4 Obstacles Managed Service Providers (MSPs) Need to Overcome

WME Managed Services

Managed Service Providers (MSPs) are becoming increasingly popular as businesses of all sizes seek to outsource their IT needs to experts. However, as the demand for MSPs grows, so do the challenges they face.

In this blog post, we will explore the four main obstacles that MSPs need to overcome to ensure their success in the competitive market. From managing customer expectations to staying up to date with the latest technology trends, we will delve into the crucial issues that MSPs must tackle head-on to thrive in this ever-evolving industry.

So, whether you’re an MSP looking to grow your business or an organization considering outsourcing your IT needs, read on to discover ideas crucial for your future decision-making.

4 Obstacles MSPs Need to Overcome


Obstacle #1: Navigating the Complexities of Regulatory Compliance

In today’s digital age, data privacy has become a critical concern for both individuals and businesses. This sensitization has led to the enaction of various data regulations that companies must comply with to protect their customers’ information. Adhering to these regulations can help businesses build trust with their customers and avoid costly penalties for non-compliance.

As an MSP, some of the most important regulations that you must be aware of include: 

Financial Industry Regulatory Authority (FINRA)

FINRA is a self-regulatory organization that oversees brokerage firms and registered brokers in the United States. It is important for businesses to be aware of FINRA regulations to ensure compliance with industry standards and to protect investors from fraudulent or unethical practices in the securities industry.

General Data Protection Regulation (GDPR):

One of the most important data protection government regulations for the legal industry is the General Data Protection Regulation (GDPR) implemented by the European Union (EU).

GDPR is a comprehensive law that sets guidelines for the collection and processing of personal data from individuals, particularly those who reside in the EU.

Companies need to be aware of the General Data Protection Regulation (GDPR) because it sets guidelines for the collection and processing of personal data from individuals, especially those who reside in the European Union. Non-compliance with the GDPR can result in hefty fines, legal liability, and reputational damage.

Health Insurance Portability and Accountability Act (HIPAA)

HIPAA is a US law that sets standards for the privacy and security of protected health information (PHI). Companies that handle PHI must comply with HIPAA regulations to protect patients’ sensitive information and avoid legal and financial consequences.

Compliance requires implementing comprehensive policies, training employees, and conducting regular risk assessments.

Apart from these very important regulations, there are some other laws as well:

  • California Consumer Privacy Act (CCPA)

This law gives consumers in California additional rights and protections regarding how businesses may use their personal information.

  • Children’s Online Privacy Protection Act (COPPA)

This law regulates the online collection of personal information from children under the age of 13.

  • Gramm-Leach-Bliley Act (GLBA)

This law requires financial institutions to protect consumers’ personal financial information.

  • Electronic Communications Privacy Act (ECPA)

This law regulates the interception of electronic communications, including emails and instant messages.

  • Federal Trade Commission Act (FTC Act)

This law prohibits unfair and deceptive practices in the collection, use, and disclosure of personal information.

Managed service providers (MSPs) are responsible for protecting their clients’ sensitive data from cyber threats, and compliance with data protection regulations is a critical component of this.

To be compliant, MSPs need to implement the following technologies:

Email Security

MSPs should implement email security measures that detect and block unauthorized transmission of Personal Identifiable Information (PII) via email, both by employees and cybercriminals.

Email security measures can detect and block phishing attempts, malware, and other cyber threats that can breach an organization’s email system and lead to the unauthorized transmission of Personal Identifiable Information by employees or hackers.

Data Loss Prevention (DLP)

DLP technologies defend against the unauthorized movement of data inside an organization and its software systems, preventing data from moving where its security becomes compromised. 

Backup, Disaster Recovery, and Data Retention

Robust backup and recovery procedures are critical to comply with regulations such as GDPR, which requires companies to restore access to personal data in a timely manner in the event of a physical or technical incident.

Identity and Access Management (IAM)

This ensures that only authorized individuals have access to sensitive resources within an organization, preventing data breaches and unauthorized access to personal identifiable information (PII).


Data encryption protects crucial user data from being compromised if it is lost or stolen. Remember, Encryption is required both for data in transit and at rest.

