, and customer expectations are accelerating simultaneously.

Scope grows. Complexity grows. The team managing it is leaner. Without clearly defined value boundaries, scope creep can quietly destroys margin — fast.

Force 3: Execution Capacity Is the New Bottleneck

Teams are leaner, more senior, and harder to replace.

The staffing pyramid — historically built on a broad base of Tier 1 and Tier 2 technicians managed by a thinner senior layer — is restructuring into a diamond. AI is compressing the base. The middle is expanding. The top is being asked to carry more with less structural support beneath them. (Service Leadership, via Channel Dive)

A senior tech who leaves doesn't just create a staffing gap — they take institutional knowledge, client relationships, and operational continuity with them. Lean teams have less room to absorb that disruption. Recovery is slower and more expensive.

The organizations navigating this best are the ones where knowledge lives in the system, not in individuals.

Force 4: Partnership Revenue Is Underperforming Its Potential

MSPs account for just 7% of Technology Services Distributor (TSD) gross billings — yet consistently drive the highest revenue per deal of any partner type when they do engage. (Omdia, via Channel Dive)

TSDs are a North American distribution channel — largely telco-rooted — that is in the early stages of meaningfully serving MSPs as a partner type. The gap is not structural neglect. It is activation. TSDs provide vendor access and contracts. They do not provide the co-marketing system, the joint messaging, the MDF strategy, or the seller enablement that would allow an MSP to show up in front of a shared customer compellingly.

The same pattern plays out in ISV and cloud hyperscaler partnerships. MSPs sign agreements, complete onboarding, and then partnerships freeze — because there is no co-marketing infrastructure behind them, no joint value proposition, no loop connecting product, marketing, sales, finance, customer success, and legal into a shared motion.

ISVs and cloud platforms are not passive in partner selection. Through programs like AWS's Channel Partner Private Offer (CPPO), ISVs actively authorize specific MSPs based on readiness signals: Marketplace eligibility, competency attainment, MDF utilization, and co-sell activity. MSPs who haven't built those signals are invisible to the ISVs trying to find them.

MSPs who have built GTM and partner activation infrastructure are being selected first, funded first, and co-sold with first.

Force 5: Founder-Built Is a Feature — And an Opportunity

The managed services industry was built by founders and small teams. The majority of companies holding managed contracts run lean. Close client relationships, deep accountability, and responsive delivery are features of this model. The right systems allow founders and small teams to scale that impact without scaling their hours.

Many MSPs at $2M–$15M in revenue are still the primary engine for sales motion, key client relationships, and escalation decisions.

Paul Daigle, Senior Managing Partner at BizAdvisoryBoard, put a version of this to his LinkedIn network that stayed with me: if someone handed your business a pre-qualified, mutually vetted, 150-seat client tomorrow — could you absorb it? Not whether you'd want it. Whether your onboarding, your staffing model, your delivery infrastructure, and your billing systems could actually receive it without the founder becoming the bottleneck for the next six months.

Organizations that have built repeatable GTM motion, documented processes, and structured partner programs can grow with and beyond their founders because the system becomes the foundation for MSPs to motion from initial GTM planning to live managed servicing.

Force 6: Revenue Model Evolution

The MSPs commanding the highest valuations, attracting substantial ISV investment, and forging the most resilient enterprise relationships in 2026 have distinguished themselves by evolving beyond a single revenue model.

Recurring managed services — the traditional MSP foundation — is one model. Project-based professional services, implementation, and integration work is a second. Proprietary tooling or platforms is a third. The MSPs growing fastest and attracting the most capital have intentionally expanded into two or three of these simultaneously.

Pure managed services — recurring contracts to manage environments clients own, with no differentiated IP and no professional services margin — is a commoditized position in today's market. PE-backed competitors use scale to compress pricing. Cloud providers are absorbing basic IT work. AI is replacing tasks once billed as labor.

Service Leadership data shows PE-backed firms were the most churn-prone in 2025, with 54.6% losing more than 10% of their workforce. (Service Leadership / ConnectWise 2026 Annual Compensation Report, via Channel Dive)

The MSPs PE firms want to acquire, vendors want to co-sell with, and enterprise buyers want long-term are the ones who moved up this stack deliberately and with a clear view of what their business is worth.

The question worth asking: what does your revenue model look like — and is it the kind that builds longevity?

What These Forces Point To

These forces don't define how big the opportunity is. They define how much of it any given MSP walks away with.

That is where the MSP growth flywheel enters. More on that in the next article.

Stay tuned for more insights and perspectives like these.

Best Regards,

Shaun Martinez, PMMC™ 

Co-Founder of ExSailIQ 360° - Strategic Product and Partner Marketing Consultant