In security these days, there are platforms and then there are platforms.

Or so says Sophos, anyway. The older, more familiar ones of the kind MSPs know and love have long helped users consolidate vendor relationships, save money, and most importantly, achieve security outcomes no multi-vendor collection of point products could hope to match. The new kind, according to Sophos, updates those benefits in ways made mandatory by the speed and novelty of today’s AI-fueled threats.

You’ve read about the speed part of that here multiple times of late. “Threat actors are using AI to iterate unfamiliar tradecraft at a pace that used to take weeks,” said Alexandra Rose, currently head of global affairs, policy, and partnerships at Sophos and formerly chief operations officer at the NSA, during a recent press briefing. “You go from something that took a significant amount of time to something that they can iterate on in days, minutes, seconds.”

Those attacks are no longer isolated events most of the time either, she added. “They move across identity, email, endpoint, and network.”

You therefore can’t defend against them without “visibility that spans control points and a response capability fast enough to act inside the attacker’s window, not after it,” says Rob Harrison (pictured), SVP of product management at Sophos. “Waiting for a human to correlate signals across five different consoles no longer keeps pace.”

As for the novelty part of the new threat landscape, just ask OpenAI and Hugging Face.

“We hit this inflection point back in November of 2025,” observed Sophos CEO Joe Levy during that press briefing. “The frontier models advanced from rudimentary assistance to agents that now carry out multi-step work on their own.”

Indeed, just days ago, Cato described a lab experiment in which AI planned and executed a complete end-to-end attack chain in 40 minutes based on a single, simple prompt. Frontier models are getting both more creative and more autonomous in increasingly unnerving ways.

Which brings us to the recently unveiled Sophos Fusion. Sophos calls it an “AI-native cybersecurity defense system.” I call it a platform, albeit a next-gen, AI-era one featuring much, much closer and more powerful integrations than its predecessors Sophos Cloud and Sophos Central.

Because in security these days, there are integrations and then there are integrations.

The integration engine in Sophos Central, called Security Heartbeat, is a “signaling protocol,” according to Harrison, that lets individual products respond separately to threat detections anywhere in the suite. If the endpoint protection module, for example, spots a compromised device, the firewall automatically isolates it.

“Useful, but narrow,” Harrison says.

Fusion, by contrast, shares the underlying data itself. “Telemetry, detections, investigations, and response actions all draw from the same layer, so coordination happens at the level of investigation and reasoning, not just alert-passing,” Harrison explains.

Shared context and synchronized action, however, are just two of four attributes that in Sophos’s view make Fusion a system rather than collection of products. “Agentic autonomy with human governance” is the third, according to Raja Patel, the company’s president of product and marketing. “The system can investigate and respond on its own inside boundaries that our analysts set and continuously calibrate with people accountable for the output.” The fourth attribute, he adds, is Fusion’s continuous learning loop.

“Every threat seen across the more than 625,000 organizations we protect makes every other customer’s defense smarter,” Patel says.

All four characteristics are powered by AI, which Levy calls “the connective tissue that lets first- and third-party endpoint, firewall, email, cloud, network, and identity reason and act as one, so the whole becomes stronger than the sum of its parts.”

It’s a vision with obvious parallels to what other big names in security have been up to, and realizing it has been a pretty significant undertaking. But not, according to Harrison, a rip-and-replace operation. Like the AI-native platform ConnectWise unveiled last month, Fusion is a mostly but not entirely new version of its forerunner.

“It’s an architectural rebuild wrapped in a familiar front door,” Harrison says, meaning that “existing Sophos Central customers move across automatically, same login, no migration project.” But it’s also, he insists, more than just a version upgrade.

“The underlying architecture has changed significantly,” Harrison says.

Because yesterday’s architectures have grown ill-suited to today’s opportunities and threats. AI has the potential both to radically improve productivity for MSPs and to obliterate their clients. The key to enjoying the former while avoiding the latter is rethinking what platform must mean in the future.

Don’t blame AI for sliding partner program satisfaction

Back in March, I shared some then barely public research from GTIA that included a troubling fact: partner satisfaction with their vendors is declining.

Not to a degree worth panicking about, mind you. 74% of the partners GTIA surveyed called themselves satisfied with their vendors. But that’s down from 88% just a year earlier, and the percentage of partners describing themselves as very satisfied has dropped by more than half, from 39% to 18%.

The question, of course, is why, and GTIA can’t say conclusively yet. Carolyn April, the group’s vice president of research and market intelligence, has a hypothesis though, and it touches on vendor partner programs.

“It’s about alignment and the changes that are going on in the marketplace today with AI,” she says. “The types of priorities that are important to [IT solution providers] and the things they want to see in a partner program, for instance, they’re different now.”

I’ve had a chance in the past couple weeks to test that theory with two people who spend most of their time studying and optimizing partner programs. Both concur with April’s suspicion that growing dissatisfaction with partner programs is responsible for growing dissatisfaction with vendors. Neither believes AI is the problem with partner programs.

“I don’t believe that AI is causing discontent,” says Ryan Morris (pictured), chief channel program strategist at Channel Mastered, the consultancy I help lead. It’s exaggerating discontent that was already there.

Danielle Ibran, senior analyst for infrastructure channels at IDC, agrees. “We can’t blame it all on AI,” she says, or even most of it. Satisfaction with partner programs, as others at IDC have discussed here in recent years, is wobbly these days for a number of reasons, including the facts that vendors don’t reward them for influencing versus closing deals and continue to slot members into function-specific buckets like reseller, solution provider, and software developer even though the average channel partner, according to IDC data, identifies with 2.8 such labels.

“They’re all doing a little bit of everything,” Ibran says. “That’s where the issue with the programs is today.”

Agentic security startup 7AI, which launched a multi-model partner program last week, gets it, as do companies I’ve written about here before like Cisco and Barracuda. Cisco, however, is a good example of why you don’t see more tech companies following suit. Building the Cisco 360 program was the kind of deeply complex, inevitably controversial undertaking that large vendors especially are understandably slow to take on.

“These programs, obviously, are humongous and they manage on a global basis,” Ibran observes. Changing them takes time.

Which gets to a larger point helpful in understanding the partner frustration GTIA is registering. Vendors almost universally offer product-related training. But AI isn’t a product, or even product category. It’s a huge, complex, and radically new technology category that will leave behind anyone in the channel unwilling to embrace an equally new outcome-oriented, consultative business model. Pax8’s among a still modest number of companies that know it.

“Nobody’s teaching that stuff,” Morris says. “Almost everybody’s pretty good at product training. Many have gotten pretty good at services training. Few have ventured into the business model training.”

Or kept up with an ongoing shift in the channel toward new, higher value, stickier revenue streams, adds Ibran, noting that 55.7% of the money partners make globally today comes from their own IP.

“Partners are seeking higher margins and defensible differentiation,” she says. “AI plays a key role here.”

Ibran would like to see more vendors reflect that fact by offering AI-specific education in areas like FinOps as well as managed service blueprints for recurring IP-led revenue in fields like AgentOps. Measuring partners more for delivering verified end user business results versus accumulating certifications would be helpful too, as would rewarding them more for pre-sales functions like solution scoping and design.

Morris, for his part, has another suggestion for vendors: Stop using AI as a substitute for people.

“More and more of the partner community and more partner questions are being dealt with by an FAQ bot as opposed to a real human,” he says. That works fine (and sometimes better than fine) with consumers, he notes, because they only need help occasionally.

“A partner doing business with a vendor has interactions every single day at some level,” Morris says. “If you put half or more of your question base into an automated response, a partner will get an automated response every single day from you, which is a really clear indication that you’ve disconnected from me in the relationship.” The better path, as some in the industry understand, is to augment and enhance person-to-person relationships via AI instead.

“Don’t get rid of your channel account managers. Empower them with AI to do even more and to automate manual tasks so that they can spend more time doing human touch with the partners in the relationship,” Morris says. “A partner’s going to feel that they get more human attention than they did in the past, not less.”

Get ready to think through similar issues more or less indefinitely, Ibran warns channel chiefs. AI moves fast and changes continuously.

“You almost have to get into a startup mindset,” she says. “Things are going to evolve, and I think you’re going to have to evolve with the market.”

Follow Me on LinkedIn

What’s MSP as a Service?

So much was going on at Pax8’s Beyond event last month that we didn’t get a chance to air the interview Erick Simpson, my business partner and co-host on the MSP Chat podcast, recorded there with Juan Fernandez about his new MSP as a Service venture until this week. Worth the wait, IMO. Check out the whole episode here and all of our other equally interesting episodes here.

What makes AI consultants different from most MSPs

It’s come up a few times here in recent weeks that SMBs aren’t sitting around waiting for someone to pitch them an AI solution. Some of them are placing outbound calls to IT providers, including companies they’ve never spoken with before, asking for help launching AI initiatives. Guess what happens if you get one of those calls but have nothing to offer.

“MSPs would be foolish not to assume that these really progressive, technology-forward businesses aren’t going out and talking to alternatives who can provide them with AI services,” says John Bush.

He knows, too, because he’s one of them.

Bush is founder of Dallas-based AI consultancy wave4. If you’re a Channelholic regular, you’ve read about AI consultants here before. They’re the people phoning up your clients if you’re an MSP and offering them workflow-transforming, time-saving, money-making AI solutions you don’t provide, making them in theory a competitive threat. Well, I’ve spoken with one now, and he’d much rather be your partner than your replacement.

Bush cut his teeth on AI while building enterprise security solutions for KPMG. “I think all of us working in technology always had the suspicion this is going to be a thing,” he says of AI. “The question was always when.” And the answer became obvious a little over a year ago as he watched engineers on his team put AI coding tools to work.

“They were doing work that would have taken them a week in like an hour,” Bush (pictured) says. That was his “AI light bulb moment,” he continues, and it had nothing to do with the enterprise.

“There’s this huge opportunity with smaller businesses who just don’t have a lot of technical talent or knowledge of all this,” Bush says.

wave4 is the “AI transformation partner” he created to fill that yawning gap. Early on, the company just asked clients what kind of AI solution they were looking for, and built it.

“What you realize is that most businesses don’t know enough about this stuff to be able to make informed decisions about what they really need,” Bush says.

As a result, client engagements these days begin with a thorough onsite assessment of a company’s people, processes, and technology, Bush says. “That allows us to unearth the solutions and the opportunities that exist for them to use AI.”

Those solutions and opportunities vary from helping businesses embed Microsoft Copilot in their workflows to building custom CRM solutions. “We’re training some of their employees to become power users who can do some of this themselves as well,” Bush says.

wave4 bills its work at rates low enough to be affordable by SMBs but high enough, when combined with the company’s extensive use of AI tooling, to deliver substantial margins, he adds.

“I’ve kept this very lean so I can come in around that, let’s say, high four- to low five-figure range, depending on what the scope of work is,” Bush explains, noting that he has two developers and two part-time consultants on staff at present. Their work involves skills an above-average MSP’s best technicians usually lack, even if their employer encourages them to spend five hours a week acquiring them.

“I’m doing twice that in a day,” Bush says. “It’s just a reps thing, ultimately. Just having more time on task.”

That said, Bush is fully aware of where his expertise ends. wave4 knows which AI tools to use (his favorites currently are Claude Code, Codex, Oz, and Hermes Agent) and when to use them, and it knows how to speak with SMB decision-makers about pain points and business goals in their own language. It knows nothing about standing up and supporting an IT infrastructure.

And doesn’t intend to learn—Bush is partnering with an MSP in California at present to fulfill that need for his clients, and wants to partner with more.

“This allows them to have something they can offer to their clients tomorrow and be able to provide all of the consulting, training, and implementation that their clients are already asking for,” he says. It gets him warm sales leads. “We can really solve each other’s problems in a lot of ways.”

Nor should potential partners worry about wave4 mastering IT services and stealing their clients someday, Bush continues. Indeed, if anyone should be concerned about the future, it’s him. AI consulting is an MSP’s game to lose.

“A lot of these businesses have never bought an AI service before, so working with someone who’s already done good technology services for them is a big advantage,” Bush says. “They have the trust element.”

Share Channelholic

Over on The Business of Tech

Host Dave Sobel’s pondering what happens when MSPs who fail to keep pace with increasing cyberinsurance requirements end up losing cybersecurity business to the insurers themselves (a phenomenon I’ve pondered too):

“So here’s the choice, and it’s about staying on the right side of a line that keeps rising. You can be the provider who keeps every client continuously above what carriers require to stay insurable—treating the insurability floor as your standard, watching it climb, and moving each client up before the renewal or the claim finds them below it. Or you can keep selling a fixed security stack while the floor rises underneath it—and become the vendor the insurer bundles past, the day your client’s coverage, not your contract, is what defines ‘secure.’”

More here.

Microsoft weighs in on the SaaSpocalypse

Hat tip to Robert Scott, CEO and co-founder of AI-powered MSP contract intelligence vendor Monjur, for calling my attention to this story, which got some coverage in the legal trade press and as far as I can tell pretty much nowhere else.

Which is strange, because it feeds directly into the ongoing debate about whether SaaS is doomed. As I’ve written here before, a lot of software categories will be impacted if not erased by LLMs, but others clustered in particular around risk and focus (as in subject matter specialization) are in better shape.

Legal software is one of the categories I labeled a safe investment bet, and here’s some evidence that it remains so courtesy of Harvey, one of the vendors I named in my piece: the roughly 2,000 people in Microsoft’s legal department are Harvey’s latest users.

A nice win for Harvey but notable as well because Microsoft has recently introduced Copilot functionality for lawyers, following in the actual footsteps of Anthropic and rumored footsteps of OpenAI. All of those tools are probably handy, too, but at least in Microsoft’s judgment, when real attorneys need to do real work in which errors will have real consequences, they need something a lot more robust than Copilot.

Also worth noting

• The new ChatGPT for small businesses program gives end users access to hands-on training and in-person AI academies, among other resources.

• Ivanti has added predictive remediation and autonomous patch management to its Autonomous Endpoint Management platform.

• Axonius has added an AI agent and MCP Server to its Asset Cloud solution.

• AvePoint has added new agentic AI governance, backup and recovery, and multicloud data protection functionality to its Confidence Platform.

• Cobalt has introduced Autonomous Pentest, a continuous offensive security solution designed to deliver actionable findings within 24 hours.

• Palo Alto Networks intends to acquire observability vendor Embrace to add new digital experience monitoring capabilities to its platform.

• Cato Networks has integrated its Cato SASE Platform with the CrowdStrike Falcon platform to enhance threat detection and accelerate investigations and response.

• Barracuda has added new training, certification, and marketing resources to its Partner Success Program.

• Keyfactor has added value-based incentives, enhanced co-selling, a post-quantum security certification, and more to its partner program.

• Coro has appointed Dor Avrahami its VP of product, Itzik Shachar its VP of R&D, and Ingo Schaefer its VP of sales for EMEA.

• Chris Fabes is the new president of TD SYNNEX Canada.

• The Channel Marketing Association has appointed Roisin Monaghan of ServiceNow and Taylor Wiggins of Axonius to its executive board.

It’s come up a few times here in recent weeks that SMBs aren’t sitting around waiting for someone to pitch them an AI solution. Some of them are placing outbound calls to IT providers, including companies they’ve never spoken with before, asking for help launching AI initiatives. Guess what happens if you get one of those calls but have nothing to offer.

“MSPs would be foolish not to assume that these really progressive, technology-forward businesses aren’t going out and talking to alternatives who can provide them with AI services,” says John Bush.

He knows, too, because he’s one of them.

Bush is founder of Dallas-based AI consultancy wave4. If you’re a Channelholic regular, you’ve read about AI consultants here before. They’re the people phoning up your clients if you’re an MSP and offering them workflow-transforming, time-saving, money-making AI solutions you don’t provide, making them in theory a competitive threat. Well, I’ve spoken with one now, and he’d much rather be your partner than your replacement.

Bush cut his teeth on AI while building enterprise security solutions for KPMG. “I think all of us working in technology always had the suspicion this is going to be a thing,” he says of AI. “The question was always when.” And the answer became obvious a little over a year ago as he watched engineers on his team put AI coding tools to work.

“They were doing work that would have taken them a week in like an hour,” Bush (pictured) says. That was his “AI light bulb moment,” he continues, and it had nothing to do with the enterprise.

“There’s this huge opportunity with smaller businesses who just don’t have a lot of technical talent or knowledge of all this,” Bush says.

wave4 is the “AI transformation partner” he created to fill that yawning gap. Early on, the company just asked clients what kind of AI solution they were looking for, and built it.

“What you realize is that most businesses don’t know enough about this stuff to be able to make informed decisions about what they really need,” Bush says.

As a result, client engagements these days begin with a thorough onsite assessment of a company’s people, processes, and technology, Bush says. “That allows us to unearth the solutions and the opportunities that exist for them to use AI.”

Those solutions and opportunities vary from helping businesses embed Microsoft Copilot in their workflows to building custom CRM solutions. “We’re training some of their employees to become power users who can do some of this themselves as well,” Bush says.

wave4 bills its work at rates low enough to be affordable by SMBs but high enough, when combined with the company’s extensive use of AI tooling, to deliver substantial margins, he adds.

“I’ve kept this very lean so I can come in around that, let’s say, high four- to low five-figure range, depending on what the scope of work is,” Bush explains, noting that he has two developers and two part-time consultants on staff at present. Their work involves skills an above-average MSP’s best technicians usually lack, even if their employer encourages them to spend five hours a week acquiring them.

“I’m doing twice that in a day,” Bush says. “It’s just a reps thing, ultimately. Just having more time on task.”

That said, Bush is fully aware of where his expertise ends. wave4 knows which AI tools to use (his favorites currently are Claude Code, Codex, Oz, and Hermes Agent) and when to use them, and it knows how to speak with SMB decision-makers about pain points and business goals in their own language. It knows nothing about standing up and supporting an IT infrastructure.

And doesn’t intend to learn—Bush is partnering with an MSP in California at present to fulfill that need for his clients, and wants to partner with more.

“This allows them to have something they can offer to their clients tomorrow and be able to provide all of the consulting, training, and implementation that their clients are already asking for,” he says. It gets him warm sales leads. “We can really solve each other’s problems in a lot of ways.”

Nor should potential partners worry about wave4 mastering IT services and stealing their clients someday, Bush continues. Indeed, if anyone should be concerned about the future, it’s him. AI consulting is an MSP’s game to lose.

“A lot of these businesses have never bought an AI service before, so working with someone who’s already done good technology services for them is a big advantage,” Bush says. “They have the trust element.”

Share Channelholic

Back in March, I shared some then barely public research from GTIA that included a troubling fact: partner satisfaction with their vendors is declining.

Not to a degree worth panicking about, mind you. 74% of the partners GTIA surveyed called themselves satisfied with their vendors. But that’s down from 88% just a year earlier, and the percentage of partners describing themselves as very satisfied has dropped by more than half, from 39% to 18%.

The question, of course, is why, and GTIA can’t say conclusively yet. Carolyn April, the group’s vice president of research and market intelligence, has a hypothesis though, and it touches on vendor partner programs.

“It’s about alignment and the changes that are going on in the marketplace today with AI,” she says. “The types of priorities that are important to [IT solution providers] and the things they want to see in a partner program, for instance, they’re different now.”

I’ve had a chance in the past couple weeks to test that theory with two people who spend most of their time studying and optimizing partner programs. Both concur with April’s suspicion that growing dissatisfaction with partner programs is responsible for growing dissatisfaction with vendors. Neither believes AI is the problem with partner programs.

