Top 6 MSP Trends to Watch in 2024

The managed IT services industry is evolving at a rapid pace, driven by new technologies and changing business needs. As per Grand View Research, the global managed services market is projected to reach $397.6 billion by 2029, growing at a CAGR of 8.3% from 2022-2029.[1]

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For MSPs to tap into this growth and remain competitive, tracking the key trends shaping their industry is crucial. In this comprehensive 3200+ word guide, we explore the top 6 MSP trends to watch in 2024 based on their potential impact and growth opportunities.

1. Increased Adoption of Automation

Automation is transforming how MSPs deliver services and manage operations. According to Kaseya’s 2023 survey, around 90% of MSPs reported that automation and cloud computing are fueling their growth.[2]

I foresee this trend accelerating further in 2024, driven by the benefits automation confers:

For MSPs:

Increased efficiency – Automate repetitive, manual tasks to improve productivity.
Cost reduction – Lower overheads and resource needs.
Improved scalability – Manage larger client bases more easily.
Higher profitability – Save time and costs to boost margins.
Enhanced client services – 24/7 monitoring and rapid issue resolution.
Competitive differentiation – Offer innovative services leveraging automation.

For MSP clients:

Cost savings – Through workflow optimization and productivity gains.
Enhanced uptime – Prevent outages via automated monitoring and maintenance.
Better customer service – Provide quick responses and issue resolution.
Higher security – Rapidly detect and respond to threats.
Deeper insights – Tap automation for advanced reporting and analytics.

According to Deloitte’s global survey, organizations implementing automation expect to achieve annual cost savings of 18% on average.[3] This creates a compelling incentive for MSP clients to drive automation with help from service providers.

However, as the Deloitte survey shows, scaling automation faces barriers like inefficient processes, unclear vision, and inadequate infrastructure readiness. By proactively guiding clients through these hurdles, MSPs can pave the path to fully automated operations, unlocking substantial value.

Specific opportunities to leverage automation include:

For MSPs:

Automated client onboarding using RPA bots
Predictive RMM based on machine learning algorithms
AI-powered chatbots for client support
Intelligent knowledge management systems

For Clients:

Streamlined HR processes like recruitment and payroll
Order processing and supply chain workflows optimization using RPA
Predictive analytics for business forecasting
Automated compliance monitoring and reporting

According to MarketsandMarkets, the global RPA market will grow from $1.6 billion in 2020 to $6.8 billion by 2025, at a CAGR of 34%.[4] As a leader in extracting data from websites and APIs, I see huge potential for MSPs to capitalize on RPA and AI-driven automation. The winners will be those that successfully integrate automation to enable new services and empower clients.

However, the path to large-scale automation is not without challenges. MSPs may face difficulties when:

Integrating complex legacy systems of clients
Managing change management and client expectations
Acquiring niche expertise to automate complex tasks
Justifying ROI for automation initiatives

With the right strategies, these hurdles can be overcome. For instance, taking an incremental approach, focusing first on the highest value repetitive tasks, can demonstrate ROI for clients. A change management plan and training programs also help secure buy-in. Ultimately, MSPs that invest in expertise and partnerships to drive automation will gain a sustained competitive edge.

2. Growing Cybersecurity Services

With cyber threats continuously evolving, organizations are seeking help securing their data, infrastructure and operations. Kaseya’s survey highlights how clients are demanding more security services from MSPs compared to 2022:

Email security rose from 11% to 15%
Security awareness training grew from 7% to 11%
Password management increased from 5% to 8%[5]

This rise in demand is fueling rapid growth for security-oriented MSPs. Enhanced security services and business continuity services showed the highest growth rates in 2024:

I expect managed security services to be a $26.5 billion market by 2030, expanding at a 12% CAGR.[6] By adding advanced security capabilities, MSPs can capitalize on this enormous opportunity.

Top offerings MSPs should consider include:

Managed firewalls
Intrusion detection and prevention
Endpoint detection and response
Data loss prevention
Distributed denial of service (DDoS) mitigation
Security information and event management (SIEM)
Identity and access management (IAM)
Data encryption and key management
Vulnerability scanning and patching
Backup and disaster recovery
Advisory and compliance services

With the right expertise and solutions, MSPs can provide complete managed security tailored to each client’s needs. Multi-layered security helps defend against sophisticated attacks like ransomware, phishing, and zero-day threats.

