2026 MSP Forecast: We’re an Optimistic Lot

Survey Data Double Click

In our main three survey categories, growth won out with over 50% positivity each time - a statistically significant number. The insights gleaned from the infographic below bear this out.

• Growth for the 2026 MSP Win! The three survey categories (Growth, Stable, Decline growth) exceeded 50 percent which will win you an election outright without a run off.
• Gap Analysis. Equally interesting is the margin of growth victory ranging from 25 percent to 10 percent depending on the category. That is predictive of the positivity in the MSP ecosystem. As tghe publication Politico says: it's all in the margins! 
• Debbie Downer. In all category cases, the rate of decline was a small number ranging from single digits except for the “economy” question that came in at 22% infering a 2026 decline in economic activity.

How to use this Information

You can assert the argument that 2026 is shaping up to be a "good" year in the MSP ecosystem. You are not in a sick sector like printing and publishing for example.

• Your Customers. In your Quarterly Business Review (QBR) share this forecast. This allows customers to see that they are investing forward in you and your solutions.
• Ammunition for MSP Vendors to Recruit new Partners. Look for vendors, one of the big pillars in our MSP ecosystem, to socialize and curate this content in 2026 as part of their partner recruiting and on-boarding process.
• Expand and Defend. Your MSP practice – this strategic planning process should be data driven along with other variables. As of our release date of early November 2025, this data can help you with your planning. Beyond expansion and guarding what you have built, perhaps bigger conversations like getting acquired will make the agenda to discuss. The window for MSP merger and acquisitions is still open!
• Friends and Family. You are making good business model decisions and this forecast backs you up. You can always count on those close to you to often be the most skeptical.
• Investors. MSP players trying to raise capital can use this guidance as validation. Private Equity (PE) and Venture Capital (VC) will likely snaek a peek as well. 

Expert Panel: MSP Ecosystem Hot Shots

We engaged with ten respected thought leaders. The replies run the full range of balanced insights. That’s not a surprise when you facilitate this type of gathering. When you read the contributions below, you see some recurring themes:

• A.I. for MSPs (of course)
  • Providing more solutions as this area matures. These are early days. But better to be early to supper than late!
  • Competitive threats. Karl asserts and I concur that things like ChatGPT are a threat to MSPs as clients will think about researching basic technical resolutions with generative A.I. and start to think about whether they need as much MPS love. It could be the return, in part, of Do It Yourself (DIY).
• Market Differentiation. This new epoch will be a look in the mirror for many MSPs to reinvent.
• Revisit the better returns from specialization. There are riches in niches!
• Forging Partner-2-Partner (PNP) relationships.
• Even though A.I. is the flavor of the month, don’t forget cybersecurity as a tent pole in your offerings.
• Business behavior volatility. Project acceleration, project delays, and restructuring and consolidation.

Karl W. Palachuk (Owner, Small Business Thoughts)

I think one of the most obvious things that will affect MSPs is something they don't want to accept. Small business owners and in-house IT are going to start turning to AI chat for tech support. Every time I've brought this up to MSPs they say it's too far out there, or that the AI is not mature enough. At the same time, their technicians are using Gemini and ChatGPT to find fixes fast. The results are clear and concise. I'm not sure why they think a non-technical person can't do the same thing. I don't think this will happen will all clients everywhere, but it will happen with a lot and MSPs should really be prepared for it.

Marc Hoppers (Managing Partner, Highridge Group)

Where I’m coming from: Most of my work is for technology services and products companies with some digital and AI transformation projects for companies in a variety of industries. I mostly advise C-level executives, founders, boards, and executive teams.

Here is a list of things I’m thinking about now in no particular order, but you’ve inspired me to do more research and a position paper later in the year:  

• Market Differentiation: “Features” in services and product companies are becoming commoditized and trust and customer success are the ways that companies will differentiate themselves.
• Capital Efficiency: Growth-at-all-costs will shift to a focus on profitability.
• AI Strategy: Moving from experimentation to enterprise integration with a specific focus on agentic workforces and addressing the high rate of disappointing outcomes for GenAI and AI investments.
• Infrastructure: Strategic cloud decisions, edge computing, and federated data governance supporting AI initiatives.
• Cybersecurity: Addressing post-quantum computing and AI-powered security threats.
• Talent Issues: There’s not enough talent (technical or tech savvy enough to exploit the technological advances available to companies.
• Regulatory: There’s a lot happening in this space and compliance will become a competitive advantage… navigating the EU AI Act, which becomes effective in full in August of 2026, US state-level AI, privacy, etc., regulation, the hope for federal preemption for AI, privacy, etc., regulation, global policy fragmentation, and probably lots of other considerations that I have yet to consider.

