Brendan White, EVP, Service Operations at Thrive, explains why MSPs must pivot toward delivering cost-predictable, secure and unified hybrid-cloud environments.
There is a growing need to deliver more with less across numerous industries, and IT leaders are no exception. Resilience expectations are rising, security requirements are tightening, and boards still want visible progress on innovation.
At the same time, budgets are flat or even shrinking, and bills associated with cloud projects are under sharper scrutiny. That combination is reshaping what organisations need from their managed service providers (MSPs) and is also rewriting how MSPs themselves design and run cloud platforms for their customers.
For many organisations today, the conversation has moved away from cloud at any conceivable cost. In its place is a push for predictability, governance and performance that can be measured and defended. Beyond workload migration, demand is growing for sustainable cloud workload management, with clear accountability for what is spent, where data resides and how services perform over time. This is the foundation for where MSPs will need to prioritise their efforts in 2026 and beyond.
Budget pressures are now design constraints
Budget pressures are design constraints that influence architecture choices from the start. In practical terms, that means a shift away from uncontrolled public cloud sprawl and potential unforeseen costs later down the line, towards a model that aligns spend with consumption, while avoiding any nasty surprises along the way.
This trend is being intensified by new cost drivers. Organisations are being pressed to invest in AI capabilities, and much of that investment competes with existing IT spend. At the same time, traditional vendors have increased costs in areas such as private cloud software licensing. Many of the major cloud providers have also signalled price rises. CFOs are asking the tougher questions sooner as a result, while IT leaders are looking for cloud strategies that stand up to financial scrutiny.
For MSPs, the value proposition is changing. Customers are less impressed by another set of dashboards. Instead, they expect cost governance that is practical and connected to decision-making, rather than a quarterly reporting exercise that arrives too late to act on properly. MSPs must provide tangible outcomes to be successful.
Hybrid cloud is becoming the default operating model for AI
AI is transforming hybrid cloud from a potential option into an essential operating model that many organisations expect to keep for the long-term. Data consumption, latency, sovereignty and predictable performance become more influential than elastic compute when it comes to AI workloads. It’s no longer just about scaling compute up and down. Workloads need to be placed where they make the most sense – close to the data, within the right compliance boundaries and with defined performance characteristics.
Hybrid is a strategic advantage in this context because organisations can keep sensitive, data-intensive workloads in private environments, selectively burst into the public cloud when it makes economic sense, and still maintain a single approach to governance. Supported by a single pane of glass, hybrid setups are manageable as a single environment rather than a patchwork of disconnected tools.
What MSPs need to keep in mind here is that hybrid setups can’t be composed of two separate public and private worlds, which would otherwise add complexity for customers. The MSPs that meet modern customer requirements will be those that treat hybrid as a single operating model, thereby reducing friction, improving visibility and making it easier to scale emerging technologies such as AI without surrendering control.
Security, compliance and sovereignty
Security and compliance concerns have not disappeared. If anything, they have become more nuanced. Many organisations are not trying to cut corners, but they are asking themselves how they can design cloud environments that are compliant and operationally efficient. That uncertainty is often amplified when data residency requirements are strict, as is common in financial services and regulated industries.
A clear advantage of a well-run private cloud setup is certainty around where data is hosted. Customers value being able to say, with confidence, which data centre or region their data sits in. For MSPs, the opportunity is to remove any ambiguity by building security posture and compliance controls into the platform design, then backing it up with operational discipline and clear evidence.
Provider partnerships that combine capabilities are helping to make the difference – for example, the combination of modern private cloud infrastructure with orchestration and cost governance capabilities, aiming to provide predictable costs, consistent compliance controls and a platform that can support data-intensive AI workloads.
Success based on outcomes
Customers want hybrid environments that operate as one, with governance that informs day-to-day decisions. Budget pressure is driving more disciplined design, while AI is increasing the need for performance, sovereignty and smart workload placement.
MSPs will therefore be judged less on what they can provision and more on how well they can run and evidence outcomes over time. Those that succeed in the market will build cost control, security and operational discipline into one manageable platform, helping customers modernise with predictability and adopt AI without adding any additional risk.
