Hi Channel Insiders. Welcome back to another episode of Channel Insider Partner POV. I'm Victoria Durgin, your host today and the managing editor at Channel Insider. This episode brings back members of our editorial team that you may recognize from previous episodes they've joined us on, Jordan Smith and Louie Malaris, our staff writers for our site, newsletter, and all of the social channels you can find us on. We dive in specifically to trends from the first half of 2026 we've noticed in our reporting and the topics probably won't surprise you.
Security, AI, M&A consolidation, and the ongoing need for MSPs to adapt to an ever-evolving landscape. It seems to change basically every day. We talk a little bit about our time on site at recent events including Jordan's trips to Vegas for Scale Computing and Dell Technologies World. And plus, like always, you'll get us enjoying our company, enjoying some banter, and generally speaking, trying to have a good time in the sea of crazy we all find ourselves in.
So, take a listen, take a watch, and thanks as always for tuning in to Channel Insider Partner POV. I'm joined once again by my teammates on the editorial team, Jordan Smith and Louie Malaris. Guys, thanks for joining. >> Hello, hello. Happy to be here. >> Perfect. Well, welcome back. I know we haven't done one of these in what feels like a very long time, but that's kind of how this whole year has felt, I think. So, we have plenty to dive into on 2026.
Uh this will be a wide-ranging conversation about a little bit of everything from this year. It'll also probably just end up feeling like a team meeting, haha, just on camera for other people to watch this time. So, we'll kind of just kick things off though with maybe our personal favorites from this half of the year or story that's kind of stuck with you. And I know even at the channelinsider.com we've covered plenty, but Louie, maybe we'll go to you first.
Is there something that really stands out in your mind that you've worked on from January through now? >> I think my favorite story so far has been covering the supposed SAS apocalypse that came about this year because of agentic AI. So, earlier this year Anthropic released their new agentic plugins that would automate basically a number of different industries like legal, cybersecurity, sales, etc. And because of that release, SAS stocks plummeted to more than $300 billion as a reaction to AI agents, you know, possibly rendering the SAS subscription model obsolete, you know, hence the SAS apocalypse.
You know, personally, when I thought about it, I do believe it's a valid concern with agentic AI, you know, lowering costs, requiring less training, giving the teams the ability to really customize and automate their workflows and operations. But, when I dove into it a bit more, this turned out to be my favorite one of my favorite stories because it was interesting to see how MSPs really turned agentic AI into a key opportunity for the year. And one significant pathway or route from the data I saw was the emergence of MSPs serving as AI orchestrators, them becoming sort of a conduit for what AI agents can do, and helping their customers and partners implement agentic AI to achieve their goals.
Pax8 described it in one of their analysis saying that, you know, agentic AI is sort of serving as a vehicle for MSPs to transition from being a service-focused organization into becoming more of intelligence providers. You know, it's really helping them unlock the tech to maximize their data, and you know, really getting ROI from any AI investment that they may make. So, I think as scary as SAS apocalypse sounds like, I think with the and with the valid concerns companies have with agentic AI, there's still a lot of MSPs really being creative in how they're integrating the genetic AI into their services.
And truly like transforming in real time to not only maximize the technology itself, but also trying to survive this shift from this pretty impressive technology. >> And I think it's probably worth noting that the SAS apocalypse has not necessarily come true. I think we saw many of those stocks slightly to mostly rebound pretty quickly, but it it is kind of to your point of a lingering concern about just kind of the broader tech market and and where we go from here.
So, definitely something we're probably not done talking about. Jordan, I'll hand it over to you now. Anything stuck in your mind particularly? I know you've been on the road a bit this year as well. >> Yeah, so I wanted to highlight Dell Technologies World just a couple of weeks ago. And I wanted to choose this because it they dovetails well with what Louie was talking about in terms of the cost and the ROI around AI because Dell Technologies World was turned out to be a pretty timely event because it occurred really when we started to see a ton of stories probably a bunch of posts in your LinkedIn feed and all of your algorithms about tokenization and the cost of actually operating AI models.
