The New MSP Model: Combining Automation, Emotional Intelligence, and E-Commerce for Success

[00:00:01] It's been a few years since I published my editorials on starting an MSP and starting an IT service provider. And here in the midpoint of 2025, I think it's time to update what my perspective is now. Now this is useful to think about what a fresh IT provider or MSP would look like so that we can understand what we're competing against and what the future might look like.

[00:00:24] So let's start with a controversial take. Don't build a managed services provider. Now, not in the traditional sense. The idea of managing infrastructure, keeping machines running, patching systems, and performing reactive or even proactive maintenance is either already commoditized or rapidly on its way there, especially with AI automating so much of it. That's a race to the bottom.

[00:00:51] Instead, the opportunity in 2025 is to build a tech services business that helps small and mid-sized organizations drive top-line revenue through technology. That's evergreen, that's valuable, and that's what I'd build. The first step is rethinking the talent stack. Traditional MSPs hire techs with certifications. I'd flip that. I'd hire empathetic, business-savvy people. Folks who could

[00:01:21] talk to talk to clients like humans and understand their business needs. The future help desk doesn't look like a tiered queue of technicians. It looks like a team of highly emotionally intelligent people trained to act more like business advisors than tech troubleshooters.

[00:01:39] There's a brilliant example in Andrew Bolton's senior citizen support model. $40 a month for unlimited tech help delivered not by IT pros, but by young, patient people who know how to walk someone through logging into Fortnite with their grandkid. The magic isn't technical, it's emotional intelligence. Here's how I structure the team. First, you have tech conciergeers. These are your frontline people, not help desk agents, but relationship managers.

[00:02:07] They're there to talk to clients like humans, make them feel heard, and translate needs into action. Their value isn't in fixing printers, it's in building trust. Most staff under the age of 30 have a natural talent for technology anyway, particularly using it and making it work.

[00:02:26] Next, you need business process advisors. These are your business brains. They walk into a client's operation and ask, is this the right point of sale system? Are you duplicating efforts across platforms? Are you missing revenue opportunities? These aren't technical questions, they're outcome questions. That's where the real value lies.

[00:02:49] Now, behind the scenes, you've got your automation specialist. Someone who takes everything repeatable and turns it into code. Whether that's onboarding workflows, ticket triage, or recurring reporting, this person's job is to scale the operation without scaling headcount. And finally, you have your generalist troubleshooter. The technical utility player who handles the weird edge cases that don't fit into a script or a flow. They're not living in the queue, they're solving the hard stuff.

[00:03:18] You'll notice what's missing. The entire tiered support model. Because in this design, you don't escalate, you resolve, or you automate. This kind of team lets you lead with empathy, back it with automation, and deliver outcomes that actually move the needle. It's not just different from the old MSP model, it's fundamentally better.

[00:03:39] So second, you'll be automating the front. If you're building an MSP in 2025, automation isn't a feature, it's the foundation. The old model relied heavily on bodies. Manual setup, manual onboarding, manual maintenance, manual proactive maintenance. But today, most of the back end can and should be automated. That frees your people up to do what machines can't. Have real conversations, solve actual business problems, and build relationships.

[00:04:08] Here's how I think about it. Start with cloud-native management platforms. These handle things like device setups, patching, policy enforcement, and compliance baselines. You set it once and it runs. You're not managing servers, you're managing intent. Then layer in workflow automation. Tools that handle the boring stuff. You shouldn't have a human emailing onboarding checklist or generating monthly reports.

[00:04:33] Those tasks can run on triggers based on templates and flow through to clients seamlessly. Next, you equip your team with internal knowledge assistance. I don't mean chatbots talking to customers. I mean internal-facing AI tools that help your staff answer questions faster, find documentation, and generate client-facing materials on demand. Think of it as giving every team member a personal researcher and writer.

[00:05:01] And you also want a layer for orchestration. A way to standardize how you deploy and manage the line of business applications your clients rely on. This is especially important when your real value is helping them pick and implement the right software stack, not just keeping their laptops updated. And of course, none of this works without centralized monitoring and risk visibility, ideally through unified dashboards that flag issues before they become phone calls.

[00:05:28] All of these tools, whether you build them in-house or stitch them together, exist to do one thing. Make space for your people to be human. Because when your team isn't buried in repetitive work, they can spend their time doing what actually drives value. Listening, advising, and solving. This year, in 2025, automation isn't about replacing people. It's about making them indispensable. And here's where we take a leap. For years, automate has been the mantra.

[00:05:56] But it's been hard, and most never really do it. What changes is that this year is the rise of MSP platforms that allow natural language input to create automations automatically. If you can give non-technical staff the ability to describe a workflow in plain English and have the system build it, that unlocks entirely new potential. It's the difference between automation being an engineering task and it becoming everyone's tool.

[00:06:23] That's the breakthrough that allows smaller teams to scale efficiently without needing to add layers of engineering overhead. I'd lean heavily into Microsoft 365, Intune, and other workflow solutions. Not because they're unique, but because they're standardized, scalable, and already 80% built. You automate all the provisioning, the patching, the monitoring. Then you free your people up to work on actual business outcomes. That's where you drop in analysts.

[00:06:51] People who know business models, point-of-sale systems, operation tools, and advise clients on whether their stack makes sense. Does your retail client need to ditch their legacy point-of-sale system for a modern cloud tool? That's where you drive value. So third, you embed e-commerce and client self-service provisioning. Automation is table stakes. E-commerce and self-service are the force multipliers.

