A recent report from Guidehouse signals the dawn of a new era for managed services. By the end of 2025, fees and contracts will increasingly be tied to business outcomes rather than traditional service delivery.
As this transition unfolds, expect to see more co-investment between MSPs and their clients. Rather than simply providing IT services, managed service providers (MSPs) will partner with customers to achieve specific, measurable outcomes—sharing both risk and reward.
Intelligent operations and AI-driven automation
The next generation of managed services will be built on transparent, intelligent operations powered by visualization tools and large language models (LLMs). These technologies will allow clients to easily see and understand the workflows managed on their behalf.
Meanwhile, advances in artificial intelligence (AI) will automate repetitive tasks, freeing MSPs to focus on hiring specialists who can manage complex processes and exceptions. To succeed, MSPs must capture institutional knowledge in repeatable playbooks and controls, reducing cycle times and accelerating business value.
Rather than managing discrete IT tasks—many of which will be handled by AI agents—human roles will evolve into process specialists, exception managers, and decision owners. These professionals will bring subject matter expertise to ensure accuracy and consistency in outcome-driven workflows.
What this means for MSPs
The pace of this transition will vary by client size and resources. SMBs may struggle to invest in co-innovation, but the question is no longer if this shift will happen—it’s how far and how fast. MSPs must prepare to acquire and retain business process expertise to deliver outcome-based services effectively.
In theory, MSPs should welcome this change. Traditional IT services are easy for clients to price-shop, driving margins down to unsustainable levels. Outcome-based services, by contrast, typically require multiple IT services combined with business insights, creating value far greater than the sum of their parts.
This transformation won’t happen overnight. It will require significant upfront investment, and MSPs must plan carefully for the time it will take to see returns. But one thing is certain: margins on traditional services will continue to shrink. Standing still is not an option—the bridge behind MSPs is already on fire.
Photo: 3rdtimeluckystudio / Shutterstock
This post originally appeared on Smarter MSP.