“I don’t believe that AI is causing discontent,” says Ryan Morris (pictured), chief channel program strategist at Channel Mastered, the consultancy I help lead. It’s exaggerating discontent that was already there.

Danielle Ibran, senior analyst for infrastructure channels at IDC, agrees. “We can’t blame it all on AI,” she says, or even most of it. Satisfaction with partner programs, as others at IDC have discussed here in recent years, is wobbly these days for a number of reasons, including the facts that vendors don’t reward them for influencing versus closing deals and continue to slot members into function-specific buckets like reseller, solution provider, and software developer even though the average channel partner, according to IDC data, identifies with 2.8 such labels.

“They’re all doing a little bit of everything,” Ibran says. “That’s where the issue with the programs is today.”

Agentic security startup 7AI, which launched a multi-model partner program last week, gets it, as do companies I’ve written about here before like Cisco and Barracuda. Cisco, however, is a good example of why you don’t see more tech companies following suit. Building the Cisco 360 program was the kind of deeply complex, inevitably controversial undertaking that large vendors especially are understandably slow to take on.

“These programs, obviously, are humongous and they manage on a global basis,” Ibran observes. Changing them takes time.

Which gets to a larger point helpful in understanding the partner frustration GTIA is registering. Vendors almost universally offer product-related training. But AI isn’t a product, or even product category. It’s a huge, complex, and radically new technology category that will leave behind anyone in the channel unwilling to embrace an equally new outcome-oriented, consultative business model. Pax8’s among a still modest number of companies that know it.

“Nobody’s teaching that stuff,” Morris says. “Almost everybody’s pretty good at product training. Many have gotten pretty good at services training. Few have ventured into the business model training.”

Or kept up with an ongoing shift in the channel toward new, higher value, stickier revenue streams, adds Ibran, noting that 55.7% of the money partners make globally today comes from their own IP.

“Partners are seeking higher margins and defensible differentiation,” she says. “AI plays a key role here.”

Ibran would like to see more vendors reflect that fact by offering AI-specific education in areas like FinOps as well as managed service blueprints for recurring IP-led revenue in fields like AgentOps. Measuring partners more for delivering verified end user business results versus accumulating certifications would be helpful too, as would rewarding them more for pre-sales functions like solution scoping and design.

Morris, for his part, has another suggestion for vendors: Stop using AI as a substitute for people.

“More and more of the partner community and more partner questions are being dealt with by an FAQ bot as opposed to a real human,” he says. That works fine (and sometimes better than fine) with consumers, he notes, because they only need help occasionally.

“A partner doing business with a vendor has interactions every single day at some level,” Morris says. “If you put half or more of your question base into an automated response, a partner will get an automated response every single day from you, which is a really clear indication that you’ve disconnected from me in the relationship.” The better path, as some in the industry understand, is to augment and enhance person-to-person relationships via AI instead.

“Don’t get rid of your channel account managers. Empower them with AI to do even more and to automate manual tasks so that they can spend more time doing human touch with the partners in the relationship,” Morris says. “A partner’s going to feel that they get more human attention than they did in the past, not less.”

Get ready to think through similar issues more or less indefinitely, Ibran warns channel chiefs. AI moves fast and changes continuously.

“You almost have to get into a startup mindset,” she says. “Things are going to evolve, and I think you’re going to have to evolve with the market.”

Follow Me on LinkedIn

What’s MSP as a Service?

So much was going on at Pax8’s Beyond event last month that we didn’t get a chance to air the interview Erick Simpson, my business partner and co-host on the MSP Chat podcast, recorded there with Juan Fernandez about his new MSP as a Service venture until this week. Worth the wait, IMO. Check out the whole episode here and all of our other equally interesting episodes here.

Spend even a little time with data center spending figures right now and you find yourself encountering very big numbers very quickly. Like, numbers so big they make anything involving mere billions look puny.

Such as the $2.9 trillion Morgan Stanley expects to be spent on data center projects through 2028, or the $1.6 trillion the firm says will be spent specifically on data center infrastructure through 2030.

A lot of that latter sum will flow directly to NVIDIA if Jensen Huang’s forecast a few months ago proves correct. Another hunk will wind up with memory manufacturers, according to TrendForce, which foresees DRAM contract prices rising 13-18% in Q3. Not year over year, mind you, but quarter over quarter, which is actually a dip from the 58-63% quarter-over-quarter spike it projected in Q2. You can safely look forward to similar price hikes for many quarters to come too, according to SK Hynix CEO Kwak Noh-jung, an admittedly biased source who says customer demand for memory will exceed supply beyond 2030.

Remember what happens when demand exceeds supply? Of course you do.

“We’ve all taken economics,” observed Cheryl Rang (pictured), vice president of technology solutions at Ingram Micro, during a keynote presentation at the distributor’s Trust X Alliance Unplugged event in Buffalo, N.Y., last week. “The price is to the highest bidder.”

And who is that? “The hyperscalers, the neocloud providers, the Fortune 100 enterprises,” Rang said, “because they have no care in the world. They’re not dealing with budgets the same way that we are.”

And by “we,” of course, she meant the channel partners in her audience and their sub-Fortune 100 clients.

“We are in a capacity locked environment,” Rang said, and we’re going to be there a while. “You can talk to any manufacturer. They will tell you this isn’t a 2026 problem.”

It is instead the decidedly uneven playing field on which companies with voracious infrastructure appetites and stratospheric valuations collide with 50-person companies overdue for a laptop refresh, not to mention their IT providers.

“So many of those chips and the hardware and RAM and the storage are going to the new AI data centers,” says Trust X Alliance member Zach Esmond, director of strategic partnerships at Houston-based MRE Consulting. “Most of the manufacturers are producing as quickly as they can, but they’re doing it obviously for whoever’s buying the most.”

And the giant sucking sound from all their buying is producing supply constraints big enough to affect even major hardware makers. One of MRE’s clients in the oil and gas industry uses high-end custom workstations from Dell formerly priced at $12,000 each. “We just did a proposal for them to add a few staff members, and our cost on those right now is $18K.”

That’s an only slightly above average example of an industry-wide phenomenon. Year-over-year price hikes across comparable product lines rose 20-40% in Q2, according to Omdia, increases steep enough to have driven global shipments of desktops, notebooks, and workstations down 3.6%.

“Everyone’s starting to feel it,” says Josiah Philipsen, owner of Newberg, Ore.-based NextTech Consultants, including the customer who recently learned that the new laptops he needed would cost $2,000 versus the maybe $1,500 he was expecting.

“That conversation, that frustration, is hard to navigate,” Philipsen says.

Sticker-shocked businesses are hanging onto aging devices longer than they normally would, he adds. Omdia’s seeing the same thing:

It could wind up backfiring, though, when delaying any further stops being an option. “I know in six months the price is going up,” Philipsen says. “Lenovo’s told us that. Dell’s told us that. The vendors aren’t being discreet about it because they’re trying to be transparent and they know this is a problem we’re all facing.”

That problem might actually be easier to deal with if prices were only moving in one direction, but they’re not. MRE recently sent a $66,000 quote to a client on a server that would have cost more like $40,000 a year ago, and didn’t hear back right away.

“Quotes have been expiring in two weeks instead of 30 days on the price commit lately because of the fluctuations, so we had to reprice it,” Esmond says. “My cost went down to $46,000.”

Some buyers have had enough. “They’re migrating up to the cloud I’d say at substantially faster rates than they have in the past,” Esmond says. “Generally, we’re actually coming in a little better [than physical servers] on the five-year total cost of ownership.”

Which is good news, I suppose, for the same hyperscalers driving hardware prices through the roof, but still leaves most IT providers in a tough spot.

“We know that AI is in demand. We know the hyperscalers aren’t stopping their purchasing. We know that inventory is going to continue to be constrained. We know that there’s going to be more and more pricing pressure put on every single one of you. And we know that the impact to the partners and to the customers that sit in this room is going to be at the absolute highest because you don’t have infinite budgets,” Rang said.

Distributors like Ingram with purchasing power can help offset those costs, she continued, provided they have an ongoing feel for what to buy and in what quantities.

“We need you to tell us what you need, what you’re seeing, and how we can bring that in faster to make sure that you don’t lose your place in line and that you’re not stuck seeing and dealing with all these price increases one at a time after time.”

AI is our baby

Distributors and channel partners sharing supply chain intel. It takes a village to navigate a hardware crunch, doesn’t it?

It also takes a village, famously, to raise a child, as Rang experienced personally the first time she flew cross-country with a newborn. You don’t get a VP title at a company the size of Ingram without some pretty serious organizational skills, and Rang had every last logistical detail planned in advance. It all went like clockwork too on the outbound leg of the trip, and for the first two hours of the return trip as well. And then…

“He woke up very fussy and you start getting the smell and I’m like, all right, it’s time to go change a diaper,” Rang said during her keynote. “So I’m getting all my stuff together and I grab him and I stand him up and he looks at me and he looks at the guy next to me and just projectile vomits all over this guy.”

Who was exceptionally patient about the whole thing. That and a sympathetic flight attendant got Rang through the ordeal. Which is more than just the basis of a memorable story, she added. It’s a metaphor.

“The baby is AI,” Rang said.

As in lovable, unpredictable, and disruptive at the worst times in ways impossible to plan for.

And they grow up so fast! “What I’m hearing a lot is how do we keep up with the rate of change, because it’s moving at a speed most companies haven’t been familiar with,” says Bill Brandel (pictured), Ingram’s EVP and president, North America, during an interview on MSP Chat, the podcast I co-host. Just as it took a village to help Rang with her baby, moreover, so too will it take one to help the rest of us raise our baby.

“We’ve got to get back to that community where we work together to figure this stuff out,” said Brandel during a keynote.

Which is precisely what Trust X Alliance members are doing these days wherever they gather, according to Holly Niedzielski, director of partner communities at Ingram. “The leaders have to figure out their strategies and their companies, and this is what these owners are talking about,” she says, in part because there’s nowhere else to do it. “They can’t have those conversations with their staff back at home.”

Indeed, coping with anxious employees is one of the biggest AI-related discussion topics among Trust X Alliance members at the moment. “AI is transforming everything, and it scares the crap out of a lot of people,” Brandel observed during his keynote. And understandably so, he added.

“If you’re not involved with those decisions and people are making decisions for you, trust me, that’s a scary place to be, because they might be making decisions that are good for them and not necessarily good for you,” Brandel said. The remedy, he adds during his podcast appearance, is communication.

“It’s making sure that you are communicating to your team openly and transparently,” he says. “The more transparent you can be about where you want to go and how you’re going to leverage the technology to get there, I think that solves a lot of the issues of people being afraid and of you getting any resistance to the adoption.”

Philipsen agrees. “I’ve been very transparent with my employees,” he says. “Being transparent is how you gain trust.” And what he’s telling them is that NextTech’s AI transition won’t cost anyone their job, if they commit to being part of the change coming.

“In five years when support changes, your position will change with it as long as you’re willing to be flexible and adapt,” Philipsen tells his team. “I think that’s the key concept with your employees. Make sure they can be flexible and adapt because if they don’t and your company doesn’t, you’re going to fail miserably.”

MRE is proving to employees that they have a future with the company if they’re willing to adapt by making training programs and certifications available to them. “As long as we have them on a path where they’re always learning something new, I don’t think it’s going to be a humongous problem,” says Esmond of workforce displacement. Reminding employees that IT providers will need people no matter how good AI gets is helpful too, he adds.

“The human element, the human connection, the trust factor—you’re not going to get that from AI,” Esmond says. Or at least not yet.

“We’ll see what the future holds.”

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Want to hear the rest of what Brandel had to say about AI last week?

Tune into the latest episode of MSP Chat to hear my complete conversation with him on AI, community, and more. Then go here to explore the many other stimulating conversations we have with industry thought leaders on that show every week.

Thread’s next magic act is for techs

My conversation with Esmond occurred five days after a separate one with Mark Alayev, founder and Chief of Magic at service desk automation vendor Thread. I didn’t bring the topic up, but MRE turns out to be a recent and happy Thread partner.

“It basically responds in a manner that actually sounds better than a traditional Tier-1 tech just responding to [tickets],” Esmond says. “It’s going to take away a lot of the busy work, just the mundane tasks that don’t truly add value to our end customers or honestly that much to us.”

I’m guessing he’s not Thread’s only success story given how many people privy to its financials are investing in it. Thread completed an $18 million round last December and raised an additional $8 million in March. The company’s first major feature, a ticket triaging tool called Magic Agent, is responsible for much of that investor enthusiasm.

“We are hitting 66% successful triage from an AI to a human,” Alayev (pictured) says, plus a 36% reduction in time to close.

The people who like Magic Agent most though, he continues, are the end users getting quick, accurate IT help over the phone, in email, and from inside tools they live in all day like Teams and Slack. “Our superpower is the communication layer,” Alayev says. “We, from our very first day, focused on realizing that the PSA is not where people communicate.”

Thread’s second major feature, shipped earlier this month, is designed to add another superpower, this time less for an MSP’s clients than for its employees.

“We’re finally launching an agentic solution for the technicians,” Alayev says. Using everything Thread has learned about customers from past interactions, the system diagnoses tickets, devises a resolution, and then executes it as soon as a tech approves the plan.

“It’s not a product, it’s a platform,” Alayev says. “You can delegate your work to it, not a task.”

That includes work done by MSP owners and account managers rather than the help desk. “At the launch, we were able to build a whole QBR deck just by talking to Super Magic,” Alayev says. So far, he continues, techs and their employers both like the system.

“For every two people that try out Super Magic, one person uses it every day of the week,” Alayev says.

The Super Magic launch was the first of what will be a weekly series of updates and additions Thread’s calling the “Summer of Magic.”

“We’re just harnessing all of the power of our engineering team using AI and delivering the things that our partners have wanted from us,” Alayev says.

Which apparently includes functionality inspired by the same AI coding technology Thread uses in house. The company’s next big feature will be an AI-powered scripting tool called Auto Magic.

“I’m not going to say too much about it, apart from the fact that it’s less like an RPA and more like a Claude Code or Lovable,” Alayev says.

And it’s coming soon. “It’s not vaporware,” Alayev insists. “We already have a customer on the platform.”

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Over on The Business of Tech

Host Dave Sobel discusses the connection between the infrastructure and workforce change issues Ingram and its partners spoke about in Buffalo last week and IBM’s horrific Tuesday:

“A software giant losing seventy billion dollars in a day. PC refreshes stalling. The heaviest AI spenders hiring more people, not fewer. IT unemployment falling through the floor. If you read any one of those alone, you’d get the story wrong. Because these aren’t four stories. They’re one — and it’s about where the money for all of this is coming from … AI spending isn’t arriving as new money added on top of existing budgets — it’s being funded by raiding the line items that were already there.”

More here.

Also worth noting

• The ConnectWise Platform, which you read about here recently, is now generally available.

• Russell Rosa is the new CRO at N-able.

• MSP360 has introduced MSP360 Tickets, a built-in ticketing system that integrates with its management platform to give MSPs a unified way to track, manage, and resolve support requests.

• Devolutions and Telegraph Ventures have made a strategic minority investment in Mizo, a service desk automation startup you’ve read about here before.

• Workflows, from JumpCloud, is a no-code automation capability that enables IT teams to securely streamline routine identity, device, and access management tasks.

• According to its founders, the MSP Business Growth Marketplace is the first free, vendor-neutral expert consulting marketplace for MSPs.

• Sophos calls its new Fusion platform the industry’s first AI-native cybersecurity defense system. More to come in next week’s post.

• Fortinet has added new AI governance, data security, risk visibility, and AI-assisted operations capabilities to its FortiEndpoint platform.

• Blumira and DNSFilter have shipped an integration that combines DNS-layer threat protection with security detection and response capabilities.

• Keeper Security has introduced Keeper Privileged Cloud, a cloud-native privileged access management solution.

• NINJIO has acquired SafeStack to add secure coding education and developer-focused training to its human risk management platform.

• Cato Networks has proved in lab testing that AI can complete an end-to-end attack chain unassisted in as little as 40 minutes.

• Small businesses using AI are significantly more confident and growth-oriented than non-users, though roughly one-third remain stuck in the experimentation phase, according to new data from Pax8.

• AI is saving nearly half of small businesses at least four hours per week while improving productivity and operational efficiency, according to small business bank Bluevine.

• Exclusive Networks has inked a global distribution agreement with Fortinet.

• Coalition is now selling cyber insurance directly to U.S. enterprises.

• Delinea’s new global partner program features updated incentives, enablement resources, and engagement models.

My AI-related conversation with Zach Esmond at Ingram Micro’s recent Trust X Alliance event occurred five days after a separate one with Mark Alayev, founder and Chief of Magic at service desk automation vendor Thread. I didn’t bring the topic up, but MRE turns out to be a recent and happy Thread partner.

“It basically responds in a manner that actually sounds better than a traditional Tier-1 tech just responding to [tickets],” Esmond says. “It’s going to take away a lot of the busy work, just the mundane tasks that don’t truly add value to our end customers or honestly that much to us.”

I’m guessing he’s not Thread’s only success story given how many people privy to its financials are investing in it. Thread completed an $18 million round last December and raised an additional $8 million in March. The company’s first major feature, a ticket triaging tool called Magic Agent, is responsible for much of that investor enthusiasm.

“We are hitting 66% successful triage from an AI to a human,” Alayev (pictured) says, plus a 36% reduction in time to close.

The people who like Magic Agent most though, he continues, are the end users getting quick, accurate IT help over the phone, in email, and from inside tools they live in all day like Teams and Slack. “Our superpower is the communication layer,” Alayev says. “We, from our very first day, focused on realizing that the PSA is not where people communicate.”

Thread’s second major feature, shipped earlier this month, is designed to add another superpower, this time less for an MSP’s clients than for its employees.

“We’re finally launching an agentic solution for the technicians,” Alayev says. Using everything Thread has learned about customers from past interactions, the system diagnoses tickets, devises a resolution, and then executes it as soon as a tech approves the plan.

“It’s not a product, it’s a platform,” Alayev says. “You can delegate your work to it, not a task.”

That includes work done by MSP owners and account managers rather than the help desk. “At the launch, we were able to build a whole QBR deck just by talking to Super Magic,” Alayev says. So far, he continues, techs and their employers both like the system.

“For every two people that try out Super Magic, one person uses it every day of the week,” Alayev says.

The Super Magic launch was the first of what will be a weekly series of updates and additions Thread’s calling the “Summer of Magic.”

“We’re just harnessing all of the power of our engineering team using AI and delivering the things that our partners have wanted from us,” Alayev says.

Which apparently includes functionality inspired by the same AI coding technology Thread uses in house. The company’s next big feature will be an AI-powered scripting tool called Auto Magic.

“I’m not going to say too much about it, apart from the fact that it’s less like an RPA and more like a Claude Code or Lovable,” Alayev says.

And it’s coming soon. “It’s not vaporware,” Alayev insists. “We already have a customer on the platform.”

Share

Deloitte created a minor stir on the socials recently in response to a research piece about “tollgating,” an increasingly common practice in which vendors charge users for access to their own data.

As the article itself observes, some of this isn’t exactly new. Hyperscalers, among others, have long charged data egress fees, for example, to discourage migration to competing platforms. AI, however, has added a new motivation to practices like that and extended it beyond hyperscalers to pretty much every software maker with an MCP server: Feeding data to end users and their hungry, autonomous agents costs money that someone has to cover.