We're starting to see a lot more of that. And not only did Dell introduce new updates to their partner program at the conference including some new rebates and incentives. They made portfolio enhancements to simplify AI adoption to help remediate some of that AI cost that enterprises are sort of taking on, but they also spoke a little bit about local AI and how that's going to help reshape not just the enterprise security landscape, but reshape how organizations are utilizing AI because this is going to be more about putting a actual physical device into your stack on prem for you rather than using exclusively frontier cloud-based AI models, which is likely going to help with saving on costs and also with keeping valuable information out of just pouring it into Claude or Chat GPT.
All these concerns about shadow AI will hopefully be remediated in terms of this. Now granted, Dell has the capabilities to be able to offer things like this because they run the full gamut. They have physical devices, obviously laptop computers and things like that, but they also have software solutions, services, and then the new shifts to their partner program are going to help with delivering these a sort of products. And yeah, like like you said, Victoria, it it has been a a half year of travel for me.
Yeah, I hit up Scale Computing's conference, SAS Innovates. There was a press summit I did for Genetec, which is a physical security company. And then I'll be on my way to Ever Peers' conference in a couple of weeks. So hopefully we'll get some updates on the storage landscape there. >> Yeah, and if anyone watching this wants Vegas travel inspiration, Jordan has become the the de facto expert on the team. So by all means, reach out to him. I'm sure he'll love to talk about the conference center situation on the strip. >> I keep my mindset ready by watching Casino and Ocean's 11, Ocean's 13.
Not leaving Las Vegas, though. That's too depressing. >> Okay, there we go. I'll probably stay on the AI beat. That probably doesn't surprise anybody watching this, but I did dive a bit deeper into the AWS ecosystem, specifically the AWS Marketplace earlier this year in some reporting I did. Spoke with executives at AWS and also some of their top partners about what they're seeing in terms of customer demand. I think it's easy sometimes and we've all kind of I think poked at this to rely on AI as this everybody wants it and everybody's succeeding with it right now.
But with that story and those conversations, I think illustrated was a a broader point that customers, decision makers at at enterprises all the way down to SMBs, are certainly raising their hand and going, "I want AI. I want agentic AI tooling in in my stack and in my operations." But it's the partners kind of stuck in the middle between the vendors pushing it and the customers demanding for it who have to actually figure out what that means in terms of practical integration and adoption and ultimately helping those customers find success.
So it was I think a great check-in moment and a bit of a reality check that AI demand is here to stay, but AI success is is still maybe a bit fleeting for some and it's a huge channel opportunity, I think, moving forward to help customers realize the value that they think they're going to get prior to those um implementation procedures starting. Well, since we all talked about AI for the last 10 minutes anyway, let's just keep on the subject. We'll roll right in.
It is one of the dominant themes that we've seen. Jordan, maybe we'll start with you on the AI front. When you think about the past 6 months of our coverage, conversations you've had on-site, virtually with partner and vendor execs, what stands out to you in terms of themes you keep coming across, conversations you keep having with these individuals in the channel? What is the state of AI to Jordan Smith on June 5th as we record this? >> Yeah, I think especially over the past year plus, we've been seeing the line of that AI's not going to replace people, it's going to augment and help make processes run faster, more efficiently, free you up to do other pieces of work.
And there's a big part of the overall IT sector that makes you feel like, well, that's not true cuz we see people unfortunately being laid off with AI being a key part of that, this whole restructuring thing. But now I think that we are going to start see more conversations revolve around the real value of AI. Um like I recently worked on a report that Workday released and it was really about how work is feeling harder than it should despite the adoption of AI.
One of the key takeaways was that 82% of employees said they spend a significant time acting as translators, basically copying and pasting information between systems. Employees are positive about the work and about AI, but they do feel like they're kind of stuck as the go-between between these sort of disconnected, fragmented systems, which is really limiting the overall impact of AI for enterprises. So I think we are starting to see it and we are going to see it even more so um a shift in how AI is viewed and deployed at the enterprise level.
You know, it's it's been about rapid adoption and kind of figuring out the rest later. It's like use AI and start bringing the use cases to us up top. But I think despite having use cases for adoption, I think AI is starting to maybe we're starting to see a little bit more of its limitations in terms of just blanket adoption across an enterprise. And that's also something that, you know, many smart people have told us is that you can't just have blanket bloated adoption.
