Market Update: Managed Service Providers Q4 2021
Managed Service Providers (MSPs) will remain hot as buyers continue to show increased interest in cloud adoption, advanced security measures, and desire for IT automation. Given the highly fragmented nature of the MSP space, M&A activity will continue to be abundant as sponsors and strategics look to increase scale and capture emerging technology trends to expand their geographic footprint.
According to MarketsandMarkets Research, the MSP market is expected to grow from $242.9 billion to $354.8 billion in 2026, a 7.9& CAGR. Additionally, the MSSP (Managed Security Services Provider) market is expected to grow closer to 12-15% annually.
Fourth-quarter 2021 recorded 66 deals – a 5% increase compared with Q3 2021. Deal volumes and valuations remain high as:
- Cloud adoption continues to grow – by 2023, 40% of all enterprise workloads will be employed in cloud infrastructure – Gartner
- Companies implement advanced security measures to combat cyber terrorist
- IT automation becomes the new normal in our data-driven society
7MA has completed numerous M&A transactions in the MSP space and has developed unparalleled deal expertise and knowledge of the industry trends, valuation trends, and most active strategic and financial buyers. Please contact Tim Frye, Steve Buffington, or Tanner Lange if you would like to learn more about MSPs.