Government publishes external research on the Managed Service Provider market
The Department for Science, Innovation and Technology (DSIT) has published an independent research paper quantifying the size and scope of the Managed Service Provider (MSP) market in the UK.
The research has been published as part of the introduction of the Cyber Security and Resilience Bill (CSRB) to Parliament. Large- and medium-sized MSPs who meet the definition for a ‘Relevant Managed Service Provider’ (RMSP) will be brought into scope of the Network and Information Systems (NIS) Regulations.
The research, conducted by Frontier Economics and Glass.AI, has produced key findings and highlights opportunities and challenges for these types of organisations as the sector prepares for the introduction of the CSRB.
Key findings
According to the report, the UK is home to 12,867 MSPs, employing approximately 343,762 people, generating an estimated £51 billion in revenue and contributing £22.3 billion in Gross Value Added (GVA).
More than half of the active MSPs identified (7,074) offer cloud services. All the MSPs identified in this research are companies registered and active on Companies House, with at least one office in the UK, whether headquartered in the UK or overseas.
Scope of the CSRB
To fall within the scope of the CSRB, an MSP must employ at least 50 people and have an annual turnover of €10 million or more.
It remains unclear whether the employment threshold for the CSRB refers to UK-based staff or global headcount. This distinction significantly impacts the number of MSPs in scope of the regulation. Based on an annual turnover of €10 million or more and UK employment only, 977 MSPs meet the criteria, whereas 1,213 MSPs qualify when global employment figures are considered. Missing revenue data also widens the scope as employment levels become the only measurable metric, increasing included MSPs from 977 to 1,214 when considering UK employment, and from 1,213 to 2,381 MSPs.
Analysis indicates that a significant proportion of MSPs already fall within the Bill’s scope. Cloud service providers account for approximately 658 of 1,214 UK-based MSPs and 1,362 of 2,381 globally meeting this definition.
In total, between 556 and 1,019 additional MSPs could fall within the scope of the CSRB, beyond those already covered as cloud service providers.
Updated taxonomy
The inclusion of three new service categories in the MSP taxonomy: system integration, business process outsourcing and IT support for operational technology adds a further 255 companies to the count. These additions reflect the evolving nature of managed services and their critical role in operational resilience.
Challenges in defining MSPs
The study highlights several obstacles to establishing a clear definition of Managed Service Providers (MSPs), particularly in the context of the CSRB.
- Lack of a universal definition – MSPs do not fall under any dedicated Standard Industrial Classification (SIC) code, making them difficult to identify consistently across official datasets. This absence of a formal classification creates gaps in traceability and complicates regulatory oversight.
- Overlap with other IT services – due to MSPs lacking a precise definition, they are often grouped with other IT service categories such as cloud computing, IT consulting, infrastructure management and outsourcing. These categories differ significantly in terms of cyber security risk and compliance requirements, yet they are frequently treated as one, blurring the boundaries of what constitutes an MSP.
- Rapidly evolving service offerings – MSPs are inherently dynamic, adapting their services to meet changing cyber security needs and respond to emerging threats. This constant evolution makes it challenging to maintain a static definition that accurately reflects the sector.
- Diverse business models – The market comprises both dedicated MSPs, whose core business is managed services and diversified firms that offer managed services alongside other activities. Estimating employment and revenue for diversified providers is particularly difficult, as they rarely report figures by service category. This complicates market sizing and classification efforts.
Why does this matter?
The CSRB is a welcome step forward as government looks to strengthen the UK’s cyber defences across critical sectors. As the Bill progresses through Parliament, it will be essential that organisations, like MSPs, that were not previously covered by the NIS Regulations 2018 engage with the new provisions.
However, as with primary legislation, there are still a number of unanswered questions and greater clarity is needed to help businesses prepare for implementation. The research shows the complexity of defining an MSP and the variables that influence whether an organisation would be captured under the new regulation. Government should offer more clarity around the way it defines an MSP to ensure relevant businesses can start to comply with the regulation.
More clarity is also needed on issues such as, how government defines a large- and medium-sized MSP; whether cloud providers or overseas-headquartered MSPs with UK operations fall into scope; the distinction between Relevant Digital Service Providers (RDSPs) and MSPs; whether future-proofing has been considered through the inclusion of AI-driven MSPs and the extent of the regulator’s ability to designate SME MSPs as ‘critical suppliers’ and bring them into scope.
techUK looks forward to working with the government and parliamentarians to ensure the CSRB is fit for purpose and can be implemented by MSPs who will support the UK’s cyber resilience across critical sectors.
techUK will be producing more analysis on the Bill in the coming weeks.