Danny and David Suk Brown (Directors – Strategic Partnerships, AppMeetup and DBS Leadership Group)

These are our thoughts for the 2026 outlook for MSPs after having coached and helped with rev ops over 250 MSPs in 2025:

1. Continued focus on digital transformation and cybersecurity
2. More focus on AI-driven automation (lead generation, AI support, automation of routine tasks, AI customer support and improved user experience)
3. Strategic Patronships with vendor focused for multiple solutions/offerings and more aligned in an all-in with a specialization for market diversification
4. More AI readiness assessments
5. Hiring more junior techs that are AI focused to reduce costs, improve customer satisfaction and increase profitability

Phelim Rowe (Industry Analyst, CTG Intelligence)

1. Market or sector specialization will win out. Where tooling has started to differentiate based on price and not by feature companies that can 'speak' to a sector will win business. From website copy to sales techniques passing the 'smell test', demonstrating not just that you know how to offer managed services of managed security services but that you know their specific subsector will be key. The 'deep bench' doesn't cut the mustard. 

2. A possible battle between endpoint software looking to take on managed security services. You already see this where SaaS platforms have been labeled 'managed services' or where a third party managed SOC which provides services to MSSPs is now apparently an MSSP themselves according to various lists. This will create channel relationship problems. 

3. Any MSP or MSSP that can add believable metrics to AI solutions will win in 2026. It's not enough to use them internally and bill the customer as per usual. You have to be able to demonstrate how your service created ROI and as we head into a possible 'trough of disillusionment' with some AI tooling this is going to be key. 

4. Private equity will become disinterested in the channel. This is just a hunch and not based on numbers but with a few conversations, PE will question their own ability to 'do what they do' with managed services as customer repeatable business fluctuates, the advent of 'no minimum' sign ups becomes increasingly popular and SaaS platforms look to go direct (as they tend to try and do every 5 years or so). 

Grace Schroeder (CEO, Slingr)

My 20226 Outlook: Beyond the Hype, Into True Partnership

As we look to 2026, my optimism is rooted in a fundamental shift in how we approach technology. The defining trend won't be a flashy new product, but a new strategy: companies will seek true AI partners to guide their journey, realizing that generic, off-the-shelf solutions can't address their unique bottlenecks or move at their required speed.

While some vendors chase the hype, the real value is found in the "nuts and bolts" of business. The most impactful applications of AI are the ones that remove tedium from our work. This is where the magic happens—it frees people to step away from repetitive tasks and truly think about their clients, their strategies, and the bigger picture.

This shift creates exciting new career paths for curious workers with extensive domain expertise. Suddenly, the employee who knows a process inside and out—even if their core skill is mastering spreadsheets—becomes the vital bridge between business needs and technical implementation.

My outlook for 2026 is one of pragmatic collaboration. Choose the right partners to build tailored solutions that empower your best people, and you will unlock a new level of human-led innovation.

Keith J. Nelson, Ph.D (CEO, Vistem Solutions)

The outlook for Managed Service Providers (MSPs) in 2026 is highly optimistic, driven by robust demand for cybersecurity and IT optimization amid what we view as a growing economy and more demand for those offering service over commodity sales, like the faux $300 per device goal often mentioned. Vistem Elevate and Vistem SecurePro are experiencing better-than-anticipated growth, positioning us for significant gains in 2026 through our service-over-commodity model, which delivers measurable business outcomes and concierge-level support that outshines generic offerings.

We anticipate 25-30% growth in the ports sector alone, with minimal negative declines in shipments despite tariffs, as new agreements between trade partners fuel increased activity. The outlook for Vistem Solutions, Inc. is particularly strong, bolstered by our 26-year history of zero downtime with the DHA/Dispatch System at the Ports of Los Angeles and Long Beach, in stark contrast to competitors' failures to match such reliability. These shortcomings have highlighted Vistem's superior performance, leading to increased demand—we're now being asked to install our system at additional ports, positioning us for significant expansion and market dominance in maritime IT services.

