The episode examines the ongoing shift in the IT services market from traditional managed services to “managed intelligence,” as vendors like PAX8 and ConnectWise attempt to reposition their offerings around artificial intelligence (AI). This structural change introduces increased operational complexity for MSPs who are being urged to adopt new AI-driven models, while facing evolving expectations regarding service delivery, pricing, and accountability. The mechanism at play is the transfer of risk and uncertainty from vendors to MSPs, especially as AI and usage-based billing models upend established business practices.
One significant development highlighted is PAX8’s call for MSPs to become “managed intelligence providers”; however, according to PAX8’s own head of AI adoption, only 17 out of 600 interviewed partners currently meet that standard, up from 13 a year prior. In response to this slow uptake, PAX8 has introduced bridge services and a Managed Intelligence Program to support partners through the transition, including white-labeled AI services and a platform for tracking usage called the agent gateway. These efforts underscore that the managed intelligence model presents a steep learning curve for most MSPs, with few having yet achieved operational maturity in this area.
Related market activity further illustrates these dynamics. ConnectWise has restructured its platform around an AI core, introducing predictive intelligence and shifting to ticket-based billing rather than traditional per-seat models. According to ConnectWise, this shift reduces L1-L2 ticket escalations by 86% and increases technician productivity by 30%. Meanwhile, concerns remain about data ownership and the scope of actionable information, with companies like Lexful and Enable pushing for greater integration across siloed applications. There is also ongoing debate on whether system-of-record vendors or independent AI-native platforms will ultimately control operational workflows and client relationships.
For MSPs and IT service providers, these developments translate into practical concerns around vendor dependency, variable cost exposure, and pricing pressure. The move to consumption-driven models and token economics increases unpredictability, forcing providers to absorb or carefully manage AI usage costs or risk compressed margins. There are also governance and accountability questions related to client relationships, especially as more AI service layers are introduced by upstream vendors. The operational implication is a need for heightened financial diligence, risk assessment, and a clear strategy for maintaining client trust and service differentiation in an increasingly intermediated service landscape.
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[00:00:13] PAX8 stood in front of 3,500 MSPs from 30 countries and told every one of them to become a managed intelligence provider. Here's the number that stopped me. By the count of PAX8's own head of AI adoption, just 17 of the roughly 600 partners he's interviewed personally actually clear that bar today. That's up from 13 in November. A full year of pounding this drum and the score went from 13 to 17.
[00:00:43] Same week, ConnectWise tore up and rebuilt its entire platform around an AI core. And the one pricing model everyone in this industry now agrees is dying is the per-seat model the whole channel runs on. So this week, the vendors are all selling MSPs a race. The question nobody wants to say to a microphone is whether it's a race MSPs can win or one they run while the vendors collect the winnings.
[00:01:11] My guest today has been in the rooms where this story is being written with a notebook open. Welcome to the Business of Tech Lounge. This is where we break down what's changing in the IT services market, what it means for providers and vendors, and what to actually do about it. If you're running or supporting an MSP, this is about making sense of the environment you're operating in, not just the headlines. Now to make this conversation possible, a message from our sponsor.
[00:01:39] Here's what I'm hearing from MSP owners in the communities I watch every week. AI isn't making things simpler. It's creating new headaches. Clients are making bad decisions based on it. Tool stacks keep growing. And every vendor is claiming to have the answer. Pax8 is different. They're not selling you another tool.
[00:01:58] They're building the platform that pulls it together. An intelligent cloud marketplace, curated vendors, an education that maps how to monetize AI and build a scalable managed intelligence practice. If your goal is a cleaner, more profitable operation, not just more tech, that's exactly what Pax8 is built for. Check them out at Pax8.com. That's P-A-X, the number 8, dot com.
[00:02:26] Rich Freeman is the founder of Channelholic, the weekly insider's read on the SMB channel, and was founding editor and executive editor of the Channel Pro Network across 17 years covering this exact market. He's also chief analyst at Channel Mastered and co-hosts the MSP Chat podcast. He just came off back-to-back coverage of Pax8 Beyond and ConnectWise's platform launch. Put it this way, if there's a CEO, channel chief, or founder shaping where the AI money flows in this channel,
[00:02:55] Rich has probably already interviewed them. Rich, welcome to the show. Well, thank you very much, Dave. Great to be back. I love talking to you. You've got all the latest chatter, so we've got to dive right into it. At Beyond, Pax8 spent three days telling MSPs to remake themselves as managed intelligence providers. Nobody in that room was really arguing about whether to offer AI. Your piece really put it well. Well, the question has shifted entirely from whether to how.