People are going to start to trim the fat around AI um and really lean into I think more platform-based AI adoption rather than just individual tools that they're picking up here and there. >> I think that's the interesting part. Maybe Louis will bring you back in here right when we think about the the SAS apocalypse of it all that you reported on earlier this year that everybody was going to just use an AI for everything and not worry about connecting tools and then it'll all be well and good.
And Jordan, to your point, many of have ERP systems, they're leveraging various productivity platforms and security tooling. I mean, you can't just rip all of that out of an enterprise workflow overnight. So, when you think about the next half of this year, Louis, do you think the SAS apocalypse is going to happen? >> I think there are going to be challenges, of course, but I think as I mentioned earlier, this is going to be where the AI orchestration part of MSPs going to come into play.
And how partners are going to do their best to attempt to connect these different systems, whether they're AI-enabled or not. At the end of the day, what customers and end users want is for their tools to work. And with the amount of tools in organizations' tech stacks, that's going to be where MSPs can find good opportunity in being able to see where things can connect well, what different frameworks would work, what workflows actually make sense with or without AI.
So, I I think that's a good opportunity uh in the next 6 months to take a look at. >> Maybe we'll stick with you then. What's your AI hot take or AI summary of of the last 6 months of the reporting you've done? >> I think turning it over now to more like when we speak of AI, we always think of like the software side, the solutions that we use on our computers, but I think it's also an interesting conversation to look into the hardware. So, I recently covered AI PCs and how they could potentially impact device refresh cycles for partners.
It's a big question. Gartner says that they expect AI PCs to actually account for 55% of the total PC market by this year and possibly become the standard by 2029, which is It's pretty crazy to think that's 3 years away. You know, are more businesses going to procure AI PCs over traditional computers to keep up with the innovation and how will that affect refresh cycles in general? Like for us, we see it possibly shortening the refresh cycle, but you know, it remains to be seen.
It's an especially opportune question since Windows 10 did reach end of support last October 2025. So, more companies have to migrate to Windows 11 for that support and security and stability. So, we are expecting a lot more businesses and therefore partners have to ask themselves if they want their machines in their organizations to have that dedicated hardware to handle AI tasks locally out of the box or if that's something that still isn't really in their priorities as of yet and if the current state of their AI solutions still are enough. >> Jordan, is that something you heard on site at Dell Technologies World?
I know you touched on the local AI piece a little bit when you were talking about your time there, but what does that partner ecosystem kind of start to to look at from an AI PC perspective because to your point, Dell has the PC business. >> Yeah, I think that from an enterprise perspective, I think we will start seeing more particularly in the remote sense. Maybe we could see people starting to utilize AI PCs more um just so that they're a little bit more secure and the the devices that Dell was talking about in the updates that they were making with little help from Nvidia as well, um, were these, um, GB10 and GB300 devices that are for the enterprise.
So, I don't think that, um, they're necessarily going to be not going to be a lot of consumer-based consumption of these devices cuz they're several thousand dollars. It's not like just picking up an external hard drive and plugging it in ready to go. It's these are in their current iteration the the the cost of these hasn't exactly gone down. But, with larger organizations like that, you also have the supply chain security side of it. So, you can trust that for organizations like Dell and for other, um, companies that are building these devices or even just the ones that are making these software, um, capabilities from the ground up and integrating security, um, from the bottom up.
You can trust that there's more, um, secure, um, aspects built into it, which is a a big part of what's been, um, on people's minds, um, and where the on-prem AI also came in, uh, along with the, as I mentioned before, the whole tokenization issues that people are running into. >> So, OpenAI and Anthropic both seem to be angling towards IPO pretty quickly, potentially by the end of this year alongside SpaceX, which maybe doesn't have the the channel component.
So, we won't talk about them as much here, but as we're recording, like I said, this is June 5th, the morning of. So, things could always change by the time this comes out, but Anthropic this week filed the confidential kind of first step towards doing their IPO process that looks like they're significantly ramping up, like I said, for a a by the end of the year. We already know OpenAI has been angling in that direction, and we know that both of those companies have, over the course of the the first half of '26, ramped up channel as well.
I think that's something that many of us in this space weren't totally surprised by, but the speed at which they seem to be angling into, not just enterprise adoption, but enterprise adoption through the channel, I think is is worth keeping an eye on for all of us in this space, whether you're in the Anthropic partner network or not there yet. I do think it's it's interesting to note that Anthropic just this week kind of dropped their tearing structure, their partner portal.
