What Are the Top 10 MSP Challenges Today? (And Help Beating Them)

Running a managed service provider (MSP) business is hugely rewarding. MSPs give their customers the tools to be productive. They help solve problems so clients can achieve great things. And owning your own company means you decide what kind of work you want to do. 

But it’s not all a bed of roses. There are several common MSP challenges that can make running this kind of business difficult. Let’s learn more about the top MSP challenges in 2024 – and what you can do about them. 

10 Major MSP Challenges You’re Likely to Face

Whether you already run an MSP or are thinking of starting your own business, it’s important to be aware of today’s top MSP challenges. Some of these issues are new or emerging, while others are a perennial part of running an IT support business. 

We’ve dug into recent research results, discussions on MSP forums, industry webinars, and asked our in-house experts to identify key MSP challenges today. Here are the top MSP challenges in 2024:

1. Cybersecurity and threats
2. Compliance and regulations
3. Pricing
4. Technological change
5. Hiring and retention
6. MSP marketing
7. Work-life balance
8. Corporate social responsibility
9. Customer churn
10. Shrinking IT budgets

1. Cybersecurity And Cyber Threats

Customers depend on MSPs or MSSPs to keep their IT estates safe. Dealing with advanced and sophisticated security threats is one of the biggest MSP challenges out there. 

The issues for MSPs are enormous and well known. These include:

• Continual emergence of new kinds of malware, phishing tactics and similar threats;
• New devices and ways of working that make security management more complex;
• The use of artificial intelligence to ramp up cyberattacks;
• The need to continually apply patches;
• The ever-present problem of human error and inadequate security training/awareness;
• Poor cybersecurity hygiene.

How Can MSPs Overcome the Cybersecurity Challenge?

To keep your customers’ networks safe, you need an effective solution for protecting IT systems. Today, a growing number of MSPs are using advanced, all-in-one cybersecurity platforms that give them a single place to manage everything – from networks to endpoints, emails to access management. By using a single, seamless tool, it becomes much easier for MSPs to protect their customers. 

2. Compliance And Regulations 

Whatever region you’re based in, whatever industries you support, your MSP will be required to help customers comply with ever-changing regulations. Failing to do so could cause major damage to your customers’ reputation and, by extension, yours. 

The challenge is that complying with regulations can be very difficult in practice. The need to change business processes, report on updates and demonstrate compliance is far from easy. Customers may be resistant (especially if they don’t understand the regulations), and compliance can be seen as a drain on resources. 

How Can MSPs Overcome the Compliance Challenge?

Complying with regulations like NIS2, HIPAA, GDPR and more, is undoubtedly one of the biggest MSP challenges. There are several techniques you can use to help clients comply:

• Use automatic compliance monitoring and reporting tools
• Develop strong compliance programs which simplify the process of meeting regulations
• Communicate regularly and clearly with clients about their responsibilities

3. Pricing MSP Services

Pricing services has always been one of the trickiest MSP challenges. Your firm needs to make a profit, while also remaining attractive in a competitive market. 

How Can MSPs Overcome the Pricing Challenge?

Choosing an appropriate price point as an MSP is always difficult (we’ve written an entire blog on this very topic). But here are some tips for managing the MSP pricing challenge:

• Rationalize IT costs: Reduce your expenses as much as possible by rationalizing your costs. Why spend on multiple cybersecurity systems, network management tools or remote monitoring tech, when you can do it all in one place? 
• Adjust SLAs: If customers are struggling financially, adjust your SLAs as appropriate. Some clients may not need the full level of support – and this can save time and money. 
• Build loyalty: By becoming a valued partner – not just a vendor – you can demonstrate your value to a customer. 
• Win new business: Invest in MSP marketing to generate new leads. 
• Say goodbye: If a customer is unprofitable, sometimes it’s better to end a relationship – this can ultimately save you time and money. 

4. Technological Change

Continual advances in business software are very exciting. But they can also represent a real cost and challenge for MSPs. Staying up to date, ensuring expertise is still relevant, and being able to answer customer questions is very difficult in a continually changing market. 

Integrating all this new and varied technology is very tough. According to The 2023 Global Managed Security Survey, 32% of MSPs say that “integrating technology solutions” is one of their biggest challenges. 

How Can MSPs Overcome the Technological Change Challenge?