That’s made data tollgating an urge impossible to resist for the enterprise app makers Deloitte mostly wrote about. Is Kaseya feeling the same temptation? After all, it’s got some 3 billion gigabytes of data on its servers. It’s not hard to imagine the company charging usage-based fees to cover some or all of what hosting and distributing that costs it.

And it will, eventually. Just not to MSPs.

That’s one of many facts shared by Kaseya CTO Pratik Wadher (pictured) during an illuminating conversation last week inspired by a recent press release about the new generation of unified APIs the company has been building out since Wadher stepped into his current job last September.

Everyone in Kaseya’s ecosystem benefits from the company’s huge trove of data, very much including Kaseya, for reasons I discussed two months ago. As Wadher observes, however, storing and serving those bits and bytes isn’t cheap.

“There’s a tremendous cost to it,” Wadher says.

As far as MSPs and corporate IT users go, Kaseya intends to foot that bill indefinitely, and it has no intention of charging egress fees either. Indeed, data portability (as opposed to the data gravity Kaseya itself enjoys) is one of the chief advantages of doing business with Kaseya, according to Wadher.

“Customers own their data,” he says, and they can take it wherever they want whenever they want without paying for the privilege.

Vendors, eventually, will be a slightly different story.

Part of the logic behind the “API-first” strategy Rania Succar described very early in her very first U.S. keynote as Kaseya CEO is that it allows the company to embed itself in an industry’s worth of third-party platforms, and the more such platforms, the better. That’s why one of the core attributes of the company’s new API platform is that anyone who wants to use it can do so more or less as they wish.

“It’s an open API,” Wadher says. “We’re being fair to everyone.” But not for free. Or at least not forever.

“The platform is open, but at the same time we want to make sure that we can monetize it, because there’s a cost to it,” Wadher says, adding that Kaseya needs to recoup at least some of that bill.

“We are going to charge for this,” Wadher says. “We’re working through that with our partners to figure out how.”

The goal, however, is not to discourage vendors from using the API. Kaseya has no problem with responsible third parties accessing its data for their own purposes, even if those third parties are system of action vendors and their purposes include building competing products. Such companies pose little long-term threat, according to Wadher, because they offer stand-alone products with no hope of replicating the deep integration and end-to-end capabilities offered by Kaseya’s platform.

“If you look at cyber resilience, cybersecurity, IT service delivery, there is probably no other company like Kaseya that will give you the benefit of all those products in one place,” he says. “That is our unique selling point.”

Three reasons Kaseya thinks MSPs will love open APIs

Vendors aren’t the only beneficiaries of Kaseya’s API openness. In fact, they’re not even the primary beneficiaries. MSPs are, or will be, according to Wadher, for at least three reasons.

1. Open APIs will enable MSPs to use the AI-powered interface of their choice. Remember when Succar told me she had big plans for connecting AI front ends to Kaseya’s back end via MCP last August? I certainly haven’t forgotten, and a large part of why I booked time with Wadher is that the recent press release I mentioned before quotes him on how the possibilities Succar hinted at are coming to life:

“With Kaseya Intelligence, we are building the first truly open, agentic IT platform—one that meets technicians inside the tools they already use, including Claude and Microsoft Copilot, and gives them the ability to move from real-time insights to fully automated remediation without ever switching context. That is not a feature; it is a fundamental shift in how IT gets done.”

It’s not a theoretical, someday shift either. Some of Kaseya’s larger, more sophisticated partners are using systems like Claude and Copilot in homemade AI interfaces, integrations, and workflows today.

“They’re using all different kinds of tools,” Wadher says. “They’re actually moving data out of our products into a custom area so that they can do some analysis.” Other MSPs you’ve read about here have similar ambitions, and Kaseya blesses them all.

“Our goal is really to meet the technicians where they are,” Wadher says. “If they prefer to jump, that’s fine. They can go to the different tools and do more complex queries or more complex workflows.”

2. It will make life easier for all of an MSP’s employees. As in both the flesh-and-blood kind and the agentic ones.

“The API framework is designed for both human and non-human actors,” Wadher says, meaning it will eventually allow both technicians and their agents to ask the same questions, get the same answers, and act on them in response.

3. It will enable MSPs to share agents and automations with peers. “The whole goal here is that whatever an MSP does, because it’s an open platform, they can make that available to the rest of the MSPs,” Wadher explains. “The platform actually gets better over time because everyone else is using it and contributing to it.”

The wait until that process gets underway won’t be long either, according to Wadher. “The goal is really to start surfacing the API platform and to start having customers start using it by the end of this year,” he says. Like perhaps November, when the APAC edition of Kaseya’s Connect conference takes place in Sydney?

“The platform will be the big story,” Wadher predicts.

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Kaseya Assist takes command

As you just read, big, sophisticated MSPs are building AI front ends into Kaseya’s back-end data lake. For the moment, most smaller MSPs lack the know-how to do the same. But presumably as LLMs and LLM-powered technologies like Copilot grow more capable, they’ll start constructing custom AI interfaces too, right?

“I see it happening the other way around,” Wadher says. Large MSPs are building AI interfaces because they have no alternative right now, he notes. Most of them would happily let a vendor like Kaseya bear the burdens of funding software development and paying down tech debt if they could. And smaller MSPs aren’t eager to take on those costs either.

“They just want to run a business,” Wadher says. “They don’t want to get encumbered with building other solutions.”

The vehicle Kaseya will eventually use to free them from that encumbrance is Assist, the company’s AI assistant. Today, it’s basically a standard-issue chatbot offering quick answers to basic questions about individual solutions. Over time, as the unified API comes more fully to fruition, Assist will become a centralized source of deeper insights from across the Kaseya portfolio.

“If you’re looking at an endpoint, for example, you’ll be able to see if that endpoint is secure. You’ll be able to see if it is being backed up,” Wadher says. “You’ll be able to look at all the tickets against that particular endpoint.” And without investing in a do-it-yourself project.

Service Leadership takes on the service margin mystery

There’s a mystery embedded in Service Leadership’s recently published 2026 Annual IT Solution Provider Industry Profitability Report.

It’s not why the industry’s top quartile MSPs grew EBITDA 25% last year, versus 10% for their median peers and 5% for the lowest quarter. That’s a long-standing pattern for which Service Leadership has a long-standing explanation: Top-ranked MSPs sell end-to-end packages of standardized services across all accounts in a targeted client base while consistently employing rigorous, disciplined operational processes. What’s different in last year’s data is the advantage top performers enjoyed in service margins, and the degree to which that advantage appears to be mounting.

Service margins are my shorthand for a metric Service Leadership calls service multiple of wages. To calculate it, you total up all the money an IT provider makes delivering services and divide it by all the money they spend on salary, bonuses, benefits, and beyond for everyone on their service delivery team. Higher SMWs correspond to higher profits and growing numbers suggest growing profits.

That top-quartile MSPs do better than others on SMW is nothing new. Service Leadership has long advised clients to target 2.5x on that metric, and best-in-class clients have been averaging 2.7 for a while. The mystery is why that number is rising so fast right now.

“In the most recent three quarters we’ve seen that marching up to 2.8-ish, 2.9-ish, and in Q1 it was 3.01,” says Peter Kujawa (pictured), ConnectWise’s EVP and general manager of Service Leadership and IT Nation. “The only other time we’ve seen a 3 on that was at the bottom of the Great Recession when wages tanked.”

Except that everyone’s SMW presumably rose that time. This one is much more limited in scope. “The median is just barely going up,” Kujawa says. “The bottom quartile is flat.”

Service Leadership’s new report, as thorough as it is, offers no explanation for either why service margins are increasing sharply for top-tier MSPs or why they’re not rising for anyone else. But Kujawa has a theory.

The last three quarters correspond very roughly with the period of time in which MSPs have been adopting service desk automation software in meaningful numbers, he notes, and it’s reasonable to think best-in-class MSPs were among the earliest and most effective adopters. The upshot, Kujawa believes, is that top-quartile providers are growing measurably more productive and hiring more slowly as a result.

“What the data is showing us is that the best in class are starting to be more disciplined in their backfilling,” he says, adding that the bottom-line impact is just beginning.

“I think personally in a year, the best in class will be at somewhere between 3.25 and 3.4 on a service multiple of wages,” Kujawa predicts.

A cynic might note here that ConnectWise, which just launched a new platform with built-in AI functionality, has good reason to speculate without evidence that AI functionality is making MSPs more profitable and productive. ConnectWise, however, hopes to provide that evidence soon when it publishes the first results of its “Automation Index,” a new measure of AI readiness, adoption, and financial impact based on six inputs, including SMW. Watch for it in Q3.

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Automation security matters too

Mythos, Fable, GPT-5.6, and models like them are generating a lot of fear, uncertainty, and doubt in the security world right now. Arve Kjoelen, Barracuda’s CISO, brings reason- and experience-based insight to the topic on the latest episode of MSP Chat, the podcast I co-host. Check it out here, and check out our many, many other episodes here.

An answer to the loosely integrated versus tightly integrated MSP rollup debate

Service Leadership attempted to resolve another mystery in its latest report and did, but not in a way that’s likely to satisfy any of the parties most directly invested in it.

Those would be the private equity firms and other investors buying up MSPs in big numbers. Broadly speaking, they have two philosophies about portfolio building. One (The 20 is a good example here) holds that your best bet is to align everyone around a single brand, identical tool stack, and shared operating processes. The other (think New Charter) believes in letting acquired companies retain their brand and culture while sharing resources in areas like sales, marketing, and finance. Service Leadership calls platforms in the first camp fully integrated and those in the latter one semi-integrated.

Which approach is better? Literally billions of dollars are riding on the answer. And having crunched the numbers, Service Leadership can now say the correct answer is … both.

“The [revenue] growth rates are in fact faster for the semi-integrated folks, but the service gross margin and EBITDA are better for the fully integrated folks,” Kujawa says.

And indeed, per Service Leadership’s latest data, semi-integrated platforms grew revenue 26.3% last year, versus 20.6% for fully integrated ones. On the flip side: fully integrated platforms recorded 19.1% gross margins versus 16.8% for semi-integrated ones and came out ahead on EBITDA as well, at 19.5% versus 18.6%.

Those numbers reflect a trade-off between disruption and efficiency, Kujawa believes. Semi-integrated platforms do less onboarding after acquisitions, resulting in less churn and more time for revenue building. Fully integrated rollups, by contrast, collect the longer-term benefits of standardization and economies of scale.

Which outcome is better? That’s a little like asking whether a Roth IRA or a traditional one is better, Kujawa argues. “It depends on what your tax bracket is and what you’re trying to achieve.” Same goes for building MSP platforms.

“It depends on what you’re trying to achieve,” Kujawa says. “Both models can be successful if properly executed is our conclusion.”

One last note for any MSP reading this and thinking I don’t care what works for private equity because I have no intention of ever working with it. Like it or not, you will have to compete with PE-backed providers, and the data says they’ll have an important edge on you.

“Generally speaking, private equity companies outperform the non-private equity companies on EBITDA by about three to five points,” Kujawa says.

Over on The Business of Tech

Host Dave Sobel recently paid automated visits to a bunch of MSP websites to see how many of them reference AI services.

“Across roughly twenty-nine hundred websites, sixty-eight percent have no AI mention anywhere on the site. Even among the larger, more visible MSPs — the ones you’d expect to be out front — it’s about half. The AI gold rush you keep hearing about has not reached most MSP marketing.”

More here.

Also worth noting

• Barracuda has acquired IAM vendor Evo Security.

• Infoblox has agreed to acquire network intelligence and observability software maker Kentik.

• Accenture and Google Cloud are collaborating on pre-built, industry-specific agentic AI solutions for mid-market organizations.

• Attribute, from DoiT, is designed to map AI token, GPU, and shared infrastructure usage to specific customers, features, and agents automatically.

• MSP360’s new public API lets users connect their RMM directly to external dashboards, PSA platforms, and business intelligence tools.

• More evidence that AI security matters: ESET’s analysis of nearly 900,000 AI skills turned up tens of thousands of suspicious and thousands of outright malicious ones.

• Blackpoint Cyber has launched an AI SOC agent.

• Keeper Security’s Endpoint Privilege Manager product now has agentic AI governance capabilities.

• Cynet’s cyber platform for SMBs is now available on the Pax8 Marketplace.

• Optimize365’s M365 security management platform is now available on the Microsoft Marketplace.

• Optimize365 also has a new alliance agreement in place with CyberFOX.

• Tia Scripting, the latest addition to TeamViewer’s DEX platform, helps IT teams to generate device automation scripts from natural-language prompts.

• Michelle Graff is the new SVP of global partners and channel at Veeam.

• Jeff Spridgeon is the new CEO at AI-powered email security vendor Trustifi.

• Chris Stoddard is the new CRO at Jitterbit.

There’s a mystery embedded in Service Leadership’s recently published 2026 Annual IT Solution Provider Industry Profitability Report.

It’s not why the industry’s top quartile MSPs grew EBITDA 25% last year, versus 10% for their median peers and 5% for the lowest quarter. That’s a long-standing pattern for which Service Leadership has a long-standing explanation: Top-ranked MSPs sell end-to-end packages of standardized services across all accounts in a targeted client base while consistently employing rigorous, disciplined operational processes. What’s different in last year’s data is the advantage top performers enjoyed in service margins, and the degree to which that advantage appears to be mounting.

Service margins are my shorthand for a metric Service Leadership calls service multiple of wages. To calculate it, you total up all the money an IT provider makes delivering services and divide it by all the money they spend on salary, bonuses, benefits, and beyond for everyone on their service delivery team. Higher SMWs correspond to higher profits and growing numbers suggest growing profits.

That top-quartile MSPs do better than others on SMW is nothing new. Service Leadership has long advised clients to target 2.5x on that metric, and best-in-class clients have been averaging 2.7 for a while. The mystery is why that number is rising so fast right now.

“In the most recent three quarters we’ve seen that marching up to 2.8-ish, 2.9-ish, and in Q1 it was 3.01,” says Peter Kujawa (pictured), ConnectWise’s EVP and general manager of Service Leadership and IT Nation. “The only other time we’ve seen a 3 on that was at the bottom of the Great Recession when wages tanked.”

Except that everyone’s SMW presumably rose that time. This one is much more limited in scope. “The median is just barely going up,” Kujawa says. “The bottom quartile is flat.”

Service Leadership’s new report, as thorough as it is, offers no explanation for either why service margins are increasing sharply for top-tier MSPs or why they’re not rising for anyone else. But Kujawa has a theory.

The last three quarters correspond very roughly with the period of time in which MSPs have been adopting service desk automation software in meaningful numbers, he notes, and it’s reasonable to think best-in-class MSPs were among the earliest and most effective adopters. The upshot, Kujawa believes, is that top-quartile providers are growing measurably more productive and hiring more slowly as a result.

“What the data is showing us is that the best in class are starting to be more disciplined in their backfilling,” he says, adding that the bottom-line impact is just beginning.

“I think personally in a year, the best in class will be at somewhere between 3.25 and 3.4 on a service multiple of wages,” Kujawa predicts.

A cynic might note here that ConnectWise, which just launched a new platform with built-in AI functionality, has good reason to speculate without evidence that AI functionality is making MSPs more profitable and productive. ConnectWise, however, hopes to provide that evidence soon when it publishes the first results of its “Automation Index,” a new measure of AI readiness, adoption, and financial impact based on six inputs, including SMW. Watch for it in Q3.

Share

Automation security matters too

Mythos, Fable, GPT-5.6, and models like them are generating a lot of fear, uncertainty, and doubt in the security world right now. Arve Kjoelen, Barracuda’s CISO, brings reason- and experience-based insight to the topic on the latest episode of MSP Chat, the podcast I co-host. Check it out here, and check out our many, many other episodes here.

An answer to the loosely integrated versus tightly integrated MSP rollup debate

Service Leadership attempted to resolve another mystery in its latest report and did, but not in a way that’s likely to satisfy any of the parties most directly invested in it.

Those would be the private equity firms and other investors buying up MSPs in big numbers. Broadly speaking, they have two philosophies about portfolio building. One (The 20 is a good example here) holds that your best bet is to align everyone around a single brand, identical tool stack, and shared operating processes. The other (think New Charter) believes in letting acquired companies retain their brand and culture while sharing resources in areas like sales, marketing, and finance. Service Leadership calls platforms in the first camp fully integrated and those in the latter one semi-integrated.

Which approach is better? Literally billions of dollars are riding on the answer. And having crunched the numbers, Service Leadership can now say the correct answer is … both.

“The [revenue] growth rates are in fact faster for the semi-integrated folks, but the service gross margin and EBITDA are better for the fully integrated folks,” Kujawa says.

And indeed, per Service Leadership’s latest data, semi-integrated platforms grew revenue 26.3% last year, versus 20.6% for fully integrated ones. On the flip side: fully integrated platforms recorded 19.1% gross margins versus 16.8% for semi-integrated ones and came out ahead on EBITDA as well, at 19.5% versus 18.6%.

Those numbers reflect a trade-off between disruption and efficiency, Kujawa believes. Semi-integrated platforms do less onboarding after acquisitions, resulting in less churn and more time for revenue building. Fully integrated rollups, by contrast, collect the longer-term benefits of standardization and economies of scale.

Which outcome is better? That’s a little like asking whether a Roth IRA or a traditional one is better, Kujawa argues. “It depends on what your tax bracket is and what you’re trying to achieve.” Same goes for building MSP platforms.

“It depends on what you’re trying to achieve,” Kujawa says. “Both models can be successful if properly executed is our conclusion.”

One last note for any MSP reading this and thinking I don’t care what works for private equity because I have no intention of ever working with it. Like it or not, you will have to compete with PE-backed providers, and the data says they’ll have an important edge on you.

“Generally speaking, private equity companies outperform the non-private equity companies on EBITDA by about three to five points,” Kujawa says.

Channelholic regulars are thoroughly familiar with how fascinated I am by AI productivity solutions for MSPs. I write about them all the time. Some are made by startups fighting for market share and brand recognition. Others are from the biggest names in the industry. Some (like Squash, of which more in a moment) have been around several months. Others (like Pia and Thread) have been around several years.

When it comes specifically to agentic AI productivity systems for MSPs, though, the very first you’ve read about here through the years is Atera Autopilot, or Robin as it’s been named since March, which first began stirring to life in the company’s R&D lab five months before ChatGPT’s debut and first appeared on my radar some 13 months after that milestone.

That makes it, by the standards of its product category at least, old, a trait it happens to share with yours truly. And just as my increasingly gray hair is a harbinger of what younger readers have ahead of them, so too does Robin offer hints about what lies ahead for younger autonomous MSP solutions. I count at least five clues about what the future holds for such systems as they mature, in fact, based on a recent conversation with Atera CEO Gil Pekelman (pictured).

1. They’ll get smarter. With AI as with people, age breeds experience, experience breeds context, and context breeds wisdom. Robin is no exception.

“Robin processes about a million events every month that increase its learning, its capabilities, its accuracy, and its speed,” Pekelman says. “It gets much smarter all the time.”

It’s smart enough already, in fact, that its ability to close tickets without human help has progressed beyond the numerous Tier 1 issues it initially addressed, according to Pekelman, “deeply into Tier 2.” Indeed, Robin’s know-how extends so deep into Tier 2 at this point that Atera now guarantees partners they’ll be autonomously resolving 50% of all tickets within 90 days of onboarding.

