14 May MSPs Positioned for Significant Growth in Cybersecurity
The cybersecurity market is set to expand rapidly in 2024 and beyond, according to Canalys. The services sector is projected to outpace the technology sector, with cybersecurity managed services expected to grow by 15% to $80.9 billion, compared to a 10% increase in the cybersecurity technology market, reaching $86.6 billion.
The rising frequency and sophistication of cyber threats make robust cybersecurity essential for organizations. Managed Service Providers (MSPs) are primed to benefit, as 99% already offer security services. However, the market is highly fragmented, with approximately 6,500 vendors and over 10,000 Managed Security Service Providers (MSSPs).
Private equity-driven mergers and acquisitions are consolidating the market, yet the number of players is expected to increase due to the sector’s rapid growth. Mid-market companies offer significant opportunities for roll-up strategies.
Cybersecurity Services Segments
Cybersecurity managed services are projected to be the fastest-growing segment, including substantial growth in these areas:
- Remediation services: 145.7% growth to $2.4 billion.
- Managed technology services: 10.1% growth to $47 billion.
- SOC and SIEM services: 4.4% growth to $14 billion.
- MDR services: 49.7% growth to $8.9 billion.
Managed technology services dominate the cybersecurity MSP market, offering stable, double-digit growth. Remediation and MDR services are poised for exponential growth, boosting the overall sector.
Other cybersecurity service categories are also set to grow significantly by 2024:
- Consulting: 12.4% growth to $26.8 billion.
- Integration services: 17.1% growth to $5.4 billion.
- Maintenance and support services: 8.3% growth to $34.1 billion.
To capitalize on these opportunities, analysts recommend developing platforms that provide integrated security services. The importance of services is increasing, with providers earning $2 in services for every dollar of security product sold.
Despite macro economic challenges, the cybersecurity and managed services sectors are experiencing robust growth. Service providers and investors should aim to build market share now, as growth and deal activity are expected to accelerate with improving economic conditions.
