AIMultiple ResearchAIMultiple ResearchAIMultiple Research
We follow ethical norms & our process for objectivity.
This research is not funded by any sponsors.
AI
Updated on Apr 3, 2025

Model Context Protocol (MCP) and Its Importance in 2025

Model Context Protocol (MCP) is an open protocol that standardizes how applications provide context to LLMs. More simply, it enables applications to connect to AI models, helping to achieve standardized results.1

Why is it important?

MCP servers are becoming more popular because of their integration capabilities with AI systems. This has become an essential feature for AI users since the lack of standardized communication and data transfer with AI systems makes using specific tool capabilities hard.

MCP solves these problems by offering a standardized way to connect AI models to other applications and tools.

For a web developer using a vibe coding tool like Cursor, MCP can help make direct Figma integration easier for the design-to-code process. After implementing the design easily with the Figma MCP server, that developer can also use a Stripe MCP to help get payments. Without MCP integrations, this developer will be unable to use Stripe easily and will have to explain the AI coding tool process step by step to get a more non-standardized result.

AI systems and model context protocol

Model Context Protocol (MCP) creates a standardized interface for agents’ interactions with their environment and tools. MCP interacts with AI agents with:

  1. Tool/Function Calling: With MCP, agents can use tools and functions which can help AI to perform real-life tasks.
  2. Context Management: MCP helps agents manage their working memory and input context more effectively by providing structured ways to retrieve and process information. This is crucial for agents that need to maintain state across multiple interactions.
  3. Agent Orchestration: MCP provides protocols for how multiple agents communicate with each other, share data, and coordinate tasks when they need to work together. This enables more complex multi-agent systems.
  4. Action Planning: MCP can help structure how agents formulate plans, breaking down complex tasks into sequences of actions with clear inputs and outputs at each step.
  5. Standardized I/O: By standardizing how information flows in and out of the agent, MCP makes it easier to build, debug, and iterate on agent systems. Developers can focus on agent capabilities rather than building custom interfaces for each integration.
  6. State Persistence: MCP provides conventions for maintaining and retrieving the state between sessions for long-running agents.

The overall goal is to create more capable, reliable, and easy-to-operate AI agent systems by establishing clear protocols for interacting with their environment, tools, and other agents.

Real-life examples

With more users starting to use AI coding tools, the need for MCP servers for different data sources and tools increased. To solve that, a Figma MCP server is being used; it can easily connect with Cursor, Windsurf, Cline, etc, to make the design-to-code process easier for users.2

Building and configuring MCP servers

An MCP server acts as middleware between AI models and the tools they use, consisting of:

  1. Request Handler: Processes incoming model requests
  2. Tool Registry: Manages available functions and their specifications
  3. Context Manager: Stores conversation history and working memory
  4. Authentication: Verifies permissions for tool access

MCP servers can be written in any language that can print to stdout or serve an HTTP endpoint. The MCP configuration file uses a JSON format with a specific structure. Host application servers are used to connect MCP clients to AI tools, allowing external systems to be used on AI applications.3

FAQ

What is the future of MCP and AI integration?

Anthropic is actively developing remote MCP hosts to remove the local restriction. Users can also build their own MCP servers, which helps them integrate easily. AI systems interact with multiple servers, creating the needed tool response with increasing MCP servers.

What are the features of MCP tools?

MCP includes a permissions framework to control access and make adoption easy.
It uses a client-server architecture supported by JSON-RPC 2.0 and flexible transports.
MCP has diverse use cases like knowledge graph management, database queries, and API integrations.

Share This Article
MailLinkedinX
Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 55% of Fortune 500 every month.

Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE and NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and resources that referenced AIMultiple.

Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised enterprises on their technology decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.

He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.

Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.

Next to Read

Comments

Your email address will not be published. All fields are required.

0 Comments