I mean, this looks like a very traditional channel partner program that we would cover any other organization in the space doing. So, to see, for as much as they are a leading-edge, next-generation startup, because in some ways they still are that, when it comes to channel play, the basics still seem to work for everybody, for lack of a better term. So, I have my eye on them for the second half of the year, which nobody should be particularly surprised to hear, but I am talking with executives at Kaylent, a services provider that you've seen actually on this show before talking about their AWS relationship and the way that they help customers migrate to AWS workloads.
They're in the Anthropic partner network themselves, and it'll be interesting to see how the the market, from a channel perspective, starts to react to the big guys entering the space in a in a structured way. So, more to come, I'm sure, always more to come, and I'm sure we'll say in the video about 50 times more by the end of this as well, but it'll be an interesting time, so to speak. Let's kind of dive into the dovetail end of this conversation, which is security.
I mean, Jordan, you pointed out in your conversation about Dell that, you know, you can't really talk about one without the other at this point. I think we've seen a shift in how MSPs and their customers are talking through guardrails and compliance and and things associated with machine identities as AI agents are deployed across the stack. Louis, you cover AI and security in the intersection of them pretty frequently for us. How would you summarize the the first half of this year in terms of tooling, but also in terms of the the services the channel partners are starting to see demand for from their customers? >> Yeah, so I think for security, the trend that you already took note of has been how important it is now more than ever for teams to keep up with AI-powered attacks.
And you know, in particular, uh social engineering campaigns. We know that AI has really supercharged different cybersecurity threats with phishing and social engineering being really two of the main beneficiaries. Earlier this year, I covered a threat trend report from Level Blue where they found that VPN gateways and social engineering attacks actually topped the list in 2025 for exploited attack surfaces. So, threat actors are apparently getting so good that they can bypass defenses by convincing employees themselves to give these bad actors access to systems by acting as fake IT support or using phishing emails to pretend that they're security personnel and gain entry from there.
Data Mirror also released research saying how the scattered lapsus hunters threat group used AI-enhanced voice phishing to get past defenses and engage in social engineering. So, with AI, I think we have to remember that the innovations that come with these technologies come with a double-edge. Attackers also have the same access to these tools as we do. So, to me, with the broader MSP space, it's gotten a bit clearer in the past 6 months how security teams really have no choice but to leverage and develop AI tools themselves, AI defenses, AI education, because bad actors are not going to wait and be honorable when they target organizations and enterprises as a whole.
Personally, I think it's going to be an uphill battle trying to shore up AI defenses while also making sure that each part of an organization is equipped to spot and detect these AI AI-powered attacks. >> Yeah, Louis, definitely a lot to consider especially for MSPs who now have to make sense of what this whole world's going to look like in their customer environments. Jordan, you also cover security. I guess I should say all three of us really cover security to some degree, but I know you spend a lot of time in in vendor programs and also just in how the the tooling is reaching the channel and then how MSPs ultimately are using it.
What stands out to you in terms of the the security landscape, the threat landscape, and what partners need to know as we all head into the second half of 26? >> You know, I keep bringing it back to um on-prem and physical AI versus frontier and cloud-based models, but really I I I do because I think that that's going to be the like the next big issue um especially as from a security standpoint, um people start to trend more towards resilience and building up their defenses.
I hope everybody's ready for a movie quote, but um if you remember in Captain America: Civil War, um there is actually a line that was our strength in sight's challenge, um which coincidentally enough was said by a superhero who is built by AI essentially and is a walking humanoid. But anyway, it's it's that sort of idea that the strength that these organizations are getting through AI and how what they're able to do with their capabilities is sort of inviting outside challenge from threat actors who are also trying to evolve their capabilities to combat what organizations are doing with AI-enabled security.
So, these AI devices that are on-prem, they can help not only with in the budgetary sense, but they can help in the security sense as I mentioned before. However, as Louie alluded to that the social engineering aspect of it, um you know, we've seen a lot of conversations around prompt engineering, deep fakes are going to start to get even more impressive than they are right now. So, there are just going to be new ways that threat actors continue to challenge enterprises and to breach and the on-prem AI devices that we could start see pop up more and more aren't going to be the end-all, be-all for maintaining security for your organization.