2. They’ll get faster. Robin doesn’t just know more than it used to. It moves faster too, according to Pekelman, who says mean time to repair end user problems now averages 120 seconds.

3. They’ll deliver steadily increasing ROI. In addition to getting smarter and speedier with the passage of time, Robin’s growing more scalable too. Atera has partners supporting 1,000 users per technician at present, and the number continues to climb. That’s a boon to MSPs pursuing richer margins.

“You can grow without adding more people,” Pekelman observes.

4. They’ll transform what technicians do for a living. Most Robin users, Atera says, reassign one-time help desk technicians to new, more valuable roles. Sometimes it’s high-margin consulting and project work. Other times it’s an entirely new function brought into being by agentic AI, which Microsoft calls “agent boss” and Pekelman calls “agent manager.”

“It’s a new job, a new profession that’s developing,” he says. “We’re seeing it more and more.”

Robin, he continues, isn’t so much an agent as a swarm of agents with different skills and responsibilities. “You have a lot of them, they do all kinds of things, and you need to teach them,” Pekelman notes, not just about what they must and must never do, but about the right and wrong ways to handle permitted work as well. Agent managers are responsible for that work.

5. They’ll grow easier to use. Robin’s not hard to use now, according to Atera, but will require even less expertise when a major new update rolls out soon.

“We’re working on the next generation of IT management platforms, the agentic RMM and PSA,” is all Pekelman will say about it for now. Publicly, anyway. He dropped some large and interesting hints about what’s coming off the record, and I’ll share the whole story here just as soon as the product ships.

What hasn’t changed

Usage-based LLM pricing schemes, as I’ve written here before, make setting budgets and controlling margins difficult, and one could easily imagine vendors passing that headache along to their partners. Atera has decided not to. Robin, which currently costs $20 a month per authorized user, won’t be switching to consumption-based rates any time soon, according to Pekelman.

“We decided to take the path of giving our customers visibility and confidence in how much it will cost them as opposed to connecting it to tokens,” he says, noting that Atera can afford the risk of mixing variable upstream spending with flat-rate downstream pricing thanks in part to Robin’s growing age and wisdom.

“We have enough information now to make sure it’s a calculated risk,” Pekelman says.

It’s governance first, AI second at Squash

Atera’s guaranteed 50% automated ticket resolution rate within 90 days of implementation is essentially just a starting point. Robin can potentially close as many as 92% of tickets eventually if you grant it permission to address all the many ticket types it’s capable of addressing.

“There are customers that do that and there are others that limit it, and they’re at 75% or 60%,” Pekelman says.

Hard to know without guessing why users who limit Robin’s actions are doing so, but uneasiness about the many things that can go wrong when AI acts alone probably has something to do with it, suggesting that there’s a direct relationship between how much MSPs trust their AI automation tool and how much productivity benefit they get from it.

Which brings us to Squash, a very young service desk automation startup founded by veterans of Silicon Valley high-flyers Rippling and Harvey that’s betting big AI can deliver a lot more for MSPs than it is today provided those MSPs are comfortable allowing it to.

“We are at a point with the technology where the tech is not the limitation any longer,” says CEO and co-founder Sandeep Uppaluri (pictured). “The limitations that we see are basically MSPs’ willingness to lean in, adopt, and make the most of the tech.”

The product Squash built in response to that analysis stands apart, the company believes, for two reasons, starting with the breadth and depth of its automation abilities.

“A lot of the other players out there in the market today are mostly focused on ticket intake, maybe triage and dispatch of tickets,” Uppaluri says. “We integrate very broadly into your entire tech stack, and we will take actions on your behalf to help you resolve those tickets.”

More importantly, he continues, AI governance is a core design pillar rather than afterthought at Squash.

“We built out the governance controls before we built out any of the AI stuff, basically because we think it’s super important,” Uppaluri says. “The better your governance controls, the more it allows you to unlock the power of the models, the further you can push them, and the more you can get out of them.”

Squash uses a containerized environment within the tool to enforce governance. Incoming tickets go straight to that isolated space, where the system automatically applies the user’s guardrails. The system helps users slowly define those policies over time on a ticket type by ticket type basis.

“A lot of our product is designed around how we can enable a gradual rollout,” Uppaluri says. “It’s that trust building that is the crux of getting value out of AI. It’s not tech.”

Squash users come in every variety, the company says, but tilt a bit toward the kind of MSP running OpenClaw in the lab because they like living on the leading edge.

“Very quickly they start to realize that you need more governance controls,” Uppaluri says.

That Squash takes such controls seriously isn’t the only thing distinctive about it, however, he adds. The company’s unusually flexible pricing scheme sets it apart as well, not just from other AI startups but from nearly everyone else as well. Want per endpoint pricing? Squash is happy to provide it. Prefer something outcome-based? Squash has you covered there too.

“We try to flex the model to make sure that it’s working for you,” Uppaluri says. “The goal is to make it feel as bespoke as possible.” And to ensure that the fees partners pay and productivity gains they collect net out to about a 20% increase in service margins, he adds.

Consistently. Like Atera, Squash has opted not to saddle partners with the challenges of earning predictable profits while paying unpredictable token-based rates.

“MSPs shouldn’t be worrying about what model to use, how much it costs, how the price has changed, and how to orchestrate these different things,” Upplauri says. “That’s the responsibility of a vendor.”

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Don’t shout AI

Squash is one of many vendors touting AI-based managed services functionality these days. Uppaluri is the first to admit that sorting through them all is hard work for MSPs.

“Every vendor claims to have AI solutions,” he says. “There are just a lot of different things coming at them in different ways.”

Sean Lardo feels their pain. Every spring for the past several years, he’s led a committee at ConnectWise tasked with deciding who gets into the company’s annual PitchIT program, a 16-week startup incubator that hands out $150,000 worth of prizes to the three best graduates.

“It was very challenging this year,” says Lardo (pictured), ConnectWise’s vice president of IT Nation Communities. And not just because the applicant pool was unusually deep (over 65 companies competing for what turned out to be 25 slots).

“These companies are claiming AI in everything,” Lardo says, adding that it didn’t impress the judges. “You shouting AI doesn’t mean you have anything. It’s about what you’re doing with it. What’s the actual use case?”

The use cases Lardo and his fellow evaluators prioritized reflect their read on what MSPs most want and/or need right now. “If you look across the board for this class, everybody represents some segment or fraction of the business that’s a necessity or will be more of a necessity moving forward,” Lardo says.

Some of those necessities relate directly to AI itself. Class-members Synthreo and Aportio, for example, make AI-powered service desk automation software while Lemhi, which you met here recently, helps MSPs sell customer-facing AI services. Kipling Secure’s solution, meanwhile, aims to help users mitigate the risks those AI services can pose.

“AI cybersecurity is big because AI hacking is a real thing now,” Lardo says. “It’s happening faster, more often, and it’s really hard.”

Other contestants, including Handover, TechAlign, and MSP Report Card, help with more traditional tasks like conducting quarterly business reviews, something too few MSPs do at all, according to Lardo, and fewer still do properly.

“They don’t use them for what they should be, which is an actual growth tool, a sales enablement tool,” he says.

Lardo advises MSPs struggling to evaluate the many young vendors vying for their business to ask the same questions he and his team did when vetting would-be PitchIT contestants. Does the leadership team have experience in managed services? What do people say about the company online? How long has it been around?

“You have to look at their credibility,” Lardo says. “We don’t expect ten years of business, but we do expect to see a couple of years of them doing things.”

ConnectWise will name this year’s three finalists in September. Two months later, a panel of judges from outside the company will crown the winner at the vendor’s IT Nation Connect event in Orlando. Which contender grabs their eye most will offer an interesting glimpse at what a winning recipe for success with MSPs looks like in the age of AI.

Share

Speaking of AI-era startups…

The founder and CEO of one, Cyft, joined us on the most recent episode of MSP Chat, the podcast I co-host, for a thoughtful look at the present and future of AI-powered productivity for MSPs. Give it a watch here and check out all of our other interesting guests here.

Todyl offers proof, not promises

AI and security solutions, predictably, figure prominently on this year’s lineup of PitchIT contestants. So too, somewhat less predictably, does QBR software. Another issue ConnectWise apparently thinks MSPs want and need help with right now, though, is compliance, which shows up in products from three of the 25 vendors on this year’s PitchIT list. Not surprising, according to Lardo, given how many rules, requirements, and regulations there are to comply with and the potential consequences for MSPs and end users who slip up.

“They could lose their whole business,” he says.

Todyl is aware of that danger too, as well as the burdens associated with avoiding it. Cyberinsurers and regulators want more than your word on compliance, observes Ken Patterson (pictured), the security vendor’s VP of community.

“They’re asking for proof,” he says. “MSPs, quite frankly, are not ready for this.”

Todyl can help, Patterson says, both through its platform, which imports reporting data from the vendor’s SIEM, MDR, and other products directly into its GRC solution, and through alliances with the partners featured on its recently introduced Assurance Marketplace.

There are four such organizations at present, each of which offers something cyberinsurers and other compliance enforcers value. Membership group GTIA offers third-party validation of cyber readiness through its Cybersecurity Trustmark program, certification and cyber warranty provider SPECTRA provides third-party validation of security best practices, insurer Ledgebrook offers better rates and coverage based on validated security evidence, and Optimize Cyber delivers pen testing and incident response services many privacy and safety regulations require. Todyl may add more companies, according to Patterson, but no more than a carefully curated few.

“We’re not looking to be a distributor,” he says.

The Assurance Marketplace is part of a broader MSP push at Todyl, which sells exclusively through the channel. Other examples include the virtual CISO it’s appointed to help partners advise clients and new courses it offers on delivering AI security services.

“My whole thing is about educating and enablement,” Patterson says.

That and community, which is closely tied to enablement in Patterson’s mind. Vendors often call the partners who sell and support their products their community.

“That’s not a community,” Patterson says. “We have to give back. There has to be a back and forth relationship between us and them.”

Preferably in person whenever possible. AI is sure to make vendors like Todyl more effective in the years ahead, says Patterson, who spoke with me at Rewst’s FLOW event in Nashville last month.

“It’ll never replace this though,” he said, pointing back and forth at us, “the direct face-to-face conversation.”

Over on The Business of Tech

Host Dave Sobel was joined live by yours truly last week to discuss recent news from Pax8, ConnectWise, and beyond. An interesting conversation, at least from my end. See if you agree.

Also worth noting

• Businesses added 47,000 tech workers last month, according to CompTIA, down from 69,000 in May. On the other hand, tech unemployment is down, too, from 3.1% to 2.9%.

• New data from AvePoint suggests that AI agent adoption is accelerating faster than governance. Not surprising, perhaps, given that MSPs aren’t jumping to help.

• CyberFOX has equipped itself to offer cloud-native SASE and zero trust network access by acquiring Timus Networks.

• The new Managed Identity Security Posture Management solution for Microsoft 365 environments from Huntress is now generally available.

• New research from Cynomi reveals the top AI questions MSPs are asking in 2026. Number one on the list? How do we say no to client AI requests without losing the account?

• MSP360 says it will not increase pricing on its managed products for eligible MSP partners. Ever.

• DNSFilter’s new MSP Partner Program offers enhanced benefits, resources, and incentives intended to help members grow their security businesses.

• SnapLogic’s new MCP Builder is designed to turn existing integrations, APIs, and business processes into governed MCP tools in minutes.

• BlueVoyant has introduced a dedicated AI agent security service for Microsoft environments.

• Exabeam has expanded its behavioral intelligence capabilities to detect, investigate, and reduce risk from AI agents, autonomous workflows, and human-to-agent activity.

• New capabilities added by Infoblox to its Universal Asset Insights solution are designed to improve visibility for AgenticOps initiatives and IT automation.

• MyCloud Managed Security, from Reinvent Telecom, is designed to help partners expand into managed cybersecurity services.

• Intruder’s new free plan provides permanent access to core exposure management capabilities.

• Impartner has added native CRM synchronization for HubSpot to its PRM platform.

• Mika Yamamoto is the new chief marketing and customer AI officer at Veeam.

Atera’s guaranteed 50% automated ticket resolution rate within 90 days of implementation is essentially just a starting point. Robin can potentially close as many as 92% of tickets eventually if you grant it permission to address all the many ticket types it’s capable of addressing.

“There are customers that do that and there are others that limit it, and they’re at 75% or 60%,” says Gil Pekelman, Atera’s CEO.

Hard to know without guessing why users who limit Robin’s actions are doing so, but uneasiness about the many things that can go wrong when AI acts alone probably has something to do with it, suggesting that there’s a direct relationship between how much MSPs trust their AI automation tool and how much productivity benefit they get from it.

Which brings us to Squash, a very young service desk automation startup founded by veterans of Silicon Valley high-flyers Rippling and Harvey that’s betting big AI can deliver a lot more for MSPs than it is today provided those MSPs are comfortable allowing it to.

“We are at a point with the technology where the tech is not the limitation any longer,” says CEO and co-founder Sandeep Uppaluri (pictured). “The limitations that we see are basically MSPs’ willingness to lean in, adopt, and make the most of the tech.”

The product Squash built in response to that analysis stands apart, the company believes, for two reasons, starting with the breadth and depth of its automation abilities.

“A lot of the other players out there in the market today are mostly focused on ticket intake, maybe triage and dispatch of tickets,” Uppaluri says. “We integrate very broadly into your entire tech stack, and we will take actions on your behalf to help you resolve those tickets.”

More importantly, he continues, AI governance is a core design pillar rather than afterthought at Squash.

“We built out the governance controls before we built out any of the AI stuff, basically because we think it’s super important,” Uppaluri says. “The better your governance controls, the more it allows you to unlock the power of the models, the further you can push them, and the more you can get out of them.”

Squash uses a containerized environment within the tool to enforce governance. Incoming tickets go straight to that isolated space, where the system automatically applies the user’s guardrails. The system helps users slowly define those policies over time on a ticket type by ticket type basis.

“A lot of our product is designed around how we can enable a gradual rollout,” Uppaluri says. “It’s that trust building that is the crux of getting value out of AI. It’s not tech.”

Squash users come in every variety, the company says, but tilt a bit toward the kind of MSP running OpenClaw in the lab because they like living on the leading edge.

“Very quickly they start to realize that you need more governance controls,” Uppaluri says.

That Squash takes such controls seriously isn’t the only thing distinctive about it, however, he adds. The company’s unusually flexible pricing scheme sets it apart as well, not just from other AI startups but from nearly everyone else as well. Want per endpoint pricing? Squash is happy to provide it. Prefer something outcome-based? Squash has you covered there too.

“We try to flex the model to make sure that it’s working for you,” Uppaluri says. “The goal is to make it feel as bespoke as possible.” And to ensure that the fees partners pay and productivity gains they collect net out to about a 20% increase in service margins, he adds.

Consistently. Like Atera, Squash has opted not to saddle partners with the challenges of earning predictable profits while paying unpredictable token-based rates.

“MSPs shouldn’t be worrying about what model to use, how much it costs, how the price has changed, and how to orchestrate these different things,” Upplauri says. “That’s the responsibility of a vendor.”

Follow Me on LinkedIn

Squash is one of many vendors touting AI-based managed services functionality these days. Sandeep Uppaluri, the company’s co-founder and CEO, is the first to admit that sorting through them all is hard work for MSPs.

“Every vendor claims to have AI solutions,” he says. “There are just a lot of different things coming at them in different ways.”

Sean Lardo feels their pain. Every spring for the past several years, he’s led a committee at ConnectWise tasked with deciding who gets into the company’s annual PitchIT program, a 16-week startup incubator that hands out $150,000 worth of prizes to the three best graduates.

“It was very challenging this year,” says Lardo (pictured), ConnectWise’s vice president of IT Nation Communities. And not just because the applicant pool was unusually deep (over 65 companies competing for what turned out to be 25 slots).

“These companies are claiming AI in everything,” Lardo says, adding that it didn’t impress the judges. “You shouting AI doesn’t mean you have anything. It’s about what you’re doing with it. What’s the actual use case?”

The use cases Lardo and his fellow evaluators prioritized reflect their read on what MSPs most want and/or need right now. “If you look across the board for this class, everybody represents some segment or fraction of the business that’s a necessity or will be more of a necessity moving forward,” Lardo says.

Some of those necessities relate directly to AI itself. Class-members Synthreo and Aportio, for example, make AI-powered service desk automation software while Lemhi, which you met here recently, helps MSPs sell customer-facing AI services. Kipling Secure’s solution, meanwhile, aims to help users mitigate the risks those AI services can pose.

“AI cybersecurity is big because AI hacking is a real thing now,” Lardo says. “It’s happening faster, more often, and it’s really hard.”

Other contestants, including Handover, TechAlign, and MSP Report Card, help with more traditional tasks like conducting quarterly business reviews, something too few MSPs do at all, according to Lardo, and fewer still do properly.

“They don’t use them for what they should be, which is an actual growth tool, a sales enablement tool,” he says.

Lardo advises MSPs struggling to evaluate the many young vendors vying for their business to ask the same questions he and his team did when vetting would-be PitchIT contestants. Does the leadership team have experience in managed services? What do people say about the company online? How long has it been around?

“You have to look at their credibility,” Lardo says. “We don’t expect ten years of business, but we do expect to see a couple of years of them doing things.”

ConnectWise will name this year’s three finalists in September. Two months later, a panel of judges from outside the company will crown the winner at the vendor’s IT Nation Connect event in Orlando. Which contender grabs their eye most will offer an interesting glimpse at what a winning recipe for success with MSPs looks like in the age of AI.

Share

Speaking of AI-era startups…

The founder and CEO of one, Cyft, joined us on the most recent episode of MSP Chat, the podcast I co-host, for a thoughtful look at the present and future of AI-powered productivity for MSPs. Give it a watch here and check out all of our other interesting guests here.

AI and security solutions, predictably, figure prominently on ConnectWise’s lineup of PitchIT contestants this year. So too, somewhat less predictably, does QBR software. Another issue the company apparently thinks MSPs want and need help with right now, though, is compliance, which shows up in products from three of the 25 vendors on this year’s PitchIT list. Not surprising, according to Sean Lardo, ConnectWise’s VP of IT Nation Communities, given how many rules, requirements, and regulations there are to comply with and the potential consequences for MSPs and end users who slip up.

“They could lose their whole business,” he says.

Todyl is aware of that danger too, as well as the burdens associated with avoiding it. Cyberinsurers and regulators want more than your word on compliance, observes Ken Patterson (pictured), the security vendor’s VP of community.

“They’re asking for proof,” he says. “MSPs, quite frankly, are not ready for this.”

Todyl can help, Patterson says, both through its platform, which imports reporting data from the vendor’s SIEM, MDR, and other products directly into its GRC solution, and through alliances with the partners featured on its recently introduced Assurance Marketplace.

There are four such organizations at present, each of which offers something cyberinsurers and other compliance enforcers value. Membership group GTIA offers third-party validation of cyber readiness through its Cybersecurity Trustmark program, certification and cyber warranty provider SPECTRA provides third-party validation of security best practices, insurer Ledgebrook offers better rates and coverage based on validated security evidence, and Optimize Cyber delivers pen testing and incident response services many privacy and safety regulations require. Todyl may add more companies, according to Patterson, but no more than a carefully curated few.

“We’re not looking to be a distributor,” he says.

