When Omdia published their 2026 MSP Trends and Predictions report this year, the headline number was a 10% revenue growth forecast for the managed services market. That sounds like good news. In some circles, it probably got a nod and a “solid year ahead” on a LinkedIn post.
Here’s the problem: it’s not good news. It’s a warning dressed as a growth report.
IDC is projecting overall IT spending to grow by roughly 10% in 2026. Managed services, at best, keeps pace. That means an industry that spent the last decade growing faster than the overall market is now just running alongside it — if everything goes right. If it doesn’t, Omdia’s worst-case scenario puts MSP revenue growth at 5-6% — which, after you factor in inflation and acquisition-related padding on the top line, is essentially flat.
I’ve built partner programs from scratch, scaled them, and torn them down when they stopped working. I’m used to the math being uncomfortable. This math is uncomfortable.
But here’s what the headline number buries: the 10% is an aggregate. It’s the average. And averages lie.
The Split Is Already Happening
Omdia’s research makes the real story clear. The managed services market isn’t growing 10%. Some MSPs are growing 20-30%. Others are treading water. The gap between those two groups is getting wider, not narrower.
This isn’t an emerging trend. According to Robin Ody, Omdia’s head of MSP research, what’s happening in 2026 is the formalization of a “bifurcation between the haves and the have-nots” — a split that market watchers have been predicting for years and that is now showing up in the data.
The reason is structural, not cyclical. It’s not the macro environment that’s creating winners and losers. The macro just makes the underlying problem more visible.
What Got Commoditized, and When
Here’s what happened: the services that built the MSP business — endpoint management, cloud backup, network monitoring, basic helpdesk — are mature. The market knows what they cost. Clients know what they cost. Pricing has hit a ceiling that isn’t going to move.
If you’re still leading with those services in 2026, you’re not running a differentiated business. You’re running infrastructure with a management layer on top, and the client across the table from you has three other quotes within 10% of yours.
The MSPs growing above market rate aren’t doing it by selling better endpoint management. They’re doing it by moving into three categories where the market hasn’t commoditized yet and margins are still real:
1. Managed Security Services. Analysts project managed security services growing at 11-14% CAGR through 2030, with the market expected to roughly double from its current ~$40 billion base within five years. Ransomware is getting more destructive. AI-enabled attacks are scaling attack volume in ways that overwhelm stretched IT teams. Cyber insurers are tightening requirements and denying coverage to organizations with poor security hygiene. The demand pull is there. The MSPs building actual security operations capability — threat hunting, MDR, incident response — are capturing it. The ones offering “we manage your antivirus” are not.
2. Compliance and Regulatory Advisory. Clients don’t just need their networks managed. They need someone who can tell them what CMMC Level 2 actually requires for their defense-adjacent contracts, or what their state’s data privacy law means for how they handle customer records. Regulatory complexity is a real problem for SMBs, and most don’t have the internal expertise to navigate it. MSPs who’ve built that advisory muscle are getting paid advisory rates — not per-seat IT management rates.
3. AI Management — By Vertical. This one is newer, but it’s moving fast. Enterprise clients are deploying AI tools. They need someone to manage the governance, usage policies, data access controls, and operational integration. The MSPs who get there first with genuine vertical expertise — healthcare AI, financial services AI, manufacturing AI — are establishing positions that will be very hard to displace.
The Macro Layer Makes Everything Harder
The divergence between the haves and have-nots isn’t happening in ideal conditions. It’s happening against a backdrop of genuine economic uncertainty.
Tariffs are creating hardware price volatility. Interest rates are keeping client CFOs cautious. The companies buying managed services don’t know where their own revenue is going, which makes multi-year contracts harder to close and renewals more tense. Omdia’s own framing is that “geopolitical instability and macroeconomic volatility will keep MSP clients focused on cash flow and predictability over expanding IT operations.”
That’s a real headwind. But it hits everyone equally. What it does is compress the middle — it makes the providers who can clearly articulate premium value more valuable, and it makes the providers who can’t look like a discretionary expense.
The Hard Question
I’ve been in enough planning sessions to know that most MSPs reading this are somewhere in the middle of the bell curve. Not top-quintile growth. Not hemorrhaging clients. Just… fine. Growing a little. Holding on.
The Omdia data says that position is getting more precarious, not less. When the aggregate grows 10% and the distribution is widening, being in the middle means the distance between you and the haves is growing faster than you’re closing it.
The question isn’t “are we profitable.” The question is: which side of the split are you on?
If you can’t answer that with data — if you don’t know your margin by service line, your net revenue retention, your expansion revenue from security upsells — then you probably already know the answer.
What the “Haves” Are Actually Doing
I’ll give you the concrete version, because strategic frameworks are useless without specifics.
The MSPs who are pulling away from the pack in 2026 share a few operational realities:
- They price outcomes, not hours. Managed security isn’t billed per seat. It’s billed as risk reduction with defined SLAs and escalation paths. The client is buying a result, not a resource.
- They have real tier-based client segmentation. They know which clients are worth investing in for security expansion, and they’ve built their service catalog around it.
- They’ve made explicit platform bets. They’re not running 12 different point solutions. They’ve consolidated onto unified platforms — for security, for RMM, for PSA — so they can actually scale without proportional headcount.
- They’re invested in one vertical. Not two. Not “healthcare and manufacturing and legal.” One. Deep enough to have opinions and repeatable plays that close faster because the client sees someone who understands their world.
None of this is secret. These aren’t insights from a proprietary PE playbook. This is just the operational discipline that separates growing businesses from flat ones in a competitive market.
The Bifurcation Is Done Choosing Sides. You Still Can.
The market decided a while ago where the growth is in managed services. The Omdia data is just confirming what the best MSPs have been doing for the last three years.
What I keep watching is how many providers see the 10% headline and feel validated — assume they’re in the right half of the split because they’re still standing, still growing, still landing new clients. That’s survivorship bias mistaken for strategy.
The have-nots in 2026 aren’t going to fail. They’re going to grow slowly, compress margins a little more each year, and wonder in 2028 why it got so hard to compete.
That’s a worse outcome than failing. It’s slow enough that you don’t fix it until it’s too late.
The question is whether you’re in the 10% story or the 10% headline. There’s a meaningful difference between those two sentences.
Jaxon Navarro is ChannelPulse’s Strategy & Disruption Editor. He built partner programs from scratch, scaled them, and tore them down when they stopped working. He writes about why most of it is broken.