Mobile Device Management (MDM)

MDM technology enables organizations to secure and manage data on employee mobile devices, such as smartphones and tablets.

Obstacle #2: Surviving in a Risky Digital World


MSPs work with multiple clients, which means they hold massive amounts of sensitive information and data. If someone gains unauthorized access to their systems, they could potentially access thousands of business systems.


That is why MSPs are highly vulnerable to digital threats and risks, including the following three hot areas:




Ransomware attacks are like modern-day highway robberies – except that they happen on the internet. on the other hand, Managed service providers (MSPs) are entrusted with a lot of power – they have significant access and control over their clients’ networks. 


However, this access also makes MSPs an attractive target for cybercriminals. If a hacker can infiltrate an MSP’s systems, they can potentially use this as a launchpad to attack the networks of the MSP’s clients. This can result in the theft of sensitive data or the installation of malware. 

So, the challenge here for MSPs is that they want to make sure not only that you prevent your client company from ransomware but also that your own personnel or technology don’t become a means for hackers to launch ransomware into your client’s crucial data. 

One popular tactic used by cybercriminals is to use MSP access to install ransomware. Shockingly, more than 40% of MSPs have been targeted by ransomware attacks in 2022 and the number is only growing since then. 


Once an attacker has gained access to an MSP’s network, they can use commonly used MSP tools like Remote Desktop Protocols (RDP) and MSP management consoles to steal privileged credentials that enable them to install ransomware on their victim’s network.


DDoS Attacks & Threat of Social Engineering



There has been a surge in the number of DDoS-for-hire services lately, and one of the reasons is the widespread remote working situation brought about by the pandemic.


Remote Work Issues

Companies are moving towards distributed and hybrid work models. As a result, their IT needs are becoming more complex, creating a demand for professional steering. This has been a boon for managed service providers (MSPs) in recent years. 

More and more businesses are turning to MSPs to upgrade and innovate their infrastructure and meet the growing demand for end-to-hosting software. However, with the rise of remote work, MSPs now face an expanded risk surface.

Employees are accessing work tools like Slack and Teams on their personal devices, which can put sensitive company information at risk of being stolen or accidentally exposed. In fact, most businesses see mobile devices as a major cybersecurity challenge.

Security breaches can be incredibly costly for MSPs, but there are ways to protect against them.

Both MSPs and their clients should take the following steps:

  • Implement a security solution that offers strong protection against digital threats, including social engineering, DDoS attacks, ransomware, and system vulnerabilities.
  • Use advanced threat detection and response solutions to identify potential risks before they become major problems.
  • Conduct regular security exercises to keep staff up to date on how to handle security breaches and cyberattacks.
  • Deploy automated cloud backup and archiving systems to ensure reliable backups and minimize the impact of any potential data loss.

Obstacle #3: The Roadblocks to Scaling & Growth 

Scaling & growth are crucial for sustainability, but they come with their own challenges. Managed Service Providers (MSPs) face similar obstacles when trying to scale their business, especially for those who want to transition into strategic solution providers.

They may be hesitant to change their business model and disrupt established marketing and sales plans. However, the rewards of increased scalability and profitability outweigh the risks. 

Some of the common difficulties are:

Some MSP customers feel limited when their choices become restricted, especially when their MSP can offer only a limited range of tech stacks.

There are other complaints as well including: 

  • Inadequate technical support and problem resolution due to lack of enough variety of skilled personnel.
  • Limited flexibility and customization options
  • Difficulty in accessing the necessary expertise for specific technologies or industries.

Whereas MSPs also keep resisting scaling options, mostly not constrained by resources but by mindset. Some of them have the mindset that “Don’t fix it if it’s not broken” They simply prefer “not falling prey” to any scaling proposals. Scaling with future needs and ambitious goals in mind is not among their top priorities. 

Some MSPs think their current investment is enough to give them better outcomes so why “waste more resources?”

The Challenge of Business Model

However, for MSPs serious to embrace change, one of the main limitations is the challenge of changing their business model and overhauling established marketing plans and sales efforts. 

Many such MSPs have been found to be reluctant to risk these changes, which can make it difficult for them to expand their services and customer base.

