The managed services industry is at a turning point. Customers no longer just want services—they expect measurable business outcomes and a clear return on investment (ROI). To stay competitive, managed service providers (MSPs) must rethink their operations, and shift from traditional service delivery to a model focused on driving tangible value.

This shift presents both challenges and opportunities. The adoption of AI, the growing role of customer success, and the move toward value-driven pricing models are reshaping the industry. Understanding these trends is essential for MSPs looking to thrive in this outcome-based era.

This blog will explore key forces driving change in managed services, backed by industry insights and data-driven analysis. You’ll understand where the market is headed and what you can do to adapt, evolve, and lead in this new landscape. To fully understand these trends and insights, read the report in the TSIA Portal. 

{{special-callout}}

A Year of Change: The Evolution of Managed Services

Over the past year, managed service providers (MSPs) have faced a push towards outcome-based services, fueled by rising customer expectations for measurable business value. Simply maintaining IT infrastructure is no longer enough—your customers want a strategic partner who actively contributes to their success and delivers a clear ROI.

To stay competitive, MSPs must go beyond traditional service delivery. The focus now is on customer success, leveraging data-driven insights and automation to enhance the customer experience and drive real business impact. AI plays a pivotal role in this transformation, offering opportunities and challenges. Those who embrace AI-powered tools can improve service efficiency, enhance predictive capabilities, and set themselves apart in a crowded market.

Looking ahead, the MSPs that adapt to these evolving demands—by prioritizing customer outcomes and investing in innovative technologies—will be best positioned to lead in the future of managed services.

Overcoming the Biggest Challenges in Managed Services

As MSPs transition to outcome-based models, they face three critical challenges: restructuring operations for agility, proving business value through customer success, and evolving key performance indicators (KPIs) to align with a new reality. Addressing these challenges is essential to staying competitive and meeting customer expectations.

Restructuring for Agility and Customer-Centric Service

Many MSPs struggle with outdated organizational structures that rely on siloed teams and reactive support models. These legacy approaches limit agility, slow down responsiveness, and create gaps in service delivery. 

To succeed in an outcome-based world, you need a more customer-centric structure that encourages cross-functional collaboration, proactive problem-solving, and seamless knowledge sharing. Breaking down silos and fostering a culture of continuous improvement will help you drive better results for your customers.

Related: The Evolution of Pricing Models for Managed Services

Proving Business Value Through Customer Success

Customers no longer judge MSPs based on uptime and service-level agreements (SLAs) alone, they want clear evidence of how your services impact their bottom line. This means shifting from a transactional approach to a value-driven mindset. To demonstrate business value, you need:

• A deep understanding of each customer’s goals and challenges.
• Robust data analytics to measure the impact of your services.
• Clear, outcome-focused reporting that highlights ROI and business improvements.

By embedding customer success into your strategy, you can build stronger relationships and position yourself as a trusted partner—not just a service provider.

Rethinking KPIs for an Outcome-Based Model

Traditional MSP metrics, such as ticket resolution times and uptime percentages, don’t fully capture the success of an outcome-based approach. To align with evolving customer expectations, you need to track KPIs that measure real business impact, such as:

• Customer satisfaction and retention: Are your customers seeing measurable improvements?
• Revenue growth and cost reduction: How are your services directly contributing to financial outcomes?
• Innovation and efficiency gains: Are you helping customers stay ahead of market shifts?

As part of TSIA’s KPIs and Best Practices for Measuring Managed Services research, we’ve identified a comprehensive framework to help MSPs assess and refine their success metrics. Aligning your KPIs with business value will enhance customer satisfaction and differentiate your services in an increasingly competitive market.

By addressing these challenges head-on—restructuring for agility, proving business value, and evolving performance metrics—you can strengthen your position as a leader in managed services and drive long-term growth.

Related: Top KPIs and Best Practices for Measuring Managed Services

Emerging Trends Shaping the Future of Managed Services

The managed services landscape is evolving, with three key trends driving transformation: the rise of customer success, the integration of AI in service delivery, and a shift away from cost-plus pricing models. These developments reshape how managed service providers engage with customers, optimize operations, and deliver measurable business value.

Customer Success Is Becoming a Priority for MSPs

Customer success is no longer just a function of software companies—it’s now a critical focus for MSPs. Recent research shows that most providers are still in the early stages of developing formal customer success programs, but the momentum is clear:

• 57.5% of MSPs are in the early stages of building a customer success strategy.
• 21.3% have a program in place but are struggling with adoption.
• Only 7.5% have a mature, highly effective customer success framework.

This shift reflects a growing recognition that proactive onboarding, ongoing relationship management, and personalized support drive customer retention, increase product adoption, and maximize lifetime value. MSPs that invest in dedicated customer success teams and data-driven engagement strategies will be better positioned to meet customer expectations and drive long-term growth.

Related: Why Customer Success is Vital to Managed Services

‍

AI Is Enhancing Service Delivery and Proactive Support

AI is rapidly transforming how MSPs deliver services, enabling them to provide faster, smarter, and more proactive support. Key advancements include:

• AI-powered chatbots and virtual assistants for instant customer support, reducing wait times, and allowing human agents to focus on complex issues.
• Predictive analytics to anticipate and mitigate risks such as cyber threats or system failures before they impact customers.
• Automation of routine tasks like software updates and system maintenance, improving efficiency and minimizing errors.

By leveraging AI, MSPs can streamline operations, reduce costs, and enhance customer satisfaction—offering more value than ever.

The Shift Away From Cost-Plus Pricing

Traditional cost-plus pricing models—where services are priced based on labor and infrastructure costs plus a fixed margin—are becoming obsolete. Today’s customers demand pricing models that align with their business goals and demonstrate clear ROI.

Forward-thinking MSPs are adopting:

• Subscription-based pricing for predictable, recurring revenue.
• Value-based pricing that ties costs to specific business outcomes, such as improved efficiency or reduced downtime.

By moving toward outcome-driven pricing, MSPs can differentiate their services, strengthen customer relationships, and ensure long-term profitability.

‍

What This Means for MSPs

These trends—customer success, AI-driven service delivery, and value-based pricing—are reshaping the managed services industry. To stay competitive, MSPs must:

• Invest in customer success programs to improve retention and drive measurable value.
• Leverage AI technologies to optimize service delivery and offer proactive solutions.
• Move away from cost-plus pricing and adopt flexible, outcome-driven models.

By embracing these shifts, MSPs can meet evolving customer expectations and position themselves for sustained success in an outcome-based market.

The Future of Managed Services: Where Do You Go From Here?

The managed services industry is rapidly evolving, with a clear shift toward outcome-based models and a greater emphasis on customer success. To stay ahead, you must adapt, rethink your organization's operations, redefine how you measure success, and embrace AI-driven innovations.

MSPs can differentiate themselves in an increasingly competitive market by focusing on business outcomes, rather than just service delivery. The key to long-term success lies in continuously evolving alongside customer needs, investing in the right capabilities, and ensuring your services provide measurable value.

Your Key Takeaways

• Prioritize customer success: Build a dedicated customer success function that proactively supports customer needs, improves adoption, and drives long-term retention.
• Adopt outcome-focused KPIs: Move beyond traditional operational metrics and focus on KPIs that reflect business value, such as customer satisfaction, revenue growth, and cost reduction.‍
• Leverage AI and automation: Use AI-powered solutions to optimize service delivery, enhance predictive capabilities, and increase operational efficiency.