Is It Me, or Is It Getting Hot Out There?

Anecdotal evidence from MSP attendees of ThreatLocker’s Zero Trust World conference suggests 2025 is off to a surprisingly strong start.

Fans of the podcast I so relentlessly plug here may recall a surprising fact shared by Peter Kujawa, the vice president and general manager of ConnectWise’s Service Leadership consulting unit, during a recent interview: service provider revenue growth tends to slow in the runup to presidential elections.

“We got approached early in the summer by a reporter who asked us if there’s any correlation between U.S. presidential election years and revenue growth for MSPs,” Kujawa says. “We talked about it internally and we thought that’s a ridiculous premise. There’s no possible way that there’s a correlation on these two things. But being curious about it, we decided to run the data set.”

And sure enough…

“In the last four presidential election years, revenue growth for MSPs—and this is not just managed service revenue, but project revenue, product, all of it—revenue growth was down from the previous year between five and a half and 11.5 percent.”

Service Leadership has yet to finalize the numbers, but it looks like the trend held in 2024. Kujawa’s currently forecasting a roughly 8.5% year-over-year decline in revenue growth last year. So what does history teach us to expect in 2025?

“We don’t have a crystal ball, but the best predictor of the future are patterns from the past and after each of those slowdown years, the presidential elections, we’ve seen a nice lift the following year,” Kujawa says.

Based on anecdotal evidence from the MSPs I quoted earlier in this piece, that lift is already underway. January, according to Westerheim for example, was an unusually good month for Ekaru.

“We’re delighted with the number of new prospects that came in,” she says. “That’s a small data set, but I think there’s some optimism in the market.”

She heard the same thing from peers at ThreatLocker’s conference this week. “I spoke to one guy who’s onboarding five customers now,” she says. “Maybe there’s some pent-up demand out there.”

Weiss (pictured left) is feeling it too. Co-managed clients, who account for about 60% of his top line, have been green-lighting projects more readily lately, he says. “Things are moving faster now.” And given that interest rates haven’t dipped a bunch recently, and post-inflation prices are still relatively high, he sees only one likely explanation.

“I don’t know how it wouldn’t have something to do with the election,” Weiss says.

There’s a hole in that theory, though. Canada hasn’t had an election recently, yet Mitchell’s numbers are up too.

“Our 2025 started off real strong,” he says, adding a cyclical theory of his own to the picture. Businesses, he notes, spent a lot of money on technology after Covid hit.

“Then inflation came, massive retraction happened, and now what’s happening is we’re seeing those that survived and those that made it out are now taking over the market of those that didn’t,” Mitchell says. “That’s leading to some expansion and some weird opportunities that are occurring.”

Of course, we’re not even two months into the year yet, so who knows how long that lasts. Westerheim isn’t waiting to find out.

“We’re going to double down on it,” she says, by ramping up sales and marketing.

About that podcast…

I told you that I plug it relentlessly, didn’t I? So don’t say you’re surprised to see me do it again here. The latest episode, posted earlier today, features an interview with Syncro CEO Michael George on AI on managed services and much more, including the mystery product I wrote about here. Listen in and then let me know your theory on what Syncro’s got coming in April.