[00:03:25] But I thought the how was kind of brutal. Chance Weaver told you that 17 of about 600 partners he's personally interviewed clear the managed intelligence provider bar, up from 13. Their answer was a free MIP program to walk the MSPs through the journey, plus managed intelligence services, the idea of white labeling AI delivery by Pax8 itself. They've also shipped the agent gateway. So I got to start with that 17 of 600.
[00:03:53] They've been at this for a full year. Do you think that number is evidence the strategy is working or evidence the bar is just genuinely that high for a normal, healthy MSP? So I think it's the latter. I mean, just to give you some perspective on this. And I wrote something about this in Channelholic after the Beyond event. I had an extended conversation with Rex Frank, who runs Pax8 Academy, their partner education and enablement group.
[00:04:23] And so, you know, he was there in the audience with a bunch of other people a year ago. And Scott Jason, the CEO of the company, said, we're going to turn this whole community of managed service providers into managed intelligence providers. And he said his first thought when he heard that, I mean, he was very excited about it because he had actually been contemplating retirement. And he's like, no, I'm sticking around. I want to be part of this.
[00:04:46] But his first thought was back to, you know, John F. Kennedy in front of a microphone saying, we're going to put a man on the moon by the end of the decade. And, you know, there are all these engineers at NASA like, wow, that's our job now. We've got to go figure out how to make that happen. Well, Rex is in the audience. Scott Jason says, we're going to create an army of managed intelligence providers. And it was Rex and his team. It was their job to build the Apollo program, basically.
[00:05:14] So they spent a year on this building the curriculum. That's what becomes the managed intelligence provider program that Pax8 rolled out at the show. So a year ago, Pax8 introduces the vision. They know going in, this is going to be a process, a journey for MSPs to learn how to sell, deliver, price, you name it, managed intelligence services.
[00:05:42] And they've spent the year kind of building up the resources that MSPs need to commence that journey, essentially. So from their perspective, and I'm putting words in their mouth just a little bit, I don't think they feel like they're behind the curve or that this past year has been kind of a bust. It's like we laid out the vision. It took us a year to get to a point where we could come to people with the materials they needed to begin that journey because it is so new, this new model.
[00:06:13] It's now that we're ready to go. And because this market doesn't wait forever and MSPs really do need, whether it's remaking yourself as a managed intelligence provider or adding whatever it is, you need to be talking to your customers sooner versus later around AI and acknowledging that it's a journey to become an MIP. It's going to take time now that the curriculum is available. That's where the managed intelligence services come from.
[00:06:41] Here's the bridge, the thing that you can sell through our professional services organization to your customers while you're educating yourself and getting yourself ready to do it on your own. It's interesting that bridge piece because I've been, and I understand that their answer is this is hard, right? And so part of their answer is Pax8 delivering the AI work on the partner's behalf.
[00:07:03] Do you have a sense of where the line is between that being a bridge and that becoming Pax8 quietly becoming the provider while the MSP more slides back into being more of a reseller? Do you have a sense of how they're thinking about that positioning? My sense is that they really do view this as a bridge. I didn't pick up it. I did a number of Pax8 executive interviews show.
[00:07:28] I didn't pick up a whiff, basically, of people seeing this as some great revenue opportunity for them. I think if anything, you look at the managed intelligence services that are available now, and this menu might grow a little bit, but it's a relatively short list of services that you can get. Through Pax8 right now, it tends to be low hanging fruit kind of stuff around Microsoft Copilot and so on.
[00:07:54] And if you think about the cost and the complexity of really kind of building out a meaningful roster of service, I just don't think that's the business that they want to be in. But I think that they're also worried about them and their partners missing out on the near-term opportunity in managed intelligence while they're kind of getting themselves ready to really go at it the right way. And there's clearly a need here.
