On-Prem MSP Still The Lion, Cloud MSP Doubles The CAGR

cloud vs on prem msp revenue growth
Home » Blog » On-Prem MSP Still The Lion, Cloud MSP Doubles The CAGR
Free Digital Marketing Consultations

Helping technology companies create sustainable revenue growth.  Serving MSPs, Cybersecurity Firms, Software Developers, SaaS, & B2B Tech.

Table of Contents
    Add a header to begin generating the table of contents

    In a recent article by 451 research on behalf of S&P global market intelligence, a look at the managed services market was taken to get a better feel for how MSPs are earning their revenue. One thing that stood out to me in the article was that about 80% of managed services revenue is generated from on-premise environments, but cloud MSP revenue is more than doubling the forecasted compound annual growth rate (CAGR). The cloud has been hyped for quite some time now, but this stat puts a little bit more color around its potential. The on-prem revenue growth forecasts sit at a still healthy 8.5%, but the cloud’s forecasted CAGR is a more enticing 19.8%.

    What Does This Mean For MSPs?

    It’s still tough to be a cloud-native MSP, companies in the cloud often will have a blend of infrastructure sprawled out across various data centers, using both on-prem and cloud but, there’s no denying an additional layer of experience is required to manage cloud infrastructure. Many established MSPs will have oriented their businesses around legacy infrastructure management and maintenance, and quality cloud engineers are so difficult to find and retain that many challenges lie ahead for them to make the transition to providing adequate support.

    This leaves the door open for cloud-native MSPs to make an entrance into the market and build a competitive moat with a focus on a particular public platform, Azure, AWS, GCP, etc. Here in Jacksonville, we’ve got one of the largest and most effective AWS MSPs in the country in Source Fuse, but seemingly no one with any traction focused on Azure or GCP. What gives?? The door is wide open for new entrants or young companies looking to make a strategy switch to focus on building expertise and providing services to customers around these platforms. A white-label provider cloud services provider for other MSPs may even be a model with commercial viability in the coming years as the established players look to adapt.

    What Do MSPs Do In The Cloud?

    The managed services model is dead, long live the managed services model! Ok so the MSP model has had fits and spurts and debates about its continuing viability, but I do want to mention that cloud-focused MSPs will likely have to bear the burden of a bit more project work and consulting work than a traditional local MSP might have to shoulder, for the simple reason that a lot of companies will be migrating on-premise environments to the cloud. This type of activity is something companies are going to need a lot of help with and successful providers will assist in the transition and add the MSP activities afterward rather than try to source only in-the-cloud and ready-to-go managed companies.

    Final Thoughts

    On-premise environments still compose the lion’s share of potential MSP revenue to be earned and have a decent growth rate over the coming years, but a nearly 20% growth rate in the cloud is something that MSPs looking to change up their overall strategy can’t afford to ignore. Cloud expertise is still rare and valuable, leaving the opportunity for MSPs to be able to charge higher rates, increase their margins, and build a competitive moat relative to the broader market. Building a cloud MSP is a completely different challenge than a traditional local MSP, but the rewards and growth rate are there to support those with the ambition.

    Share This Article
    Posted in:
    Tagged:

    Hunter Nelson

    Hunter is the founder and president of Tortoise and Hare Software, a digital marketing agency for the technology sector and other lead generation oriented businesses. Hunter has more than 10 years’ experience building web applications and crafting digital strategies for companies ranging from scrappy startups to Fortune 50 household names. When not on the clock, you'll find him spending time with his family and pups, relaxing on the beach, or playing competitive online video games. See for more.

    Leave a Comment





    Recent Blog Posts

    Google Ads Keyword Match Types Guide For MSPs

    Many MSPs want a steady flow of qualified inbound leads. Google Ads is one channel that can help deliver that. Understanding keyword selection is one of the most important aspects…

    Keyword Stuffing Your Google Profile Name: The SEO Risks And Rewards

    For MSPs focused on local SEO, adding a concise service term after the brand in your Google Business Profile name can increase relevance for key searches. Formats like “[Brand Name]…

    Case Study: TNHS Helps Phoenix MSP Create Path To Sustainable Inbound Lead Volume

    In the fall of 2024 a Phoenix based MSP reached out to Tortoise and Hare Software for help with the Google Advertising account. This MSP had used Google Ads in…

    7 Ways For MSPs To Boost Local SEO Traffic And Lead Volume

    Nearly half of all Google searches are looking for local information. If your MSP isn’t showing up, your competitors are collecting the leads that should be yours. Local SEO isn’t…

    Why Did My Google Search Console Impressions Drop Suddenly (Num 100 Update)

    If you opened Google Search Console in August 2025 and saw your impression count nosedive, you’re not alone. SEO professionals across industries noticed the same pattern: a sharp, unexplained drop…