Um there are going to be bad actors out there who are going to continue to try to circumvent these new strengths that organizations are adding into their arsenals. But, what also what I've been told to is that it seems like organizations are going to settle into more of a hybrid model for AI um with the on-prem and the frontier cloud-based models. Um sort of like how we landed with cloud. There are use cases for having on- prem data storage and there is use cases for having cloud-based data storage, but there is also drawbacks to both and that's the same with this AI situation right now.
So, I think yeah, we're going to start to see um that a little bit more, but again, the the security side of things, there's not going to be a a magic silver bullet that secures people fully, especially in this AI era. It's only going to make things a little bit more challenging um um and service providers are going to start adding um more security components to their um sort of offerings. So. >> Definitely sort of feels like a what's old is new again conversation I think as as infrastructure and AI start to to blend together the way that security and AI are blending together.
I know we've both talked to uh people at at Optiv, one of the largest security providers lately Jordan. I spoke with John Hurley, CRO. And we had a a wide-ranging conversation about what enterprise security demand looks like. And and to your point, it's a lot of the same but escalated to a certain degree because AI has kind of shown a spotlight on on all of the traditional security needs that are still requirements but maybe now at a scale that hasn't been seen before and at a speed that hasn't been seen before.
So I know that's something that I think is going to be on a lot of partners' minds the second half of this year. There's something that was said to be many years ago when I was first learning the channel, which is that MSPs are looked at as this kind of magician who handles all of the things that internal teams and executives don't necessarily understand the nuances of, right? So if you're an MSP and and your customer thinks of you as the security guy and as the IT guy, then they're expecting that no matter what the tech landscape looks like, they're covered and protected and and running efficiently.
And I think it'll be the the next frontier for MSPs to figure out what that looks like and then also start to monetize those offerings, right? There's the business side of the channel that maybe doesn't always get as much shine as the tech side, which is that MSPs are business owners too and they need to worry about supply chain costs and margins and all of the things that their customers are worried about too. So on that note, let's maybe transition into that business analysis that we also each do for channelinsider.com.
Subscribe to the newsletter, get our insights daily, etc. There's my shameless plug of the day, but Louis, when you think about some of the the business angles you've taken in your reporting over the last few months, the partners that you've spoken to, I know you did a deep dive recently into the ongoing trend we're seeing that services and the kind of money made off of those services, to be blunt, is outpacing direct product revenue. Could you dive a little more into what you found in that reporting? >> Of course.
So, this was based on recent analysis from Canalys and Jay McBain who used the cybersecurity industry as an example. So, McBain said that the cybersecurity market generated roughly $311 billion in revenue with 204.8 of that from cybersecurity services and 106.4 billion in product. So, essentially saying that cybersecurity made $2 in services for every $1 in product. So, to my eyes, this shows that a lot of the demand for services right now is born out of organizations and businesses wanting more of that outcome-based IT in terms of return.
Like, as Victoria mentioned, when you're seen as the security guy, they expect you to handle most of everything. So, it's not just anymore about the standalone product itself. They're They're looking for personnel or organizations that know how to manage the infrastructure, the tool set, the environments, so they can focus on their own business goals. So, these are for a variety of reasons, you know, IT environments today are getting too complex to handle, so they'd rather offload this burden to service organizations.
This is also because of AI in cybersecurity, where there's a massive premium right now being placed on providing dedicated expertise in AI integration, AI governance, defending against AI-powered cyber threats. And I think it's going to be more than likely the trend for the next few months, especially since both AI and cybersecurity are such fast-evolving industries that it's going to be more than likely that more of these organizations are going to rely on experts and MSPs that can provide these dedicated um expertise. >> Yeah, absolutely.
I think we've we've all talked a bit about that with partners this this first half year, right? The way that services are expanding, the way that business models are are reshaping what customers ask for from their MSPs. Jordan, what stands out to you? I mean, we we interview MSP owners, MSP workers, et cetera. We've covered a bunch of trends on partner programs, the way those are evolving this year to meet what vendors expect from their ecosystems.