[00:08:22] I mean, Dima's watching, and he already threw in two of his partners over at Huntress have recently shared that their construction customers have been pacing their responses to RFPs into consumer and publicly open AI. And he follows up that, you know, even if not managed intelligence providers, the need for basic AI security guidance is real. You know, I want to say, like, how much of this do you think is just we haven't even covered the basics?
[00:08:49] And while Pax8 is really aspirational here, like, is there more work to be done on the front end here? On the MSP side, specifically? On the MSP side, yeah. I think absolutely. And I'm thinking back towards the beginning of May, I attended Nerdio's conference. And, you know, I can't think of a vendor sort of more plugged into Microsoft and the Microsoft Cloud organization than the folks at Nerdio.
[00:09:15] So I figured these are good people to ask about, you know, a Microsoft-based AI strategy and what are they hearing from their MSPs? And the message I got from them loud and clear, basically, very similar to the Pax8 message. It's not a question of should I? It's how do I? And that is a real struggle for Nerdio's partners right now. What is the strategy? I know I need to have a strategy.
[00:09:41] What's the strategy that will work, that will scale, that's repeatable, that delivers me margin? And to me, that all feels very much like initial upfront work. You know, the basics, I think, as you were putting it before that, is still going on right now. Yeah. Now, the other thing they talked about was this idea of the agent gateway, right?
[00:10:04] This idea that they could start tracking some of that and they put a token on the invoice with the margins that the MSP gets to choose. I kind of want to get your take on this. Like, for an owner who's looking at a lot of flat rate contracts right now, changing to some of this dynamic pricing would be a considerable shift. Did the Pax8 leadership team talk a little bit about the way they're thinking about that with their gateway offering?
[00:10:30] Well, I think from Pax8's perspective, I think they are well aware of the fact that there are a lot of different potential pricing schemes out there for MSPs. I don't think they have picked one, you know, one and one only that they're going to support and tell everybody that they should use. That whole area is very much in flux right now.
[00:10:53] The issue and the thing that they're trying to address is a very important, and it's funny, Dave, just like two weeks before the agent gateway gets announced, I wrote a quick little thing on Channelholic in which I was kind of talking about how whether they like it or not, whether they want to or not, MSPs are going to have to get good at token economics because this is how, you know, AI services get priced.
[00:11:19] And, you know, like you, your vendors, everyone is going to be sort of downstream from some kind of usage based service. And you're either going to have to figure out how to price around that and still somehow protect your margins or just get really good at optimizing that usage based spend for yourself and for your customers. And at the end of that piece, I said, man, it would sure be great if there was a tool that could help you with that. And sure enough, two weeks later, that's that's what the agent gateway is, basically.
[00:11:49] They're going to measure and monitor and track what the consumption is, what the cost is. They're going to help if you want to price downstream on a usage basis. They're going to help you with that. They're going to help you with things. So getting smart about token economics is going to increasingly include getting smart about which model and which version of which model to apply to which use case,
[00:12:16] because you're really looking to optimize that AI spend for your customers. And so that is a discipline called model routing. As people probably know, there's model routing built into the agent gateway. So this is the issue that Pax8 is trying to address. They're basically trying to make it practical for the MSP to apply whatever pricing scheme they decide they want to do. Gotcha. Now we're going to talk a little bit more about the way those fall out.
[00:12:46] I want to take a quick break and hear from today's sponsor. This episode is brought to you by Control Map. Growing MSPs are using Control Map to build recurring revenue by expanding their GRC services. Starting now, Control Map is offering a free plan for MSPs looking to get started with providing compliance as a service. Create a free account and run an assessment. Track key items like policies, risks, and evidence in one place.
[00:13:13] It's a practical way to prove value to a client before deciding to expand your compliance offering. Try Control Map for free today. Visit scalepad.com slash Dave to get started. That's scalepad.com slash Dave. Now the other thing I got to dive into then is ConnectWise. So ConnectWise relaunches effectively its whole platform around the same time. And for me, the interesting part isn't necessarily the rename.