The Assurance Marketplace is part of a broader MSP push at Todyl, which sells exclusively through the channel. Other examples include the virtual CISO it’s appointed to help partners advise clients and new courses it offers on delivering AI security services.

“My whole thing is about educating and enablement,” Patterson says.

That and community, which is closely tied to enablement in Patterson’s mind. Vendors often call the partners who sell and support their products their community.

“That’s not a community,” Patterson says. “We have to give back. There has to be a back and forth relationship between us and them.”

Preferably in person whenever possible. AI is sure to make vendors like Todyl more effective in the years ahead, says Patterson, who spoke with me at Rewst’s FLOW event in Nashville last month.

“It’ll never replace this though,” he said, pointing back and forth at us, “the direct face-to-face conversation.”

Share

MSPs like automation.

A lot. So much, in fact, that 97% of the ones Rewst surveyed not long ago said they plan to do more of it this year, and 71% called it essential to their strategy. Not hard to understand why, either, given that 86% of respondents to the RPA vendor’s study say automation has increased operational efficiency, 75% say it’s improved consistency and standardization, and 46% say it’s reduced ticket volumes.

Such figures help explain why MSPs like Durham, N.C.-based Net Friends have run over 19.5 billion tasks on Rewst’s platform in the last year, nearly 2.4x the prior year’s volume.

“We were probably trending around 300, 400 hours saved [a month] on about 80 automations,” says Net Friends CEO John Snyder, until the company’s growing automation skills quickly grew those savings to more like 700 hours.

Embedded in Snyder’s story, however, is a clue to why Rewst’s undeniable success (the company’s attracted some 1,500 partners and $124 million in seed and venture capital since its founding in 2021) hasn’t been even greater: Though its software is capable of delivering serious ROI in the right hands, such hands are in short supply.

Indeed, there are something like 80,000 to 90,000 MSPs in the world and collectively, Rewst guesstimates, they might employ 1,000 qualified automation engineers (or “builders” as the company often refers to them). Net Friends is racking up big RPA productivity gains because it has three such engineers on its payroll.

“Rewst is fantastic if you’ve got builders like we have,” Snyder says. “They’re really hard to find.”

All of which suggests Rewst and its MSP users have been sitting on a huge unrealized unlock for some time. “It’s not a technical problem anymore,” said Rewst CEO Aharon Chernin (pictured) of RPA adoption at the vendor’s FLOW event in Nashville last week. “We have a product that can automate anything. It’s a people problem.” Make the system easier to use and a lot more people will use it.

Which is exactly what Rewst hopes will start happening as soon as this coming week when early access opens to a new version of its software designed to democratize access to RPA’s power. And when I say that release is new, I mean all new from the ground up and so infused with generative and agentic AI that when I asked Chernin about the product’s AI roadmap he said there isn’t one.

“The entire app is now controlled by AI,” Chernin explained. “There’s nothing left for me to add AI to that doesn’t have AI already.”

The result is a heavily automated solution capable of building new automations on the fly based on natural language instructions. “As long as you know how to prompt—and we have classes to teach you if you don’t know—you can get it to do anything,” says Charlie Tomeo, Rewst’s chief revenue officer.

And “you,” theoretically, is no longer limited to engineers, automation or otherwise. With a little training, bookkeepers, salespeople, and administrative assistants will be able to automate their workflows with minimal or no assistance.

Importantly, Chernin notes, the same goes for customer-facing employees. Rewst has been encouraging partners to provide “automation-as-a-service” to clients using its software since 2024, but only about 17% of them do at present, mostly because account managers and process optimization analysts don’t know how to build automations. Now, the company says, they don’t need to.

“They can go in, interview a client, get the details, type them into the agent, and have a draft done in minutes,” Chernin says. “It’s going to be a dramatic shift.”

With potentially dramatic implications for Rewst too. I wrote about the impact automation as a service had on the vendor’s total addressable market many months ago. How much more of that TAM will Rewst and its partners capture now that you don’t have to be a builder to build?

Hear it straight from Rewst

Tomeo discusses everything I just did and more on the latest episode of MSP Chat, the podcast I co-host. Tune in here to listen, or click here to view all our recent interviews with the likes of ThreatLocker CEO Danny Jenkins, Cynomi CEO David Primor, and ScalePad CEO Chris Day among many others.

Data gravity meets action gravity

I’ve written in the recent past about data gravity, the inexorable attraction that large masses of data exert on vendors, IT providers, and end users who need data to make AI work. Rewst, interestingly, is cultivating something different but arguably every bit as valuable, at least for MSPs. Let’s call it action gravity.

Part of what partners like about Rewst’s software is that it integrates with roughly 100 widely used managed services tools. Except that the product’s true integration count is actually a great deal bigger than that, according to Chernin, now that it has the ability to build integrations on demand for users in response to natural language prompts.

“If the agent can make an integration on the fly, why would we even go to market that Rewst has 100 integrations, because it really has an infinite number of integrations,” Chernin says.

That matters a lot for MSPs and the vendors who serve them for reasons related to the difference between RPA and AI, a difference that BetterTracker Chief Business Development Officer Matt Solomon summed up neatly during a general session presentation at FLOW: “AI thinks. Automation acts.”

Which is to say that while AI is increasingly good at figuring out how to do something an MSP needs done, it’s generally not responsible for most of the actual doing.

“AI is directing tools to go do that,” Chernin says.

And MSPs have a lot of tools, 96 of them on average, according to BetterTracker’s data, up from 88 just nine months ago. Say I’m an MSP with a mere 30, however.

“If you connect your agent to 30 different tools, that context from all the tool data is sent on every request,” Chernin says. “That’s probably bringing you, I don’t know, hundreds of thousands of tokens.” Use Rewst instead, he continues, and you get access to all 30 tools at once through a single, far more efficient connection with an infinite supply of integrations.

But not just integrations. Automations in Rewst reflect an individual user’s standardized workflows and they execute those workflows exactly the same way every time an agent triggers one. Left to their own devices, as headlines regularly reveal, agents are a tad less predictable.

One connection to one tool that’s integrated with all of an MSP’s other tools and executes a nearly limitless set of actions based on the MSP’s best practices with lock-step consistency. That, I’d argue, is action gravity and it should make Rewst and other RPA solutions with similarly expansive integrations very popular with systems of action and their agent coworkers.

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B2A (business-to-agent) marketing

Being popular with systems of action is something vendors like Rewst need to start thinking about too, Chernin argues. As agents gradually spend more time in their products than humans, they also gradually become the users whose opinion matters, especially for sales and marketing teams.

“We need the agent to recommend our products,” Chernin says, “and the only way to do that is to make an agent’s life easier.”

He’s seen that play out in real life too. During his keynote presentation, Chernin ran side-by-side demos he created showing Claude Code execute a task about 50% faster with Rewst than without it. What he didn’t tell his audience was how difficult getting Claude to run the task without Rewst was.

“It was dying,” Chernin says. “It wanted to use the Rewst connection so much.” To the point of repeatedly making him confirm that he absolutely, positively wanted to complete the task the harder, more expensive way.

“I was fighting with it so much that I eventually had to disable the Rewst MCP,” Chernin says.

And if you think that marketing to agents is something only software makers have to think about, he adds, it’s not.

“MSPs are going to have to start to market to agents too because your prospects are now in agents all night planning their family’s healthcare, and you need to figure out how to get the agents to recommend your products and services,” Chernin says. “We’re in the same boat.”

Over on The Business of Tech

Host Dave Sobel plans to hit me with some interesting topics during my latest appearance on the weekly live episode of his show, and he’s made them no secret:

– Pax8’s “managed intelligence provider” gap, the Agent Gateway, and why trust may be the MSP’s last real moat

– ConnectWise’s bet on becoming a “system of action,” not just a system of record — and who actually owns the data

– The pricing collision: why seat-plus-consumption billing may be devastating to the MSP model, and whether MSPs will do the AI work while vendors capture the upside

– What an MSP with a flat-rate client should change Monday before AI eats their margin

Wish me luck on that last one. I’m not sure anyone has a good answer right now.

N-able sheds light on AI’s shadows

Lately, it feels like a lot of what I’ve been writing about reflects a widely shared sense that there’s no time to lose with AI.

Anthropic’s feeling it, certainly, which is why it’s building AI solutions for SMBs directly before OpenAI or Google has a chance to do the same.

Pax8’s feeling it too. The marketplace recently rolled out an enablement program designed to help managed service providers become managed intelligence providers, plus a set of outsourced professional services they can sell while they’re making the transition. And just in case anyone at the marketplace operator’s recent Beyond conference failed to appreciate that completing the MSP-to-MIP journey quickly matters as much as completing it at all, CEO Scott Chasin walked onstage for his keynote to the sound of a ticking clock.

Last but not least, business leaders are feeling it. As a couple of my posts have noted in passing lately, SMBs aren’t so much receptive to AI proposals from IT providers as pleading for them, and often charging ahead on their own at damn-the-torpedoes velocity.

“They’re signing up for every AI platform they get an Instagram ad for,” says Robert Johnston, N-able’s chief innovation officer.

And then promptly losing track of them. Fully two-thirds of businesses surveyed by researchers from The Economist don’t really know how many agents they have and what they’re all doing. It’s just like shadow IT except worse, notes N-able CEO and president John Pagliuca (pictured).

“The potential outcome is even more devastating with shadow AI as opposed to shadow IT because of what the agents could potentially do,” he says. Like delete a company’s entire production database or leak customer PII.

Protecting clients from that fate is both an opening for MSPs feeling time pressure to add AI services, according to Pagliuca, and the function performed by the Shadow AI Visibility solution N-able quietly unveiled last week.

“We’ll show an MSP what the end customer is installing and what’s being used from an AI perspective within that environment,” Johnston says. Securing it all is both an immediate source of one-time project revenue and a long-term source of recurring monitoring and management fees.

“It’s a perfect tool in the MSP’s toolkit: discover it, build a project around it, launch it, and then wrap a service around it,” Pagliuca says.

Perfect, perhaps, but not unique. Kipling Secure, ShadowLock, and Nudge, among others all make similar products. According to Johnston, however, using one requires MSPs to add another item to an already sprawling tool stack.

“I don’t think they want yet another tool,” Johnston says, noting that N-able partners get the same functionality through the RMM and/or MDR solution they already use at no extra cost.

Share

Both/and versus either/or

The logic of that last thought applies more broadly to how market-leading MSP software makers are thinking about AI.

Like all businesses, managed service providers rely on systems of record for comprehensive, trustworthy data. Large numbers of them now rely on AI-powered systems of action as well to boost profits and accelerate growth. There’s strategic power for vendors in playing either role, but as ConnectWise CEO Manny Rivelo recently said here and as his counterpart at Kaseya would undoubtedly say too, the true sweet spot for software makers is to be both a system of record with massive data gravity and a system of action with autonomous AI functionality.

N-able concurs.

“We believe that putting an AI-infused system of action on top of a system of record is the right formula,” Pagliuca says. Partners are completely welcome to use N-able solely as a source of data, as its recent MCP server launch makes clear. Those looking for more value with fewer interfaces, tighter integration, and less spending, Pagliuca predicts, will get their AI from N-able too.

“We believe that provides the best path and the best experience,” he says.

At present, N-zo, the AI assistant N-able introduced in April, is the closest thing the company has to system of action functionality. That’s set to change in the future, however.

“We’re in the process of building coworkers right now,” Pagliuca says. As in agents capable of performing tasks like patching and vulnerability management mostly or entirely on their own.

“When we look at the top, call it, 10 or 15 tasks that MSPs and technicians do, our plan is to automate that leveraging AI so we can take the burden off some of the L1 technicians,” Pagliuca says. “We’re expecting to put that in preview later this year.”

BetterTracker greets Betty and Bob

N-able likes the sound of combining data gravity with AI automation in one platform, as do ConnectWise, Kaseya, and many others. Would it surprise you to learn BetterTracker is headed there as well?

Before I explain where the company’s going, though, let’s review where it’s been. BetterTracker’s solution has its roots in a system called NaviStack that helped MSPs inventory all of the software they use or sell. Over time through integrations with a subscriber’s Microsoft tenants, banks, and credit cards the system also began revealing what they were paying for all that software. Later still, BetterTracker let MSPs monitor all of their spending using those same integrations.

Providing that service involved accumulating a lot of information from what’s now approaching 7,000 MSPs. BetterTracker’s latest feature, Betty AI, is how the company begins converting that data from a helpful data store into a real-time intelligence resource too.

Currently in beta testing with selected partners and due to reach everyone else late next month, Betty lets users get AI-powered answers to spend-related questions via natural language prompting. For example, notes CEO Kevin Lancaster (pictured), MSPs have long yearned to know not just what they’re paying for tools but what they should be paying.

“Now we have a big enough volume of transactional data where we can tell you that pretty straight up,” he says. “We can give you ranges on what you should be paying for certain products in certain categories based on your size and endpoints and revenue and what have you.”

By end of year, MSPs who use BetterTracker’s customer-facing functionality to enhance strategic relevance will be able to ask similar questions about end users.

“What should I be selling them next? Where are they overleveraged? How can I help them optimize their technology stack?” Lancaster says.

In time, though, he continues, the system will move past answering questions about spending to calling out issues like unused subscriptions, overlapping tools, contract anomalies, and approaching renewal dates unprompted.

“Betty will basically be your business adviser,” Lancaster says. “It will turn into a very proactive, ongoing, business optimization platform.”

Useful stuff for a system of record, according to Lancaster, but not a complete realization of Betty’s potential.

“The holy grail in all of this is how do you turn it into a system of action,” he says.

And the answer is by going a step beyond identifying money-saving suggestions to actually implementing them automatically. “If you can do that and create some predictability to it, you can start squeezing out two, three, four, five, ten points of margin,” Lancaster says.

BetterTracker has similar functionality coming for vendors. The system already helps them use partner reviews and spending data to benchmark themselves against competitors, Lancaster notes. Betty’s forthcoming companion Bob will add AI-powered analysis to those insights.

“We’ll help vendors understand, based on anonymized aggregate data, how they should be pricing and what their true ICP looks like,” Lancaster says. Crucially, he adds, and in a departure from how most vendors handle pricing and targeting today, Bob’s suggestions won’t be speculative.

“Everybody’s making assumptions and we can show them real, factual, real-time data,” Lancaster says. “It’s pretty eye-opening.”

Also worth noting

• Sophos has joined OpenAI’s Daybreak Cyber Partner Program to combine its agentic SOC and prevention architecture with OpenAI’s cyber capabilities.

• Proofpoint has joined too.

• Cynomi has added vulnerability management integrations, automation, and AI-powered capabilities in what it calls the largest expansion of its platform to date.

• SuperOps and Guardz have introduced a bundled offering designed to give MSPs a unified, AI-ready operations and security stack.

• Bitdefender has launched RealCheck, a deepfake detection solution for iOS and Android that analyzes videos for manipulation and malicious intent.

• The new Wasabi Impact Circle is a sustainability program designed to help customers and partners measure and address cloud storage emissions through curated carbon credit portfolios.

• Keeper Security’s new Keeper Teams App brings privileged access request, approval, and management workflows directly into Microsoft Teams.

• Netwrix has added visibility, continuous monitoring, identity risk assessment, and other AI governance features for hybrid Microsoft environments to its 1Secure solution.

• Xurrent has launched a built-in iPaaS platform designed to simplify enterprise integrations and automation.

• Parallels has added a new hypervisor-agnostic integration platform to Parallels RAS.

N-able likes the sound of combining data gravity with AI automation in one platform, as do ConnectWise, Kaseya, and many others. Would it surprise you to learn BetterTracker is headed there as well?

Before I explain where the company’s going, though, let’s review where it’s been. BetterTracker’s solution has its roots in a system called NaviStack that helped MSPs inventory all of the software they use or sell. Over time through integrations with a subscriber’s Microsoft tenants, banks, and credit cards the system also began revealing what they were paying for all that software. Later still, BetterTracker let MSPs monitor all of their spending using those same integrations.

Providing that service involved accumulating a lot of information from what’s now approaching 7,000 MSPs. BetterTracker’s latest feature, Betty AI, is how the company begins converting that data from a helpful data store into a real-time intelligence resource too.

Currently in beta testing with selected partners and due to reach everyone else late next month, Betty lets users get AI-powered answers to spend-related questions via natural language prompting. For example, notes CEO Kevin Lancaster (pictured), MSPs have long yearned to know not just what they’re paying for tools but what they should be paying.

“Now we have a big enough volume of transactional data where we can tell you that pretty straight up,” he says. “We can give you ranges on what you should be paying for certain products in certain categories based on your size and endpoints and revenue and what have you.”

By end of year, MSPs who use BetterTracker’s customer-facing functionality to enhance strategic relevance will be able to ask similar questions about end users.

“What should I be selling them next? Where are they overleveraged? How can I help them optimize their technology stack?” Lancaster says.

In time, though, he continues, the system will move past answering questions about spending to calling out issues like unused subscriptions, overlapping tools, contract anomalies, and approaching renewal dates unprompted.

“Betty will basically be your business adviser,” Lancaster says. “It will turn into a very proactive, ongoing, business optimization platform.”

Useful stuff for a system of record, according to Lancaster, but not a complete realization of Betty’s potential.

“The holy grail in all of this is how do you turn it into a system of action,” he says.

And the answer is by going a step beyond identifying money-saving suggestions to actually implementing them automatically. “If you can do that and create some predictability to it, you can start squeezing out two, three, four, five, ten points of margin,” Lancaster says.

BetterTracker has similar functionality coming for vendors. The system already helps them use partner reviews and spending data to benchmark themselves against competitors, Lancaster notes. Betty’s forthcoming companion Bob will add AI-powered analysis to those insights.

“We’ll help vendors understand, based on anonymized aggregate data, how they should be pricing and what their true ICP looks like,” Lancaster says. Crucially, he adds, and in a departure from how most vendors handle pricing and targeting today, Bob’s suggestions won’t be speculative.

“Everybody’s making assumptions and we can show them real, factual, real-time data,” Lancaster says. “It’s pretty eye-opening.”

Lately, it feels like a lot of what I’ve been writing about reflects a widely shared sense that there’s no time to lose with AI.

Anthropic’s feeling it, certainly, which is why it’s building AI solutions for SMBs directly before OpenAI or Google has a chance to do the same.

Pax8’s feeling it too. The marketplace recently rolled out an enablement program designed to help managed service providers become managed intelligence providers, plus a set of outsourced professional services they can sell while they’re making the transition. And just in case anyone at the marketplace operator’s recent Beyond conference failed to appreciate that completing the MSP-to-MIP journey quickly matters as much as completing it at all, CEO Scott Chasin walked onstage for his keynote to the sound of a ticking clock.

Last but not least, business leaders are feeling it. As a couple of my posts have noted in passing lately, SMBs aren’t so much receptive to AI proposals from IT providers as pleading for them, and often charging ahead on their own at damn-the-torpedoes velocity.

“They’re signing up for every AI platform they get an Instagram ad for,” says Robert Johnston, N-able’s chief innovation officer.

And then promptly losing track of them. Fully two-thirds of businesses surveyed by researchers from The Economist don’t really know how many agents they have and what they’re all doing. It’s just like shadow IT except worse, notes N-able CEO and president John Pagliuca (pictured).

“The potential outcome is even more devastating with shadow AI as opposed to shadow IT because of what the agents could potentially do,” he says. Like delete a company’s entire production database or leak customer PII.

Protecting clients from that fate is both an opening for MSPs feeling time pressure to add AI services, according to Pagliuca, and the function performed by the Shadow AI Visibility solution N-able quietly unveiled last week.

