The Top 6 MSP Challenges and How to Address Them

5 min

Operating as a successful Managed Service Provider (MSP) is no walk in the park. There are countless hurdles to overcome, but you can’t afford to get hung up on any single stumbling block. If you do, another obstacle will blindside you.

With that said, defining problems makes them easier to solve. 

Here are six of the biggest challenges you’ll encounter as an MSP.

MSP Challenge #1 Security

We start with one of the most critical concerns of every MSP. Managing security risks takes more than mere effort. Here is where you need to work smarter, not just harder. If security threats were predictable, they wouldn’t be a problem. In other words, your threat stance needs to adapt to unique and evolving challenges.

Solution: Build a security strategy

An excellent way to handle security is to build around a proven framework and update all the security measures. This doesn’t mean you need to update all at once, but have a good strategy to keep things updated regularly. 

To overcome this challenge, you must develop a robust cybersecurity strategy. Here is a detailed list of what your strategy may include:

  • Keep systems updated: Keep your software and systems fully up to date. You may invest in patch management or a managed security solution.
  • Control access: Perform regular security assessments and implement robust authentication methods and access controls. Don’t forget to secure your physical systems, too. Believe it or not, one of the attacks that you can receive on your systems can be physical.
  • Password management: Needless to say, having the same password setup for everything is highly dangerous.
  • Backup your data: Perform onsite, offsite, and cloud backups to be sure you can leverage multiple sources to recover lost data seamlessly. Read about effective strategies to back up your data.
  • Employee education: You must regularly train your staff to recognize potential security risks and various indicators of cyberattacks. Training, establishing best practices, and simulating risk responses are all good ideas.  Remember that employees working in a hybrid or remote work environment are exposed to even more security threats.

Learn more about the managed security services you can offer and how Domotz can help.

MSP Challenge #2 MSP Offerings

Your MSP needs to differentiate itself, but you want to appeal to a broad customer base. How can you strike a workable balance?

Solution: Target the right people to sell them your best offer

Start by targeting your audience. Decide what kind of ideal customer your MSP model can serve best. Learn from past client successes to highlight marketable strengths and develop a strong portfolio.

You’ll also want to engage in proactive cost management. MSP margins depend on sustained subscriptions, so identify profitable revenue sources. If you’re unsure of your expenditures, this is the time to implement top-down monitoring practices.

Finally, know how to position yourself and build your MSP profitability. Cost-cutting and upselling are both helpful ways to make your offerings more appealing. You’ll need to know your networks regardless of your route, so monitoring is vital.

MSP Challenge #3 Growing Complexity

Technology is advancing, but that doesn’t necessarily make your life easier. The convenience of plug-and-play hardware is awesome for users, yet it complicates networks for MSPs.

The Internet of Things consists of billions of devices, growing at a breakneck pace. These systems differ from each other, meaning you need a unifying integration framework. As an MSP, however, you can’t force your customers to cooperate. People want the freedom to connect any devices according to their preferred topologies.

These realities mean you have to manage new technology intelligently. 

Solution: Automate more

One smart solution is to use automation to deal with the specifics. For instance, tools that detect different OSes and perform the correct security scans are great time-savers. Automating customer onboarding also minimizes friction and helps your users establish good habits. You may need to implement automation testing tools, Professional Service Automation (PSA) tools, or a network management tool like Domotz.

MSP Challenge #4 Customer Retention

Customer behaviors and expectations are evolving just as fast as technology is. This makes retention challenging because you’ve got to hit a moving target.

Solution: Research, analyze, and apply

Predicting trends and doing market research are wise moves. But looking outward is only half the story. It’s also important to learn from your existing MSP clients. You need to find out

  • Where you’re succeeding. Why do clients stick with you? How do these characteristics differentiate you from competitors? Exploring your successes can teach you where to focus your efforts.
  • What you’re doing wrong? What are the most significant pain points with your current services? Learning how clients work around issues could inform your search for a solution.
  • Who are your customers? Who makes the purchasing decisions in the organizations you serve? What kinds of clients prefer your services? These factors define your ideal buyer personas.

Only once you’ve answered these fundamental questions should you tackle customer retention. Remember, it’s not about providing shiny new features but satisfying real-world needs.

Read more on how to get, manage and retain MSP clients.

MSP Challenge #5 High Labor Costs and Employee Shortages

Employers currently face a tough labor market. Workers demand better benefits and compensation, and it’s up to you to satisfy them. The IT talent gap is a real problem that needs to be addressed with a good strategy in place. Read more on how the talent shortage affects MSPs.

Solution: Develop an IT company culture

Treat your team with the same care you apply to your customers. Maintain open channels of communication that let them express their concerns. By allowing your workers to take a proactive part in your growth, you’ll help them feel more invested. What’s more, you’ll increase their motivation and satisfaction. Another thing you can do is to provide feedback – encourage them when they perform well and provide clear instructions about where they can do better. You’ll also learn how to attract talent with more rewarding roles. Read more on how to create a strong IT company culture.

MSP Challenge #6 MSP Marketing Challenge

Your marketing has to keep up with your growth. At the same time, it must remain true to your vision and mission. This can be hard to achieve – the bigger the organization, the harder it is to move in unison.

Solution: There is always room to improve your marketing

Today’s B2B buyers prefer using an even mix of marketing channels. Why not rise to the occasion by adopting an omnichannel approach? Integrate or build an advertising system that unifies customer experiences. No matter how someone engages your brand, it should be seamless.

Here are some suggestions for building a successful marketing strategy:

  • Specialization: Focus on niche services to target a specific audience effectively.
  • Content Marketing: Create informative content to showcase expertise.
  • SEO Optimization: Optimize online presence for search engines.
  • Client Testimonials: Feature satisfied clients to build trust.
  • Social Media: Engage on platforms where clients are active.
  • Email Campaigns: Send tailored content to nurture leads.
  • Networking: Attend industry events and join relevant communities.
  • Partnerships: Collaborate with complementary businesses for referrals.
  • Monitor ROI: Analyze marketing efforts to refine strategies.
  • Consistency: Maintain a consistent brand image across all channels.


MSPs are in a unique position. Unlike other IT businesses, you can’t stop at satisfying your clients. You also have to help them please their end users. Analyzing your operating practices with network monitoring is the best way to improve.

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