Professionalisation in the MSP market: why technology no longer saves you
AuthorMSP Late NightPublished on:The professionalisation in the MSP market is moving faster than many owners want to admit. Three years ago you could still get away with twenty separate tools, a director doing sales personally, and a proposition that went not much further than “the modern workplace”. Today an M&A party with twenty labels underneath it is ready to walk into your patch with a national offering and purchasing terms you cannot match. And the sting is not even in that one large party. It is in the sum: your client gets more demanding, your suppliers consolidate, your staff expect a career path, and the legislation stacks up. All at once.
The average MSP in the Netherlands has 20 to 40 staff, runs on around 10 per cent margin, and works with nearly twenty tools from just as many suppliers. Work that out on a revenue of three to five million: that is a margin for error where you can hardly afford to do anything wrong. One wrong tool, one client lost, one hire that does not work, and your whole year is at risk.
Compare that with the other advisers of that same mid-sized client. The accountant, the lawyer, the tax adviser. All of them on margins three to four times higher. Meanwhile you are the one keeping their business up 24/7, securing their data, and before long also being held responsible under cyber security law through chain liability. The imbalance between responsibility and margin is not this large in any other advisory role. And that is not because the market undervalues you. That is because you still sell yourself on technology.
What professionalisation in the MSP market really asks
The reflex with tight margins is to economise on operations. Run lean, automate, choose a platform instead of tying twenty point solutions together. That is fair and it works, but it is the easy part. The bigger gain sits at the front: stop talking about EDR, MDR and endpoints, and start talking about business impact. No mid-sized business owner buys an endpoint. They buy the fact that their company simply runs on Monday morning.
What works in practice is annoyingly simple and annoyingly hard at the same time. Define who you are and for whom. Not “we do mid-sized business up to 100 workplaces in the region”. But: “we do hospitality, and alongside IT we also arrange the room access systems and the televisions, so that a hotel manager talks to one party.” That is not a marketing exercise. That is a choice that touches your whole organisation: which clients you turn down, which suppliers you consolidate, which services you cut from your offering because they do not belong with that positioning.
What consolidation will do to the market in the coming years
M&A activity has picked up again this year, after a quieter 2024. In the Nordics there are now nine large M&A parties looking actively across borders, a movement that is only just starting in the Netherlands and Belgium. The first acquisitions in Belgium are a fact, and with that the same wave of consolidation begins there that we started here five years ago. Anyone who wants to know what their own market looks like in three years should look at the United Kingdom and the Nordics. That is the crystal ball. In the UK you now see MSP platforms of five hundred to a thousand people, with their own SOCs, their own procurement, and a commercial punch a local party simply cannot match on standard work.
“What we have been through in the market is happening elsewhere too.”
From decentralised label to national offering
Most M&A parties start decentralised. Twenty to thirty acquired MSPs keep running under their own name, with their own go-to-market. The first year they work on operational efficiency: getting the kitchen in order. But that shifts. At some point a central product offering arrives, one purchasing volume, one set of supplier agreements. From that moment you as a local MSP can no longer offer the standard modern workplace competitively. Their cost price sits structurally below your selling price. Anyone still positioning on “we do IT for mid-sized business” will be in a price war within three years that they cannot win.
The way out is not getting bigger. That race has largely been run. The way out is getting deeper in a vertical or niche, and living that through every fibre of the organisation. The difference between an MSP that is really in hospitality, healthcare or legal, and an MSP claiming “experience in healthcare” on its website, is visible within five minutes of a client conversation. The first talks about business continuity in terms of occupancy, lost revenue per hour of downtime, and compliance obligations the client knows by heart. The second talks about backups and SLAs.
Sales inside your own client base is the biggest blind spot
Alongside that: the biggest opportunity does not sit in new clients, but in existing ones. Sales inside your own client base is still confused with support by most MSPs, while that is where the highest conversion and the lowest acquisition costs sit. A lunch and learn with ten existing clients, with a speaker from government on chain liability under the new cyber security law, as a rule produces more than a quarter of cold acquisition. The reason is simple: your existing client already trusts you, knows how you work, and has the same compliance questions as their neighbour. Those questions just do not come to the table by themselves. Someone has to make that happen, and that someone is not your service desk engineer who happens to be there to swap a switch.
“Sales is more than a few people making a lot of calls.”
That brings the third piece to the table: sales as a serious function. Most MSPs of 20 to 40 people have no full commercial organisation. There is a director who historically brings in the deals, there may be an account manager who mainly does relationship management, and there is a marketing person filling LinkedIn. What is missing is someone who structurally talks to the existing client base about what is needed next year, which risks are there, and which services go with that. Anyone who fills that role, internally or externally, as a rule earns that investment back within two quarters. Anyone who leaves it keeps hoping the phone will ring.
The market is changing fast, but most MSPs still have time. Not much, but enough to get the basics in order: one platform instead of twenty tools, a sharp positioning instead of general IT services, and sales as a serious function instead of a task the founder squeezes in. Anyone making these three choices within the coming year will belong to the group that stays independent alongside the national parties. Anyone waiting until the figures force it is in practice choosing to sell to an M&A party at the valuation of a commodity business.