What would you like to kind of highlight as the the lesson learned from the first half of this year that business owners should be looking at for the second half? >> Yeah, I think um particularly in this AI era that we are starting to see cyber resilience replace more of the traditional security um as a strategic priority. Um there's been a real emphasis on resilience, disaster recovery, um immutable backups, recovery validation, and ransomware preparedness.
Um I think as these as cyber threats, as we spoke about just before, they become more evolved, they become stronger. I think organizations are starting to I think more along the lines of it's a little bit to use an analogy like hurricane preparedness. You can build um more wind-resistant buildings, you can, you know, um reinforce the levees to help prevent um flood damage, but at the same time, that hurricane's still going to hit. Um and there's still going to be a penalty for that.
And that that's the same thing with AI and I think what organizations are going to are starting to realize is that no matter how shored up their defenses can be at the forefront, they still need to have a plan for when eventually things start to break down or a breach inevitably incurs because it it's too difficult to remediate every single threat, especially in the AI era. So, instead of focusing on prevention is going to be more about rapid recovery when incidents occur.
And yeah, simply put, AI has changed the game for security both for defenders and attackers as both are using it on either ends. Um and as I mentioned before, phishing attacks, social engineering, prompt engineering, they're becoming significantly more common and forcing organizations to adapt and that's also changing the offerings that organizations are starting to put into the market. So, remediation and resilience is the name of the game now. >> I think too we've we've seen that I know I've certainly seen that in interviews I've done.
Louie, you've done some reporting as well on the kind of renewed conversation around cyber insurance policies. Now, it should be stated that MSPs themselves do not offer cyber insurance policies. Obviously, they are not insurance companies. They're technology providers and advisors, but for many MSPs, your customers are now increasingly either required to have an insurance policy of some sort or or working that into their annual planning and as the MSP, you need to be able to help your customers through the application process, through the the ongoing audit process, right?
Things of that nature. I know Huntress is working uh with a provider on on how to make sure that their solutions from a technical standpoint are aligned with expectations. I've talked to Cork CEO Dan Candy about the ways in which MSPs need to kind of start thinking outside the traditional box of solutions-based services and start thinking Louie to your point about outcomes-based technology, right? What does a customer ultimately need? They don't need 50 licenses of of CrowdStrike.
They need to be secure at the end of the day, right? And and shifting the way that you as a partner approach business reviews and and other things of that nature to make sure that you're answering the needs of customers because unfortunately or fortunately, depending on how you view it, if your customer doesn't get what they need from you, they're going to go somewhere else to get it. And I think that is another trend that we're seeing. M&A has certainly not gone away by any means in the first half of this year.
Jordan, you do a monthly recap of the latest deals from the previous month, so I would encourage anybody to go catch up on those on channelinsider.com, but I know when I kind of look at the market right large and talk to MSPs, consolidation's probably going to continue not just to the rest of this year, but through next year as well. We're seeing the the continued rise and interest in the platform-based kind of mega MSPs, for lack of a better word, places like the 20, like Evergreen's portfolio, who retain the kind of nuances of individual providers, retain branding and things of that nature, but bring them into a much larger portfolio group that can service customers.
And I think what I'm starting to hear more both from MSP owners and from others in the space who have been in the channel for a long time is that this is yet another wave where MSPs are being asked to retool their businesses and rethink the ways that they do everything. I mean, there was the cloud wave that we've talked about, there's the security wave, there's the transition from break-fix into services in the first place. And I think as we reach a cresting where many MSP owners maybe started their businesses 20 to 30 years ago and are right around the age where retirement starting to sound pretty nice, you'll probably see some some more mergers and some more massive acquisitions occur as people ultimately make the decision whether they want to stick around for another transformation era or whether maybe it's it's time to collect and and move on.
And it's certainly something we'll continue to cover. It's certainly something that we'll continue to provide analysis and insights on. So, if you're an MSP who is starting to think about the next chapter, who wants some information on preparing for M&A activity, what you should have shored up in your own business before you start looking for a partner for the next chapter, we have plenty of insights and analysis on the site in the newsletter to help you do that.
And we'll probably beef those out the second half of the year because I think it's one of the major trends that that we'll keep hitting on pretty hard as an industry. On that note, I think it's time for probably way too early 2026 predictions. So, I'm going to ask each of you to stare into the crystal ball that we don't own and give me your bold hot take, nuanced take, whatever you want to provide that we will probably be talking about by the end of this year when we rejoin other than Jordan's movie quotes.
