As artificial intelligence becomes more deeply embedded in managed services, N-able CEO John Pagliuca says MSPs are entering a new phase of opportunity and risk.
Pagliuca told Channel Insider that most MSPs are no longer simply experimenting with AI for personal productivity. Instead, many are beginning to use AI to streamline technician workflows, support customer AI projects, monitor shadow AI, and eventually build recurring services around AI governance and automation.
“When I talk to MSPs, 100% of MSPs consider AI net positive to their business, both on their bottom line and their top line,” Pagliuca said.
AI creates a new services opportunity for MSPs
Pagliuca described MSP AI adoption as a multi-stage progression.
At the earliest stage, MSPs are using AI in the same way many workers are: to improve personal productivity.
The next stage, where he said most MSPs are today, involves using AI to automate repetitive technical tasks and improve internal operations.
More advanced MSPs are beginning to help customers deploy and manage AI tools, including Microsoft Copilot environments and shadow AI monitoring.
A smaller group, Pagliuca said, is starting to build agentic coworkers that can reduce manual labor for SMB customers.
That shift could open a larger revenue opportunity for MSPs, similar to previous waves around cloud and cybersecurity.
“AI looks to help alleviate MSP’s number one bottleneck in their business case, and that is labor,” Pagliuca said.
MSPs need enterprise-wide AI strategies that keep humans in the loop
Pagliuca cautioned that MSPs risk limiting AI’s impact if they only apply it to isolated tasks or individual teams. To create meaningful efficiency, he said, partners must look across the full customer and service lifecycle.
“What MSPs are failing to do is they’re not thinking about it from an enterprise approach, documenting the process end to end,” he said.
Still, he emphasized that AI is not a shortcut around operational discipline.
“There’s a lot of foundational work, hard work, and elbow grease that needs to get done. You need to clean your data. You need to document your processes. You need to make sure that you have the controls in place and orchestration in place,” Pagliuca said.
“But if you’re not willing to do some of those foundational layers, AI’s not magic. AI is just technology.”
He also warned against removing human oversight from AI-enabled work. To Pagliuca, AI technology is revolutionary in many cases, but still not on par with the people-driven nature of work.
“You need to put the human intelligence on top of the AI intelligence,” Pagliuca said. “It’s creating more noise in some cases and not enough signal.”
Shadow AI and agentic security expand the MSP security mandate
As customers adopt AI tools, MSPs are also being asked to secure new categories of risk, including shadow AI, non-human identities, and agentic security.
Pagliuca said those are “new nouns” that still require familiar managed services functions: monitoring, managing, detecting, responding, backing up, and recovering.
For MSPs still skeptical of AI’s urgency, Pagliuca said the clearest warning comes from cybersecurity.
“When the bad guys are using things at machine speed, you need to also be defending that at machine speed,” he said.
“If your competition in the MSP space is leveraging the technology and really collapsing that time to detect and respond to minutes, or maybe even instantaneously, you will not be at market, and you will put yourself at a disadvantage and put your business at risk,” Pagliuca added.
N-able positions AI as technician automation support
N-able is responding by embedding AI into its security, backup, XDR, and UEM offerings, including its Enzo AI assistant. Pagliuca said the long-term goal is to reduce the amount of work required from traditional L1 technicians.
“Our job is to raise the bar on what an L1 technician needs to do and does not need to do,” he said.
Here, too, though, Pagliuca stressed the importance of retaining humans throughout the workflow. While L1 technicians will see much of the manual work they do automated in the near future, Pagliuca believes this provides MSPs with the opportunity to upskill early-career technicians to take on more strategic, client-facing work.
The future of the channel looks a lot like its past
For all the talk about how much AI is disrupting and changing the way MSPs operate, the foundational truths of the channel remain: partners serve customers, and vendors serve partners to reach customers.
2026 has seen growing concern over a potential “SaaSpocalypse,” the prospect of AI agents and vibe coding replacing traditional software-buying decisions, and even worries that MSPs might no longer be necessary for their customers in the years to come.
For Pagliuca, those concerns are largely unfounded.
“Durable truth number one is that small and medium enterprises will always look to MSPs to help them with their technology challenges,” he said. “Durable truth number two is that small and medium enterprises will always look for a trusted advisor to help them with their security and compliance needs.”
“Durable truth number three is that MSPs’ reason for being is to provide services to these customers,” he continued. “They don’t have the scale, the expertise, and most of them don’t have the desire to go build product themselves. That’s not what they do.”
“I believe that MSPs and VARs will continue to look for vendor-friendly, channel-friendly partners to help them navigate this, because their domain knowledge is the customer and the relationship and the servicing of those customers — not building a data protection business at scale or building agents that can endure a cyberattack from a threat nation.”