[00:13:41] It's kind of the fear that I find underneath that a little bit. They launched what they call the industry's first predictive intelligence platform, officially the ConnectWise platform. As you reported, that's ASIO rebuilt around an AI-native core. Much of it the same code that came in with the Zofik acquisition just a few months earlier. Matty Rivello calls it ASIO 2.0. When I talked to their chief product officer, he wanted to emphasize that it wasn't ASIO.
[00:14:09] So there's a little bit of confusion over the naming here. But it's the results that were interesting, right? They're claiming an 86% reduction in L1 to L2 ticket escalations and a 30% jump in technician productivity. And they've been really lean into that. So I looked at that and say, and then the other piece that they revealed to me was the fact that they're looking at billing this not on tokens, but on kind of tickets processed, right? And I think that that's an interesting kind of piece of the economics.
[00:14:39] I thought that the story you drew out was really important. Like, you know, it's about strategic survival. ConnectWise was at risk of being dismediated, right? The AI-native startups turning them from a critical app to just another data supplier. And so ConnectWise's answer seems to be to be a system of action, right? Not just the system of record. But of course, top downs, Chris Day pushes back saying nobody owns all the first-party data
[00:15:04] because it's split between Microsoft, HubSpot, QuickBooks, Huntrix, or sorry, Huntress, which is why Lexful raises $7 million. I want to turn it to you with a question then. So Ravallo says that the AI had to go into the control plane, like that his premise is that it could not get bolted on and that having the data there is ConnectWise's native advantage. But Chris Day says nobody has it all. Do you have a take on who's right?
[00:15:30] And which one decides like the strategy of the next couple of years? You know, so I mean, my sense of things is Chris Day is probably closer to right. So ConnectWise has a big lake of data. You know, if you're an MSP and you're a ConnectWise partner, there's a big deep data lake there of very valuable information for you. But it is very, it depends a little bit on how much of the platform you're using.
[00:16:00] But it's very PSA centric, ticketing centric in terms of the portion of the data that they have. And if you think about the, you know, if you were to build the sort of ideal data graph for an MSP, it would absolutely include all the PSA data. But I mean, there's a lot more going on for the MSPs and their customers right now, right? I mean, you just think about everything that's happening on Slack and on Teams and in QuickBooks and in HubSpot
[00:16:29] that what you really want is all of that PSA stuff. And if you're doing security through ConnectWise, all that security data. But that that becomes sort of the core of what, you know, the superset essentially covers all of these other data sources that your customers are touching and using right now. And so that data is all over the place.
[00:16:53] And there's a real question, you know, there is a very young vendor I've written about before called Lexful. And right now, the main thing that they do for their MSP customers is documentation automation via AI. But in the course of doing documentation, they're collecting data from all of these different tools.
[00:17:18] So they're essentially trying to position themselves to be that kind of ultimate superset of data. And that includes the PSA data, but a lot of other stuff as well. I don't know what the future holds for them necessarily. But there is it feels like an opportunity. The closer you can get to that vision, I would think, the better a position you're going to be in.
[00:17:43] Now, the thing that I've been thinking about, though, is is the kind of the promise of MCP, of model context protocol. Right. The idea here, of course, is and the vendors themselves are rushing to to focus on that. Right. Is to add that MC capability. It almost becomes a little bit irrelevant if an AI agent layer just can get access to all of this and start pulling in the data as needed. The MSP themselves can start just pulling from their various sources.
[00:18:11] You know, the promise of the old school thinking about PSA. I mean, Arnie Bellini would talk about the silos, right? The individual silos and the silos of chaos that you bring together. The biggest problem was we didn't have a way to pull that together. But in theory, MCP solves the idea of doing that. If you just want to ask a question of your data, you can do that. Do you get a sense that the vendors are thinking about the way that that might be part of the solution for the MSPs themselves?
[00:18:40] Or do you think that they're looking and saying we still have to deliver this component for our MSP partners? Well, so it's a very interesting and very strategic question for the likes of Kaseya and ConnectWise, etc. Right. Because they do have this great big pool of data there and they all have, you know, MCP servers.
[00:19:04] So they're all kind of making that data available potentially to agents. From a strategic standpoint, though, and this is a question I asked like six months ago in a post. Do you want to just be the system of record? Do you want to be the data source or do you also want to have that system of action layer that is more strategic to the MSP? The MSP spends more time with and in.