We'll probably contain the Odyssey and Spider-Man and Dune instead of relying on Captain America. So, I'm excited to see what you do there. But Jordan, what is kind of what you're watching from a channel perspective for the end of the year? >> So, I think a lot of what we've talked about is going to culminate sort of in what my prediction is going to be like what we just talked about with mergers and acquisitions. A lot of that in the first half of the year has been geared towards adopting AI services that the acquiring business can incorporate and integrate into their own solutions.
And sort of the shift from fragmented AI tooling to more of a AI platform-based era that will not only help reduce costs, but we're talking about just organizations being able to provide more of a a full service And been really trying to establish more ROI out of their AI investments. Again, we have been told for like the past couple of years now that AI is not really going to replace people and it can only enhance and augment what people and organizations are already doing.
And and I think that's starting to ring even more true now is that there are certain limitations to just adopting a singular AI tool and hoping that it will help you grow your business overnight and really plug in and change the game, but really it's it's more of a process. There's going to be more to it than that and there's still going to need to be a lot of humans at the core of what's going on and I I think that human I hate to use the phrase human capital because it sort of reduces the role of humanity in life.
But there's going to be more of a I I think a re-emergence I think in just how valuable people are to all of these processes. And my prediction is to kind of wrap that all up is I I think we're going to see more of a greater shift towards AI platforms and um organizations start to offer more of a whole suite of offerings, which we have seen start to trickle through a little bit more and more, but there's a ton of AI organizations have popped up and a ton of startups have been occurring, but there's only so much room in the market for every single startup.
There are only so many pieces of the pie, so I think they're going to start to consolidate and we're going to see more overall offerings from um providers, from all different types of organizations and businesses. >> I guess unfortunately you taking more of a taking a glass half empty take. I feel like there This is just my feeling. This There is going to be more of a conversation about organizations or with partners or customers not really getting as much ROI under the AI investments as they expected.
Whether it's because something breaks because of AI or it's not being able to keep up with AI-powered threats or just that, you know, we see it with our reporting and with what's what's happened in the past 2 or 3 years, the enormous cost-to-return ratio or with these AI investments, how much money that's been thrown into these. I think it's going to be more of a conversation about what really are we getting out of these AI tools, AI solutions. And there is also that more public aspect of the backlash on different sort of everyday things like are the AI-related layoffs that we've seen.
So, I think there is going to be a bit more pushback in the next few months, especially with the large amount of money and infrastructure that's being invested in AI. >> I do think it it'll be interesting. I know, of course, we focus on on the channel and the B2B side of AI, but to your point, Louie, these are are issues and impacting people, not just business employees, and I think this is an area where the kind of consumer angle of of tech actually really bleeds into the channel in a specific way.
So, it will be interesting and probably at times unfortunate to to see that play out through the rest of the year. I think on that note, I'm following We haven't spent a lot of time in this episode talking about specifics, but I do think partner programs writ large are evolving. There's been um some very recent research out of Canalys from the perspective of what partners actually leverage from their vendors, right? If you're an MSP who's been around the channel for a long time, you've probably heard the MDF conversation 40 times over.
Is it helpful? How do I use it? How do I operationalize marketing support and things of that nature? But also on a a broader front, the incentive structures, the rebates, the what vendors are pushing their partners to push out to customers. We've seen Microsoft introduce new licensing tiers. We've seen the kind of ongoing push of Copilot into environments that's being funneled largely through the channel. I think that's going to continue. I think more of these kind of traditional old legacy guys, so to speak, and I'm I'm sorry to use that phrasing, right?
But the the companies that have been around for a long time, your Microsofts, your Google Clouds, in the channel your Kaseya and ConnectWise and and all of those kind of big dogs that traditionally were thought of as necessary, whether you felt you were supported by them fully or not, I think have challenges from startups that they haven't seen in years prior. And I think they're retooling their programs and their approach to ecosystems to address that and to stay relevant to the channel and to stay on top of MSPs' minds.