However, Scaling & growth in this era of hyper-competition and fast-adapting technology is just inevitable. They directly correlate with an expanded and more loyal customer base and ultimately increased profitability. 

The best part is, MSPs can still and grow and scale even if resources are their biggest constraint.

Here are some tips:

Avoid Clutter & Standardize Your Approach

In the world of IT, things are changing fast. One problem that is apparently unsolvable today can be solved using tens of ways the very next day. So, it’s important to have a strong grip on your area of expertise.

When you standardize your way of solving problems, you avoid the clutter of so many options wandering on your planning documents. To address this confusion, you need to come up with a particular solution that best fits your business model and stick to that no matter what.

Your core focus should be to solve problems, not the technology or techniques you use. Adopting this approach makes so many things including training, documentation, purchasing, etc. easier and straightforward. Ultimately, scaling becomes a breeze for you. While enabling high-quality services, you can make quick growth.

Maintain Robust Documentation

It is crucial to document all information related to your IT infrastructure, including configurations and critical details. Consider utilizing a solution that provides a central location for this information, serving as a single source of all the dependable information and facts.

Establish a secure repository to store this information and utilize automated backup and archiving systems to ensure data preservation.

Embrace Remote Work

In response to the COVID-19 pandemic, remote work has become more prevalent than ever before. To capitalize on this trend, consider embracing remote work and hybrid work models. Doing so will allow you to tap into talent pools beyond your local area, including individuals from different parts of the country or even the world. 

Automation Should be Your Go-To Solution

Automation is like having your own personal army of robots that do all the grunt work for you. It’s like having an extra set of hands to help you manage your business.

Here are some examples of how automation can help MSPs:

  • Say goodbye to tedious tasks. Automate routine tasks such as software updates, backups, and security patches. An automated ticketing system can instantly log and prioritize customer issues.
  • You can also use machines to mass-eliminate human error.

For example, automated scripts can ensure that all client systems are properly configured, reducing the risk of mistakes and oversights.

  • Then, you can streamline billing. With all of this comes significantly reduced costs and increased efficiency. This means that MSPs can now take on more clients and generate more revenue.

That said, when you have more time for important tasks like customer service and business development, you have more clarity about your scaling plans. Leverage automation tools (https://scribehow.com/library/msp-tools) today, integrate them, and start playing big. Scaling a small business might be challenging but it’s the need of the hour. So, just go for it.

Obstacle #4: Accidental Deletions

Accidental deletions can be a nightmare for MSPs, who are responsible for managing and protecting their clients’ data. Nearly all MSPs may have accidentally deleted an important file or document in the past. Even today, they are common.

Unfortunately, accidental deletions are more common than you might think, and they can have severe consequences for businesses that rely on their data to operate. In some cases, accidental deletions have led to data breaches, financial losses, and even the collapse of entire companies. MSPs must be prepared to prevent, detect, and recover from accidental deletions to minimize their impact on their clients’ businesses.

Let’s examine the most common reasons for accidental deletion in the MSP workplace:

  1. Simple human error is the most frequent cause of accidental deletion. Employees can mistakenly delete vital files, overwrite data, or fail to realize they have done so until it’s too late.
  • Out-of-sync mobile devices can result in the loss of company data. Users who save company data saved in their personal mobile phones often forget to sync or back up that information to the cloud.
  • Employee leaving the company or administrative glitches can lead to improper data governance. Without a proper employee replacement process, data handled by previous employees may not be preserved correctly, and it happens a lot. Even, disgruntled employees may use this vital customer data as a bargaining chip to blackmail their previous employers or delete it maliciously, putting the company at risk.
  • Data Fragmentation: When data is spread across multiple systems, applications, and storage locations, it can be challenging to keep track of what data exists, where it is located, and who has access to it. As a result, MSPs may accidentally delete data that they did not realize existed or that they did not know was essential to their client’s operations. 

Data Fragmentation can also make it more challenging to perform accurate data backups and restorations, increasing the risk of data loss in the event of accidental deletion. 

