Key Takeaway: 36% of MSPs use 10 or more tools. Tool sprawl is not just a cost problem. It is a training burden, an integration complexity, and a vendor relationship overhead that compounds over time. Every tool in the stack should earn its seat by delivering value that justifies its cost and operational overhead.
The average MSP uses more than 10 tools to manage its operations. According to Auvik’s 2026 IT Trends Report, 36% of MSPs use 10 or more tools, and tool sprawl is one of the primary drivers of operational complexity, margin compression, and technician burnout. The MSP that has accumulated tools over the years, some used actively, some barely used, some duplicating the function of other tools, is paying for complexity that does not generate revenue.
Tool consolidation is not about using fewer tools for its own sake. It is about ensuring that every tool in the stack earns its seat by delivering value that justifies its cost and the operational overhead of maintaining it.
Why Tool Sprawl Happens
Tool sprawl is the natural result of growth without governance. The MSP that started with a basic RMM and PSA adds tools as client needs evolve: a backup solution, an EDR product, a DNS filter, a documentation platform, a security awareness training platform, a password manager, an email security gateway. Each addition is justified at the time. The cumulative effect is a stack that is expensive to maintain, difficult to train new technicians on, and full of overlapping functionality.
Tool sprawl also happens through client inheritance. The MSP that takes on a new client who is already using specific tools faces a choice: migrate the client to the MSP’s standard stack, or manage the client’s existing tools. The path of least resistance is to manage the existing tools. Over time, the MSP ends up managing five different backup solutions, three different RMMs, and two different PSAs because each client brought their own.
The Cost of Tool Sprawl
The direct cost of tool sprawl is the licensing fees for tools that are underutilized or duplicative. The indirect costs are larger.
Training burden. Every tool in the stack requires technicians to learn it, maintain proficiency in it, and troubleshoot it when it behaves unexpectedly. The MSP with 15 tools has a significantly higher training burden than the one with 8 tools. New technicians take longer to become productive. Existing technicians spend more time on tool-specific issues and less time on client work.
Integration complexity. Tools that do not integrate well with each other require manual data transfer, duplicate data entry, and workarounds that consume technician time. The PSA that does not integrate with the RMM requires manual ticket creation for alerts. The documentation platform that does not integrate with the PSA requires manual credential lookup. Each integration gap is a recurring time cost.
Vendor relationship overhead. Every vendor relationship requires management: contract renewals, support escalations, feature requests, and the ongoing evaluation of whether the tool is still the right choice. The MSP with 15 vendors has 15 renewal cycles to manage, 15 support relationships to maintain, and 15 pricing negotiations to conduct.
The Consolidation Audit
The tool consolidation audit starts with a complete inventory of every tool in the stack, its cost, its primary function, and its actual usage. The audit should answer four questions for each tool:
What does this tool do that no other tool in the stack does? If the answer is nothing, the tool is a candidate for elimination. If the answer is something that another tool in the stack also does, one of the two tools is redundant.
How many clients and technicians actually use this tool? A tool that is licensed for 50 clients but actively used for 10 is a candidate for renegotiation or elimination. A tool that is licensed for 10 technicians but used by 2 is a candidate for right-sizing.
What would happen if this tool disappeared tomorrow? If the answer is “nothing significant,” the tool is not earning its seat. If the answer is “significant operational disruption,” the tool is essential and should be protected.
Is there a tool already in the stack that could replace this one? Many MSPs have tools with overlapping functionality that were acquired at different times for different reasons. The consolidation audit often reveals that one tool can replace two or three others with minimal capability loss.
The Consolidation Strategy
Tool consolidation should be approached as a project, not as a series of ad hoc decisions. The consolidation project has three phases.
Phase 1: Audit and prioritize. Complete the tool inventory, identify redundancies and underutilized tools, and prioritize the consolidation opportunities by cost savings and operational impact.
Phase 2: Migrate and eliminate. For each tool identified for elimination, plan the migration of its function to the replacement tool, communicate the change to affected technicians and clients, execute the migration, and cancel the eliminated tool’s license.
Phase 3: Standardize and govern. Establish a tool governance process that prevents future sprawl: a defined approval process for new tools, a regular review of the stack against the governance criteria, and a standard for client onboarding that requires migration to the MSP’s standard stack.
Frequently Asked Questions
How do I handle clients who refuse to migrate to my standard stack?
Price the non-standard configuration accordingly. The client who insists on using their own tools is creating operational overhead that should be reflected in their pricing. The managed services agreement for a non-standard client should cost 15% to 25% more than the standard agreement to reflect the additional complexity. Some clients will accept the premium. Others will migrate to the standard stack when they understand the cost of the alternative.
What is the right number of tools for an MSP?
There is no universal right number, but the principle is that every tool should earn its seat by delivering value that justifies its cost and operational overhead. A well-run MSP with 8 tools that are all actively used and well-integrated is in a better position than one with 15 tools where half are underutilized and poorly integrated.
About Brent Lacy: Brent Lacy is a technology advisor and the voice behind Rewired MSP. He is the author of Rewired MSP: Mastery, Scalability & Performance, vCIO Rewired: Virtually Conquering IT Obstacles, and Near Miss: Preventable IT Failures Threatening Your Business Security.
Related Reading
- The Silent Margin Killer: How Tool Sprawl Is Eating Your MSP’s Profits
- The MSP Starter Stack: What Tools You Actually Need
- MSP Profit Margins: What You Should Be Making
- MSP Growth and Sales Hub
This article is part of the MSP Growth and Sales Hub. See also: The MSP Starter Stack and MSP Cash Flow Management.