“We’ll show an MSP what the end customer is installing and what’s being used from an AI perspective within that environment,” Johnston says. Securing it all is both an immediate source of one-time project revenue and a long-term source of recurring monitoring and management fees.

“It’s a perfect tool in the MSP’s toolkit: discover it, build a project around it, launch it, and then wrap a service around it,” Pagliuca says.

Perfect, perhaps, but not unique. Kipling Secure, ShadowLock, and Nudge, among others all make similar products. According to Johnston, however, using one requires MSPs to add another item to an already sprawling tool stack.

“I don’t think they want yet another tool,” Johnston says, noting that N-able partners get the same functionality through the RMM and/or MDR solution they already use at no extra cost.

Share

Both/and versus either/or

The logic of that last thought applies more broadly to how market-leading MSP software makers are thinking about AI.

Like all businesses, managed service providers rely on systems of record for comprehensive, trustworthy data. Large numbers of them now rely on AI-powered systems of action as well to boost profits and accelerate growth. There’s strategic power for vendors in playing either role, but as ConnectWise CEO Manny Rivelo recently said here and as his counterpart at Kaseya would undoubtedly say too, the true sweet spot for software makers is to be both a system of record with massive data gravity and a system of action with autonomous AI functionality.

N-able concurs.

“We believe that putting an AI-infused system of action on top of a system of record is the right formula,” Pagliuca says. Partners are completely welcome to use N-able solely as a source of data, as its recent MCP server launch makes clear. Those looking for more value with fewer interfaces, tighter integration, and less spending, Pagliuca predicts, will get their AI from N-able too.

“We believe that provides the best path and the best experience,” he says.

At present, N-zo, the AI assistant N-able introduced in April, is the closest thing the company has to system of action functionality. That’s set to change in the future, however.

“We’re in the process of building coworkers right now,” Pagliuca says. As in agents capable of performing tasks like patching and vulnerability management mostly or entirely on their own.

“When we look at the top, call it, 10 or 15 tasks that MSPs and technicians do, our plan is to automate that leveraging AI so we can take the burden off some of the L1 technicians,” Pagliuca says. “We’re expecting to put that in preview later this year.”

You’re too kind, Channelholic readers. Almost nothing I’ve posted this year has been more read than my April story about Treeline, one of a growing crop of venture capital-backed MSPs forging a new model for success fueled by leading-edge AI. That means a lot of you read it. Yet no one gave me a hard time for failing to answer a fairly obvious question: How does a company with coast-to-coast ambitions and a strategy based on organic growth rather than acquisitions plan to handle truck rolls?

The answer, it turns out, is by making some acquisitions.

Or more acquisitions, I should say. Treeline had purchased three MSPs by the time I first wrote about it, mostly to bring experienced technicians on board and to help its AI developers refine the company’s software.

“We needed design partners. We needed training data,” explained Jeff Gaines, Treeline’s chief growth officer, during a conversation at Pax8’s recent Beyond conference. The return it got from those investments speaks for itself, he continues. Net profitability at the first MSP Treeline acquired is up 400% thanks to the company’s AI platform.

“That won’t be the case for every business. They’re all a little bit different,” Gaines says. “But even a 200% net profitability lift means we can go to market at a little bit less than our competitors from a cost basis, and we can reinvest into sales and marketing, reinvest more into product development and our engineering talent. Those are all just flywheels that we’re creating.”

With those flywheels now in motion, however, Treeline needs more than just design partners. It needs boots on the ground to deliver onsite support to clients across the country and accommodate their inevitable wish to meet with their trusted tech advisor in person occasionally rather than on Zoom.

“The pursuit is still organic growth,” Gaines (pictured) emphasizes, “but relationships in these local communities still matter very much.”

Which is why Treeline’s buying MSPs. The company has two acquisitions moving through the funnel right now, in fact, and is eyeing more.

“I’m going to be in New York all next week with our M&A person trying to find a partner out there,” Gaines says. “The Texas market’s very attractive to us too.” As are vertical industry markets not tied to specific regions.

“Can we buy an MSP that’s really strong with healthcare?” Gaines asks. “Can we buy an MSP that’s really strong with manufacturing and that has more of a national footprint?”

It can and probably will buy such companies and others too, but not a lot of them. Treeline has no intention of making dozens of acquisitions like Evergreen, Integris, and other mega mega MSPs.

“It’s part of the strategy,” Gaines says of M&A, “but I wouldn’t say it’s the star of the show.” The company’s got its sights on just a handful of metros at present and hopes to “knock those down sequentially and then go from there and maybe pull up in a year and see where we’re at.”

In the meantime, he continues, organic growth has the company on track toward its goal of tripling revenue this year. And not just any organic growth. According to Gaines, Treeline’s seeing huge demand among SMBs for what Pax8 would call managed intelligence. “A lot of the pipeline that’s coming into the Treeline brand right now is tethered to AI opportunities,” he says.

And inbound opportunities at that. Treeline isn’t running giant AI lead gen campaigns. Total strangers are calling into the company to ask about the technology for reasons Gaines can’t explain precisely but suspects has to do with the last two letters of its URL.

“We have AI in our name, so people are coming and asking about that,” he says.

The company’s hatching plans to drive demand in areas beyond AI too. Ask a stranger who the leader in payroll is and they’ll say ADP or Paychex, Gaines notes. “Ask that same person to tell you about an IT company and they would have no idea.” Treeline has marketing plans afoot for next year aimed at changing that.

“Building Treeline into a household name and making it a brand-led business is still very much what we’re after,” Gaines says. “You should just see a lot more of the Treeline name in 2027.”

Permanent capital

Before we move on, I want to belatedly introduce some nuance into my ongoing series of stories about companies like Treeline, Titan, and Shield Technology Partners. I generally call them, as I did at the top of this post, venture-backed MSPs. That’s a perfectly accurate label to attach to Treeline, which is backed by Andreessen Horowitz, and Titan, which is backed by General Catalyst.

Most of the $200 million and counting behind Shield, however, was supplied by Thrive Holdings, a unit of Thrive Capital launched last April. Thrive Capital, as the name implies, is a venture capital firm. Thrive Holdings, on the other hand, is a permanent capital firm, and for reasons the Shield folks stressed during an off-the-record conversation in April, the distinction matters.

Venture capital firms typically plan to exit startups 8 to 10 years after investing in them. Private equity firms of the kind rolling up MSPs right now are more apt to target a three- to five-year time horizon. Permanent capital firms have no time horizon. They build, buy, or fund companies in high-potential markets (like managed services, say) and then hold onto them more or less forever, provided doing so continues to make financial sense.

That’s a model with advantages for MSPs pondering an exit, Shield argues, because it incentivizes your acquirer to embrace a long-term growth mindset rather than a buy-and-flip mentality.

It has implications for someone like me writing about Shield too. Venture capital and permanent capital are two different things, so it’s past time I stop calling Shield’s funding venture capital and start calling it what it is. Though it would be nice to have some way of helping readers understand where Shield fits into the larger trend of investors from the venture universe buying into managed services.

Can I get away with calling its funding venture adjacent?

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Evergreen’s budding AI playbook

Treeline isn’t the only MSP getting a steady stream of end user calls about AI at present. Lyra Technology Group, per a recent post, is too. And as anticipated in an even earlier post, it’s experimenting with a variety of ways to satisfy that demand.

One in particular is “really taking off,” according to Ramsey Sahyoun, co-founder and M&A partner at Lyra parent Evergreen. Eight of the company’s 120-ish MSPs have begun embedding forward deployed engineers (three of Silicon Valley’s five favorite words right now) with clients to turn clumsy manual workflows into speedy agentic ones.

“It’s like a really skinnied down version of the Palantir model,” says Sahyoun (pictured). And clients, like a manufacturer Lyra supports that no longer takes orders by hand and an engineering firm that now uses AI to extract project data from blueprints and the like, are loving it.

“You’re saving the customer more money than they’re spending for managed services,” Sahyoun says. “It’s game changing if we can make it repeatable.”

Two lessons stand out already for making it work, he continues. First, talk to a client’s executives rather than line workers to identify workflows in need of automation. “It’s very top of mind for them,” Sahyoun says.

Second, don’t assume any old tech on your team will make a good forward deployed engineer. Evergreen’s been onboarding newcomers for FDE gigs using one specific employee as a model for the skills they need.

“Basically, we found we had one business where there was a person doing this really well for customers, so we interviewed him,” Sahyoun says. “We’ve been hiring based on him to a certain extent. It’s a lot of people early in their career.”

Lyra, which has hired 16 FDEs in all to date, usually assigns them to customers in pairs. “You need someone that’s a little more technical and then someone that’s a little more business process and can be a consultant to the customer,” Sahyoun says, adding that one such duo is all most MSPs need. Palantir’s FDEs can spend months onsite with the enterprises they serve, he notes.

“With smaller businesses where there are probably simpler processes, a team of two can work across a bunch of different clients.”

The AI multiple in MSP M&A

You don’t need to be deploying FDEs like Evergreen as an MSP right now, but having something in AI to offer customers is increasingly what separates winners from losers in managed services, according to Ramsey.

“You’re kind of seeing it show up in the financial results,” he says. “I’m seeing a lot of MSPs that are growing really quickly and I’m seeing a lot of MSPs that are just stagnant for the last few years.” The growing ones tend to be embracing AI. The stagnant ones tend not to be.

Not surprisingly, then, AI maturity plays an increasingly important role in the valuation process at Evergreen, which bought 33 MSPs last year and expects to buy even more in 2026.

“The biggest thing when we do the customer diligence is are they in that conversation with their customers around guiding them on AI or are they being left out of that conversation?” Sahyoun says. “If you’re getting cut out of these conversations around how we implement AI in our business, that’s dangerous, because then you could just be a commoditized help desk.”

Other, more traditional, variables factor into Evergreen’s calculations too these days. “We spend a lot of time on the revenue mix, the organic growth trajectory of the business, and we spend a lot of time on diligence in customer health and customer satisfaction,” Sahyoun says. “The way you get burned in acquiring these businesses is not retaining the customers.”

Not that Evergreen or anyone else purchasing MSPs can afford to be as choosy as they might like right now. “It’s a real seller’s market,” Sahyoun says, less because the supply of MSPs is shrinking than because demand for MSPs is rising at a time when six mega mega MSPs and some 75 private equity platforms are chasing after the same businesses. All that competition has Evergreen looking beyond the $8 to $10 million firms it normally wants.

“We’ll go as small as $3 million in revenue,” Sahyoun says, adding that its EBITDA range has widened too. When Evergreen first opened its doors in 2018 it wanted at least $2 million.

“Then we got into the space and found the slim pickings at that size and we adjusted,” Sahyoun says, first down to $1 million and then to $500,000. It doesn’t seem to have hurt the company much.

“We ended last year at a billion and a half of revenue, $250 million of EBITDA, and double-digit organic growth,” Sahyoun says.

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Are SMBs cyber ready?

ESET’s Tony Anscombe has been one of my go-tos on security for years, so it’s hard to believe it took me this long to get him on MSP Chat, the podcast I co-host. Check out his take on ESET’s 2026 SMB Cyber Readiness Index on the latest episode.

Top Down Ventures seeks frequent flyer founders

OK, so now we know what discerning buyers of MSPs are looking for these days. What about discerning buyers of vendors for MSPs?

Few know better than Chris Day, founder and chairman of Top Down Ventures, a venture investor exclusively focused on MSP software makers that recently closed its first fund at an oversubscribed $28 million, an amount big enough to get the firm in front of a lot of young software companies.

“I feel like there’s no new startup that we don’t get to look at,” Day (pictured) says.

Not surprisingly, most of those startups these days are doing something AI-related.

Actually, scratch that. All of them are.

“In the last five months, I’m not sure that we’ve looked at anything that’s not,” Day says.

“Everything is either directly on the agentic side, like workflow automation and agentic automation, or on the orchestration side or the observability side of AI.” The quality of their code isn’t what most motivates Top Down to invest, he adds.

“Code is now free,” Day says. “You can write 10,000 lines of code in five minutes.” Great founders are harder to produce, which is why founder quality matters even more than it already did at present. According to Day, the money to be made at the intersection of AI, MSP, and SMB is attracting more high-quality founders than ever.

“We’re seeing more Bay Area-style entrepreneurs, real solid engineering mindset folks, coming out,” he says.

Engineering know-how isn’t the most important attribute in a founder, though, according to Day. The more time people spend on Teams, Zoom, and webinars, he notes, the less effective those tools have become as sales vehicles.

“I think over the next few years, channel events are going to become the best way to get in front of folks,” Day says. Top Down wants people willing to log a lot of miles attending them.

“Not every founder wants to do that, but the ones we’ve invested in are all hustlers,” Day says. “They’re ready to get out there.”

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Over on The Business of Tech

You’re running out of time to register for Dave Sobel’s 2026 SMB Online Conference, which runs noon to 3:30pm ET each day June 23 to June 25. Four key facts:

• The theme is “Profitable is Enough.”

• The content is for independent MSP owners more focused on running sustainable, profitable businesses than chasing growth at any cost.

• The speakers include Jay McBain, Tiffani Bova, Arlin Sorensen, Rayanne Buchianico, James Kernan, and Amy Babinchak.

• Registration is free for members of Sobel’s Small Biz Thoughts community and just $129 for everyone else.

Details at www.smbonlineconference.com.

Also worth noting

• Lyra Cloud Services (part of Evergreen) is partnering with Anthropic to help enterprises adopt AI on AWS.

• Google has introduced the Agentic Resource Discovery Specification, an open standard intended to help AI agents discover, understand, and interact with external resources and services more effectively.

• GTIA announced six finalists for its inaugural Innovate Awards, which recognize channel organizations delivering high-impact AI solutions.

• Barracuda’s new Integrated Email Protection platform is designed to simplify cyber resilience and defend organizations against increasingly sophisticated AI-driven threats.

• The latest enhancements to CrowdStrike’s Open Gateway ecosystem are designed to position its Falcon platform as a control plane for AI, IT, and security.

• Fortinet has shipped FortiSOC, a unified security operations platform that uses agentic AI to bring together threat detection, investigation, response, and risk management.

• Keeper Security’s integration with Wiz aims to help organizations link cloud security findings with privileged access management workflows.

• Mark it on your calendar for 2027 and beyond: Coro has declared June 16^th Global Lean IT Day, an annual celebration of IT pros who improve efficiency, reduce complexity, and drive business outcomes with lean operational practices.

• MSPAlliance has added AI Risk Visibility capabilities to its Cyber Verify platform, giving organizations real-time oversight into AI-related dangers across vendor ecosystems.

• HPE’s new unified partner program features incentives, partner-led offerings, and growth initiatives designed to help partners increase profitability and accelerate customer outcomes.

• Veeam and HPE are partnering on new private cloud offerings designed to bring resilience and data protection to modern, virtualized AI infrastructures.

• AWS’s new Business Value Realization motion is designed to help partners quantify, communicate, and demonstrate the business value of AWS investments throughout the customer lifecycle.

• AWS’s new Amazon Connect Customer Competency, meanwhile, aims to help organizations deliver AI-powered contact centers experiences.

• Former CIA operations officer Erin Whitmore is the new head of Blackpoint Cyber’s Adversary Pursuit Group.

• Alex Callihan is the new CTO at KnowBe4.

• Moshe Ben Simon is the new chief product officer at Axonius.

• The new Netskope Catalyst MSP/SP Program and Partner Orchestrator platform both seek to help MSPs accelerate service delivery, simplify operations, and generate revenue more quickly.

• Three strikes and yer out. Data from Xurrent suggests 60% of end users will consider switching MSPs after three outages.

Treeline isn’t the only MSP getting a steady stream of end user calls about AI at present. Lyra Technology Group, per a recent post, is too. And as anticipated in an even earlier post, it’s experimenting with a variety of ways to satisfy that demand.

One in particular is “really taking off,” according to Ramsey Sahyoun, co-founder and M&A partner at Lyra parent Evergreen. Eight of the company’s 120-ish MSPs have begun embedding forward deployed engineers (three of Silicon Valley’s five favorite words right now) with clients to turn clumsy manual workflows into speedy agentic ones.

“It’s like a really skinnied down version of the Palantir model,” says Sahyoun (pictured). And clients, like a manufacturer Lyra supports that no longer takes orders by hand and an engineering firm that now uses AI to extract project data from blueprints and the like, are loving it.

“You’re saving the customer more money than they’re spending for managed services,” Sahyoun says. “It’s game changing if we can make it repeatable.”

Two lessons stand out already for making it work, he continues. First, talk to a client’s executives rather than line workers to identify workflows in need of automation. “It’s very top of mind for them,” Sahyoun says.

Second, don’t assume any old tech on your team will make a good forward deployed engineer. Evergreen’s been onboarding newcomers for FDE gigs using one specific employee as a model for the skills they need.

“Basically, we found we had one business where there was a person doing this really well for customers, so we interviewed him,” Sahyoun says. “We’ve been hiring based on him to a certain extent. It’s a lot of people early in their career.”

Lyra, which has hired 16 FDEs in all to date, usually assigns them to customers in pairs. “You need someone that’s a little more technical and then someone that’s a little more business process and can be a consultant to the customer,” Sahyoun says, adding that one such duo is all most MSPs need. Palantir’s FDEs can spend months onsite with the enterprises they serve, he notes.

“With smaller businesses where there are probably simpler processes, a team of two can work across a bunch of different clients.”

The AI multiple in MSP M&A

You don’t need to be deploying FDEs like Evergreen as an MSP right now, but having something in AI to offer customers is increasingly what separates winners from losers in managed services, according to Ramsey.

“You’re kind of seeing it show up in the financial results,” he says. “I’m seeing a lot of MSPs that are growing really quickly and I’m seeing a lot of MSPs that are just stagnant for the last few years.” The growing ones tend to be embracing AI. The stagnant ones tend not to be.

Not surprisingly, then, AI maturity plays an increasingly important role in the valuation process at Evergreen, which bought 33 MSPs last year and expects to buy even more in 2026.

“The biggest thing when we do the customer diligence is are they in that conversation with their customers around guiding them on AI or are they being left out of that conversation?” Sahyoun says. “If you’re getting cut out of these conversations around how we implement AI in our business, that’s dangerous, because then you could just be a commoditized help desk.”

Other, more traditional, variables factor into Evergreen’s calculations too these days. “We spend a lot of time on the revenue mix, the organic growth trajectory of the business, and we spend a lot of time on diligence in customer health and customer satisfaction,” Sahyoun says. “The way you get burned in acquiring these businesses is not retaining the customers.”

Not that Evergreen or anyone else purchasing MSPs can afford to be as choosy as they might like right now. “It’s a real seller’s market,” Sahyoun says, less because the supply of MSPs is shrinking than because demand for MSPs is rising at a time when six mega mega MSPs and some 75 private equity platforms are chasing after the same businesses. All that competition has Evergreen looking beyond the $8 to $10 million firms it normally wants.

“We’ll go as small as $3 million in revenue,” Sahyoun says, adding that its EBITDA range has widened too. When Evergreen first opened its doors in 2018 it wanted at least $2 million.

“Then we got into the space and found the slim pickings at that size and we adjusted,” Sahyoun says, first down to $1 million and then to $500,000. It doesn’t seem to have hurt the company much.

“We ended last year at a billion and a half of revenue, $250 million of EBITDA, and double-digit organic growth,” Sahyoun says.