All MSP business owners are tech-enthusiasts at heart, so staying up to date shouldn’t be onerous. Nevertheless, learning and deploying new IT takes time – and the lack of time is perhaps the biggest issue. 

For many MSPs, a valuable approach is to set aside a dedicated time slot each week to keep up to date with technology, reading, learning and listening. Helpful resources include:

• Industry magazines and publications;
• Newsletters;
• Blogs;
• Webinars;
• Forums.

5. Hiring And Retention

Hiring and retaining skilled IT staff has always been one of the biggest MSP challenges. It appears commonly in studies, as well as retaining skilled people.

How Can MSPs Overcome the Hiring and Retention Challenge?

Before you begin promoting an open position in your company, you need to understand why you’re looking to hire a new person

Tracy Simek, MSP Corporate Recruiter

There are many things MSPs can do to attract and retain tech talent. But this issue really needs a plan and a process in place – which might include hiring HR resources too. Strategies include:

• Focusing on company culture;
• Gathering honest (anonymous) feedback from staff;
• Having clear employee development plans;
• Having a hiring strategy;
• Salary research – find out how competitive your pay truly is;
• Offer remote working – and hire remote staff too;
• Financial and non-financial rewards and bonuses.

6. MSP Marketing

If your MSP business is to truly grow consistently, you need a solid marketing strategy. ‘Word of mouth’ referrals might be enough to begin with, but eventually any MSP needs a marketing strategy. But, as with many other MSP challenges, it requires time and expertise – which you may not have in-house. 

How Can MSPs Overcome the Marketing Challenge?

If I was starting an MSP in 2024, I’d definitely want to be known as a thought leader in my space and in my region

Jim Peterson, MSP Thought Leader. 

There are many MSP marketing strategies, and your choice of method will depend on your specialism, size and niche. That being said, general MSP marketing methods include:

• Thought leadership: Generate content, blogs, articles and reports demonstrating your expertise. 
• Advertising: It costs money, but remains an effective tool. 
• Social media: Maintaining a presence on social media – particularly LinkedIn – is valuable. 
• Events: Attend IT industry events, as well as events in your niche (e.g., if you offer managed services to the finance industry, exhibit at FS conferences).
• Outsource or hire marketers: Marketing agencies and consultants can support marketing strategies, while in-house marketers can develop detailed marketing plans. 

7. Work-Life Balance

Burnout is a serious issue in the managed service provider industry – especially for business owners. Customers expect 24/7 support and the responsibilities for leaders are enormous. Studies revealed that 64% of MSP owners had worked holidays or weekends, 44% had worked consecutive 50+ hour weeks, and 28% had missed a family event due to an IT crisis. 

How Can MSP Leaders Manage the Burnout Challenge?

My kids get daily dedicated dad time without the phone going ‘ping’

Ernest Murray, MSP business owner discussing burnout on the Tech Tribe forum. 

Achieving work-life balance as a business owner is incredibly tough – and there are no easy answers. But there are several things you can do:

• Dedicated non-work time: Set aside time every day to do no work at all. Turn off devices, and practice mindfulness. 
• Delegate: Trust employees and hand over responsibilities to them. 
• Hire experts: As a business owner, your role is to think strategically – hire experts to do the ‘work’, while you focus on leadership. 

8. Corporate Social Responsibility (CSR)

Writing on the Tech Tribe forum, MSP owner Ben Schneider asks: “Our insatiable and growing need for tech, cloud apps and now AI has real consequences for the planet. Newer, faster, bigger means more resources, more heat generation, and more water usage… Are we thinking about this?”

Many businesses today are tackling issues related to the environment, social justice and other topics. Both customers and employees increasingly expect firms to take a position on these issues, and influence change in their domain. 

How Can MSPs Manage the CSR Challenge?

MSPs may not be the most obvious ‘offenders’ when it comes to CSR, but as the above quote from Ben Schneider points out, everyone in the IT industry is contributing to carbon emissions – among other social issues. There’s no easy answer here, but it’s worth considering:

• What CSR issues (climate change, social justice etc.) affect your business in particular?
• Can your business go ‘carbon neutral’ by using renewable energy?
• Can you address inequalities in hiring and recruitment? 
• Do you have equal opportunities policies for hiring and pay?

9. Customer Churn

Kaseya’s MSP survey revealed that “acquiring more customers” was the most commonly anticipated challenge for business owners in 2024 – with 36% identifying this as an issue. Churn can happen for many reasons (such as mergers, or clients’ businesses failing), and can be a cause of real uncertainty for MSPs. 

