Syncro Survey Finds Backup, Security Gaps in Microsoft 365 MSPs

Operational complexity, incomplete backups, and reactive security practices are emerging as major challenges for managed service providers (MSPs) as they work to secure multi-tenant client environments, according to Syncro’s 2025 Industry Survey on Microsoft 365 Management.

Fragmented tools amid broad Microsoft 365 adoption

At the outset, the report found that 60 percent of MSPs said Microsoft 365 powered more than 80 percent of their client base, underscoring the platform’s central role in modern MSP operations. 

Alongside this reliance, several key challenges were identified:

• 29 percent of MSPs said they experienced a preventable client data loss incident that could have been avoided with dedicated backup.
• 40 percent cited operational complexity and lack of integrated tools as their top Microsoft 365 management challenge.
• 28 percent of respondents only review or update security baselines after incidents occur. 
• 18 percent of technician time was spent managing user access and credential issues.

The survey, conducted in July 2025, drew responses from 152 MSPs. Respondents represented a mix of company sizes, service offerings, and geographic regions, reflecting the overall diversity of the MSP market.

“Microsoft 365 is the backbone of business operations and MSPs are under enormous pressure to deliver protection that’s both effective and scalable,” said Michael George, chief executive officer at Syncro. 

“The findings show that while MSPs are embracing the cloud, many are still grappling with fragmented tools and manual workflows that leave critical gaps in both data and identity protection.”

The report also highlighted MSPs’ reliance on multiple disconnected systems for Microsoft 365 security and administration. Syncro noted that this fragmented approach leads to inefficiency and increases the risk of configuration errors, policy drift, and delayed threat response.

Next steps and key recommendations

In response, the study outlines three key recommendations to help MSPs reduce risk and scale more efficiently: simplifying complexity, closing the backup gap, and strengthening baseline management.

The survey expands each recommendation, as follows:

• Simplify complexity: Consolidate management under unified platforms to improve consistency and reduce friction. MSPs using integrated systems reported fewer configuration errors and better visibility across tenants, creating a stronger foundation for scale.
• Close the backup gap: Protect both business data and identity infrastructure to ensure business continuity. Incomplete or inconsistent backups remain one of the most preventable causes of client downtime and data loss; yet, more than half of MSPs admit that their coverage is still incomplete.
• Strengthen baseline management: Automate proactive security practices across tenants to move from firefighting to foresight. Standardized baselines and automated checks reduce technician workload, enhance policy enforcement, and help providers maintain consistent protection as they grow.

“The survey makes it clear that reactive security is not enough,” said Matt Lee, Senior Director of Security and Compliance at Pax8. 

“MSPs have an opportunity to shift toward proactive, automated protection, and that shift will define who is best positioned to grow,” Lee added.

In September, Syncro launched Cloud Backup for Microsoft 365 and Entra ID. Read more about the offering and how it gives MSPs unified security, compliance, and recovery tools for their clients.