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Are SMBs cyber ready?

ESET’s Tony Anscombe has been one of my go-tos on security for years, so it’s hard to believe it took me this long to get him on MSP Chat, the podcast I co-host. Check out his take on ESET’s 2026 SMB Cyber Readiness Index on the latest episode.

Recent coverage elsewhere told us what discerning buyers of MSPs are looking for these days. What about discerning buyers of vendors for MSPs?

Few know better than Chris Day, founder and chairman of Top Down Ventures, a venture investor exclusively focused on MSP software makers that recently closed its first fund at an oversubscribed $28 million, an amount big enough to get the firm in front of a lot of young software companies.

“I feel like there’s no new startup that we don’t get to look at,” Day (pictured) says.

Not surprisingly, most of those startups these days are doing something AI-related.

Actually, scratch that. All of them are.

“In the last five months, I’m not sure that we’ve looked at anything that’s not,” Day says.

“Everything is either directly on the agentic side, like workflow automation and agentic automation, or on the orchestration side or the observability side of AI.” The quality of their code isn’t what most motivates Top Down to invest, he adds.

“Code is now free,” Day says. “You can write 10,000 lines of code in five minutes.” Great founders are harder to produce, which is why founder quality matters even more than it already did at present. According to Day, the money to be made at the intersection of AI, MSP, and SMB is attracting more high-quality founders than ever.

“We’re seeing more Bay Area-style entrepreneurs, real solid engineering mindset folks, coming out,” he says.

Engineering know-how isn’t the most important attribute in a founder, though, according to Day. The more time people spend on Teams, Zoom, and webinars, he notes, the less effective those tools have become as sales vehicles.

“I think over the next few years, channel events are going to become the best way to get in front of folks,” Day says. Top Down wants people willing to log a lot of miles attending them.

“Not every founder wants to do that, but the ones we’ve invested in are all hustlers,” Day says. “They’re ready to get out there.”

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Pax8 wasn’t the only company to break news during its Beyond event last week. ConnectWise made an announcement too that I finally have time to discuss.

It was kind of a big deal, too, concerning the launch of what the company calls “the industry’s first predictive intelligence platform” for managed service providers, a sensible thing for it to be launching given that competitors both large and much smaller already sell AI-enabled MSP stacks and a surprising development only in that it follows the company’s acquisition of AI-powered service desk automation startup zofiQ by a mere five months.

Indeed, the only thing odd about the launch of what’s officially called the ConnectWise Platform is that the company responsible for it already had a platform, called Asio, which it’s been expanding and integrating since 2021 and which it only just recently finished porting its PSA solution onto. Is Asio, after all that time, effort, and money, dead?

Yes and no.

“This is Asio modified,” says ConnectWise CEO Manny Rivelo (pictured). “It’s version 2.0, if you will. Next-gen Asio.”

Which is to say that while huge parts of the ConnectWise Platform are brand new, substantial parts aren’t. “A lot of it is new code, but not all of it,” Rivelo says. “They rewrote dozens and dozens of modules inside the platform.”

“They” being ConnectWise chief product and technology officer David Raissipour and his team, who’ve been hard at work on that project since Raissipour stepped into the job a year and a half ago. Their mission wasn’t so much to discard and replace Asio as to accelerate its completion, increase its scalability, deepen its data lake, and equip it with a layer of agentic services it previously lacked. The result is a largely new platform with an entirely new AI-native core composed mostly of code acquired along with zofiQ in January.

“We didn’t want to bolt it on,” says Rivelo of that core. “We thought bolting it on was going to be restrictive with MCP servers and APIs and all that kind of stuff. We want access right into the control plane or the data plane of the product.”

Having that access is delivering measurable results for the hundreds of MSPs ConnectWise says are already using the new platform, including an 86% reduction in L1-to-L2 ticket escalations and a 30% or more improvement in technician productivity.

“If you’re an organization and you have 10 technicians, that’s three people. It’s material,” Rivelo says. “If you’re an organization and have 100, 200 technicians, it’s very material.”

There are even better returns to come, he continues, as the platform grows increasingly automated over time. Predictive intelligence isn’t so much what the ConnectWise Platform delivers today as the eventual destination of an ongoing five-phase genAI journey. Phase one, in which AI automates specific, generally routine tasks, began late in 2023 when ConnectWise released its SideKick copilot feature. In phase two, where ConnectWise says it is today, AI accelerates workflows with human-in-the-loop participation. The next phase is approaching fast, according to Rivelo.

“It’s where most of the work is being done by AI, but the humans are supervising it,” he says. “We believe we will be at phase three by the end of the year, not for every problem that can be fixed, but for many of them.”

Phase four, in which AI becomes fully autonomous and recursively self-improving, will take longer to reach, as will the longest-term goal, phase five, in which predictive intelligence anticipates and remediates issues before they have a chance to happen.

“Uptime, we believe, will be almost five nines,” Rivelo says.

In the meantime, the phase two version of the ConnectWise Platform remains a work in progress. Most of the agents available today automate ticketing-related workflows like triage, dispatch, and summarization but equivalents for RMM workflows are due in the next few months, according to Rivelo, who says that ConnectWise plans to port its CPQ and ScreenConnect products onto the new platform over the next several quarters as well.

“At that point in time, the full kit and caboodle will be in the product,” he says.

By the way, if the name “ConnectWise Platform” seems a touch generic…

That’s because it is, though not entirely by design. ConnectWise wanted Asio 2.0 to bear a name other than Asio to make clear how different it is from the 1.0 version, but finding something good not already in use proved difficult.

“We came up with every name that we felt was creative, and there was always somebody else out there that had claimed it or was using it,” Rivelo says. The easiest way to name the ConnectWise platform without encountering trademark disputes turned out to be naming it the ConnectWise Platform.

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System of action, system of record

Needless to say, shipping the ConnectWise Platform, even if it is still a work in progress, is an important milestone for a company previously at risk of disintermediation by an emerging crop of AI-native automation startups theoretically capable of converting ConnectWise PSA in particular from the most critical application in a user’s stack to an out-of-sight-out-of-mind supplier of data to far more strategic applications. That’s a fate Rivelo refuses to suffer.

“We want to be a system of action,” he says. The ConnectWise Platform and its increasingly autonomous functionality position Rivelo’s company to be one, like Thread and Pia, and to be a system of record like Lexful as well.

Remember Lexful? The other headline you could easily have missed last week amidst all the news from Pax8 and ConnectWise is that the AI-native documentation vendor has landed $7 million of fresh seed funding in a round led by Top Down Ventures and York IE. That’s a flash in the pan compared to the $400 million secondary raise NinjaOne disclosed the next day, which increased its valuation from $1.9 billion early in 2024 to an astonishing $12.3 billion now, but a big deal nonetheless for a company just four months out of stealth mode trying to build the definitive data repository for managed services AI.

Rivelo believes the system of action functionality ConnectWise has just introduced gives it an edge over companies like Lexful (which he didn’t explicitly name) building chiefly around data gravity, just as the data gravity ConnectWise already has gives it an edge over system-of-action vendors dependent on someone else’s system of record.

“We have a native advantage in that the data is right there,” he says. “It’s embedded. The system itself can help you understand how to optimize your business.”

Chris Day (pictured), chairman of Top Down and CEO of Top Down portfolio holding ScalePad, wonders how big an advantage ConnectWise really enjoys as a system of record, however. Something like half the knowledge you need to run an MSP resides in applications like ConnectWise PSA, he says, but the rest is in the Microsoft cloud, HubSpot, Docusign, QuickBooks, and apps from MSP favorites like Huntress.

“None of us is going to have all the first-party data,” says Day, and that includes ScalePad. “You might have the service data, you might have the RMM data, but MSPs are not necessarily going all one vendor.” Lexful’s early momentum merited more seed capital in part because it’s attempting to build a superset of first-party data and make it accessible to agents, he continues, which could put it in an enviable position as the agentic AI “arms race” among heavyweights like ConnectWise and newcomers like GenticFlow unfolds.

“The more integrations and the more data overlay you can do will be where the best systems of action will happen,” he says.

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More on the ConnectWise Platform coming soon to MSP Chat

The next episode of the podcast I co-host will feature further discussion of this story. Enjoy our episode from Pax8 Beyond in the meantime!

The last time I spoke with Chance Weaver, Pax8’s global vice president of AI adoption, was in November, about five months after the company first began urging managed service providers to remake themselves as managed intelligence providers at its 2025 Beyond event. How many MSPs out there qualify as MIPs today, I asked him. Hard to know, he answered, but just 13 of roughly 600 partners he’d interviewed personally arguably cleared the bar.

Has the number risen since then, I asked Weaver at this year’s Beyond conference last week? Yes, he replied.

To 17.

Let’s be clear, the issue isn’t lack of desire among MSPs to join those trailblazers. There were over 3,500 people from some 30 countries at Beyond this year, every last one of whom knew going in that Pax8 would be serving them MIP for breakfast, lunch, and dinner multiple days in a row. Whether to offer AI services, per several recent posts here on Channelholic, is no longer at issue for MSPs.

“The challenge is how to,” says Lane Brannan, Pax8’s EVP and general manager for the Americas.

It’s a steep challenge. MIPs need technical know-how and consultative muscle most MSPs lack at present, not to mention an entirely new lineup of repeatable, scalable solutions to offer. That’s way more than an evolution of technology, observed Craig Donovan (pictured), Pax8’s chief experience officer, during a Beyond keynote appearance.

“It’s a fundamental shift in how all of us have to operate,” he said. “It requires a discovery conversation that you know how to run, and someone on your team that can do process discovery and mapping. It means having a playbook for what happens after the sale and an execution capability that many of us are still building.”

Pax8 is well aware that acquiring all of that will take time. It also knows that time is a commodity in short supply for both it and its partners right now. The window of opportunity to get in on AI may be wide open today, but it won’t be forever. That’s the thing about windows, Donovan noted.

“As fast as they open, they can close just as fast,” he said, and this particular one’s no exception. “The SMBs that your clients are competing against, they won’t wait.”

Indeed, they aren’t waiting. “Customers are coming to us all the time, constantly, every day” for AI solutions, says Elliott Hyman, CEO of mega mega MSP Lyra Technology Group, on the latest episode of the podcast I co-host. Lyra’s begun hiring AI-focused forward deployed engineers of the kind Palantir made famous to meet that demand as a result, in no small part because if it doesn’t give AI-hungry clients what they want the AI consultants already calling into its accounts will.

Or maybe Anthropic will. The AI giant recently announced a $1.5 billion venture aimed at bringing AI solutions directly to midsize businesses, not because it aspires to be a player in the services game (it doesn’t) but because it’s under massive financial pressure, has an IPO approaching, and can’t wait around for the channel to catch up.

A lot of people, in other words, are feeling an urgent need for speed with respect to AI right now, including Pax8, which is why the company sought to strike a delicate balance with the would-be MIPs in its audience last week. Hurry up, it told them, but get it right.

The Managed Intelligence Provider Program Pax8 launched during the show targets the get it right part. Available free to the company’s partners, the new enablement offering walks MSPs step by step by step through the journey to becoming an MIP, whether their ultimate goal is to be a broker of third-party agents or a builder of custom agentic workflows.

That journey’s a long one, however, and there are no shortcuts along the way, so Pax8 also introduced Managed Intelligence Services, a set of white-label offerings delivered by Pax8 itself on behalf of partners, to help with the hurry-up part of the equation in the meantime.

“All of you will get there. It’s really a question of when,” Donovan said. “And I think when it’s a challenge of timing, of roadmap, sometimes you just need a bridge. You need a team there to support you while you cross the chasm, and that’s why we built Managed Intelligence Services.”

Together, MIS and the MIP Program form Pax8’s answer to the problem statement everything the company said at Beyond this year scrolled up to: The power of AI is real, the market for it is enormous, bringing it to SMBs is hard, and your customers won’t wait while you figure it all out.

“And in a world that no longer waits, the advantage belongs to those who don’t either, those who turn agents into outcomes and intelligence into industry,” said Scott Chasin (pictured), Pax8’s CEO, during a Monday keynote. “This is the race to managed intelligence, and the clock is already ticking.”

MSPs have the inside track in that race, Donovan noted, because they have something neither those AI consultants nor whatever Anthropic’s building can match.

“It’s your history. It’s your relationship. It’s the fact that when something breaks, your clients call you,” he said. It is in a word the trust (my word of the year for 2026) that clients place in their MSP to guide them through whatever IT throws at them next.

“That’s your moat,” Donovan said. “In fact, I’d argue that is the moat, the one that matters. But it only stays a moat if you protect it.”

Like, right now.

Moonshot

To get a sense for just how heavy a lift becoming an MIP is, put yourself in Rex Frank’s shoes for a while.

Few people are more qualified than Frank to gauge the difficulty of that process. A former IT provider and long-time MSP consultant, Frank has been vice president of Pax8 Academy, the company’s partner education unit, since 2021. His was the team on point for devising the MIP Program’s training content, and Frank knew it would be hard work from the moment he first heard Chasin commit Pax8 to turning MSPs into MIPs. So much so, in fact, that he immediately thought back to a similarly ambitious proclamation by another chief executive, JFK.

“I felt like the engineers probably felt when Kennedy got on stage and said, ‘We’re going to go to the moon in this decade,’” Frank (pictured) recalls. “It was kind of a feeling like, ‘How are we going to do that?’”

At the time, remember, no one even knew what an MIP was. How are they staffed? What do they sell? How should they sell it? How should they price it? The parallels to the Apollo program seemed so apt to Frank that he asked everyone in the Academy group to watch a television mini-series about it, because designing the first MIP curriculum would be a little like designing the first space suit.

“The answers don’t exist,” Frank told his team. “We need to go invent them.”

The way they did so calls to mind the “square peg in a round hole” scene from Apollo 13: gather a lot of smart people, assemble everything available to start from, brew a lot of coffee, and get going.

In Pax8’s case, the smart people involved were its own employees and MSP members of its AI innovation partner community, followed eventually by 125 MIP Program trial enrollees. They had a lot to do. In addition to everything they created from scratch, the team had to update MSP-era materials about nearly 150 internal processes for the MIP era. And for reasons we’ve already covered, they needed to do it, per Gene Kranz in the movie, rapidly.

“The speed at which all of this needed to be revised was sometimes mind numbing,” Frank says.

Technical topics were definitely part of the agenda. Frank’s been encouraging MSP owners to focus on business rather than technical topics for years, but AI’s upended that advice. MIP owners need hands-on experience building and deploying agents, he contends.

“The owner needs to go back to being tech-curious and doing the technical work,” he says. “They’re going to have to step back to some of their roots where they were the ones doing the work so that they could define what their offering was.”

For most MSPs, however, the harder task will be learning to host a consultative client dialogue. Frank has an exercise he likes to perform with MSPs where he puts a pencil, a cheap pen, and a fancy pen on the table and asks them to sell him one. Way more often than not the MSP picks something up and start talking about its features.

“About 20% of the time, I get the answer I’m looking for, which is somebody starts asking me questions about what I would use a writing instrument for,” Frank says. “I’m looking for them to dig into my pain.” If they do, he tells them he often has to start all over on something he’s been writing because he made a mistake.

“The A+ answer is to sell me the pencil because it has an eraser,” Frank says.

The MIP Program spends an appropriately large amount of time familiarizing participants with that kind of needs discovery process. If it succeeds in teaching a bunch of engineers to think like McKinsey consultants, it will have done something long overdue in the channel.

“As a former MSP founder, I like to say that it’s the conversation we always wanted to have but never really did,” Weaver says. “Well, now we have to.”

Hear the story from Frank himself

He tells the tale of building the MIP Program’s content on the latest episode of MSP Chat, the podcast I co-host, which features an interview with Elliott Hyman too. Check it out here.

Building the tool continuum

Skills, I suspect, will ultimately loom larger than tools in what makes for success in managed intelligence. But tools matter too.

“One of the clearest signals we’ve heard from partners is AI is not the problem,” said Nick Heddy, Pax8’s president and chief commerce officer, during a kickoff morning keynote. “The access point is the problem. You know what you want to do, you can picture the workflow, you can see the outcomes, but assembling the right agents, integrating the right tools, and managing the deployment seamlessly, that’s where it usually breaks down.”

As it happens, I touched on a piece of that problem myself here just a few weeks ago. Like it or not, I wrote, MSPs need to master the byzantine complexities of managing token costs before customers start screaming at them about out-of-control AI bills, and it sure would help if there was an MSP-oriented tool to assist them.

It’s a fairly obvious thought, so I probably shouldn’t be surprised that Pax8 was far enough ahead of me on it to have such a tool ready to ship at Beyond. Called the Agent Gateway, it’s aimed squarely at the issue I discussed not only a few weeks ago but also a few weeks before that.

“Right now, there’s not really a straightforward way for our partners to monetize token consumption at a client-by-client level,” said Chief Product Officer Libby McIlhany (pictured) during a keynote appearance. The Agent Gateway, she added, is designed to fill that gap.

“Every call is openly metered and attributed to the right client, you see exactly what each client spends, and every token lands as a line item on the same Pax8 invoice that you’re already using with margins that you choose.”

“Model routing” functionality helps steer agents to the right LLM for the work they’re doing based on real-time price/performance calculations as well, while a credential vault keeps API keys accessible yet secure. The system does health monitoring and compliance reporting on agents too, and automatically assigns them Microsoft Entra IDs.

The goal is to give MSPs the channel-friendly, comprehensive agent oversight tool no hyperscaler, distributor, or frontier lab offers them today. “Our central argument is that AI agents need to be governed, deployed, and monetized at scale across hundreds of small business clients simultaneously, and we’re not seeing anyone do this in the market today,” McIlhany said.

The Agent Gateway was just one of three products Pax8 discussed during Beyond. The Agent Store the company previewed under a different name a year ago officially went live during this year’s show, with a growing list of offerings from multiple vendors, and the company also showcased a forthcoming orchestration and commercialization platform for rolling out home-made agents, something MSPs do on a one-off basis today, according to McIlhany.

“We are building them a platform that enables them to build an agent once and deploy it across their entire client portfolio, with each client in a structurally isolated tenant,” she says. “What that means is it handles fleet-level governance, per-tenant budgeting, step-level observability, and commercial infrastructure for pricing agents by subscription, usage, and outcome.”

Together, McIlhany notes, the Agent Store, Agent Gateway, and Orchestration/Commercialization platform (final name still TBD, thankfully), form a continuum for MSPs at various levels of agentic maturity. Agent Store listings are your entry point, she says.

“They’re how you introduce AI with a recurring revenue line that starts immediately. The Agent Gateway is what makes that scalable and yours to own. Every model those agents run on, every token they consume governed by client, securely vaulted, and billed on the invoice you already send. And the Pax8 Agent Orchestration and Commercialization platform is what turns all of that into a business you own.”

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AI Switzerland

Questions worth asking about SaaS are often worth asking about AI as well. Why should people get either one from Pax8, for example, when they can get it straight from Microsoft or AWS instead?

The answer with respect to SaaS, according to Pax8, is that we connect you to multiple hyperscalers at once. The same logic may well apply to AI, according to one of my favorite bloggers in a recent post.

“No enterprise is going to run only Microsoft’s agents. Or only Anthropic models. Someone has to govern the multi-vendor mess (the parallel was multi-cloud). Set policy across all of it, clear actions across all of it, hold the audit trail across all of it, etc. Become the ‘single pane of glass.’ The incumbents can’t credibly be neutral here (Microsoft governing Salesforce’s agents? Good luck). That neutral seat is a super strategic position in software right now.”

