AI is all the rage in large enterprises as industry giants like Google, Microsoft, and IBM push to further harness AI to serve customers and increase their revenue and sales, but it also appears that small- and medium-sized businesses and MSPs are not being forgotten as the AI firestorm continues.
With smart strategizing and planning, MSPs are seeing business growth from AI services as they introduce them to their customers, according to several experts who shared their views with ChannelE2E.
“MSPs can leverage AI in two ways: Enhancing their own operations and helping clients succeed with AI,” Jimmy Hatzell, the CEO and co-founder of Hatz AI, a secure AI platform built for MSPs and SMBs, told ChannelE2E. “Many MSPs have already adopted AI to improve their business practices. Externally, MSPs should guide clients in safely using AI, recommending approved tools, and educating them on AI's potential.”
To drive this growth with customers, MSPs should consider focusing on being an AI adoption resource for their clients, said Hatzell. “MSPs are key partners in their clients' technological growth, and their need for help leveraging AI for their business is only going to increase.”
Start with Confidence-Boosting First AI Projects
MSPs can start to boost this interest and confidence with customers in areas where they are most comfortable, such as security and privacy measures, added Hatzell. “Moreover, MSPs can build a managed services practice that assists with AI by leveraging their expertise in AI prompting and integration. This approach can enable them to take on larger contracts and provide comprehensive support for complex AI projects.”
Robin Ody, an MSP and channel analyst with research and analysis firm Canalys, said he is seeing MSPs building automation into their own workflows to improve ticket resolution, customer reporting, and scripting and coding, while others are helping customers build use cases around generative AI best practices, Microsoft Copilot consulting and deployment, and Proof of Concepts involving small language models and data analytics.
But this growth so far remains slow, he said, with only about 61% of MSP partners seeing little or no shift from proof-of-concept to production for generative AI projects. “This is not to say generative AI is not growing, but many customers are still in the discovery phase. Being ready to provide professional services and consulting to customers in the future and getting them ready is important, but it is taking time for the AI market to filter through to the channel.”
One important thing MSPs can do for customers is to “find the business case and focus on selling the improvement, such as how AI built into managed detection and response (MDR) will improve cybersecurity posture and decrease organizational risk – this gets past the technical aspect and cuts to the chase for business owners,” said Ody.
MSPs Must First Get Their Own Businesses Up to Speed
Another IT analyst, Rob Enderle, owner of the Enderle Group, told ChannelE2E that to grow their AI services businesses, MSPs must first get up to speed inside their own operations.
“Right now, there is a lack of AI experience with MSPs and even most OEMs are still coming up to speed,” he said. “Customers are in even worse shape due to a lack of experience, and the project failure rates are not sustainable.”
To battle this inexperience, MSPs should start working “with informed customers, which will allow the MSP to gain competence without putting their customers at excessive risk,” said Enderle. “Until the MSP builds up a strong core competence, they should avoid customer engagements where the customer is uninformed as that will result in … failure.”
MSPs should also build their own AI chops by “aggressively using AI themselves and build up a core competency in the tools they will be selling and installing,” said Enderle.
AI Business Building Tips for MSPs
To encourage this AI business growth, MSPs should start by identifying three to five customers where AI can provide immediate value, said Hatzell. “Begin with larger, services-based entities that have significant repetitive processes,” he said. “Good areas to target initially include insurance, non-profits, and manufacturing sectors, where AI can automate repetitive tasks, improve efficiency, and enhance reporting.”
Other areas to start include where companies have many repetitive tasks that can be automated, he said, including insurance businesses, non-profits, and manufacturing, all of which can have processes that are ripe for AI-driven automation.
“Customers often envision AI as a tool for end-to-end process automation and staff replacement,” said Hatzell. “However, MSPs should guide them to start with smaller, more feasible AI applications and gradually progress to complex use cases. The journey begins with adopting AI internally and realizing efficiencies before tackling advanced automation goals.”
Perhaps the best advice, said Hartzell, is to be prepared for the inevitable queries about AI. “If you are an MSP and your customers have not asked you about AI yet, they will in 2025.”
He saw a similar adoption curve arrive several years ago with cybersecurity, and this growth is moving much faster with AI, said Hartzell.
“The opportunity for MSPs is huge, and it is important to just get started by using AI internally and getting yourself in a place where you at least have an answer about how you help customers with AI when they ask,” he said.