[00:19:30] I mean, it was hard for me to imagine six months ago that that was a good place for a let's call it legacy managed services toolmaker to be. And sure enough, you know, just in the first half of the year, we've seen a real push on system of action functionality in those those provide. You know, so Kaseya and then more recently ConnectWise adding that ability, we're going to we're going to have that whole use case for you basically.
[00:20:00] Enable has introduced an MCP server and said, hey, look, if our MSPs want to just use some other system that they've written themselves or brought on board to access, that's fine.
[00:20:11] But I interviewed their CEO and president just last week at the Roost conference, and they are working towards system of action functionality as well because they absolutely know that it is a better you're on the strategic high ground if you can do that as well as offer the MCP server and the system of record back end.
[00:20:35] So that there are almost two questions there that you're kind of getting at, Dave, and one is what's best for the vendor and the other is what's best for the MSP. The vendors would all argue that there's a huge advantage for the MSP in getting the system of action and the system of records from the same company. And it's all sort of natively integrated. All of that stuff is coming to you through the same interface and it's all paid for on the same bill. There are some real efficiencies there.
[00:21:04] What the AI native system of action startups out there would say, and I just interviewed one like an hour and a half ago, basically, and had this conversation with them and they would just say, and I'm putting words into their mouth, but basically they would, we're better at this. We're better at this than they are. We've been doing it for longer. We understand it better.
[00:21:26] We're moving faster because we don't have this entire portfolio, this entire tool stack that we have to kind of bring along with us. And so they kind of feel like, yeah, you know, it's two different bills and maybe two different panes of glass, but you're going to come out ahead because we can help you automate and get more productivity than they can with their technology right now. So that is very much an open question.
[00:21:56] All right. Well, I got to ask the analyst question here, right? So ConnectWise sort of ended the discussion by saying phase three, most of the work done by AI with human supervising by the end of the year. Now, you and I have both watched this vendor ship against its own roadmaps before. What's your take on that timeline? You know, and they gave themselves a little wiggle room, right?
[00:22:21] Where they, I forget the exact wording, but I think what he said is, you know, most, not all. It's like, you know, they're not necessarily committed to 100% crossing that milestone by the end of the year. I think back to IT Nation Connect last November, basically, where to a great degree, a lot of what you heard from the executives on the main stage in the general session was mea culpa.
[00:22:50] Basically, where we know a lot of this stuff has taken a long time for us to get out to you. And we've spent, you know, most of the last year, this is them talking last November. We spent most of the last year fixing that. And you are going to, it's going to be different going forward, basically. If we tell you this is when this functionality will be available, it will be available then, you know, give or take weeks, not like months or years.
[00:23:18] You know, it's only been since November and we'll see. They are taking that very, very seriously. So it's challenging to get to where they say they're going to be by the end of the year. But I think they are much more, they're really trying to be much more disciplined about actually following through on promises like that. Gotcha. Gotcha. All right. Well, you brought it up a little earlier. So I want to dive some more into the pricing and billing discussion.
[00:23:47] You talked about token economics being disruptive. I think this is worth a conversation. You talked about, or you talked with Lyra's Elliott Hyman, right? Who talked about the fact that he's seeing in his customer base, healthy growing businesses with declining headcounts, right? Which in theory would be very devastating to a per user consumption model.
[00:24:08] I've been talking about this on my daily news show, and I've been arguing that a seat plus consumption model can actually be quite devastating to the MSP model. Because MSPs built their business on this predictable recurring revenue and known costs. And consumption billing turns their whole cost structure variable and unpredictable. By the way, we talked about ConnectWise. Because Atera, when I had Gil Peckerman on the show, Atera is specifically noting that they're absorbing that.
[00:24:37] And that part of their go-to-market is that they will fully absorb that variability of AI. But I want to kind of get your sense. You're sitting in all these vendor rooms and discussing this. When I say that plus C, plus consumption is going to be damaging, am I being really contrarian? Or are the vendors aware that they're shifting this risk onto the MSP and they're not talking about it? What's your sense of that?
