Wes SpencerCo-Founder, Empath · Co-Founder of Empath | Recovering Cybersecurity Guy| Keynote Speaker | 2020 Cyber Educator of the Year | Building the MSP Workforce Operating System

The MSP Commoditization Trap

5 Sept 2026 · 1 min

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In this segment, Wes Spencer explains how increasing efficiency and tooling in the Managed Service Provider (MSP) industry are turning service offerings into commodities. He argues that as MSPs become more effective at delivering services, they can lower prices to stay competitive, much like buying a generic product such as corn where the source is irrelevant. While tools remain important, their efficiency enables sophisticated MSPs to undercut the market. Spencer cautions that despite this pressure toward commoditization, MSPs must still preserve space for growth and differentiation.

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And what that's going to do is I think it's going to do what the economy has always done to say, if we can actually make this more effective and more efficient, we can actually bring our price down and be more competitive at a lower price rate, not a higher price rate. And so what is that going to do? It's going to make the offerings that we present as an MSP more and more of a commodity. And when I say a commodity, I mean the word as it is, right? Like if I buy corn, I don't care if the corn comes from Farmer Joe or Farmer Bob, it's all corn. And that's what's starting to happen in the MSP space. Is that it's not that our tools are not important, but the efficiencies of those tools are really starting to drive the ability for sophisticated MSPs to undercut the market by coming lower in price. But we still need to have room to grow.