You can access the full report here, and techUK’s overview of the CSRB and its provisions here.
Submit your feedback
techUK is encouraging members to submit their comments, feedback and questions on the CSR Bill to the techUK team over the coming days and weeks via this form. We are particularly interested to understand any views from members' legal teams, which may help us to identify opportunities for improvement (with amendments) and/or any areas for concern.
Olivia Staples
Junior Programme Manager - Cyber Resilience, techUK
Olivia Staples joined techUK in May 2025 as a Junior Programme Manager in the Cyber Resilience team.
She supports the programs mission to promote cyber resilience by engaging key commercial and government stakeholders to shape the cyber resilience policy towards increased security and industry growth. Olivia assists in member engagement, event facilitation and communications support.
Before joining techUK, Olivia gained experience in research, advocacy, and strategic communications across several international organisations. At the Munich Security Conference, she supported stakeholder engagement and contributed to strategic communications. She also worked closely with local and national government stakeholders in Spain and Italy, where she was involved in policy monitoring and advocacy for both public and private sector clients.
Olivia holds an MSc in Political Science (Comparative Politics and Conflict Studies) from the London School of Economics (LSE) and a BA in Spanish and Latin American Studies from University College London (UCL).
Outside of tech, Olivia enjoys volunteering with local charities and learning Norwegian.
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Jill Broom
Head of Cyber Resilience, techUK
Jill leads the techUK Cyber Resilience programme, having originally joined techUK in October 2020 as a Programme Manager for the Cyber and Central Government programmes. She is responsible for managing techUK's work across the cyber security ecosystem, bringing industry together with key stakeholders across the public and private sectors. Jill also provides the industry secretariat for the Cyber Growth Partnership, the industry and government conduit for supporting the growth of the sector. A key focus of her work is to strengthen the public–private partnership across cyber to support further development of UK cyber security and resilience policy.
Before joining techUK, Jill worked as a Senior Caseworker for an MP, advocating for local communities, businesses and individuals, so she is particularly committed to techUK’s vision of harnessing the power of technology to improve people’s lives. Jill is also an experienced editorial professional and has delivered copyediting and writing services for public-body and SME clients as well as publishers.
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Annie Collings
Programme Manager, Cyber Resilience, techUK
Annie is the Programme Manager for Cyber Resilience at techUK. She first joined as the Programme Manager for Cyber Security and Central Government in September 2023.
In her role, Annie supports the Cyber Security SME Forum, engaging regularly with key government and industry stakeholders to advance the growth and development of SMEs in the cyber sector. Annie also coordinates events, engages with policy makers and represents techUK at a number of cyber security events.
Before joining techUK, Annie was an Account Manager at a specialist healthcare agency, where she provided public affairs support to a wide range of medical technology clients. She also gained experience as an intern in both an MP’s constituency office and with the Association of Independent Professionals and the Self-Employed. Annie holds a degree in International Relations from Nottingham Trent University.
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Olivia Staples
Junior Programme Manager - Cyber Resilience, techUK
Olivia Staples joined techUK in May 2025 as a Junior Programme Manager in the Cyber Resilience team.
She supports the programs mission to promote cyber resilience by engaging key commercial and government stakeholders to shape the cyber resilience policy towards increased security and industry growth. Olivia assists in member engagement, event facilitation and communications support.
Before joining techUK, Olivia gained experience in research, advocacy, and strategic communications across several international organisations. At the Munich Security Conference, she supported stakeholder engagement and contributed to strategic communications. She also worked closely with local and national government stakeholders in Spain and Italy, where she was involved in policy monitoring and advocacy for both public and private sector clients.
Olivia holds an MSc in Political Science (Comparative Politics and Conflict Studies) from the London School of Economics (LSE) and a BA in Spanish and Latin American Studies from University College London (UCL).
Outside of tech, Olivia enjoys volunteering with local charities and learning Norwegian.
- Email:
- [email protected]
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Fran Richiusa
Programme Team Assistant for Public Sector Markets, techUK
Fran serves as the Programme Team Assistant within techUK’s Public Sector Market Programmes, where she is responsible for delivering comprehensive team support, managing administrative functions, and fostering strong relationships with members.
Prior to joining techUK in May 2025, Fran built a meaningful career in the charitable and local government sectors. She worked extensively with both victims and perpetrators of crime, and notably led the coordination of Domestic Homicide Reviews across Surrey—an initiative aimed at identifying lessons and preventing future incidents of domestic abuse.
Outside of work, Fran is an avid traveller and a proud cat mum who enjoys unwinding with her feline companions.
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