Profitability a priority for Australian MSPs by 2025

A new report by Kaseya highlights the prioritisation of profitability among Australian Managed Service Providers (MSPs) for the year 2025, against a backdrop of increasing market apathy towards cybersecurity.

The report indicates that 91% of MSPs have identified profitability as a top priority. A significant finding from the survey is that nearly half of the respondents view "customer apathy" as the primary challenge in delivering effective security solutions, a concern that climbed from seventh place in last year's survey ranking.

The use of Artificial Intelligence (AI) both as a tool and a threat is noted in the report. Over two-thirds of MSPs experienced AI-driven attacks in 2024. Meanwhile, leading MSPs are harnessing AI to automate routine tasks, enhance security measures, and improve operational efficiency.

Despite challenges, 64% of MSPs reported revenue growth last year, and 67% expect continued expansion over the next three years. Smaller MSPs are carving out success by leveraging niche expertise, often gaining an edge over their larger counterparts.

Gary Pica, Founder of TruMethods, a Kaseya company, stated, "Small and medium-sized businesses are becoming more and more tech savvy – and MSPs are reaping the rewards. They're seeing revenue growth and want to continue that momentum long into the future. MSPs are an essential service and they're making the right moves to build sustainable, high-margin businesses. By streamlining their operations and utilising automation, MSPs are preparing to capitalise on big opportunities in 2025."

Many MSPs are offering co-managed services, with 83% reporting such offerings. These services assist internal IT teams with business continuity, disaster recovery, cloud infrastructure design and management, as well as data backup and protection.

The report also underscores the rising challenge of client indifference towards cyber risks. Pica adds, "It can be difficult to get small businesses to understand the importance of investing in security when they often don't see themselves as a target. While educating clients is important, it's pivotal for MSPs to invest in platforms and tools that allow their customers to be better protected without breaking the bank."

AI offers both opportunities and threats; more than two-thirds of MSPs saw an increase in AI-driven attacks over the past year. MSPs faced more AI-supported attacks (32%) than supply chain (29%) and endpoint threats (29%) in 2024. Yet, AI is also used to combat emerging threats, highlighting its paradoxical nature.

The findings suggest that high-earning MSPs, those generating over USD $10 million annually, share practices from which smaller MSPs can learn. These include the proactive adoption of new technologies, prioritising client needs, and employing automation to enhance efficiency.