Kaseya has released findings from its 2026 State of the MSP Report, based on a survey of more than 1,000 managed service providers worldwide. The results indicate that AI is viewed both as a leading area of client demand and as a tool for improving operations, including scaling services, managing costs, and maintaining service quality.
Demand for managed services remains strong, but growth is becoming more difficult. A total of 71% of providers identify customer acquisition as their main challenge, while one-third cite slow client onboarding as a constraint on growth. Larger contracts are less common than in the previous year, with 41% of MSPs reporting annual client spend above £20,000, down from 75%. Around 19% of providers report increasing difficulty in demonstrating value to prospective customers.
AI and automation play a role on both the demand and operational sides. Nearly half of MSPs rank these technologies as the most requested services for 2026, ahead of traditional areas such as security and backup. However, only 13% report that they are effectively monetising these offerings.
Internally, more than half of providers use AI to support tasks such as ticketing, patching, and monitoring, reporting improvements in response times, efficiency, and staff workload. At the same time, most organisations have automated only around a quarter of their processes.
Skills shortages are also increasing. The proportion of MSPs reporting difficulty in hiring skilled technicians has doubled over the past year, contributing to greater reliance on automation to support operations without increasing headcount.
Cybersecurity and backup services continue to represent significant sources of revenue. Around 71% of MSPs report year-on-year growth in cybersecurity revenue, the highest among service categories, while approximately half report growth in business continuity and disaster recovery services. These areas remain comparatively stable as other service categories face tighter margins.
