As businesses reassess the cost, privacy, and performance tradeoffs of cloud-based AI, Plugable CEO Lynn Smurthwaite-Murphy sees local AI becoming a more urgent channel opportunity for IT resellers and MSPs.
In an interview with Channel Insider, Smurthwaite-Murphy said AI adoption remains “all over the map” as companies experiment with cloud-based models, emerging open-source tools, and new hardware approaches.
But she argued that the market is moving toward hybrid AI environments, where some workloads remain in the cloud while others run locally.
“By next year, most organizations will have a hybrid AI model simply because they’re going to have to,” Smurthwaite-Murphy said.
Local AI could lower the barrier for channel partners
For MSPs and resellers still trying to define an AI practice, Smurthwaite-Murphy said local AI may offer a more approachable entry point than large-scale cloud AI implementations.
“With local AI, you can spin up a proof of concept much faster and easier than you could on a cloud,” she said.
For partners, the broader message is clear: AI cannot remain a vague talking point. It needs to become part of a defined services strategy.
“If you’re a channel partner and you don’t have some strategy there, I would argue that your days are numbered,” Smurthwaite-Murphy said. “It’s like the Industrial Revolution. It’s everywhere.”
For more information on how MSPs are building AI services at scale, check out our latest interviews and analysis.
Specialization may matter more than scale
Smurthwaite-Murphy said smaller partners should not assume AI is only a hyperscaler or large integrator opportunity. Instead, she said the channel should focus on building deeper vertical knowledge and practical use cases for clients with specific needs.
Smurthwaite-Murphy said the opportunity is especially relevant for partners already advising customers on compliance, data management, and vertical-specific workflows.
Those conversations can serve as a bridge to AI consulting, particularly as customers weigh which workloads should remain local and which can move to the cloud.
“If they’re already working compliance and they’re already working with the data, this is a natural extension,” she said.
For larger MSPs and solution providers, she said the market will likely require both cloud and local AI capabilities. For smaller partners, the opening may come through specialization.
“For partners that have specialization, this is a really great opportunity for them,” she said.
How Plugable is addressing partner opportunities with open-source technology
Plugable develops docking stations, connectivity peripherals, and infrastructure solutions designed to support hybrid and multi-vendor IT environments.
The company is extending that approach into AI with local AI hardware offerings that enable organizations and channel partners to deploy AI workloads on-premises rather than relying exclusively on cloud-based models.
“People don’t want to lock into a solution right now. They don’t know where it’s going. Things are changing so quickly,” Smurthwaite-Murphy said.
“It was very natural for us to take, again, an agnostic, universal approach with our local AI solution that works with what you have and it’s flexible and modular.”
To Smurthwaite-Murphy, the near-term opportunity for partners lies in establishing deeper relationships with customers not just around AI itself, but also across related conversations about data, infrastructure, and device needs.
Dell is also investing heavily in enabling its channel partners to deliver AI outcomes at scale. Catch up on Jordan Smith’s reporting from Dell Technologies World 2026 to learn more about the tech giant’s approach to local AI, partner incentives, and more.