[00:07:16] Your clients expect the same frictionless experience they get from consumer apps. Click. Buy. Use. A modern tech services firm bakes that directly into its delivery model. Curated service catalogs publish a pre-approved list of SaaS apps, hardware bundles, project packages, and micro-engagements. Each item has transparent pricing and clear service-level agreements.

[00:07:40] Self-service portals let customers add seats, upgrade licenses, or schedule quick consults without opening a ticket. Orders flow straight into your automation stack for provisioning. It'll include automated billing and reconciliation. New purchases post immediately to the client's account, generate invoices, and sync to your finance system. No manual true-ups at the month end. And it's policy-driven provisioning.

[00:08:07] Behind the scenes, Intune, Microsoft 365, or your orchestration tool applies the right profiles, security baselines, and reporting tags the moment an order closes. And you'll use embedded upsell moments. Analytics surface when a client's usage or growth patterns signals the opportunity. The portal nudges them towards a higher-value tier or an add-on advisory engagement. Result? Higher wallet share, lower support friction, and real-time visibility into revenue.

[00:08:35] SureWeb's white-labeled portal proves the model. 450 partners are already offloading day-to-day license management while capturing incremental revenue. Adopt that mentality. If a workflow can end with a buy now button, it should. So you'll focus on revenue, not just recurring contracts. So let's talk about money. The MSP industry loves to talk about recurring revenue. And sure, that model absolutely has its place.

[00:09:03] But too often, it turns into a game of stacking contracts and chasing ARR for its own sake. Growth for growth sake. That's not the game I'm playing. I care about profit, margin, and stability. I care about building a business that actually pays the team well, reinvests it itself, and doesn't rely on some future exit to be viable. The goal here isn't financial engineering. It's financial responsibility. So what does that look like?

[00:09:33] In my model, you don't need 300 clients. You might only need 50, maybe fewer. You're delivering high-touch, high-value advisory and enablement. Not just help desk support. That earns you premium pricing and lets you keep your operation lean. So let's sketch it out. You got 4 to 6 people on the team. You're managing 40 to 60 clients. You're charging somewhere in the range of $2,000 to $4,000 a month. You're aiming for 55 to 65% gross margin.

[00:10:02] And you're running at 20 to 30% net profit. That's a healthy, durable business. Not a unicorn, but a company you can be proud of. One that supports careers, not burnout. One that clients stick with for years because they see real value. Most investors chase recurring revenue. And sure, that's a benefit. But we're building businesses, not spreadsheets. This isn't about financial engineering.

[00:10:27] It's about creating something valuable that generates profit and creates jobs. Build something sustainable, profitable, and valuable. And investors, the right ones, will follow. Because at the end of the day, profitability is the new innovation. That's the play in 2025. Forget chasing growth at all costs. Build a boutique, white-glove, high-margin services firm. Systematize where possible.

[00:10:57] Personalize where it matters. So I get asked, bootstrap one or acquire something to build it? Well, that depends on your goal. One of the biggest decisions when entering the space is this. Do you build from scratch or do you buy something that already exists? And here's the honest answer. Depends on what you're actually trying to accomplish. Starting from scratch is faster and easier if you're looking to innovate. Buying an existing MSP? Well, you've got to be aware.

[00:11:24] Pivoting their existing customer base to your new model is really hard. You're often better off thinking of it as an aqua hire. Buy the people. Maybe get 20 clients that pay the bills. But build your real value on the new clients that want what you're offering. If you've got the skill set to sell, if you're clear on your value proposition, and if you want full control of culture and delivery, building from zero is faster than you think and probably cleaner.

[00:11:50] You're not burdened with legacy clients, outdated pricing, or technical debt. You start fresh. You define the rules. But there's another path worth considering, especially if you want a head start on talent or infrastructure. That's the aqua hire model. Buying a small MSP not for its book of business, but for its people. I've talked to plenty of owners who built themselves a job, not a company. And that's okay. But if you acquire someone like that, someone making under $400,000 a year,

[00:12:18] serving 15 to 20 clients, you're not buying a growth engine. You're buying a partner, maybe even a co-founder. Let them keep running the legacy clients with minimal disruption while you use that capacity to build something new. The legacy revenue helps fund the future play. Now, if you're thinking about buying a traditional MSP and converting it into the modern advisory first firm, be careful. That's much harder than it looks. Clients do expect the old model. They're trained on it.

[00:12:46] Changing what you offer midstream is always harder than selling it fresh to someone new. So here's the framework. If you want control and you've got a clear thesis, build. If you want talent and tech without baggage, aqua hire. If you want recurring revenue from day one, buy carefully and know what baggage you're inheriting. And bottom line, there's no wrong way yet. Just know what you're really buying or building. By the way, don't necessarily go it alone.

[00:13:13] My experience and the data I'm collecting suggests that partnerships outperform solo founders in the space. Build a team. Match complementary skill sets. It's a lot of work and having the right people next to you matters. No matter the path, you'll want a partner. Someone who balances your skill set and shares the vision. In my experience, the firms with a strong founding team tend to outperform solo operators. It's just too much to do alone and too easy to lose perspective.

[00:13:42] Now, use AI behind the curtain, not as the star. Artificial intelligence isn't ready to be your frontline interface, but it is ready to make your team smarter, faster, and more scalable. From custom crafting recommendations to generating research to building unique messaging for every client, AI will enable your human team to do more with less friction. Just don't make AI the product. Make it the amplifier.

[00:14:09] So bottom line, if I were building an MSP in 2025, it would be a boutique advisory firm powered by automation and AI, staffed with empathetic business thinkers, and designed to help clients grow their revenue through technology, not just maintain their IT stack. It would be profitable first and scalable second. Because good businesses come from serving real needs, not chasing multiples.

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