On average, 60% to 80% of an MSP’s (Managed Service Provider’s) revenue typically comes from MSP. This percentage reflects the recurring revenue generated through contracts for IT management, monitoring, and support. However, the exact figure varies depending on the MSP’s business model, client base, and service offerings.
MSPs focused primarily on MSP will derive a higher percentage of revenue from these recurring contracts. Others may supplement revenue with project-based work, such as IT consulting, system upgrades, or cloud migrations.
Comprehensive service packages, including 24/7 monitoring, cybersecurity, and infrastructure management, tend to generate more recurring revenue. MSPs offering niche or specialized services may see a different revenue split.
Larger clients with extensive IT needs often sign higher-value contracts, contributing significantly to an MSP’s revenue. Small and medium-sized businesses (SMBs) may opt for smaller, less comprehensive packages.
MSPs often earn supplemental revenue from:
In mature markets, MSPs often derive a higher percentage of revenue from MSPs due to the prevalence of recurring service models. In developing markets, MSPs may still rely heavily on project-based revenue.
Recurring revenue from managed services ensures predictable income, allowing MSPs to invest in better tools, resources, and talent.
A higher percentage of revenue from managed services indicates the MSP’s commitment to long-term partnerships and proactive IT management rather than transactional relationships.
Managed services revenue grows as the MSP adds more clients and expands service offerings, creating a scalable and sustainable business model.
An MSP earning 60% to 80% of its revenue from managed services demonstrates a focus on recurring, long-term partnerships that prioritize proactive IT management. Businesses should evaluate this percentage alongside other factors, such as expertise and service quality, when selecting an MSP.
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