    The Ultimate Guide To MSP Keyword Research: Featuring SEMRush

    Are you trying to increase your MSP’s visibility in search and generate more inbound leads from SEO? A smart first step is getting a clear baseline of how you’re performing…

    MSP Paid Ad Campaign Strategy: Create Predictable Lead Flow With PPC

    When you are building an MSP for scale, not just to survive but to sell at a premium, your marketing strategy must work as hard as your tech stack. For…

    Building a Reusable One-Click Copy-to-Clipboard Feature with Templates

    Making content easy to interact with is key to a good user experience, especially on content-heavy or developer-focused websites. One small but impactful feature we recently added was a “one-click…

    Introducing Hurry! MSP: Grow Your MSP’s Website Traffic.. In A Hurry!

    What if you could finally get agency-level marketing results without paying agency-level prices? If you’re like most MSP owners, you’ve probably wrestled with this trade-off. You know you need real…

    Say Goodbye to Ugly ReCAPTCHAs on Contact Forms with CleanTalk Anti-Spam

    Have you ever tried to fill out a form online and had to click on tiny pictures or type blurry letters? It feels annoying, right? These puzzles are called CAPTCHAs.…

    Aesopians E8 – How SaaS Companies Are Maintaining Brand Integrity and Operationalizing Growth with HubSpot Ft. Mohamed Hamad Of Third Wunder Agency

    SaaS companies move fast—but if your branding and systems can’t keep up, growth can actually become a liability. In this episode of the Aesopians Podcast, host Hunter Nelson is joined…

    The Ultimate Guide To ChatGPT SEO

    Most SEO professionals are racing to understand how AI tools are reshaping visibility. But the biggest shift isn’t coming from Google—it’s coming from ChatGPT. As organic search volumes and conversions…

    MSP Google Ads Costs and Pricing

    You’ve heard Google Ads can generate leads quickly, but you’re not sure how much to budget, what kind of results to expect, or whether it’s really worth the spend. Many…

    Aesopians E7 – Joining The Feel Good MSP Sales Training Program Ft. Brian Gillette

    In this episode of the Aesopians Podcast, we sit down with Brian Gillette, founder of Feel-Good MSP and creator of the “Feel-Good Close.” If you’re an MSP leader who’s tired…

    MSP Advertising Strategy: 3 Fundamental Approaches to Drive Real Growth

    Is your MSP making effective use of your advertising budget, or are you weighed down too much by bottom of funnel advertising tactics that leave you in a perpetual cycle…

    How We Save Thousands With Negative Keywords For MSP Google Ad Campaigns

    Google Ads is one of the most powerful inbound lead generation channels available to managed service providers. There are few better moments to introduce your brand than when someone is…

    Aesopians E5: From Tech To Rep: Year 1 In MSP Sales Ft. Ashton Fortuna

    Most MSPs hesitate to move technicians into sales—worried they’ll lack the polish, confidence, or killer instinct to close deals. Sales is a different game. Techs solve problems with systems; sales…

    SEO Not Working: Here’s Why

    Lately I’ve been getting on more and more calls lately with people saying something along the lines of “we’ve been doing SEO or inbound for 6 months, 12 months, or…

    Why SEO Investments Help Your MSP Weather a Recession and Keep the Door Open for New Opportunities

    What happens to your pipeline when the phones go quiet, inboxes stay cold, and paid ads stop converting? That’s not a hypothetical. It’s what happens in a recession. Budgets freeze.…

    MSP Marketing – How to Build a Strategy That Works

    Let’s be honest—most MSP marketing doesn’t work.Not because the tactics are bad, but because they’re unaligned. What looks like a marketing problem is often a strategy problem in disguise. Most…

    Related Blog Posts

    Aesopians E8 – How SaaS Companies Are Maintaining Brand Integrity and Operationalizing Growth with HubSpot Ft. Mohamed Hamad Of Third Wunder Agency

    SaaS companies move fast—but if your branding and systems can’t keep up, growth can actually become a liability. In this episode of the Aesopians Podcast, host Hunter Nelson is joined…

    Why SEO Investments Help Your MSP Weather a Recession and Keep the Door Open for New Opportunities

    What happens to your pipeline when the phones go quiet, inboxes stay cold, and paid ads stop converting? That’s not a hypothetical. It’s what happens in a recession. Budgets freeze.…

    MSP Marketing – How to Build a Strategy That Works

    Let’s be honest—most MSP marketing doesn’t work.Not because the tactics are bad, but because they’re unaligned. What looks like a marketing problem is often a strategy problem in disguise. Most…

    Why Your MSP’s Online Marketing Efforts Are Failing

    If you’re leading an MSP and investing in online marketing, you’re probably feeling a growing sense of frustration. You’ve put money into websites, content, ads—even hired an agency or two…