I think we'll see some more of that come this year. I think we'll see vendors increasingly work with each other. Part of the coverage that I do when we talk to the vendor leaders throughout the channel is on integration. The focus on APIs, from an AI perspective, the focus on model context protocol, MCP, and what those servers mean in terms of how, to Jordan's point, tooling can act as a platform together so that MSPs can leverage all of this technology without having to put 50 disparate tools together in a tool stack anymore.
I think all of those conversations reach a bit of a fever pitch at the end of the year. And to go back to what we talked about earlier, I think part of that's because Anthropic and OpenAI seem to be here to stay and to win in the IT channel. And so what I'm looking at the rest of '26 is how those programs scale and lead, how partners kind of adjust to working with them, and how they in turn adjust to working with partners. It's a bit of a different role.
I think I said at the end of our 2025 recap video that the channel's not really the the best kept secret anymore, and that more of the enterprise-focused vendors are looking to IT channel partners as a as a selling motion as they are to scale adoption worldwide. I think we're going to see that continue, especially as some of the AI companies kind of coalesce um into larger organizations and out of the startup space. Jordan, you have something to add? >> I I just wanted to add to that um this the first half of the year is often times when we see a lot of um partner program enhancements and and revamps and things like that, but I think the tone from people that I've spoken to is whether that's Dell or others as have has been along the lines of we revamped our partner program not just to um help push our products into the market or in our services into the market, but because the sentiment is we need our partners.
And we need our um partners to help us along with this journey. It's it's a give and take. It's not just a here, let me push this out to you and you can get into a certain tier and you can get a certain rebate back if you do this. It's more of a um symbiosis that I'm I'm feeling um and that that could be just because we're in a very evolutionary era with AI, but it it feels a little bit different than it has in the past couple years in terms of making partner program changes, it's more intentional as opposed to we need to update this because it's about time we updated it.
It's there's a lot of intentionality behind it. >> Yeah, and to your point and I think all of us have touched on this in our reporting and in this conversation even just today, most of these new toolings hitting the market whether we're talking about kind of pure play AI, whether we're talking about infrastructure and data and security support behind the AI implementation requires a partner. I know we've all done some reporting on on how many enterprises and end user customers feel that they need at least one channel partner to get these initiatives across the line that can't bring it all in house.
They just don't have the capacity to do so. So Jordan to your point, you know, if these vendors want their technologies in customer environments which they ultimately do, uh they need the channel to get it there and I think for MSPs, for resellers, for SIs, for others, that's a huge opportunity to start realizing and and unlocking that additional revenue, those new clients, and going deeper with existing clients throughout whatever vertical you serve and whatever kind of sizing and scope of of business your ideal client is in. >> I wanted to to add on to these frontier model organizations who are also starting to dip their toes into making channel plays and and that's a real shift that I think is sort of reinforcing the strength of the channel right now. >> Absolutely.
Well, we are going to wrap as we always wrap. Where can people find more of you if they saw this and and would like to see even more? Louis, let's start with you. >> You can find me, Louis Millaire, on channelinsider.com. You can also find our newsletter. Please do subscribe. And you can find me on LinkedIn the same, Louis Millaire. >> Yeah, again, you can also find me on channelinsider.com. Um look for my stories on hopefully even more events as the year starts to evolve.
Give me a search on LinkedIn Jordan Smith spelled exactly as it sounds. Follow me on letterbox. No, I'm just kidding. Don't do that. >> That's actually what that's the Q4 initiative from Channel Insider. You're giving it away earlier. We're actually pivoting to a movie review platform. >> That sounds perfect. I'm in. >> Five stars. >> In the meantime while we stay focused on IT channel news and analysis. I'm Victoria Durgan. You can find me on LinkedIn.
I usually write our newsletter. So when you subscribe, you'll see Louie and Jordan's expert analysis interview based reporting and content, but you'll also hear from me every week on what I'm seeing in the market trends that we're all focused on that we think you should be focused on too. You can follow us here on YouTube if this is how you found this episode today. Listen to other audio and video podcast recordings of Channel Insider partner POV wherever you get your podcasts or directly at channelinsider.com.
Guys, thank you again so much for joining me for another one of these conversations today and we'll be back the second half of 2026. I can't believe that's a sentence I'm saying, but here we go. >> See you in Vegas. >> See you guys. >> Thanks for watching.
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