According to Flexera, companies using MSPs for security enjoy a 16% higher patching cadence and 21% lower downtime from attacks compared to peers.[7] This data strengthens the case for outsourcing security to specialized MSPs.

However, offering robust cybersecurity services brings its own challenges, like:

Shortage of security skills – Training staff takes time and effort
Substantial upfront investment – In security infrastructure and tools
Integrating complex client environments – With niche security needs

MSPs can overcome these obstacles by leveraging security vendors for training, opting for cloud-based tools to reduce capital expenditure, and consulting deeply with clients to map requirements. Despite the hurdles, managed security presents a multi-billion dollar growth opportunity MSPs must prioritize.

3. Integration Across Technology Stack

To deliver managed services smoothly, MSPs rely on a technology stack encompassing solutions like:

RMM for endpoint monitoring and management
PSA for project management and service delivery
RPA for task automation
Documentation tools
Remote access software
Antivirus and endpoint security
Backup and BC/DR applications

According to Kaseya, around 90% of MSPs state that integration between these tools is vital for business continuity. However, switching between disparate apps (18%) and underutilization of apps (39%) remain top obstacles to MSP growth.[8]

My experience helping clients extract data from diverse sources shows integration is key to avoid data silos. As the chart above shows, the #1 priority MSPs set when selecting new solutions like PSA is integration capabilities.

Tighter integration across the tech stack provides major benefits:

Increased technician productivity
Smoother workflows and less friction
Single pane of glass visibility
Enhanced client reporting and analytics
Higher service profitability

By adopting platforms designed for integration or using APIs and tools like Zapier, MSPs can connect their technology stack into a unified whole. Top priorities for integration include:

RMM with PSA
PSA with accounting software
Documentation tools with RMM and PSA
AV and security tools with RMM
Automation tools like RPA with PSA and RMM

Overcoming integration hurdles enables MSPs to deliver more responsive, higher quality and profitable managed services. Clients benefit through superior experience and insights into their IT environments.

However, some challenges around integration persist:

High upfront investment of time and money
Legacy systems that lack APIs or interoperability
Resistance to new tools or processes
Changing integrations as tech stack evolves

By taking an incremental approach, proving ROI through pilots, and proactively training staff, MSPs can overcome barriers. A holistic integration strategy that permeates the technology stack will define leading MSPs of the future.

4. Harnessing AI to Work Smarter

Artificial intelligence (AI) and machine learning are disrupting industries worldwide, and managed services is no exception. While stats on adoption remain limited, I see AI enabling MSPs to deliver higher value services while working more efficiently.

My experience with large-scale data extraction gives me unique insight into AI‘s potential. Key use cases MSPs should evaluate include:

Chatbots for automated client support
Intelligent knowledge management systems
Automated infrastructure monitoring and predictive analytics using AIOps
AI augmented IT documentation search
ML-based malware and threat detection
Automating help desk tickets routing using NLP

According to Omdia, over 60% of MSPs expect AI to significantly impact their organization within 3 years.[9] With the global AI market projected to reach $500 billion by 2024, it is clear MSPs must embrace this trend.[10]

I also foresee generative AI like ChatGPT playing a bigger role by helping MSP teams:

Respond faster to client queries by generating documentation
Automate repetitive tasks like scripting
Develop content for sales and marketing
Gain insights from large client datasets
Provide intelligent recommendations to boost service quality

By integrating AI, MSPs can divert their focus from mundane tasks to high-value work. Clients also benefit through faster issue resolution and more personalized service.

However, AI adoption has its roadblocks, like:

Integrating AI with existing systems and workflows
Achieving ROI amid high investment costs
Making the business case to management
Overcoming distrust of AI‘s capabilities
Managing expectations around achievable benefits

By partnering with specialist AI vendors, taking an incremental approach, and proactively communicating value to stakeholders, MSPs can overcome these hurdles.