    Microsoft Loop Presents Marketing Opportunity For MSPs

    Introduction Microsoft Loop, a recent addition to the Microsoft 365 suite, is already creating buzz in the tech community, and for a good reason. With its native integration into widely…

    Microsoft CoPilot Available For Resale Via MSP Partners

    On January 15th Microsoft announced Copilots availability to the broader business landscape. It released initially for enterprise customers back in November, but is now available via Microsoft 365 subscriptions to…

    MSP Sales Tips To Close More Deals

    I’ve been doing MSP marketing for close to 5 years now and have worked with a about a dozen technology businesses in some capacity and have had conversations with dozens…

    Is BNI A Good Fit For Your MSP?

    I recently saw a few people asking about BNI for their MSP. BNI or Business Networking International is a paid networking and referral group that is commonly found in most…

    Estimating The Value Of An MSP Lead

    In today’s post, we’ll be talking about a muddy subject.. How to estimate the value of an MSP lead and how you can translate that into what you can spend…

    Top Of Funnel, Middle Funnel, and Bottom Of Funnel Explained

    You’ve probably heard marketers talking about the top of the funnel, the middle funnel, and the bottom of the funnel, but do you know what they mean? Well, the truth…

    MSP Sales Funnel Key Terms To Know

    In today’s post, I wanted to break down a few key terms MSP owners should be aware of when it comes to breaking down sales funnels from online marketing for…

    Why Referrals Don’t Scale And Create Risk For Your MSP

    With the recent wave of layoffs in the tech sector, I’ve seen a big uptick in the recently departed deciding to try their hand at running their own consulting business.…

    MSP Marketing Guide To 5 Million+ ARR

    In this guide, we’re going to talk about how you can use MSP marketing to generate enough pipeline to get to 5 million plus in annual recurring revenue. A lot…

    Top Online Lead Generation Tips For MSPs

    According to industry research by a leading managed service provider marketing firm, 94% of MSPs self-reported lead generation as their number one challenge when it comes to growing their MSP.…

    Want To Sell Your MSP? You Need EBITDA

    In today’s post, I want to open up the curtain a bit on what selling your MSP one day might look like and why many owners of managed service providers…

    Branding Your MSP: How To Get Started

    Throughout the process of launching and running Tortoise and Hare Software these past 3-4 years there’s one thing that I’ve gotten consistently good feedback on. The brand! People who aren’t…

    How Do I Advertise My MSP? A Short Guide

    Marketing is one thing but advertising is another. You may have your logo and branding in order, a polished website, pamphlets, brochures, t-shirts, stickers, and other swag, but at a…

    Building A North Star For Your Brand

    Today I had an “epiphany”. I was writing a lead magnet for the top 10 mistakes I see technology companies making when it comes to their marketing and wrote down…

    Business Lessons Learned From 15+ Years In Competitive Online Gaming

    When I was in 3rd grade my family picked up and moved from the poor side of town to a better neighborhood on the outskirts. After my first time experiencing…

    3 Key Elements Of A Successful Sales And Marketing Transformation

    Generating a steady stream of leads and growing annual revenues at a rate that satisfies you, your investors, and your employees can be a significant challenge. It requires transforming your…

    Top Blog Content

    The Ultimate Guide to Hiring an MSP Marketing Agency

    Are you one of the many MSPs struggling to attract new clients consistently? According to research conducted by MSP Dojo, a leading MSP sales consulting firm, approximately 85% of MSPs…

    The Ultimate Guide To MSP Website Optimization

    A well-optimized website is essential for Managed Service Providers (MSPs) looking to scale their business, attract more leads, and achieve a lucrative exit. A lot of MSPs check a few…

    The Ultimate Guide To Paid Search On Google Ads For Managed Service Providers

    Generating leads for your MSP can be a challenge. You spend so much time managing employees, making sure customer support tickets are answered, procuring hardware, and defending against cyber threats,…

    The Ultimate Guide To MSP SEO

    Search Engine Optimization (SEO) is one of the most important ways to attract new business for mid-market managed service providers (MSP). If you look at MSPs that have achieved any…

    The Ultimate Guide To Setting A Marketing Budget For IT Companies

    Many IT companies get their start as a one-man operation and rely almost exclusively on word of mouth, referrals, and other organic offline means to get past their initial growth…

    Featured Review of Tortoise and Hare

    ryan drake president nettech consultants
    R.D.
    President Florida Based MSP

    Tortoise and Hare has been a key partner in our MSP's growth. Over the year's we've worked together they've helped our MSP dramatically increase our website traffic, and build a steady stream of leads sourced from our website and advertising efforts. Over that time, we've been able to raise our base customer size, build economies of scale to more efficiently service customers, and expand into new markets.