The Managed Services Industry is undergoing a pivotal transformation. As mid-market organisations face economic uncertainty, skills shortages, and rising digital expectations, MSP services are evolving to meet these challenges head-on. No longer just IT support vendors, modern MSPs are strategic partners helping businesses scale, secure, and streamline operations.
This blog explores five key trends reshaping MSP services in 2025, backed by fresh insights from the Node4 Mid-Market Report 2025.
#1. Cloud adoption is on the rise
Cloud-first is no longer the default. Instead, mid-market organisations are embracing cloud-appropriate strategies by optimising workloads across public, private, and hybrid environments.
- 97% of mid-market companies plan to migrate some workloads out of public cloud environments in the next 12 months.
- Only 5% intend to exit public cloud entirely, while 49% will repatriate specific applications.
- Key drivers include performance (31%), data sovereignty (30%), and risk management (29%).
This shift reflects a maturing approach to the cloud: one that balances flexibility with control. MSPs are playing a crucial role in helping clients assess, migrate, and optimise their cloud strategies, ensuring the right workloads live in the right environment.
Get the breakdown of how mid-market firms are shifting to cloud-appropriate strategies.
#2. AI and automation are core to service delivery
AI is no longer a future trend, it’s a present-day necessity. MSPs are integrating AI to enhance service delivery, reduce costs, and fill skills gaps.
- 30% of mid-market organisations are investing in AI and automation to improve productivity.
- 41% of IT leaders are using AI-powered assistants and Copilots, while 39% are leveraging AI operations (AIOps).
- Use cases include automated ticketing, predictive maintenance, and intelligent monitoring.
Despite this, only 14% of mid-market leaders cite gaining a competitive advantage as a reason to invest in AI. This highlights a missed opportunity. MSPs can help bridge the gap by demonstrating AI’s strategic value beyond cost savings.
#3. Cybersecurity and compliance are front and centre
Security is no longer a check box, it’s a core pillar of MSP service delivery.
- 92% of mid-market leaders are confident in their ability to prevent and respond to cyberattacks.
- Yet only 36% have fully resolved data security risks associated with remote work.
- 75% rank Data Loss Prevention (DLP) as a top cybersecurity priority.
Interestingly, confidence drops as organisations move further into the cloud and only 78% of fully cloud-based organisations feel secure, compared to 94% of those on-premises. MSPs must address this gap by offering integrated, proactive security services that span hybrid environments.
#4. Hybrid and remote working are reshaping MSP engagement
Hybrid work is now the norm, with 67% of mid-market organisations favouring some form of hybrid model and 25% planning to go remote-first. Yet, many still struggle with secure access, collaboration tools, and IT cost control.
MSPs are stepping in to:
- Provide secure remote access and Zero Trust frameworks.
- Support collaboration infrastructure and AI-powered productivity tools.
- Deliver 24/7 helpdesk services for distributed teams.
With 93% of organisations facing IT skills shortages and 39% planning to expand MSP partnerships, managed services are becoming essential to enabling flexible, productive work environments.
Learn how MSPs are helping mid-market organisations enable secure and productive hybrid teams.
#5. SLA expectations are shifting to business outcomes
Traditional SLAs focused on uptime and availability. Today, clients expect outcome-based SLAs that align with business goals.
- Mid-market leaders are prioritising cost optimisation (26%), workforce productivity (26%), and digital transformation (25%).
- MSPs are being evaluated on their ability to deliver measurable impact, whether that’s faster onboarding, improved customer experience, or reduced downtime.
This evolution demands deeper collaboration between MSPs and business stakeholders. It’s not just about keeping systems running, it’s about driving growth and efficiency.
Conclusion
The evolution of MSP services reflects broader shifts in the Managed Services Industry. As mid-market organisations navigate economic pressures, digital transformation, and talent shortages, MSPs are stepping up as strategic enablers.
From cloud repatriation to AI-driven automation, outcome-based SLAs, hybrid delivery models, and cybersecurity resilience, the future of managed services is smarter, more flexible, and more aligned with business outcomes.
Is your MSP evolving with your business? Now’s the time to reassess your strategy and partner for growth. Speak to us and let’s see how Node4 can help future-proof your IT services.