Such sprawls also happen when comprehensive data management practices like data mapping, inventory, and classification are not in place. As a result, MSPs do not have full visibility into their clients’ data and ultimately can’t protect it effectively.

  • Hardware loss or theft can potentially lead to MSPs accidentally deleting customer data if they are not properly prepared. In a 2022 survey of MSPs conducted by Datto, 59% of respondents reported that they had experienced data loss due to a hardware failure or lost device.

Another stat shows, 70 million smartphones are lost each year, with only 7 percent recovered. In the event of hardware loss, if MSPs fail to properly identify and back up critical data before wiping the device, they may accidentally delete important customer data. 

Oftentimes, MSPs have inadequate options for device tracking and remote wipe capabilities, regular data backups, and employee training on proper data management practices. The lack of proper encryption of sensitive data is also a major culprit in this case. 

To address accidental deletions, MSPs can undertake two key measures: 

  1. Optimizing Employee Onboarding and Offboarding Processes for Smooth Transitions

During the onboarding process, it is imperative to educate employees on using the appropriate equipment and software to safeguard company data and assets. In the case of a bring-your-own-device (BYOD) system, employees should be encouraged to adopt multi-factor authentication (MFA) and security systems to safeguard their devices in case of loss or theft. During offboarding, it is important to ensure that departing employees offload all sensitive data in their possession.

  • Importance of Backup and Archiving Solutions for Intellectual Property and Employee Work Product Preservation

MSPs should install backup and archiving solutions to effectively preserve and recover the company’s intellectual property and employee work product. It is essential to properly store or archive important content and to ensure that mobile devices containing sensitive information are immediately synced to a cloud location for backup. By implementing these measures, MSPs can ensure the secure and efficient onboarding/offboarding of employees while also safeguarding the company’s valuable data and intellectual property.

The Ultimate Solution for MSPs: Backup and Archiving

“The only way to completely protect yourself against data loss is to have a backup of your important files.”

Thomas F. Shinder

A cutting-edge backup and recovery system can help you overcome all these obstacles. Not only does an automated backup and recovery system ensure conformity with applicable privacy laws, but it also provides several benefits:

  • Prevents businesses from suffering the negative consequences of unintentional file deletions.
  • Helps organizations safeguard their data, especially when they have limited storage resources.
  • Reduces the impact of digital hazards and data breaches, 
  • Improves the marketing and sales strategies of managed service providers.

Remember: people often confuse Backup and Archiving as the same things, but they are not. 

Backup And Archiving are Different Things

Think of it this way:

Backup is like making a copy of your work to protect against accidental loss or damage, while archiving is like storing your completed work in a safe place for future reference or historical purposes. Backup is about quick recovery, while archiving is about long-term preservation. 

Both backup and archiving are crucial for businesses because they help protect against data loss and ensure business continuity. A backup system is designed to quickly restore data in the event of an accidental deletion, system failure, cyber-attack, or natural disaster.

Without a reliable backup system, businesses risk losing important data and experiencing costly downtime. On the other hand, archiving is important for businesses that need to retain data for compliance or legal purposes.

By archiving data, businesses can store information securely for long periods of time without consuming valuable storage space. Archiving also ensures that data can be easily accessed and searched when needed, which can be critical for legal or regulatory investigations.

The Importance of Archiving

So, while both are important for protecting data, they serve different purposes. Companies in regulated industries such as financial services, healthcare, or legal, need to prioritize the importance of archiving. This is because the law mandates the use of archiving as it offers specialized techniques to ensure data records are secure from tampering, and they are easily searchable and retrievable for audits, HR investigations, or lawsuits.

Wrapping it Up:

In conclusion, Managed Service Providers (MSPs) face several obstacles in the ever-evolving landscape of IT. However, by addressing customer expectations, embracing new technologies, focusing on training and development, and building a strong company culture, MSPs can overcome these challenges and thrive in this competitive market.

At WME, we understand the challenges faced by MSPs and have a proven track record of providing exceptional managed services to our clients. If you’re looking for a reliable and experienced MSP partner, look no further than WME.

Contact us today to learn more about how we can help you overcome these obstacles and achieve your IT goals.

Email us at: sales@winmgmtexperts.com



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