As far as agents for MSPs go, Pax8 has that seat to itself at the moment.

Four final notes

1. Prepare your farewells for per-user pricing. Consumption-based pricing of the kind Pax8’s Agent Gateway’s designed to support is one of several AI-era revenue models MSPs are experimenting with at present, along with outcome-based schemes and others I’ve written about. The one approach pretty much everyone agrees won’t work before long is the user-based model most MSPs rely on today, because the better AI gets, theoretically, the fewer users their clients need.

Except that “before long” might be sooner than we all thought. According to Hyman, several Lyra Technology Group MSPs are already serving “healthy growing businesses with declining headcounts.” That’s something they’ve been anticipating for a year, he adds, but never encountered before. “We’re starting to see it.”

2. No signs of the SaaSpocalypse. AI is where Pax8 will make money; SaaS is where it does make money. So if AI is eating into SaaS spending, you’d expect Pax8 to know about it early. So far, it’s seeing no signs of the slowdown Wall Street fears is coming.

“We’re growing at the rates that we’ve grown in the past,” Brannan says.

3. Partnering with AI partners will be an option for Pax8 MSPs before long. The MIP Program is Pax8’s go-to resource for MSPs who want to build an agentic practice. Its equivalent for MSPs who don’t want to build an agentic practice but do still want to be relevant to their customers is a forthcoming program that will let partners who lack AI know-how outsource services to partners who have it. Weaver’s team is hard at work on it now, and apparently still has a ways to go.

“We have to understand both from an opportunity perspective and a delivery partner perspective what that looks like, what the rules of engagement are, how we can automate the process and take any human intervention out of it so that there’s no bias and that all the partners have the same level of opportunity,” Weaver says. “I hope that we have something that’s actionable by the end of the year.”

4. More proof that MSPs matter at Microsoft like never before. Pax8 immediately saw Microsoft Agent 365, the software maker’s control plane for AI agents, as a potentially useful tool for MSPs the moment the product debuted last November. If, that is, it had a few extra features.

“It was governance, it was security, it was deployment across multi-tenancy, it was controls where you could set policy for multiple agents,” among other items, Heddy says, all of which Pax8 captured in a spec sheet and sent directly to Microsoft last December. Somewhat astonishingly, Microsoft shipped a version of Agent 365 based on that spec sheet scarcely six months later.

“This is the first time I’ve seen Microsoft deliver that fast,” Heddy marvels.

It’s consistent, however, with a larger pattern I’ve written about before suggesting that people at very senior levels within Microsoft have belatedly realized they need MSPs to grow Microsoft cloud adoption among SMBs, and are investing accordingly.

“There are now big teams of people that are dedicated to small business, and I believe that they’re listening to us,” Heddy says. “That’s an amazing thing.”

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Over on The Business of Tech

Host Dave Sobel is just nine days away from the start of his 2026 SMB Online Conference, which runs noon to 3:30pm ET each day from June 23 to June 25.

The content, from luminaries including Jay McBain, Tiffani Bova, Arlin Sorensen, Rayanne Buchianico, James Kernan, and Amy Babinchak, is built around the needs of independent MSP owners more focused on running sustainable, profitable businesses than chasing growth at any cost.

Registration is free for members of Sobel’s Small Biz Thoughts community and $129 for everyone else. Details at www.smbonlineconference.com.

Also worth noting

• NinjaOne’s $400 million secondary has raised its valuation from $5 billion to $12.3 billion in just 16 months.

• AI system of record vendor Lexful has raised $7 million of its own in a seed round led by Top Down Ventures and York IE.

• MSP-aaS’s outsourced tool and service stack for would-be MSPs, which I’ve written about previously, is now available on the Pax8 marketplace.

• Kaseya has introduced MSP Success, a unified growth ecosystem that combines enablement, services, resources, and strategic guidance intended to help MSPs scale their businesses worldwide.

• Guardz has introduced Agentic Reporting, a new capability designed to provide AI-generated operational and security insights.

• Inforcer’s new Threat Detection and Response service aims to unify left of boom and right of boom security management within a single platform.

• ConnectSecure has launched Patch 360, a patch management solution intended to give MSPs centralized and automated control over software patching across customer environments.

• JumpCloud’s Agentic IAM service is now available on Google Cloud.

• Field Effect has joined CrowdStrike in adding an AI detection and response product to a broader security platform.

• Cato Networks has introduced an integration hub and technology partner program.

• Cavelo has unveiled an AI Security Analyst that uses AI to help MSPs rapidly identify, prioritize, and address customer security risks.

• FlexPoint’s new agents are designed to automate MSP back office operations like billing, collections, payment reconciliation, and financial administration.

• Sigh. 76% of organizations do not fully govern or monitor non-human identities, according to new data from Netwrix.

• Axonius has extended its asset intelligence capabilities into AI security, beginning with support for Claude Enterprise.

• Cloud security trails AI security as a training priority for businesses, but not by much, according to the latest research from ISC2.

• Rubrik’s platform is now available as an AI agent, allowing users to interact with Rubrik through natural-language workflows and agentic AI environments.

• Rubrik has also launched Rubrik Agent Cloud for Claude Code, extending cyber resilience and data protection capabilities to AI-driven software development workflows.

• TeamViewer’s Digital Employee Experience platform has achieved FedRAMP In Process status.

• Fahad Qureshi is the new CRO at Devicie, who you’ve met here before.

Here’s an irony for you. My job brings me to Las Vegas all the time and I don’t gamble.

Not much, anyway, and certainly not as much as MSPs must in these still early days of AI. As the folks at Nerdio and The ASCII Group can tell you, more or less all of them know they should add customer-facing AI services by now. The hard part is determining which ones.

“Everyone is calling this the era of AI and they’re not wrong, but there’s a big difference between naming an era and determining what to build in it,” observed Colin Blair, vice president of cybersecurity and emerging technologies at distributor D&H, during the company’s NEXT+ Summit in Austin, Texas last week.

It’s a question made harder by the constant evolution of AI technologies, harder still by the endless variety of ways to use those technologies, and perhaps hardest of all by the fact that few of the services you can invest in today will pay off for you today as well.

Indeed, by Blair’s calculations, there’s some $2.61 trillion of capital committed to AI at present, a giant number up $100 billion just in the last 45 days. Yet only 20 to 25 percent of that money’s committed to services, and most of that will flow to global system integrators like Accenture and Deloitte.

“How much of that spend is reaching you? How much of that spend is reaching your customers?” asked Blair (pictured) of the SMB and mid-market IT providers in his audience. “The honest answer is not a lot.”

Or rather, not a lot yet. “It’s coming,” Blair added.

Predicting where it will land when it arrives, however, is a bit like placing a high-stakes wager involving plenty of risk and uncertain reward right now. MSPs who make the right bet on the right services will be building their way to a prosperous future. Those who make the wrong bet on the wrong services, Blair warns, will be building their future on sand.

“And sand does not compound,” he says.

End users, not coincidentally, are playing the same game at present. Whether to invest in AI is not at issue. How best to do so very much is.

“Interest is everywhere. Scale is rare,” writes Forrester in a recent blog post. “The reasons are stubbornly consistent, and they start with money. ROI uncertainty traps enterprise ambition in pilot mode because most companies can’t justify production beyond narrow efficiency gains.”

In reality, however, most businesses are less uncertain about ROI on AI spending than unhappy about it. Only 29% of organizations surveyed by enterprise AI platform vendor WRITER have gotten significant return on their genAI investments so far and nearly 70% of executives polled by HR software maker Globalization Partners are prepared to scale back next year’s AI budget if this year’s goals remain unmet.

“Everybody in the world is struggling to quantify AI ROI,” observes John Harden, founder and CEO of AI transformation startup Lemhi.

As regular Channelholic readers know, Harden is a one-time MSP and former founder of Saaslio, a SaaS management vendor acquired by Auvik in 2022. His new venture, officially launched last week, is based on insights gleaned from 100 conversations with MSPs in a roughly 120-day span. Over and over again, he says, people referenced two ways they’re gambling on AI services at present. One is performing AI readiness chores like cleaning data, implementing security measures, and drafting acceptable use policies for customers. The other is designing and deploying custom agentic AI solutions for them.

“They’re saying, ‘let’s find a $200,000 workflow in your business. Let’s charge you $40,000 to solve it, and then we’ll get maybe a $4,000 a month retainer after that to keep maintaining it,’” Harden says.

Both motions are producing good project revenue, but only for the subset of customers willing to pay either for decidedly unsexy prep work or complex, and therefore expensive, automation work. Neither looks to be a good bet for achieving sustainable AI success.

The Lemhi moment

Which brings us to the “Lemhi moment” MSPs find themselves in, according to Harden, and the inspiration for his new company’s name and mission. The name is a reference to the Lemhi Pass, the point in their journey across North America where Lewis and Clark, expecting swift passage through the Rockies to the Pacific, discovered “immence ranges of high mountains still to the West of us” instead.

“The maps were wrong,” Harden (pictured) explains during an interview on the podcast I co-host, which left the two explorers with a decision. “They could either traverse the mountains moving forward and chart a new path or they could turn back and go home.” They moved forward, obviously, and Lemhi’s mission is helping MSPs who’ve followed flawed maps to sluggish, non-recurring AI revenue do the same.

“We believe that the industry has to chart a whole new path forward,” Harden says.

Lemhi’s platform is designed to guide MSPs along that path, prescriptively and automatically, toward an end state in which they’re rolling out client-facing AI services “repeatably, responsibly, and at scale,” Harden says. The scale part, he continues, comes from the solution’s exclusive focus on AI-enabling the Microsoft software almost every SMB uses. The responsibly part comes from ensuring that every AI rollout begins with governance, security, and policy setting.

But then doesn’t end there. As we’ve seen, governance and security on their own leave business owners yawning, so Lemhi makes them a relatively small part of a much larger conversation about something far likelier to excite customers—making and saving money.

Engage, Lemhi’s first solution module, is designed to provide a repeatable structure for holding that conversation. The system guides a client’s leaders and employees through a survey process that (like similar products) covers technical readiness but also (unlike competing products) a wide range of non-technical topics, such as how comfortable they are with AI at present, how often they use it, and how they’d like to use it in the future.

“Would you benefit from more research, or having automated research? Would you benefit from being able to do Excel insights and analysis quicker? Would you benefit from being able to recap your day and have meeting recaps sent to you on the fly?” Harden says.

Most importantly, he continues, the survey asks users to estimate how much time the items on their AI wish list would save them. The goal is to establish a set of baseline metrics and ROI targets specific and compelling enough to get business managers interested. The output is a detailed roadmap that begins with technical readiness, governance, and security but moves quickly past them to an implementation and training process informed by best practices from the likes of McKinsey and Forrester.

“We have a 30/60/90 day sprint of work to clean up and then we’re going to help you with an adoption sprint,” Harden says.

That in turn is followed by a regular series of “re-pulse” surveys to assess usage, measure impact, and provide advice for increasing both. If Lemhi’s software and the MSPs using it both do their job right, the client should see measurable productivity gains worth paying handsomely for.

“Would you give me $3,000 a month if I could help activate nine hours a month for every one of your employees?” Harden asks.

Or how about nine hours a week, which is what the business leaders surveyed by WRITER say their most AI-savvy employees are saving on average, 4.5x the two hours a week AI laggards are freeing up. Just over half of all laggards and leaders alike at the big businesses Boston Consulting Group surveyed recently are saving eight hours a week, and 67% report higher job satisfaction. MSPs who bring similar results to SMBs can charge appropriately for them.

“The margin should be really high,” Harden says.

And it’s ongoing. After that first roadmap is complete, Harden says, MSPs can offer clients virtual chief AI officer services. “You’re coming in and you’re offering a monthly or quarterly session dedicated to AI and strategy with their business.” Compass, a forthcoming Lemhi module due to reach early design partners this summer and everyone else in the fall, is designed to facilitate those engagements.

“It’ll be the natural extension of continued ROI visibility, continued roadmap implementation, continued governance and security over the whole AI transformation journey,” Harden says.

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One last note

And an apt one as I make my way today to Pax8’s 2026 Beyond conference, where agents and agent marketplaces are sure to figure prominently on the agenda: None of what Lemhi’s building involves agentic AI.

“I believe deeply in the fact that there is no agent that you can build for any small or medium business today that will outweigh the value created if you activate the entire workforce with AI,” Harden says.

More about Lemhi straight from its founder

The rest of that interview I referenced with Harden is available on the latest episode of the MSP Chat podcast. Ready when you are right here.

D&H rides the advanced solutions train

Lemhi may not be thinking much about agentic AI yet, but D&H sure is.

“This is what’s emerging for us,” Blair says. “62% of organizations are experimenting with AI agents. There’s a lot of work to be done here.”

It’s going to be a while before most businesses and IT providers are ready to do it though. “Three-quarters of enterprise leaders tell us they’re adopting agentic AI. Only a small minority have it running in meaningful production beyond ‘agentish’ chatbots, and true scaled multiagent systems are rarer still,” writes Forrester in a recent blog post, mostly because the technical sophistication and organizational readiness necessary to implement them are equally rare.

“The technology is a runaway train,” the post says. “The enterprise is the heavy load it has to pull.”

Fortunately, D&H has plenty of room to make money in big, fast-growing markets like cloud computing and security in the meantime. Indeed, the whole point of NEXT+ was to get partners excited about joining the distributor’s effort to expand beyond its traditional focus on PCs and conference room gear into advanced solutions as well.

“When you look at D&H for the last 15, 20, 30 years, we’ve really focused on selling to VARs and system integrators,” says Adam Crockett (pictured), senior director of services in the company’s Advanced Solutions+ business unit. “We’re kind of known as the end user compute distributor.”

It’s been a great role to play in the channel too. “We’ve grown the company over the last 10 years from a little over $3 billion to over $7 billion, which is 3x the growth of North American distribution,” said Jason Bystrack, D&H’s SVP of cloud and Advanced Solutions+, during a keynote presentation, noting that the company grew $260 million more just in May, the first month of its new fiscal year. D&H wants to extend that momentum now from the front office to the back office.

“When it comes to distribution and total available market, we’ve had a very large share of the desktop, laptop, and end user compute space, but we’ve had a small market share when it comes to advanced solution technology manufacturers,” Crockett says. “All of our growth over the next 10 to 15 years is going to come from advanced technology vendors, because that’s where we’re so under indexed.”

Several of those vendors, including AMD, Extreme Networks, Fortinet, and HPE, made general session presentations at NEXT+. D&H itself made a point of underscoring its ability to wrap assessment, implementation, and management support around the products those companies sell for partners new to them.

“The mid-market partners we’ve grown up with and helped mature along the way may not have a deep bench of technical resources in a specific product line,” Crockett notes. “We just want to help them be able to deliver on the associated services that would go along with an advanced solutions purchase.” The idea, he continues, is to help partners add profitable new revenue streams faster and with fewer upfront investments by embracing a “borrow, not build” model.

“The professional services growth that we’ve had in the last couple of years has been based on that,” Crockett says. “Borrow our facility, we’ll do the pre-deployment work. Borrow our technical resources, we’ll do the onsite installation.”

Helping partners enter unfamiliar markets rapidly is a priority for D&H in areas beyond services too.

“We need to be able to provide them vendor-agnostic consultative pre-sales enablement, technical resources, people who know the OEM programs, how to apply for the best economics, how to make sure they take advantage of all their backend programs and post-sales service and support,” Crockett says, “all the things they need to learn about manufacturers that are new to them.”

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Remember that whole managed services thing?

Interesting fact about those end user compute partners at NEXT+: A lot of the same ones intrigued enough about advanced solutions to make the trip to Austin are also intrigued about managed services. Blair said as much during his keynote while citing data showing that 75% of IT spending is now on operational versus capital expenses.

“If I would have shown you the OpEx to CapEx ratio a couple of years ago, this would have been swapped. So it would have been 40% OpEx and 60% CapEx,” he said. As a result, he added, “many of you that were in the traditional VAR/resell model are becoming MSP-like. It’s because you’re paying attention to how your customer is buying.”

And still learning how to accommodate that demand, he could have added, which is why D&H recently launched its Success Path to MSP Toolkit, a series of live and on-demand webinars offering detailed guidance on the nuances of launching a managed services practice.

“You don’t want to build out a service desk and a NOC or a SOC without understanding how you need to thoughtfully consider changing compensation models for your sales organization to drive that behavior” for example, Crockett says. “You’ve got to be a little more methodical, a little more coordinated about making that leap.”

The kit includes additional information about automating and scaling managed service offerings, adding managed security capabilities, zero trust, cloud security, and more.

“We found that many of our partners who are somewhere on that journey of transitioning from more of a VAR or a system integrator into becoming a managed service provider need a kit that brings all these fragmented tool sets and processes and different software options out there into some sort of coordinated discussion,” Crockett says.

The toolkit’s useful in a further, less intentional way as well for those of us who’ve been covering the shift from VAR-based business models to managed services for over two decades now. Cycles like the AI one just getting underway take a very long time to play out, it shows. There will probably be partners gratefully consuming Success Path to AI Toolkits many years from now.

Over on The Business of Tech

Host Dave Sobel is getting ready for his upcoming SMB Online Conference, which runs noon to 3:30pm Eastern each day June 23-25.

The theme is “Profitable is Enough,” the content’s aimed at independent MSP owners more focused on running sustainable, profitable businesses than chasing growth at any cost, and the speakers include Jay McBain, Tiffani Bova, Arlin Sorensen, Rayanne Buchianico, James Kernan, Amy Babinchak, and Sobel himself.

Registration is $399 for the general public and zero for members of Sobel’s Small Biz Thoughts community. Learn more at www.smbonlineconference.com

Also worth noting

• GTIA Presents, a brand-new podcast from GTIA, bills itself as the place “where member insight turns resources into real business results.” New episodes on YouTube and wherever else you get your pods.

• Mere weeks after its launch, Veeam’s added new operational privacy, governance, and control capabilities to its DataAI Command Platform.

• The 20 MSP, which you’ve encountered here on Channelholic before, has acquired four more MSPs, raising the total size of its portfolio to 48 companies.

• Jim Fanning is the new (and first) president of Hatz AI.

• Cisco’s new Cloud Control platform is designed to help organizations build, manage, and secure AI agents that can operate and defend critical IT infrastructure at machine speed.

• Speaking of Cisco Cloud Control, Auvik’s network intelligence capabilities are now available to AI agents in that platform.

• Portal26 now offers a free version of its AI governance, security, and token control platform for business users of Anthropic’s Claude.

• Yet more agent control: Noma’s new Agentic Access Control is designed to help organizations manage and secure AI agents and MCP servers across the enterprise.

• Insight’s new Managed Exposure Defense service combines continuous threat exposure management, patch execution, XDR, and 24x7 monitoring.

• More reasons to make AI governance a priority, from Ivanti: While 85% of organizations have AI policies or oversight mechanisms in place, only 42% say accountability for AI decisions is clear, and just 24% say AI policies are followed very consistently in day‑to‑day work.

• Bad news from IRONSCALES: Phishing now costs businesses a little under $52,000 a year per security analyst. Good news from IRONSCALES: AI-powered defenses cut the cost of dealing with a phishing email by 12%.

• Benji Pays has a new integration with Elavon Payment Gateway designed to give users additional payment processing options.