U.S. businesses are increasingly turning to public cloud managed service providers to enhance their cloud operations and ensure compliance. As of November 2025, the market for managed service providers is growing rapidly, driven by organizations across various sectors, including finance and healthcare, migrating to the cloud to address cybersecurity risks and a shortage of cloud expertise. According to industry forecasts, the cloud managed services sector is expected to grow from approximately $50.62 billion in 2025 to $120 billion by 2035, reflecting a compound annual growth rate of 8.16%. Public cloud managed service providers offer essential services such as 24/7 monitoring, disaster recovery, and streamlined integration of artificial intelligence and analytics, enabling businesses to focus on their core objectives while maintaining secure and compliant operations.
And per Service Leadership, the Managed Service Provider (MSP) industry has reported its sixth consecutive year of profitability, although a widening performance gap is becoming evident among companies. According to insights from ConnectWise, while overall profitability remains strong within the sector, not all MSPs are experiencing equal growth, highlighting a disparity in performance levels. This trend suggests that while some MSPs are thriving, others may struggle to keep pace, raising concerns about competitive positioning and market share. The report emphasizes the need for MSPs to adapt to evolving market dynamics, as those who fail to innovate may find themselves at a disadvantage. As the industry continues to mature, stakeholders are urged to focus on strategic growth initiatives to bridge this performance gap.
According to a recent survey conducted by Deloitte, a growing number of CEOs are expressing optimism about their ability to navigate economic uncertainties and seize new opportunities. The survey reveals that optimism regarding the global economy has doubled to 28% from 14% earlier this year, with 80% of executives planning to implement cost-cutting measures and 64% intending to raise prices on goods and services. The survey, which involved 69 CEOs from various industries, highlights that over two-thirds expect artificial intelligence to significantly influence enterprise strategies. Notably, 84% of leaders are tracking AI’s performance through metrics like cost savings and operational efficiency. Despite expressing concerns about tariffs, many CEOs believe that these policies may present an equal balance of benefits and risks for their organizations.
Why do we care?
The market is telling us something pretty loud here: managed services are growing, but not everyone is going to participate in that growth. Cloud managed services are taking off because companies need help with risk, compliance, and the skill shortages we all see firsthand. But Service Leadership’s data makes it clear — only some MSPs are capitalizing on it. The rest are stuck with flat capabilities and flat results.
Add the CEO sentiment on top of that. Leaders are planning cost cuts and price increases, and they’re tracking efficiency metrics closely. That’s not a friendly environment for an MSP that can’t show real operational value. If you can demonstrate how you lower risk, improve cloud performance, or streamline operations, you’re safe. If your value proposition is “we handle your tickets,” you’re in trouble.
This is where the market separates into two groups: providers who evolve into cloud and AI-ready operations partners, and providers who keep doing what worked years ago and slowly fall behind.
Now is the time to build those capabilities, formalize your cloud services, and tighten your value story. Because the demand is real — but the market is discriminating. High performers will pull ahead, and everyone else will feel the pressure.