Wayne Small (Founder/Technology Evangelist, The Cyber Advisory)

Australia for the next 12 months for SMB IT Professionals members and the market space we see is growth across profitability and revenue. Things driving this are cyber security and of course AI. External independent research conducted by Mark Isles from Omdia has shown that this to be the case.

Ashutosh Karkhanis (Founder, Askari Infotech)

In my view, 2026 will be a defining year for AI—particularly for conversational AI. The trajectory it takes will either validate the massive bets being placed by hyperscalers and startups alike, or expose the cracks in the current hype-fueled narrative. It will be the year that separates the contenders from the pretenders. The billions of dollars being poured into AI will need to start translating into real, measurable returns—not just inflated valuations or headline-grabbing announcements.

At some point, the industry must move beyond flashy demos and start delivering dollars. Sustaining AI innovation requires more than excitement; it demands solid business models, real-world adoption, and clear contributions to the bottom line. Let’s hope 2026 is the year when capital starts flowing based on fundamentals, not just FOMO.

AI is undoubtedly here to stay, but not every use case will survive. The hype train will leave some behind—and that’s not a bad thing. It’s a necessary evolution.

Dibel Woda (Global Channel Thought Leader)

Globally, project acceleration, project Delays, and restructuring and consolidation.

What’s been true in 2025 will become more true in 2026. Tired of every conversation opening with AI. Who isn’t.  Is it all that it has been said to be? No not yet. Is ignoring it’s impact a risk to your business? Look around, it already has. Is it transformative and unable to be ignored? Absolutely.   Take one look at the old iron Telecom darlings of the 1990’s. Nortel, AT&T/Lucent/Avaya and their fates.  Declining relevance, bankruptcy and obsolescence.  Cisco and VOIP alone didn’t kill them and their partner ECO systems.  Smart phones were the final nail in the $1000 handset’s coffin.

Am I saying smart phones will kill the current partner eco system? It won’t be Apple and the iPhone but change is coming for today’s generation of technology stalwarts and their eco systems.  Beyond the hype AI and the modern partner’s world is dramatically different. Doubt me?  Maybe you should but then look and HPE & Juniper, Google and Wiz, Palo Alto Networks and Cyber Ark. Consolidation and evolution my friend. Then look at the other changes inside the industry already happening, quietly in most cases.  Costs are already being shifted, reduced or reallocated.  It’s happening at an increasing rate. Margins in the channel are reduced, the pressure on services attach has increased while the associated flow downs, and risk are increasingly being shift more and more to the partner eco system. Hyper scaler builds are no longer a secret gold mine, 

• Where to shift? How to Shift? Oh that is the question. Start by looking at your current offers, customers and the hardest part your team’s actual technical aptitude. Determine who can and might be able to evolve, those unlikely to do so. Shed the cost, start to hire reinvest.   Same with your Vendors and the Brands your represent.  The key to not being the 2026 Equivalent of the Telecom reseller 2001 with 15 vans and hard times ahead.  Consolidation and change are unavoidable.  It’s time to reinvent your business for survival, if you get it right, and get out in front of the market you might just be able to build the next monster company.
• 2026 is the beginning of the end for many. Expect an increasing rate of acquisitions, consolidations
• Looking at 2026 and the obvious trend that how customer buying has changed: self service and self-informed,

A Vendor Speaks!

Thread, an A.I. first MSP vendor focused on reimaging MSP service tickets, made this forecast contribution. In it’s forth coming Ebook, The 2026 Guide to Intelligent Service Delivery in the “Measuring the ROI of AI” chapter:

Key Performance Indicators

(Note: Thread is a partner in this 2026 Economic Forecast)

Final thoughts

So optimistically looking towards 2026, here are a couple thoughts. 

• Market madness - it’s always been that way. If you peek at the equity markets, volatility has always existed and always will (measured by the VIX). Keep your chin up and be mindful of the ups and downs and make it part of your thinking. 
• Flight to quality - if you are truly in growth mode, consider that right here right now there is a chance to acquire unsophisticated MSPs at a significant discount to build your empire. Scale baby scale! 
• Your feedback and concerns are welcome. Just hit my LinkedIn profile  and share what you really think.
• My advice: just mellow out, enjoy the ride, all is well