DSIT and Perspective Economics use Glass.AI to Research the Managed Service Provider (MSP) Market in the UK.
A recent study commissioned by the UK’s Department for Science, Innovation and Technology (DSIT) and produced by Perspective Economics revealed that there are 11,492 active Managed Service Providers (MSPs) in the UK. To identify the potential providers, and understand the range of the services provided, the Government used our AI capability that deep reads the web.
Definition of Managed Service Providers (MSPs)
MSPs are entities that provide IT Services such as systems, infrastructure, networks, and applications — including the security thereof — a third party which both relies on network and information systems and includes ongoing support (active management or monitoring).
The “security” aspect played a key part in the study, with significant interest placed on identifying MSPs potentially in scope for tighter regulation and scrutiny to tighten the UK’s digital resilience.
These businesses collectively yield an annual revenue of £52.6bn and employ approximately 294,340 full-time workers.
This sector, encompassing a wide range from global IT enterprises to small local firms, has experienced an annual growth rate of 12% over the last five years.
Although large MSPs represent just 4% of these 11,492 businesses, they account for 74% (£38.8bn) of the total revenue.
In contrast, mid-sized MSPs constitute 9% of the firms and generate 16% (£8.4bn) of the revenues, while small and micro MSPs, making up 28% and 59% of firms respectively, contribute only 10% of the total revenues.
Figure 1 — The distribution of total number of firms among size brackets (“size” here uses a combination of employee counts and turnover) and their contribution to the overall revenue for the sector
To highlight this disparity further. At a more granular level, we found that the second smallest revenue bracket — £100,000 to £250,000 — is the largest by some margin in terms of the number of firms it contains, yet it contributes only 1.28% of the total revenue for the sector. Meanwhile, only 0.12% of the firms — in the highest revenue bracket of over £500 million — provide a massive 31.5% to the total.
Figure 2 — Focusing on revenue bands, we can see the lower revenue bands contain far more MSPs but contribute to a lower percentage of the sector’s total revenue.
Looking at the distribution of MSPs across the UK’s geography reveals various hotspots.
London leads with some of the top districts: City of London (377), Westminster (356), and Camden (342) taking the top few spots.
However, a strong presence of businesses in the sector was also found in the North: Manchester (173), Leeds (166), and Edinburgh (111)
As well as the Midlands and West: Birmingham (145), Bristol (90), and Wiltshire (83).
To provide the services they do to other businesses, MSPs tend to undertake partnerships with cloud providers, software vendors, hardware providers, cyber security firms, and networking providers. During this study, the research team endeavoured to identify some of the biggest players partnering with the UK sector. Of the total sector mapped, 2,778 with partnership information publicly available were identified, these are broken down below.
As a fast-growing sector and one key to the UK government’s goals of wide-scale digital transformation, understanding the Managed Service Provider landscape is an important step in supporting the rollout of Digital Public Services. Further to this, with the current global spotlight on cybersecurity and new regulation inbound, it has never been more important to know who is managing the UK’s digital infrastructure.
You can read the full report here.