AI: What Orgs Want & How the Channel Can Deliver Outcomes

AI was one of several dominant themes throughout ChannelCon in Nashville last month. One thread seemed to tie the panels, keynotes, and side conversations together: AI is disrupting more than just the technology landscape, and MSPs have reached an inflection point.

Why MSPs might be feeling deja vu

MSP owners have experienced a lot of change over the past few decades. From the shift away from break-fix and towards managed services, to the early days of cloud computing, and then the myriad ways the COVID-19 pandemic altered tech habits and customer demands, it would be hard for anyone working in the channel not to think the world looks different than it used to.

“Since around 1988, we’ve been through seven or eight major shifts as a channel. I think what feels different this time around is that all of those previous shifts were really driven by the channel, and AI wasn’t as much- it came from around us and not from within so much,” said Rex Frank, the VP of Academy at Pax8 and a longtime channel leader.

AI isn’t just a tech innovation: the business model changes already underway

A refrain heard time and time again: this technology will fundamentally change the way you do business. MSPs are used to hearing bold claims about their future, but this time, many are feeling and seeing an actual shift take place, as companies realize they need trusted advisors to guide them through not just tech adoption but operational evolutions.

While this has led many owners to consider exiting at a time when valuations remain high for qualified MSPs, others are still wondering whether they can adapt to the changing market and continue delivering value to their customers.

“There are so many MSPs right now asking what they should do next, especially because of things like AI,” said Nancy Henriquez, the CEO of Sibyl Consulting Group and a former MSP owner herself.

“What partners are arguably the best at is adapting their business models to what customers need. This isn’t necessarily new, once you think about it from that perspective,” Frank added.

Moovila CEO Mike Psenka predicts MSPs might need to shift their focus to more complex tasks that AI can’t easily replace and customers will still need.

“Establishing yourself as an organization around the idea of analysis, consultancy, and the implementation of larger, structured processes is going to be more immune to displacement,” Psenka said. “There’s going to be best practices first from the larger MSPs who are already doing this, and smaller MSPs up to this point aren’t quite there, but they will see the scale and the opportunity soon.”

Customers remain in the hype cycle as partners try to catch up

As MSPs try to get their own operations in line with the market, their customers show no signs of wanting less AI. More than 60 percent of SMBs surveyed by GTIA, for example, reported a moderate or significant increase in AI spending this year.

“SMBs really want to buy technology, but they don’t always know what,” said Jen Anaya, CMO at Ingram Micro. “It’s important for partners now more than ever to understand their customers and what they need. I think we’re talking too much about the tech itself and not enough about how to use it and find success with it.”

Ingram Micro rolled out Xvantage Enable AI earlier this year to guide its own partners through education and enablement resources built by its teams in collaboration with AI-focused vendors available through its platform.

For Frank, who is also leading AI enablement for Pax8 partners (more on that below), the inflection point for partners isn’t an immediate death sentence.

“I’m not really in the “move now or expire” group, but I absolutely think partners need to find their ideal customer base and be the best-in-class at what they do and who they do it for,” Frank said. “Pull that trusted advisor hat out of the closet and remember that you have to understand it before you can bring it to customers. It’s time to be customer zero and shift from ‘it’s coming’ to ‘it’s here’.”

The latest solutions and offerings bringing AI to the channel

Of course, the business shifts are not the only thing worth discussing when it comes to AI. Technology itself still matters a great deal to MSPs and their customers, and the ChannelCon vendor hall showcased some of the excitement tech companies are bringing to the space.

Moovila’s Mike Psenka on how AI-enabled platform is driving value

We’ve covered Moovila a few times before, and Psenka says the company continues to innovate and attract more partners. Moovila’s project management and workflow automation platform was built with AI before the tech became a buzzword. Now, the company is focused on delivering the value that GenAI doesn’t have the technical ability to own.

“Everyone has an AI use case that ‘turns them,’ in that they finally see it do something that works for them and it clicks,” Psenka said.

“In general the new models do a terrible job with graph data, and project planning is graphing. The vertices are the tasks and the edges are the lengths, durations, and interdependencies. When I say it does a “bad job,” I mean that the’re around 65 or 68 percent, and that leaves a terrible error rate when we’re expecting 99 percent in complex projects. One damaged node can contaminate everything downstream,” Psenka explained. 

Moovila’s platform isn’t built solely with generative models and LLMs, and Psenka explained its focus on the full breadth of AI-enabled workflows allows it to perform the heavily contextualized automation MSPs need to keep complex projects and client support tasks flowing efficiently. 

Produce8’s new approach to work management

Project management isn’t the only tooling getting an AI-enhanced lift built for partners. Produce8 focuses on workforce productivity management, but CRO Marco La Vecchia says the opportunities for its channel partners go far beyond simply selling people management software.

“We felt there was a need in the MSP space for differentiation. So many partners all sell basically the same thing, but you need to be able to stand out in the market and offer different services to customers they can’t find elsewhere,” Le Vecchia said.

Produce8’s platform doesn’t just provide a report on how employees use their time in the workplace. To La Vecchia and the company, their analytics can uncover unused licenses and show which departments are using which technology and when, leading to new insights in popular concerns like SaaS sprawl and the ROI on AI investments.

“MSPs need to get back into the boardroom, Customers want to know how you align with their business strategy, and bringing a solution that allows them to see productivity and how their application usage impacts productivity ties you into those wider conversations,” La Vecchia said.

Pax8 brings AI Guided Growth to partners as marketplace evangelizes the “managed intelligence provider”

The global cloud marketplace introduced its new terminology for channel partners at its annual Beyond event in June. The era of the “managed intelligence provider” is intended to signify a shift in what customers expect from their partners as agentic AI takes over some of the support MSPs have traditionally built their pratices around.

The marketplace provider’s Pax8 Academy offering focuses entirely on building enablement classes and other materials for its global partner base of over 40,000. Data provided by the company highlights the business gains Academy can provide, including:

• IT Service Providers coached by Pax8 Academy ​achieved 37% higher EBITDA in 2024​ compared to the IT Service Provider industry​.
• Pax8 Partners​ increased their profitability 38% more [than partners not participating in coaching] in 2024​.
• Pax8 partners increased their EBITDA dollars 111% more in 2024.

Frank says his team has seen significant interest in the company’s AI Guided Growth pathway since it was launched in June.

“We’ve seen a massive hunger for education around AI, and specifically around how partners can monetize this to be successful moving forward,” Frank said.