The UK’s managed service providers (MSPs), long the unsung enablers of the digital economy, are about to face a more visible — and regulated — role in national cyber resilience. While not yet enshrined in law, proposed new cybersecurity rules signal a decisive policy shift that places MSPs at the forefront of Britain’s digital defence strategy.
Earlier this year, the UK Government announced its intention to introduce new laws that would compel MSPs to meet minimum cybersecurity standards. The move comes amid growing recognition that these providers, often embedded deep within the IT infrastructure of their clients, represent both a potential vulnerability and a critical first line of defence for the nation’s estimated 5.5 million businesses.
The recommendations, outlined in a consultation response published by the Department for Science, Innovation and Technology (DSIT), call for mandatory compliance with the Network and Information Systems (NIS) Regulations. This would bring MSPs under the same regulatory umbrella as other critical infrastructure operators, requiring them to demonstrate robust risk management, incident reporting, and resilience practices.
Though legislative change is still pending, the direction of travel is clear. Policymakers, informed by extensive consultation and industry research, see regulation as not only inevitable but essential. Another reason is the sheer value of the sector. The most recent government report on MSPs from 2022 estimated that the sector generated annual combined revenue from of £52.6 billion while employing an estimated 294,340 FTEs.
Investments Necessary, But Will Unlock Opportunity
Initially, around 1,000 MSPs are expected to be affected, particularly those with significant client portfolios and infrastructure responsibilities. But few believe it will stop there. The government is already positioning this as a “template” for wider application, suggesting that a more expansive regime could follow within a few years.
The writing is also on the wall in the public sector. MSPs seeking to do business via the G-Cloud framework have already seen a growing requirement for Cyber Essentials Plus certification. This trend is expected to accelerate as government procurement policy increasingly aligns with cyber policy. For many MSPs, optional certification is about to become a mandatory cost of doing business.
A recent survey by CyberSmart of UK MSPs reveals a sector largely in favour of clearer regulation, though not without concern. Over 60% of MSPs said that their clients assume they are “already compliant with government standards,” even when they are not. The same study found that fewer than half of MSPs currently hold any form of formal cyber certification — a gap that will need closing, quickly.
For MSPs, the implications are profound. Compliance will mean new investment in systems, training, and audit processes. But it may also unlock commercial advantage, offering a clear signal of trustworthiness in a market where clients are increasingly attuned to cyber risk. Those that move early may find themselves not burdened but better positioned.
Compliance — both the burden and the opportunity — will be one of the central themes for MSPs throughout 2025. They – and all tech businesses – can hear more, including a keynote session titled “Practical Insights on Cybersecurity from a Recovering MSP” by Chris Johnson, GTIA senior director of cybersecurity compliance programs, at Channel-Sec 2025, 8-9 May, in Birmingham, UK.
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Will Garside is the editor of IT Europa.
