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Start with a deliberately narrow, profitable first engagement priced against the prospect's measured environment, then make the expansion path and its evidence visible instead of hiding the work in a low seat-count bundle.
The mix shifted toward smaller deals.
Short answer: MSP deals are getting smaller. In Kaseya's 2026 State of the MSP Report, a survey of 1,061 MSPs, the share whose typical customer spends $25,000 or more a year fell from 75 percent to 41 percent, and the share of MSPs not yet profitable doubled from 5 to 10 percent. Pricing for this market means starting smaller on purpose, pricing against the prospect's measured environment rather than a seat count guess, and building the expansion path into the first proposal.
What the numbers say
Kaseya's survey, fielded in November 2025, shows the squeeze from both directions. Buyers are committing to less: the share of MSPs reporting typical annual customer spend under $25,000 more than doubled, from 24 to 55 percent. The share reporting average monthly recurring revenue of $1,000 or less per client grew from 24 to 30 percent and is now the largest group.
Costs moved the other way. Thirty percent of MSPs named rising labor, tool and infrastructure expenses as a direct constraint on growth, and 24 percent said clients are cutting IT budgets.
The market is not uniformly worse. The share of MSPs reporting average contracts between $7,501 and $10,000 a month doubled to 6 percent, and the share reporting mid-to-high-teens profit grew. Kaseya calls it a polarized market. The MSPs on the right side of that split did not get lucky on pricing; they priced something the buyer could see.
Stop fighting the smaller first deal
Buyers are starting with smaller engagements because they are cautious, not because they have stopped needing help. Fighting that with a full-stack proposal on day one is how deals stall.
The better move is a first engagement sized to the buyer's comfort and aimed at a specific, visible problem: the MFA rollout, the guest account cleanup, the connected-app review, the license right-sizing. Each one has a scope, a finish line and a measurable before-and-after. Each one also puts your team inside the tenant, which is where the case for the full agreement gets made.
Price the environment, not the seat count
Per-user pricing assumes every seat costs the same to support. It does not. A thirty-seat tenant with no MFA enforcement, forty guest accounts and a dozen unreviewed connected apps costs more to bring under management than a thirty-seat tenant that is already clean.
Measure before you quote. Onboarding cost, exception handling and risk all show up in configuration, and pricing against what is actually there protects the margin that Kaseya's profitability numbers say is getting thin.
Let the client's waste fund the first contract
Smaller budgets make license waste the easiest money in the room. Unused and duplicate licenses, accounts for people who left, add-ons nobody uses: recovering that spend is a finding the owner can take straight to the bottom line, and it often covers a meaningful part of your first month. It also answers the value question Kaseya's report flags, where the share of MSPs struggling to quickly demonstrate value to prospects rose from 10 to 19 percent. Saving a client money before they have paid you anything is value they can count.
Frequently asked questions
How much do MSP clients typically spend per year in 2026?
In Kaseya's 2026 State of the MSP Report, 55 percent of MSPs said their typical customer spends under $25,000 a year, up from 24 percent the year before. Only 41 percent reported typical spend of $25,000 or more, down from 75 percent.
What is the average MSP revenue per client per month?
The largest group of MSPs in Kaseya's 2026 survey, 30 percent, reported average monthly recurring revenue of up to $1,000 per client, up from 24 percent the prior year.
Are MSPs becoming less profitable?
Profitability is splitting. Kaseya found the share of MSPs not yet profitable doubled from 5 to 10 percent, while the share reporting mid-to-high-teens margins increased.
What is the best MSP pricing model for small clients?
Start with a scoped first engagement tied to a visible problem, price the full agreement against the client's measured environment rather than a flat per-seat rate, and plan the expansion from the first proposal.
How can an MSP justify its price to a cautious buyer?
Show savings and risk reduction in the buyer's own environment before the contract, such as recovered license spend or closed MFA gaps. Kaseya's data shows buyers increasingly want proof they can verify.
How SCOUTz gets you there
SCOUTz is prospect intelligence for MSPs, and pricing is where it pays for itself. From a prospect's domain, and then from a read-only Microsoft 365 view they approve, SCOUTz measures the things that drive onboarding cost and first-deal value: MFA and identity gaps, connected apps, and license use including accounts that are still billed after the person left. You quote the environment that exists, you lead with money the client is already wasting, and the work plan in your MSP's name becomes the scope of the first engagement. Point it at any client and walk out with a deal. The open beta is free for thirty days at scoutzsecurity.io.