Let me start with a warning: AI-first MSPs will eventually sell directly to your customers. You prepare now to head to higher ground with project and true consulting work.
We started our MSP in 1991, so we’ve gotten to ride a lot of technology waves, from corporate e-mail to CD-ROM and multimedia to web sites and mobile devices. What seemed like it was going to kill us never did, and that’s including the Y2K bug.
AI isn’t a wave. It’s a tsunami. Either head to higher ground or enjoy the MRR until one day you say “what happened?”
You may say: “But we have great client relationships, they keep renewing with us.”
Remember America On-Line? AOL had a long tail of revenue even years after broadband internet saturated the market. Just because customers pay doesn’t mean you have a winning formula. MSPs see recurring revenue and think they’re entitled to it. They’re not.
AI is supposed to catapult us into the future, saving time, improving efficiency and profits. And it might. But there’s a less attractive and more credible path forward, and it’s more dire: AI startups care about us until they don’t have to.
The good news is, it’s still early. AI solutions in the market for IT help desk and service automation are still missing a critical thing: credibility. They have no brand recognition. MSPs, by comparison, have the “last mile” of customer trust. Customers trust us. That makes us the AI software company’s best friend. They want to partner with us, they want to seed us with their latest, cool tools. They want to empower our techs to do more.
If you could add an EV engine to your gasoline-powered car, or buy an EV car instead, what would you choose? You’d buy the EV. There’s no need for all those tubes and hoses, and filters and everything in the car that’s devoted to combustion engines.
Once you own an EV you don’t even think of going back to a gas car. The same will occur for your customer that does that free trial of an AI-based competitor. They’ll partner with you and eventually compete with your MSP. Why wouldn’t they? Every ticket you run through them is training them to beat you.
They’re currently pitching only early adopter MSPs as a retrofit: an after-market accessory that overlays onto your current business engine. Fitting new tech onto old tech is no easy feat, just ask Connectwise. Tech debt is real. Try the new AI feature your SaaS vendor bolted onto its product. It’s not really as cool as the demo seemed, is it? These rushed new features are downright janky.
Harold Mann
We’re a San Francisco-based MSP, so we have a front row seat to innovation. We see AI software startups all the time. Some of them are even clients of ours. They don’t need to unlearn the way it’s always been done. They don’t understand how complex tickets get resolved, but they are expert coders and they know how to deliver a frictionless user experience for any request DM’d to their tool. The idea of a customer filling out a ticket makes them chuckle. Once you give a customer a direct Teams message to an automated bot that resolves 80% of the requests automatically, there’s no going back.
Slack spread like wildfire through corporations with virtually no marketing. It was freemium and upsold customers when switching costs went up. It lived under the radar until enterprise IT had to allow it because it had permeated so effectively.
The bad news is, savvy MSPs know our moat will evaporate. Customers will demand agentic resolution. They will not accept a “same day” resolution. They’ll accept “right now.” SLAs are the appendix of IT service delivery.
So you have a choice. You can bolt on AI and compete with the new entrants using fear, uncertainty and doubt. Or you can cede the lower end of the support market. AI tools won’t prematurely close tickets to game their KPIs. If you think you can beat them, you’re playing on the beach while the sirens are blaring.
You likely know more about AI than your clients. Help them deploy it into their business. Pivot now from getting paid to reset passwords. Stop troubleshooting memory or disk issues. Help your clients integrate AI into their operation with governance, observability, best practices, and help them measure the improvement. Do that and they’ll give you far more revenue than unlimited help desk requests. We didn’t ask to be teleported into an AI future this quickly, but here we are.
Head to higher ground. It’s wide open and there’s plenty of room.
(Harold Mann is founder and president of Mann Consulting, No. 191 on the 2026 MSP 501 list.)