MSPs today frequently field questions from their customers about AI, and in turn have questions for their vendors providing the underlying technology. I caught up with Pax8 corporate VP of community and ecosystems Rob Rae at ChannelCon 2025 to talk about what Pax8’s cloud marketplace is doing for MSPs in this area. He spoke of Pax8’s The Agentic Inflection Point report and Data and AI Guide Growth program designed to help turn MSPs into MIPs – Managed Intelligence providers.

Here are the highlights of my conversation with Rae, one of the most familiar faces in the channel who will also speak on an elite vendor panel at the 2025 MSP Summit Sept. 15-17 in Orlando, Fla.:

What are MSPs asking for when they come to you on AI? Do they have specific wishes, or is it more like, "What can you give us?"

Rae: The majority of managed service providers are looking at us saying “What is this going to look like?" as opposed to, "Hey, I need this, this or this.” What the MSPs are looking for from us is more the education, training and thought leadership side of it. So when their end user does call and says, "Hey, I want to take a look at AI and see how it can improve productivity, efficiency," or whatever the case may be, the MSPs need to be ready. It’s already starting to happen.

Rob Rae

What are the main issues for MSPs around AI today?

Rae: We've started investing quite a bit into thinking about what the MSP’s needs are when it comes to delivering AI. Not just now, but as time goes on. Obviously, you have the tools, right? What are we going to sell? What are these tools going to actually do? But more so, how are we going to sell it? How is an MSP going to make buying decisions around what the right technologies are? How are we going to price it? Meaning, how are we going to make money?

Because the way MSPs make money today doesn't fit into the AI model per se. We believe that not only vendors will be building out AI agents. We believe MSPs also will be building out AI agents and then selling those services ultimately to their end users, trying to build efficiencies with it. But we're very bullish on the MSP part of this because we do believe that AI technology is going to be incredibly relevant for small businesses right out of the gate. Usually, when you look at technology, it hits the enterprise space and then eventually makes its way down to SMB. We do think that AI can actually have a bigger impact on SMB businesses, and how these businesses operate and run. MSP is the only channel to actually go and deliver that AI technology.

What can a vendor do to help that?

Rae: There’s a couple of things we have now. One is that Agentic Inflection Point report, which is an incredibly comprehensive report that discusses basically the future of how we see AI fitting into the small, medium business space through the MSP. We’re also building out what we're calling our guided growth program. We’re benchmarking the MSPs on where they are in their journey around AI, benchmarking them to where the market is, how fast the market is developing. We want to find technologies that are relevant to the MSP space, introduce these technologies to the MSP space, and help them build out partner programs.

You said vendors and MSPs will both be building AI agents. Will the MSPs be competing with vendors here?

Rae: I don't necessarily think so. There's going to be the ongoing development of this technology, and the vendors have the financial wherewithal and the investment and the technology skills to be able to develop these actual tools. But you need to customize it and then potentially build bespoke services for the ultimate end users. I think the MSP takes the technologies or creates something customized towards what their SMB customers are looking for.

There’s obviously a lot of hype around AI. Are the current expectations of AI realistic?

Rae: We all want it to grow, and we all want it to grow faster, right? I think everybody is really bullish that it will, but is it meeting all of our expectations? No, this is something that's going to continue to develop as time goes on. It will take a little bit of time for the technology to catch up to what it is that we're all looking for. The great part about that is, I think it's going to come fast, and I don't think we're far off.

We hear a lot about skills shortages in IT in general, but especially for AI. Is Pax8 having any trouble finding people with AI expertise?

Rae: We've already started so, so we have a lot of engineering talent at Pax8, and some of these newer individuals that are coming in are coming in with an AI background. The great part about AI, though, is that it's something that pretty much any engineer can really start using, start leaning into, and leveraging it to become those AI experts. Because a lot of what AI is doing is actually creating itself. You just have to ask the right questions.

What other new developments are you seeing in the market?

Rae: We made the transition a couple of years ago away from being a distributor into a marketplace, because the way in which end users want to consume technology is changing. It's no longer about talking to a salesperson about what's on the truck. Instead, end users are getting incredibly savvy at being able to look up their own technology, do their own research on what it is that they think that they need, and that research is being done independent of the managed service provider, which is an issue.

So the goal is to drive those end users back to the managed service provider so that they can do their research with the MSP. The pandemic forced us all to find different ways to consume stuff, and most of that was online. A lot of organizations invested in their online presence, which made the buying experience even better. And then Gen Z-ers coming up are technically savvy. They're not afraid of technology. Yo used to see end users say, “I know nothing about this. I want nothing to do with this. You take care of this.” But now, because of the amount of information simplification and the commoditization of it, more and more end users feel like they're a lot more savvy with it.