Tech integration ‘chaos’ drags down UK MSP M&A performance – report

Nearly half of acquisitive MSPs report rising technology costs due to slow migration

Technological and cultural barriers are the primary challenges slowing M&A progress for MSPs.

That is according to a new report from ServiceNow MSP platform POPX, looking into the biggest hurdles managed services providers face when integrating people, processes, and technology following an M&A deal.

MSPs were active on the M&A scene in 2025, with several mega-mergers happening.

But two or more businesses coming under one roof can lead to the butting of heads.

Redsquid CEO Sohin Raithatha previously highlighted to CRN the importance of integration after his acquisitive year.

The new State of MSPs Report, undertaken by Sapio Research of 250 UK MSPs, revealed that platform and system integration, along with data migration and consolidation, are the top hurdles, each cited by 60 per cent of respondents.

These technical issues are compounded by human factors, with poor morale affecting 44 per cent of the surveyed MSPs, and issues with cultural or team alignment affecting 38 per cent or respondents.

Nearly half of acquisitive MSPs (49 per cent) report rising technology costs due to slow migration, while 48 per cent experience operational inefficiencies from poor integration.

Additionally, 44 per cent said these delays hinder their ability to satisfy private equity investors, and 39 per cent report delays in improving profitability and EBITDA.

“The MSP market is evolving rapidly, with mergers and acquisitions set to continue apace in 2026,” said POPX CEO Andy Venables.

“Private equity backers expect quick wins, and we know from investors they are concerned about the delays in integration having a negative impact on EBITDA.

“MSPs tell us that integration timelines often slip and costs spiral from people working in siloed systems that slow down service delivery and result in dissatisfied customers.”

Client impact and legacy barriers

Research also found client disruption remains a major concern, with 38 per cent of MSPs reporting some level of impact during integration, putting long-term contracts at risk.

The report claimed MSPs can end up running two or more parallel businesses because of integration issues.

Meanwhile legacy systems are adding another layer of complexity, with incompatible security frameworks (47 per cent) and outdated CRM systems (46 per cent) among the most common obstacles to successful integration.

These technology barriers can act as a ‘tax’ on new projects, forcing staff to work across siloed systems and slowing down service delivery to a crawl, the report stated.