If you’re a managed service provider (MSP) sitting on the sidelines of the AI revolution, you’re missing out on a game-changing opportunity. AI is reshaping the managed services landscape by helping drive efficiency, boost revenue and redefine client expectations. Read on to learn more about MSP AI adoption—and what you can do to make sure you don’t get left in the dust.
Current Challenges
The increased availability and adoption of AI comes at a time when MSPs are facing a more challenging landscape than ever. Between economic uncertainty, undercutting from competing service providers and increasing cybersecurity threats, MSPs have their hands full.
AI to the rescue? Not so fast.
Although AI has the power to help MSPs solve these challenges and then some, they still face difficulty when it comes to implementing AI. Poor data quality, complexity of implementation, security issues, a lack of AI training, ethical concerns and cost considerations mean that MSPs need to strategize carefully before adopting AI. But that doesn’t mean you should take a “wait and see” approach about AI, as we’ll continue exploring.
How AI Is Already Working for MSPs
The reason you need to tackle those challenges now is because most MSPs are already using AI. A recent MSP survey confirms what we at Pax8 have been seeing in the industry—those using AI are unlocking superpowers that just aren’t available to the everyday team.
The survey found that 90% of respondents said they view AI as either “very important” (63.6%) or “somewhat important” (26.2%) to their growth strategy. And 66.7% of MSPs are already leveraging AI for IT monitoring, while 54.4% have automated ticketing and incident management.
AI doesn’t just help you streamline workflows; it frees up your team to focus on high-value, revenue-generating activities. And the numbers don’t lie. AI-driven MSPs are reporting up to a 20% increase in operational efficiency, and those offering AI services have seen a 20-30% boost in service revenue year-over-year.
What’s Driving AI Revenue?
About that last point: It’s ultimately all about revenue, right? So it’s worth looking into how MSPs are incorporating AI into their service offerings. Three key areas are leading the charge when it comes to AI-driven services:
1. Cybersecurity
Cyber threats aren’t slowing down, so forward-thinking MSPs are turning to AI to keep up. The report shows that 56.4% of MSPs are leveraging AI-powered cybersecurity solutions as a new revenue stream, helping them detect threats faster, automate incident response and enhance overall security posture so they can provide 24/7 security service for their clients.
2. Automated Client Support
The report shows 55.4% of MSPs are tapping into AI-driven chatbots and virtual assistants to reduce response times and improve customer experiences. With fewer bottlenecks, your clients can get the support they need—quickly—leading to happier customers and less churn.
3. Predictive Analytics
About half (51.3%) of MSPs said they use AI for predictive analytics, helping them better anticipate issues before they happen, reducing downtime and proactively optimize IT environments. This is where MSPs can truly differentiate themselves.
How to Get Started With AI
Clearly, the benefits of incorporating AI into your services make it a worthwhile endeavor. Still, those pesky challenges remain. How do you get started and make sure you don’t blow things up while trying to keep it competitive?
Start small. AI doesn’t have to be an all-or-nothing play. Incremental implementation with pre-built, pay-as-you-go AI models and high-ROI use cases (like cybersecurity or automation) is the smart move.
Do an audit. Close compatibility gaps in your system with APIs, integration platforms and middleware tools.
Make sure your security is up to date with frameworks like the CIS Controls, integrating encryption, access controls and regular audits. And be sure to anonymize any sensitive data during AI model training.
Lastly, it’s time to uplevel your business. Pax8 Academy and our Professional Services teams offer the training and support MSPs need to get AI-ready. Whether it’s learning how to integrate AI into existing platforms or developing a long-term AI strategy, we’ve got you covered.
The Time to Capitalize Is Now
What’s happening now with AI is just the tip of the iceberg. Based on what we’ve seen so far, we’re predicting that the MSPs who stick around are going to be able to offer services that just weren’t available before, from bespoke, adaptive marketplaces to cybersecurity that basically amounts to precognition, allowing MSPs to anticipate and stop breaches before they happen.
The good news? You don’t have to navigate this shift alone. Pax8 Academy and Pax8 Professional Services are here to help MSPs ramp up their AI strategies with expert guidance, training and resources. Pax8 Academy lets you get your hands dirty with in-person classes and labs, plus plenty of on-demand courses so you and your people can get up to speed when it’s most convenient.
The time to act is now—because the AI revolution in managed services is already here.
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