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The 5 Top Challenges for Today’s MSPs and How to Overcome Them

Top 5 MSP Business Challenges

As today’s business needs continue to evolve, MSPs face growing challenges trying to keep up with the changing landscape. And if you add the economy, the tech shortage, and supply chain issues to the mix, managed service providers have more obstacles to overcome than ever before. Here are the top 5 challenges my MSP partners have shared with me and some tips on overcoming them.

1. Cybersecurity

One of the most critical concerns of managed service providers is cybersecurity. Cyberattacks are becoming increasingly sophisticated and target businesses, the MSPs that serve them, and their vendors. All parties must ensure their networks and systems are secure against these threats. In addition, MSPs and their vendors must stay up-to-date with the latest security technologies and techniques to protect themselves and their clients from cyberattacks.

To overcome this challenge, managed service providers must prioritize security and develop a robust cybersecurity strategy. This includes performing regular security assessments, implementing strong authentication and access controls, and staying up-to-date with the latest security patches and updates. Additionally, MSPs should strengthen their cybersecurity portfolio for clients with enhanced solutions beyond data backup, email security and password management, such as 2-Factor Authentication (2FA), Penetration (PEN) Testing, Managed Detection and Response (MDR), Identity and Access Management (IAM), Security Information and Event Management (SIEM), and advanced cloud platform monitoring, and provide their clients with security awareness training to educate them on the risks of cyberattacks and how to avoid them.

And in addition to implementing robust cybersecurity measures, vendors serving MSPs must adopt secure development strategies for their applications and programs. These include threat modeling, code reviews, and regular security testing.

Threat modeling involves identifying potential security threats and assessing the potential impact of these threats on the system. MSP Vendors can design secure systems from the outset by identifying potential vulnerabilities early in development.

Code reviews involve reviewing the codebase for potential security issues. This can be done manually or through the use of automated tools. Code reviews should be performed regularly to identify and address potential vulnerabilities.

Regular security testing is also crucial in identifying and addressing potential vulnerabilities in the system. This includes penetration testing, vulnerability scanning, and web application testing.

In addition to these strategies, MSP vendors should follow secure coding practices, such as using encryption to protect sensitive data, validating user input to prevent injection attacks, and implementing access control measures to ensure that only authorized users can access sensitive data.

By implementing these strategies, MSP vendors can help ensure their platforms are secure and protected against cybersecurity threats. It is essential that they continually monitor and update these security measures to keep pace with the evolving threat landscape.

2. Remote Work

The pandemic has accelerated the shift to remote work, and managed service providers must ensure their clients have secure and reliable access to their networks and systems from anywhere. This can be a significant challenge, as remote work introduces new security risks and network complexities.

To overcome this challenge, MSPs must implement secure remote access solutions, such as virtual private networks (VPNs) and two-factor authentication (2FA). Additionally, managed service providers should help clients establish remote work policies that address security and compliance concerns. This includes implementing policies around the use of personal devices, securing sensitive data, and accessing the network from public Wi-Fi.

3. Cloud Migration

As more and more businesses accelerate moving their operations to the cloud, MSPs must help their clients with this transition while ensuring the security and stability of their systems. Cloud migration can be complex and challenging, and managed service providers must have the expertise to guide their clients through it.

To overcome this challenge, MSPs should develop a comprehensive cloud migration strategy that includes assessing the client’s current infrastructure, identifying the right cloud solutions, and developing a plan for migrating data and applications to the cloud. Additionally, managed service providers should ensure that their clients’ cloud systems are properly configured, monitored, and maintained to ensure optimal performance and security. And MSPs don’t have to go it alone here, as many MSP vendors have developed solutions to help with these cloud assessment, migration, and ongoing management tasks.

4. Scalability

As businesses grow and their needs change, MSPs must be able to scale their services to meet their clients’ evolving requirements and scale up to bring on new business. This can be a significant challenge, as it requires managing resources, processes, and systems as effectively as possible. And it’s never been more critical to run more efficiently and scale more broadly with current staff than now, with the added challenges of the tech shortage and continually growing labor costs.

To overcome this challenge, managed service providers should implement scalable processes and systems that can be tightly integrated and can grow and adapt as their clients’ needs change. This includes implementing automation and orchestration tools to streamline processes and ensure consistent, efficient service delivery. Also, MSPs should develop a flexible pricing model to accommodate changes in their clients’ service requirements. I prefer to use a “good, better, best” strategy that bundles a set of standardized services within three options. This allows flexibility in moving clients up (or down) as their needs or budgets allow while maintaining an absolute “minimum” requirement (the “good” offering) all clients must subscribe to in order to become and remain a client. When constructed, priced and sold correctly, 85% of clients will agree to one of the two highest-priced (better and best options, and 15% will choose the lowest-priced (good) option.

5. Cost Management

MSPs must balance providing high-quality services with controlling costs to remain competitive. This can be a significant challenge, as the cost of providing IT services varies significantly based on the size and complexity of the client’s infrastructure, the level of service required, and the cost of 3rd-party vendor and supplier services MSPs incorporate into their client deliverables.

To overcome this challenge, managed service providers should develop a comprehensive cost management strategy that includes implementing cost-effective tools and processes, negotiating favorable vendor contracts, and optimizing resource allocation. Additionally, MSPs should regularly review and analyze their costs to identify areas where they can reduce expenses while maintaining service quality. Also, managed service providers should raise their rates regularly to maintain profit margins as their internal costs increase due to the rising costs of labor, vendor and supplier services; adding new services and solutions to their portfolio, and the economic impact of unpredictable fuel and shipping costs, inflation, and interest rates.


MSPs face numerous challenges in today’s fast-paced and ever-changing IT landscape. These challenges include cybersecurity, remote work, cloud migration, scalability, and cost management. To overcome these challenges, managed service providers must prioritize these concerns and develop comprehensive strategies, including implementing the latest technologies and techniques, staying up-to-date with regulatory requirements, working more effectively with their vendors and suppliers, and optimizing costs. With the right strategies and expertise, MSPs can help themselves and their clients succeed in today’s competitive marketplace.

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