MSPs face AI adoption hurdle over governance rules

AvePoint has published research with Omdia on AI readiness among managed service providers, finding that governance and compliance are the main barriers to AI adoption for MSP customers.

The study surveyed 333 MSPs across North America, EMEA and APAC, examining governance, compliance, automation maturity and scaling challenges. It points to a widening gap between demand for AI services and providers' ability to deliver them consistently.

More than half of respondents, 51%, identified data governance and compliance challenges as the primary obstacle to AI adoption. That put them well ahead of data and security management, value realisation and technical expertise gaps, each cited by a much smaller share of providers.

For many MSPs, the issue is less access to AI tools than the controls needed to manage data safely. As customers expand their use of AI, providers are facing greater scrutiny over how information is governed, retained and recovered.

Omdia forecasts the global partner opportunity linked to AI services will reach $276 billion by 2030, while the managed security services market is projected to hit $106 billion this year.

Integration Demand

The study also found growing demand for integrated software rather than separate products. Nearly half of MSPs, 49%, said they want a complete platform integrated with other core tools.

A far larger majority, 91%, said integrated data backup and disaster recovery provides stronger data governance than offering those functions separately. This suggests a preference for systems that reduce administrative complexity across multiple client environments.

The report describes a market moving away from point products as providers look to standardise governance and data protection tasks. For MSPs handling large numbers of tenants, fragmented tools can add manual work and raise the risk of inconsistent policy enforcement.

Execution Gap

One of the clearest findings is the gap between ambition and execution. While 94% of MSPs said they are committed to automating AI data readiness and compliance services, only 43% said they had reached high maturity in delivering AI-ready data environments to customers.

Most providers have yet to build the repeatable processes needed to offer those services at scale. The report notes that governance is increasingly being sold as a recurring service, but delivery remains uneven across the market.

Operational complexity appears to be a major reason. Among MSPs that have not fully automated customer data protection and compliance services, 40% cited complexity across different client environments as the main barrier.

Each tenant can bring different configurations, policies and integrations, making standard workflows harder to apply. The study included a comment from one MSP executive that captured the burden of customisation across large client bases.

"We could build automations for every single one of our clients, but we'd have to do it 700 times."

Compliance Growth

Despite those constraints, the commercial case for governance-related services remains strong. Omdia projects compliance services will grow 21% for MSPs in 2026, driven by regulatory demands, audit cycles and customer expectations for continuous compliance.

Scott Sacket, Senior Vice President of Partner Strategy at AvePoint, said the findings show governance has moved to the centre of customer AI deployment decisions.

"Governance has become the primary barrier preventing customer AI adoption. MSPs need unified data protection platforms that standardize governance across multi-tenant environments, transforming manual work into automated, repeatable services. Those who operationalize governance will capture significant market opportunity."

Robin Ody, Practise Leader for MSP Analysis at Omdia, said the study identified a bottleneck that is becoming harder for providers to ignore.

"The message from this research is clear: one of the bottlenecks for end-customer AI adoption today is the operational burden of data governance and compliance, which has become more complex and essential as AI continues to spread.

"With the global managed security services market projected to reach $106 billion this year, MSPs are increasingly involved in breaking these bottlenecks. This report shows there is still a lot of untapped opportunity in this section of the market. MSPs that adopt business solution and vertical-specific approaches to governance and compliance are going to excel at capturing this demand."

The study identified three steps for MSPs seeking to close the gap: standardised governance frameworks, better visibility across multiple tenants, and data protection controls brought together in one system. It also warned that concerns around shadow AI and data leakage are adding urgency to those efforts.