Top MSP Challenges (and Solutions) for 2025

Managed service providers are problem-solvers, with the ability to anticipate and prevent problems for clients. But when it comes to solving their own problems, most MSPs could use a little help.

MSP challenges can be both internal and external. Many external challenges — like new competitors popping up every day — are not controllable. That’s why it’s important to focus on resolving internal challenges. If you “have your house in order,” you’ll be better able to prepare for and respond to external challenges.

Let’s take a look at the top MSP challenges for 2025, and what you can do to conquer them.

External MSP challenges

While this list of external challenges isn’t exhaustive, it covers some of the most common pain points for MSPs:

Market competition

The global market for managed IT services is projected to reach $552 billion by 2032, up from $283 billion at the end of 2023. In this competitive sector, a challenge for MSPs is determining how to differentiate their business from the competition.

Some MSPs are expanding their offerings and targeting new sectors, in an effort to stay ahead of the curve.

Economic downturns

Economic fluctuations can impact client budgets and spending on IT services. MSPs need to routinely demonstrate the value they bring to their clients to prevent budget-related churn.

With professional services automation, you can track and report on all client tasks, which is a good way to show your work and strengthen your customer relationships.

Client communication

MSP clients have individual communication styles and preferred channels, which can make it difficult to keep track of all requests and responses. One solution to this challenge is PSA software that syncs all communication and channels to a central platform.

Regulatory complexity

MSPs often serve clients across multiple industries, some of which have rigid compliance guidelines. For example, MSPs who work with healthcare businesses need a HIPAA “business associate” agreement with a client before they can begin work. And any platform MSPs use for service delivery must also be HIPAA-compliant, to protect client data.

Internal challenges for managed service providers

Scalability

This is one of the biggest challenges for managed service providers:

• How can we grow without expanding our team?
• How can we expand our team without more money?

If you want to hire more technicians so you can scale, you’ll have to figure out how to get more client work without overburdening your team. That means you need to look for any opportunity to automate.

Operational efficiency

Streamlining internal processes for better efficiency is a constant challenge. Even though most MSPs recognize that inefficient workflows, sloppy processes, and redundant tasks can drain resources, it can be tough to make time for improving internal operations. This is — again — another problem that calls for automation.

Tools like Syncro’s AI- powered Smart Ticket Management serve as a “virtual administrator” for MSPs, intelligently prioritizing and routing tasks. The AI can also extract essential information from client requests and suggest resolutions for technicians, with actionable hyperlinks in the tasks.

Tech bloat

You can only “bolt on” so many apps and platforms — eventually, you’ll have too much tech, and you may lose valuable time hunting for information across disparate tools. Plus, software subscriptions can take a big bite out of your budget if you’re in the habit of adding new tools or upgrading existing ones.

PSA software can solve tech bloat in a few ways:

• It eliminates the need for a separate remote access interface and backup security tool
• It integrates with essential applications, so you can access all of your tech in a single platform
• It can replace chat-only apps with mobile workflow and communication features

Sales and marketing

To count the external challenge of competition, MSPs need to focus on sales and marketing. But it’s hard to make time for sales when you’re also doing client work.

Some PSA software includes automation for managing inbound leads, which is a good first step to improving sales processes. You can also use a PSA platform to set up a lead nurturing campaign and see who’s opening and reading your emails.

Tip: Consider setting up a referral program to boost sales.

Overhead costs

As an MSP, you want most of your time to be billable, but technicians often get bogged down with admin tasks that inflate overhead costs.

PSA systems automate internal tasks and boost efficiency. For instance, a PSA with automated billing and invoicing captures all billable hours from service tasks. That means technicians don’t have to manually report their time, and your invoices are accurate down to the minute.

Asset management

Keeping track of every client asset is not an easy feat, especially as you grow. With a PSA platform, you can organize and monitor all assets, and:

• Automate patches and remediations
• Customize alerts
• Apply cascading policies to assets
• Automatically document asset maintenance
• Link to assets from your ticket management platform
• Track asset depreciation
• Identify “sunsetting” assets
• See and manage users for every asset

Tackle challenges with Syncro

With the new year just around the corner, it’s time to start thinking about business goals and the tools you need to achieve them. Syncro is the all-in-one solution to MSP challenges.

With PSA, RMM, and remote access in a single platform, and a scripting engine that supports endless automation, you can get more done — in less time.

See Syncro in action in this on-demand demo.

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