Kaseya's 2026 State of the MSP Report finds 48% of MSPs rank AI as the number one client need, while shrinking deals and a widening talent gap make AI-driven efficiency essential to protecting margins
Miami, FL – April 14, 2026 – Kaseya, the leading global provider of AI-powered IT management and cybersecurity software, today released its 2026 State of the MSP Report, a survey of more than 1,000 managed service providers worldwide. The findings reveal that AI has become the defining variable in the MSP market – not only as the service clients want most, but as the operational lever MSPs need to scale their teams, protect margins and deliver higher-quality service in an increasingly competitive environment.
While demand for managed services remains strong, growth is becoming harder to achieve. Seventy-one percent of respondents say acquiring new customers is their top challenge, and one-third of MSPs cite slower new client acquisition as a key economic factor affecting growth. Deal sizes are also declining – the share of MSPs reporting typical customer spending above $25,000 per year fell to 41%, down from 75% the prior year. At the same time, nearly one in five MSPs (19%) report difficulty quickly demonstrating value to prospective customers, almost double the rate from the previous year.
These pressures make AI and automation critical on two fronts. On the demand side, 48% of MSPs rank AI and automation as the top client need for 2026 – ahead of security and backup – yet just 13% are currently generating meaningful revenue from these services. Internally, MSPs are turning to AI to do more with existing teams. 53% are already using AI to automate ticketing, patching and monitoring, with providers reporting measurable improvements in first-response times, technician efficiency and reduced employee burnout. However, most remain early in the journey – more than half have automated only about a quarter of their workload.
The urgency is compounded by a widening talent gap. The share of MSPs reporting difficulty hiring skilled technicians nearly doubled year over year, from 9% to 16%, making AI-powered automation the most viable path to scaling operations without proportionally increasing headcount.
“The MSP market is maturing, and rising competition is forcing providers to rethink how they grow,” said Dan Tomaszewski, Executive Vice President of Channel at Kaseya. “The strongest MSPs are tightening their operations, prioritizing efficiency and using data to clearly prove their value to customers.”
Amid these headwinds, cybersecurity and backup continue to anchor the MSP revenue model. Seventy-one percent of MSPs reported year-over-year revenue growth in cybersecurity – the highest of any service category – while 50% reported growth in business continuity and disaster recovery. As other service categories face margin pressure, these two areas remain the most reliable engines for expansion.
To learn more, download the 2026 State of the MSP Report here.