How Can MSPs Overcome the Churn Challenge?

Churn is inevitable in any B2B business, and MSPs are no different. To manage churn, it’s important to:

• Implement a sales and marketing ‘machine’, so you have a continual pipeline of new leads;
• Monitor and track churn;
• Gather customer feedback and analyze it;
• Develop stronger customer relationships. 

10. Shrinking IT budgets

One in 10 MSPs say that their customers’ “shrinking IT budgets and spending” is the top challenge they face. With economic headwinds in many global regions, IT spend is being cut back in many places, and this is directly affecting MSPs’ profitability. 

How Can MSPs Overcome the Shrinking IT Budget Challenge?

If your customers are telling you they need to cut back on IT spend, there are several techniques you can introduce:

• Revisit SLAs: To retain customers, consider reducing service offerings until their budgets ‘bounce back’. 
• Reduce your costs: As mentioned above, by reducing your company’s own IT expenses, you can cut your own costs, and therefore offer customers a more competitive price. 
• Sell to higher value prospects: By working with more financially stable customers, the issue of shrinking IT budgets may be less of an issue. 

Heimdal® – An All-in-One Cybersecurity Platform

Heimdal® is a world-leading cybersecurity and compliance solution, used by MSPs of all sizes in multiple geographies. By using our all-in-one solution, you can overcome many of the leading MSP challenges today:

• Better cybersecurity: Heimdal® offers comprehensive security, monitoring and management tools – you get a single place where you can manage all your customers’ cybersecurity needs. 
• Complete compliance: With monitoring and reporting solutions, Heimdal® allows you to help your customers comply with all IT regulations. 
• Reduce costs: Heimdal® is a single solution for all your cybersecurity management needs. Why pay for multiple tools, when you can get everything in one place?
• Stay up to date: Heimdal® keeps you abreast of new trends, threats and issues in the cybersecurity landscape. 
• Manage time and people better: With Heimdal®, you get a solution that saves you time and makes work easier. That equals happier employees and a better work-life balance. 

What to convince yourself that Heimdal® is the right solution for you? Book a demo and take it for a spin!

Join Our Partner Program: Partner NEXUS

You can as well registered to be part of our partner program. NEXUS (Network of Excellence, Unity, and Safeguarding) is a global initiative tailored for MSPs and MSSPs, distributors and resellers that aims at improving customer security and expanding business opportunities.

Why to join in? As an MSP, MSSP, distributor or reseller, you gain access to a comprehensive cybersecurity kit, user-friendly platform that simplifies security management, and extensive training and support for you to focus on growth and turn the tide against cyberattacks. Moreover, you get the best in cybersecurity:

• The most extensive XDR suite in the market.
• Unified management for simplified control.
• Next-level threat intelligence.
• Reliable and efficient cloud-native architecture.
• Innovative telemetry and responsive capabilities.
• Managed SOC services with exceptional support.

Frequently Asked Questions About MSP Challenges

We hear about MSP challenges from our partners every day. We’ve answered some of the most common questions from the community:

How can I differentiate my MSP in a crowded market?

To differentiate your MSP, there are several strategies you can follow. First, you should specialize by targeting a specific customer size (e.g. microbusinesses, SME’s, mid-sized companies), targeting specific industries (e.g. healthcare, finance, retail, education), or targeting specific geographies (a specific town or region). Next, try to provide a unique service by specializing in a specific MSP field or tech stack. You can also differentiate yourself through branding and marketing. 

What is a normal growth rate for an MSP?

Every MSP is different, but studies that the average monthly recurring revenue growth in the previous three years was between 6% and 10% – three in ten MSP businesses were growing at this rate. 

How can I reduce my MSP’s costs?

Techniques for reducing an MSP’s costs include: consolidating technology (e.g., if you’re using multiple cybersecurity tools, switch to a single platform), outsourcing some staffing, introducing remote work to cut office rental costs, using low-cost cloud-based technology, renegotiating deals with suppliers, and using automation where possible. 

Cristian Neagu

CONTENT EDITOR

Cristian is a Content Editor & Creator at Heimdal®, where he developed a deep understanding of the digital threat landscape. His style resonates with both technical and non-technical readers, proof being in his skill of communicating cybersecurity norms effectively, in an easy-to-understand manner.