Building AI-powered solutions isn’t the only way for MSPs to become MVPs, but it’s certainly one of them, and ScalePad CEO Chris Day’s struck by how few MSPs are doing it at present.
“It’s going slower than I expected, and I think the risk of that is that the SMBs just figure it out themselves, which is not good,” he says.
It’s a legitimate possibility, too, because businesses of every size (not to mention their impatient employees) are moving on AI with or without their IT providers, according to Jimmy Hatzell, CEO of Hatz AI, an AI platform provider for MSPs.
“The market has really accelerated,” says Hatzell. “All of a sudden most end customers have one or two people who have started doing stuff with AI, and maybe some companies are doing even more than the MSPs are.”
Hatzell’s pretty sure he knows why. Getting into AI is a lot easier for end users who don’t understand the complexities involved than for MSPs who do.
“There’s a lot of work to do,” he says.
It’s been a while since you’ve heard from Hatzell here, and not for lack of trying on my part or his. He’s been a busy guy. Launched early in 2024, Hatz AI recently climbed past 1,000 partners and is on track to nearly quintuple revenue this year. To accommodate that growth, the company has hired a new president, AWS and Databricks veteran Jim Fanning, to help scale the business and leased a new, bigger headquarters it will soon occupy in Manhattan’s Flatiron District.
So if you want time with Hatzell these days, you pretty much have to corner him in his office, which is exactly what I did during my trip to New York for Day’s recent book launch. Except that Hatz AI has so outgrown its current office that there’s literally nowhere for visitors to sit, so we met in Madison Square Park instead.
Hatzell has no doubts about what accounts for his company’s momentum, especially among the 10-50 employee MSPs that are its fastest-growing partner segment. Building an AI practice involves answering a lot of deeply unfamiliar questions.
“What models am I supposed to use? How do I make it so I never have to think about what model I use and it just works? How do I make sure I’m secure? How do I make sure I’m not getting surprise bills that are way too big and nobody knew about?” Hatzell asks. “Our expertise is helping small and mid-sized businesses and MSPs figure that out.”
It’s a job that OpenAI, Anthropic, and the hyperscalers won’t take on and that few MSPs would entrust them with even if they did, according to Hatzell. “You don’t want to be locked into a single provider,” he says, noting that Hatz automatically routes tasks to the most affordable yet capable option on a continually updated list of closed- and open-source models.
“We’re scoring and judging new models and new tools on how they perform for small business use cases all the time,” Hatzell says.
All of which helps MSPs gain the control they want and too often lack over AI, he adds, and yet is arguably less responsible for the company’s growth than the help it offers with the biggest AI-related challenge of all right now for MSPs.
“Everyone’s trying to figure out how we go to market,” Hatzell says. Offering the basics, he continues, is an increasingly inadequate answer.
“We’re maturing past the point where the value proposition of ‘we’re going to secure your AI’ is good enough,” Hatzell says. Businesses don’t just want AI, he notes. They want AI-powered digital labor. “How to do that and how to use [AI] for that is not obvious.”
Hatz’s AI solution building tools are designed to make the process easier by allowing smaller MSPs to automate customer workflows without help from the forward deployed engineers that bigger providers like Shield and Evergreen are hiring.
“A lot of small businesses don’t necessarily need an engineer in their office five days a week who costs $1 million or $100,000 or whatever to build out this crazy AI pipeline,” Hatzell says. “What they need is a builder to help them build their invoice reconciliation agents and plans and workflows and just get them going.”
MSPs, meanwhile, need help getting sales going, which is why Hatz recently introduced Activate, a heavily automated prospecting tool. Upload a .csv full of client data or connect it to your PSA, and the system will identify potential use cases for AI solutions and services, walk account managers through readiness assessment calls, and prepare customer-ready proposals. More such updates are coming as quickly as Hatz’s very busy developers can roll them out.
“We’re releasing new features every single week,” Hatzell says.