Maximize Profitability with Efficient MSP Operations

calendar07/16/2025
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Managed service providers (MSPs) are always looking for ways to grow while increasing profitability. Often, the right solution stack provides the efficiency and scalability needed to accommodate customers’ needs. Successful providers have discovered that profitability doesn’t solely depend on premium pricing or volume scaling. It encompasses every aspect of the MSP operation, from initial client onboarding to ongoing service delivery and strategic consultation.

More clients shouldn’t mean more chaos. MSPs can take anywhere between 40 – 80 hours to onboard each client and, according to Sherweb, the average MSP services about 200 – 300 endpoints spread across 10 – 20 clients. Similarly, scaling deployments for multiple clients through manual user and tenant management tasks can be time-consuming.

Learn how leveraging advanced tools and platforms can streamline complex processes, automate routine tasks. These capabilities provide the visibility necessary for data-driven decision making, ultimately helping MSPs thrive in this environment. 

Strategic Framework for Operational Efficiency

Modern MSPs are expected to provide expertise across multiple domains: infrastructure management, cybersecurity, compliance, cloud services, backup and disaster recovery, strategic technology planning, and more. Each domain requires specialized knowledge, dedicated tools, and ongoing management attention. The expanding scope of MSP services has created significant operational complexity. 

This complexity is compounded by the need to serve multiple clients with varying technology stacks, security requirements, and business objectives. The resources needed to maintain the breadth of knowledge can quickly erode profit margins if not managed effectively. That’s why 74% of MSPs stated they would like to use fewer tools, indicating a trend toward vendor consolidation

Moreover, traditional approaches to MSP delivery often rely heavily on reactive support models that require significant technician time and attention. When issues arise, skilled technicians must diagnose problems, research solutions, and implement fixes manually. The gold standard is 350 fully managed endpoints per technician, although that number can vary based on the complexity of services and the technology stack. This approach not only creates unpredictable resource demands but also limits the MSP’s ability to scale.

Here are three ways to maximize profitability without overburdening teams:

Streamline: Process Standardization and Automation

Standardization ensures that routine tasks are performed consistently, reducing errors and training requirements while creating improvement opportunities. However, 47% of MSPs report being overwhelmed by the volume of security data they manage, contributing to alert fatigue and making it harder to focus on strategic tasks. This suggests that compliance and archiving tasks, which generate large volumes of logs and audit trails, are a major drain on technical resources.

When processes are well-defined and documented, it becomes possible to identify which steps can be automated and which require human expertise. Automating tedious, routine tasks allows MSPs to work better and enables their teams to focus on high-value work. For instance, automation can help with system updates, regular maintenance, and monitoring alerts. This plan not only cuts down costs but also raises productivity.

Scale: Technology Platform Integration

Disparate tools that require separate management interfaces, different authentication systems, and manual data correlation create inefficiencies that directly affect profitability. Integrated platforms unify interfaces, driving scalable operations and valuable growth. This enables MSPs to manage complex client environments, encompassing monitoring, management, security, and reporting capabilities while providing the flexibility to adapt to different client requirements and technology stacks.

MSPs leveraging integrated platforms that provide multiple security capabilities through a single interface gain a more efficient path to robust service delivery. Workspace management has become another critical service area as organizations adopt cloud-first strategies and embrace flexible work arrangements. MSPs who can provide seamless workspace provisioning, management, and security across multiple platforms and locations create significant value for clients while generating recurring revenue streams.

Support Services: License Optimization

According to CAST AI, companies are estimated to waste $16.2 billion on overprovisioning cloud resources annually. When combined with idle resources, the total waste in infrastructure-as-a-service (IaaS) costs reaches approximately $43.3 billion. And about 30% of software licenses are never used, while another 8% are rarely used (less than once a month), resulting in significant costs for unused software licenses. 

License optimizations can simplify the process for clients and grow monthly revenue by upgrading to better services. Accessing a comprehensive dashboard that provides visibility into license usage and spending can help in detailed cost analysis, generate exportable reports, and receive actionable recommendations to eliminate duplicate or unused licenses — empowering smarter budgeting and efficient license management. 

Implementation Strategies for Maximum ROI

Maximizing MSP profitability requires a comprehensive approach that addresses both immediate operational challenges and long-term strategic positioning. 

From Provider to Trusted Security Advisor

Security is more than a product; it’s a long-term service opportunity. Whether clients are just moving to the cloud or fully established, MSPs can help them stay secure, resilient, and compliant — and become their go-to virtual CISO for everything from backup to AI governance. Business outcomes are as follows:

  • Launching or expanding a profitable security service offering
  • Building long-term client relationships based on trust and risk reduction
  • Differentiating from commoditized IT providers by leading with business value
  • Increasing wallet share with services beyond backup and basic Microsoft 365 support
  • Upselling compliance, governance, and protection services to existing clients

Security Services for the AI Era

Clients want the power of AI but without the risk. MSPs can deliver secure, compliant collaboration backed by automated protection and recurring security services to be monetized. From data backup to AI-enhanced policy enforcement, MSPs can reduce risk while building high-value, high-margin offerings with business outcomes such as:

  • Delivering new, recurring security services with high customer stickiness
  • Reducing client risk around Copilot and Microsoft 365 data exposure
  • Meeting growing compliance and data sovereignty requirements
  • Differentiating from competitors with AI-enhanced security offerings delivered through one unified platform
  • Bundling backup, access control, and AI policy enforcement into a single package
  • Creating long-term trust as a strategic security advisor

Smart Optimization-as-a-Service

Offer smarter services that reduce waste, improve ROI, and drive margin without adding headcount. AvePoint Elements helps you turn optimization into a revenue stream by uncovering unused licenses, over-provisioned storage, and underutilized users — giving you a simple way to provide high-value insights and automation that clients will pay for.

Smart optimization-as-a-service leads to the following business outcomes:

  • Increasing monthly recurring revenue with optimization-as-a-service
  • Improving client retention by demonstrating measurable ROI
  • Reducing license waste and overprovisioning costs for clients
  • Strengthening margins without hiring additional staff
  • Offering proactive insights that keep clients engaged year-round
  • Positioning optimization as an upsell to basic Microsoft 365 services

Drive Operational Efficiency with AvePoint Elements

The opportunity for MSPs to maximize profitability while delivering exceptional client value has never been greater. Organizations across all industries recognize the need for comprehensive IT and security services and require partners who can provide cost-effective services. 

MSPs who master operational efficiency through platforms like AvePoint Elements position themselves to capture this opportunity while maintaining the profit margins needed for sustainable growth and continued investment in capabilities and talent. This creates the foundation for success in an increasingly competitive market.

Discover how to drive revenue and deliver scalable, security-first services: AvePoint Innovates Channel Edition

author

Kris Blackmon

Kris Blackmon is Partner Marketing Director at AvePoint. She previously worked as head of channel communities at Zift Solutions, chief channel officer at JS Group, and as senior content director at Informa Tech where she was director of the MSP 501 community. In addition, Kris also chairs in CompTIA's Channel Development Advisory Council.