5. Managing and Securing IoT for Clients

Internet of Things (IoT) adoption is accelerating across industries, as connected sensors and devices provide organizations greater visibility and control. As per Gartner, 14.4 billion connected IoT devices will be in use by 2023, up from 8.7 billion in 2020.[11]

This proliferation is driving strong demand for IoT managed services, expected to reach $101.3 billion by 2027 expanding at a 23% CAGR.[12]

As an expert in extracting insights from connected systems, I foresee major opportunities for MSPs to capitalize on the IoT boom by providing:

IoT Advisory Services:

Roadmapping, scoping requirements
Vendor evaluation and selection
Solution design leveraging sensors, connectivity, data and analytics
Technology stack integration

Ongoing Management:

Device provisioning and activation
Connectivity and communications management
Monitoring, troubleshooting and break-fix support
Software and firmware updates
Security patching and hardening

Data Services:

Data aggregation from disparate IoT systems and devices
Normalization, cleansing and visualization
Analytics and business intelligence
Building data models and machine learning algorithms

IoT Cybersecurity:

With billions of insecure IoT devices set to go online, security is paramount. MSPs can provide:

Threat monitoring and detection tailored for IoT
Incident response including forensics and containment
Vulnerability management
Edge and endpoint security hardening
Identity and access management
Compliance audits and advisory

Specializing in multi-vendor IoT environments is an attractive niche, as many clients use solutions from multiple hardware and platform providers. MSPs that build end-to-end capabilities spanning advisory, management and security will gain a sustained competitive advantage.

However, the IoT arena brings unique challenges:

Rapidly evolving technologies and standards
Integrating complex legacy environments
Challenges interfacing with proprietary hardware and platforms
Lack of internal skills and expertise

By proactively training staff, hiring IoT talent, leveraging vendor partnerships, and maintaining agility, MSPs can overcome these hurdles and tap into the high-growth IoT managed services market.

6. Adopting AIOps for Smarter IT Operations

AIOps, combining big data and artificial intelligence for IT operations, is gaining rapid adoption. As per Omdia’s survey of MSPs:[13]

67% have already implemented AIOps, with 97% planning to increase spend in the next 2 years
Top use cases are automated monitoring, alert correlation and IT optimization

As an expert in extracting value from volumes of data, I strongly advocate MSPs adopt AIOps to enhance service quality.

AIOps brings powerful benefits:

Smarter Monitoring

Reduced alert noise through correlation and suppression
Automated clustering and analysis of related events
Focusing teams on critical alerts and anomalies

Accelerated Diagnosis and Remediation

AI algorithms rapidly pinpoint root causes
Enable self-healing workflows to auto-remediate common issues

Improved IT Optimization

Forecast capacity needs and optimize infrastructure scaling
Uncover usage and performance trends with ML algorithms
Enable proactive maintenance and service improvements

These capabilities can reduce MTTR by over 30% while cutting alert volumes by up to 90%.[14] Clients benefit through higher application availability and performance.

However, AIOps adoption has roadblocks:

Integrating siloed data sources and formats
Achieving accurate baselines and algorithms
Changing processes to leverage recommendations
Ongoing investment in skills to manage the platform

By taking an incremental approach, securing executive buy-in, and partnering with specialist AIOps vendors, MSPs can overcome these hurdles to leverage data-driven intelligence for more proactive, efficient and profitable services.

Conclusion

Based on my decade of experience in data extraction and analysis, combined with extensive research, these 6 trends have tremendous potential to shape the managed services industry:

Automation will drive internal efficiency and client benefits
Cybersecurity services present billion-dollar growth potential
Integration across technology stacks powers service excellence
AI will enable MSPs to work smarter and deliver higher-value services
IoT introduces new growth opportunities and security challenges
AIOps provides data-driven intelligence to enhance IT operations

While implementing these trends has challenges, the most innovative MSPs will proactively adapt solutions and strategies to turn disruption into sustainable competitive advantage.

Although the managed services market is maturing rapidly, embracing new technologies ensures ample opportunities for MSPs to continue driving value for clients while achieving profitable growth.