[00:25:05] I mean, my sense for right now is they are very well aware of the fact that there is risk attached to any kind of usage-based pricing to MSPs, basically, who then have to kind of figure out what to do with that. And so you mentioned Atera. Yeah, I've had that exact same conversation. I'll be writing about this just within the next few days. I mentioned I was talking to a startup an hour and a half ago and this topic came up.
[00:25:33] And it was like MSPs shouldn't have to think about any of that. How does usage-based pricing affect my pricing? We're going to absorb that. That's mostly what I'm hearing right now. And no one, you know, it'll be interesting to see if that remains the case permanently going forward. But I'm not detecting yet that anyone feels like they can get away with that right now.
[00:25:58] About, you know, passing that burden onto the MSP so that the vendor has solid predictable margins. And the only way the MSP does is if they can kind of figure out how to get the pricing right. I don't sense yet that anybody is looking to do that to their partners. Gotcha. Now, I've been thinking, I want to get your take on a gap that I've been thinking about. And I'm trying, I'm just struggling to frame, right?
[00:26:22] So the general pitch that has been presented is the trust is ultimately the MSP's moat, right? That they have the client relationship that they're involved. But if we kind of break this down and we say, well, if Pax8 delivers the service and ConnectWise automates the tickets and providers like Anthropic, they're throwing their venture into mid-market to directly like work together and automate that. Like, do you have a sense of what the, is the MSP just owning the client relationship? Does that survive?
[00:26:52] Is that enough to hold that if they only essentially could own just the phone number? Or is there an additional level of value that they're going to need to add on to continue to be relevant? I still don't think anyone has come up with a good substitute for the relationship that an MSP has with their clients.
[00:27:15] And so I, you know, for the foreseeable future, I think that there is a pivotal core central role that the MSP plays as the organization that best understands the customer, where the customer's at, where the customer's going. And can translate that into a set of services that they are helping the MSP consume from outside the business.
[00:27:42] But that's the trust moat that, you know, Pax8 is talking about. And if you make the journey, you know, in the direction of managed intelligence, as Pax8 would want you to do, you're going to preserve that moat.
[00:27:58] The danger to the MSP is if they they don't have the the expertise to answer the questions that their SMB customers are increasingly asking, in which case the trust withers and transfers to somebody else who can answer those questions. But as long as you have good answers to questions that SMBs need answered, I think you're you're you're still in a good place.
[00:28:24] That relationship is going to change, but I don't think you're in danger of being, you know, disintermediated by like Pax8 or any any of the companies you named except maybe Anthropic. Right. Because Anthropic wants to come in and play the role you play as an MSP potentially with your customers.
[00:28:44] Not because they, you know, they think you're in the way of some giant revenue opportunity for them, but because they really need to drive adoption and consumption of their model so that they can get ready for the giant IPO that is probably coming at some point down the road. They need to get those numbers going and, you know, the whole Pax8 story is about how well this is a process and it takes time and we're working on it.
[00:29:10] But Anthropic is like we don't have time to wait. We're going to go talk to your customers and we'll do it through, you know, with forward deployed engineers, etc. If you're not going to do it, that would be the one, you know, of the names that you mentioned there, the player in that set of companies that could potentially put an MSP at risk. It's interestingly enough Anthropic, you know, depending on the degree to which they can scale that offering.
[00:29:38] And I have big questions about that. You and me both. And by the way, OpenAI just announced their partner program, too. So it's not that. So I want to get your take on something then, because I've been there's been struggles to get any good data around how MSPs are kind of adopting AI or putting it forth to the customer. So I'm going to on the show today, I'm going to give you a preview of something that MSP radio and the business tech are working on.
[00:30:02] So we've been working on trying to catalog a number of MSPs and we're so far through 1300. Our target is to have a larger number that we've actually gone and been looking at all of their websites. And I can tell you it at now that we've crossed the 1300 rock, 61% of all the MSP websites that we've looked at have no mention of AI of any kind.
[00:30:24] And so what we're and by the way, that means no mention. Not even like, you know, not even a, hey, we'll answer your questions. Literally, it's not on their website. And this is where I'm a little bit concerned about this growing push of like, hey, the market is talking about AI. We've got large competitors that are interested in this. We've got big vendors that are talking about that.
