MSPs are rethinking cloud partnerships as the market grows more competitive and complex, shifting evaluation beyond technical performance to long-term viability, economics, and operational fit.
Why MSPs are re-evaluating cloud partnerships amid rapid growth
The MSP market is expanding rapidly, with global revenue projected to reach $354 billion in 2026 and partner programs driving 40% of growth.
As cloud platforms become foundational to infrastructure, security, and compliance services, vendor relationships are now strategic dependencies—making poor partner choices a risk to reliability, margins, and long-term stability.
MSPs should prioritize profitability and predictable margins
Profitability remains a primary criterion, with programs increasingly emphasizing predictable margins through simplified discounting and structured incentives.
Research suggests that margin pressure is growing across the MSP sector, with average gross margins declining by approximately three percentage points since 2021 due to aggressive pricing models and bundled offerings.
Common program changes across vendors include:
- Unified list-price discount structures that improve margin predictability.
- Incentive programs tied to lifecycle engagement.
- Expanded marketing funds and rebates.
These implementation changes reflect a broader shift toward partner programs designed to support repeatable revenue and service-led growth.
MSPs, then, should weigh those factors and consider how a cloud vendor’s models would impact their own ability to price their offerings.
For service providers, as margins grow tight, having the optimal partnerships in place could be the difference between significant headwinds and strategic growth in 2026.
Vendor lock-in and platform flexibility: the technology angle
Approximately 38% of MSPs cite vendor lock-in as a primary concern when evaluating partners. Lock-in limits an MSP’s flexibility to adopt new technologies, adjust pricing strategies, or migrate clients.
Vendor consolidation trends have increased this concern. Consolidating services with a single vendor can simplify operations; however, it can also create dependencies that are difficult to unwind if the relationship falls apart.
Because of all the trends already mentioned above, those limitations matter more to partners now than ever before.
As a result, MSPs should assess these technical capabilities with renewed vigor:
- interoperability and API availability
- workload portability
- data export capabilities
- multi-cloud compatibility
These capabilities allow MSPs to maintain vendor neutrality and protect their ability to migrate customers if necessary.
Even when MSPs are all-in on a particular vendor or technical solution, maintaining an exit ramp is in the provider’s and its customers’ long-term business interests.
Deal registration and contract flexibility gain importance
This might not seem “new” to many MSP owners, but many providers are placing greater importance on deal registration protections and clear rules of engagement as vendors expand direct sales and digital marketplace strategies.
All MSPs, whether they have worked with a close group of cloud vendors for a decade or are just starting out, should be diligent in understanding how those vendors engage with the channel and with the direct side of the business.
In an era of increased competition, end-user budget constraints, and uncertainty caused by the widespread proliferation of AI, no MSP will want to be caught off guard or even lose a customer’s business because they didn’t clearly understand how a vendor approached deal protections before working with them.
Partner enablement and operational support expand
Beyond economics, MSPs evaluate how effectively vendors support operations. As providers scale across clients, they depend on vendor tools, training, and automation to maintain efficiency.
Partner programs are incorporating automation, AI-driven tools, and specialized competency tracks that attract higher enrollment among MSPs.
Leading partner programs also now emphasize:
- Expanded technical certifications
- Role-based training programs
- Presales and architecture support
- Structured partner portals and operational tools
Vendors that deliver these capabilities accelerate onboarding and improve retention, making enablement a key factor in long-term partner selection.
Bottom line: cloud vendors must prove business alignment
As the MSP market evolves, vendors must demonstrate clear business alignment—delivering predictable economics, strong enablement, and flexibility.
Success in the next phase of the IT channel will depend on partnership models that prioritize long-term growth over product-centric approaches.
For MSPs, that pressure unlocks new opportunities to engage with cloud partners when everyone involved is transparent and diligent in ensuring the best possible outcome for the partner, the MSP, and the end customer.