The Last Great Shift: Why Smaller MSPs Need to Make Bold Moves – Now
We get asked about our name a lot. The 20? It doesn’t sound like your typical IT company – but that’s kind of the point. We exist to help MSPs break out of the pack and reach the top 20% of the industry. The name is a reminder: average isn’t the goal.
But what does a top-20% MSP look like? And how have the standards of MSP excellence changed over the years – from the industry’s early days to where we stand now?
In this article, we’ll take a hard look back at MSP excellence through a historical lens, outlining the key phases in our industry’s evolution – and why the shift happening right now is the most critical yet.
If you’re a smaller MSP (< $5M in recurring revenue), this article is more than an analysis; it’s an urgent call to action. That’s because the window to act is closing, and staying on the sidelines is becoming less viable by the day.
80/20 Rule: What’s in a Name?
Again, our name refers to our mission – to help MSPs join the top 20% of the industry. But why twenty, instead of, say, fifteen or even ten?
The answer lies in the 80/20 rule (aka the Pareto principle) – a simple but powerful concept that shows up everywhere: roughly 80% of results come from 20% of causes. In the MSP world, the 80/20 rule is crystal clear: the top 20% of providers dominate, capturing the lion’s share of revenue and clients, while the remaining 80% fight over scraps.
That’s the group we want to help you join – the “vital few” at the top who are capturing the majority of the market’s value.
A relevant link: Hear more from our own Chris Traxler on what today’s top-20% MSPs look like – check out the short video.
OK, let’s get into the nitty-gritty: how the bar for MSP excellence has risen over time.
History Lesson: The Evolution of MSP Greatness
What does it take to be a great MSP, where “great” is loosely defined as a top-20% company?
This is a good question. But an even better question – a great question – takes time into account: How has “what it takes” changed?
As you’re about to see, taking time into account reveals something important about the current state of our industry – and why smaller MSPs are facing a make-or-break moment.
Looking back at the evolution of MSP greatness, we’re confronted with three distinct phases or “eras.” If you run an MSP today, you need to know what came before, because it sheds a ton of light on what’s about to happen…
1. The Break/Fix Exodus (2000 – 2010): From Chaos to Contracts
MSPs emerged in the early aughts as a fresh alternative to the traditional “break/fix” model of IT support, with its reactive business model and hourly rates. In the early days of our industry, going “all in” on the MSP model – proactive support, recurring revenue, SLAs, etc. – wasn’t enough to put you in the top tier. But it was close.
Top-20% MSPs
The big winners were the ones who didn’t hedge. They walked away from break/fix entirely and committed to a new way of delivering IT: contract-based, preventative, and relationship-driven. That full embrace of the MSP business model was the first real threshold of excellence.
2. The Scaling Wars (2010 – 2017): Growing Up Fast
As the model became mainstream, the game shifted from what you sold to how you delivered it. The MSPs that scaled – operationally, financially, and geographically – rose to the top. Mature tools, ticketing systems, standard stacks, and sales playbooks emerged. It was no longer enough to just be “an MSP” – you had to be a real business.
It was during this era that The 20 rose to prominence. Recognizing that most MSPs needed help with scale, we developed a blueprint to help immature companies grow up fast – and leave the competition behind.
Top-20% MSPs
Top performers in this era focused on operational maturity, sales discipline, and building something scalable, not just stable.
3. The Consolidation Crunch (2017 – Present): Big Fish, Bigger Pond
We are in the midst of a new era in managed IT. Fueled by a deluge of private equity investment, our industry’s seen a wave of roll-ups, mergers, and national platform plays. The result? A class of super “platform MSPs” (The 20 MSP included).
Top 20% MSPs
The cream of the crop now includes players with in-house marketing teams, 24/7 SOCs, dedicated sales staff, and the ability to undercut or out-service smaller shops at scale.
Take note: For smaller MSPs, surviving this era will require one of two things: joining the consolidation wave, or finding a way to punch above their weight using smarter tools, better positioning, and ruthless operational efficiency – hey, that’s what we help with!
4. The Great Divide (Coming Soon): Too Big to Catch
As consolidation continues to sweep through our industry, we’re quickly approaching a point of no return, where the gap between the haves and have-nots becomes all but unbridgeable.
Soon, the top 20% of MSPs will operate in a different league entirely. They’ll be the first to truly harness the power of AI within the context of the managed services business model. Add to that specialized teams, compliance expertise, 24/7 service layers, and aggressive marketing engines that keep pipelines full year-round.
At that point, it won’t just be difficult to break into the top tier; it will be structurally out of reach. The window is still open, but it’s closing fast.
The Moral of the Story: It’s Grow Time, Y’all
The takeaway here couldn’t be clearer:
If you’re a smaller MSP and want to remain relevant, the time to make a big push is right now. In other words, if you want to stay in the game, you have to actually get in the game.
“Getting in the game” doesn’t necessarily mean chasing an M&A deal (although we firmly believe that building toward an exit is the smartest strategy right now – and offer MSP owners a unique and compelling path to get there). However, it does mean making major strategic adjustments and deep structural changes, instead of relying on incremental improvements.
Get in the Game at VISION ’25!
If you think this article is off base, go ahead and call our bluff. Keep doing things the same way and see how that works out.
But if you recognize that the window to join the MSP elite is closing – and refuse to be shut out – you can kickstart your MSP’s radical transformation this August at VISION ’25 (register here).
Our theme this year? Simple: Get in the Game.