[00:30:47] But I think we, but if we're looking at the customers to say, hey, we, our customers trust to talk to MSPs like the end customer. Is there like, what is your take on that realistic ability to deliver with some of the MSPs that you talked to and the vendor channel chiefs thinking that their partner base is ready to deliver? Like, is that gap getting worse? I don't know that the gap is getting worse. It is very large.
[00:31:20] How, how many people are in that position today? It's not enormous. And you know, it's interesting. I mean, I have a number of thoughts actually about the data you were just talking about there. But, you know, you look at there's a lot of attention in the media about just Microsoft co-pilot adoption, right? Like what's the lowest low hanging fruit in an AI for MSPs right now?
[00:31:46] It's driving co-pilot into their customers. And you would think by now that the percentages would be pretty large around that. And they really aren't yet. I mean, that's an illustration of what we're talking about about right now. And, you know, the other thing that occurs to me, you mentioned Lyra Technology Group and Elliot Hyman, the CEO of that 120ish MSP organization,
[00:32:13] a very, very large provider. And they, you know, Elliot said to me within the last few weeks, somebody I spoke with from Treeline, the Andreessen Horowitz backed MSP with sort of coast to coast aspiration. Both of these companies said they are getting that there's a lot of AI pipeline for them and it's inbound pipeline. It's not like their salespeople are outbound calling into SMB accounts and saying, hey, let's talk about your AI needs.
[00:32:42] The phone's ringing and SMBs are saying, hey, I was talking with my buddy on the golf course over the weekend. They're doing this amazing thing with an agent. How can we do that? So that's far from universal among SMBs right now, but it's growing. And you can feel the appetite building on the end user, the SMB side right now.
[00:33:03] And the skill set required on the MSP side to act on that demand is still very much work in progress right now. And that's a gap and it's going to take some time to close that gap. And that that is sort of the the danger zone that, you know,
[00:33:22] when Scott Jason, the CEO of Pax8, walked on stage at the ordinarily, obviously somebody comes on stage, there's some rock anthem, you know, at maximum volume blasting. I basically walked on stage to the sound of a ticking clock. Just no music, just tick, tick, tick. And that sent a loud and clear message basically that there is a massive opportunity for you out there.
[00:33:49] And for some of the partners I spoke, the MSPs I spoke to at the event, it's growing. The SMBs are looking for help with that. But the clock is ticking and you really need to move as expeditiously as you safely and responsibly can to act on that before other people do. Well, Rich, I'm going to leave it there because that is actionable insights. And I'm going to add to that for our listeners. Go take a look at your own website, MSPs.
[00:34:15] If you're not even mentioning AI on your website, perhaps this is the time to make sure it's there. Rich, I know you're working on a couple of great stories where people are interested in keeping a track of what you're up to. What's the best way for them to get in touch? Well, go to www.channelholic.news. That's where all the content appears. You can subscribe there as well. And if you want to reach out to me personally, I'm on LinkedIn or just go ahead and email me at rich at channelholic.com.
[00:34:45] Rich, this is always great fun. I love having you on. We will do it again in just a couple of weeks. And I think I will see you at ChannelCon. Yes, indeed. Yes, you will. Awesome. And I want to thank our sponsors for making the Business of Tech Lounge possible. ABC Solutions. If you're running an MSP and struggling to get clean financial visibility, that's profitability by client, service line performance or just accurate books.
[00:35:08] They focus specifically on accounting for managed service providers and IT firms. They're at abcsolvesit.com. And Rhythms, if connectivity reliability is still a constraint, especially in edge environments or for distributed teams, they deliver 5G solutions designed for MSP use cases where uptime and coverage actually matter. More on them at rythmz.com.
[00:35:33] If you're watching the recording and you got a question or a take, send it in at question at mspradio.com or on YouTube. Put it in the comments below. We really do read all of them. And if you want to go deeper on the business of running an MSP, not just the technology, but the pricing, the positioning, the business model, that's what the Business of Tech Plus is for. Join us at businessof.tech.com. Thanks again to Rich Freeman for being here. And I will talk to you next time.
[00:36:21] Produced by Picture This Video. Part of the MSP Radio Network.

