Following on from our Burn the Boats article, we now turn to the inexorable shift that should be driving strategic thinking among service providers everywhere: AI and automation are going to change, forever, the way we do business and the way customers achieve their outcomes. What now?
An often-cited aphorism is that change feels a lot better when you’re driving it than when it’s visited upon you. The MSP market is dividing into those leaning into change and those battening down the hatches, or burying their heads in the sand in the hope it passes them by.
It’s enough to keep MSP founders awake at night. The choice becomes: do I take action, or take flight? Taking action will involve some scary choices. Delivery models need to be upturned – not incremental improvement by moving from one ITSM platform to another, but a complete reboot with data, observability and intelligence at the core. Business models need to be rethought to focus on the outcome and how to derive value from our role within it, away from per-unit or per-incident pricing that happens to match how we think about unit costs. Engagement with customers will have to go deep to stay relevant. Conversations must move from feeds and speeds to value. You read it here first: the three-year contract is dead.
And MSPs might find themselves saying “no” a lot more often. No to monolithic platforms pushed by SaaS vendors. No to hardware vendors hanging by a thread onto the old box-moving drivers for ‘partners’. No to building out 20-person ‘specialist’ engineering teams just to get the best wholesale buy price in a plummeting pricing landscape. No to handing over IP and workflows to giants that plan to disintermediate partners. No to customers who won’t move to where the industry is going. No to tenders decided only on unit price that ignore the value added (as if there were ever any other criteria). No to partners and customers that fail to show, or reward, loyalty. No to cost-out activity that removes the ability to be agile, innovative and different.
The software industry has already been through this. In the cloud cliff of the 2010s, perpetual licensing and ‘maintenance’ gave way to as-a-service models with monthly charging. The large revenue lumps that characterised the procurement cycle were replaced with much smaller monthly numbers that had to rebuild over time. The industry survived, where it caught or led the disruption; those who stayed stuck in perpetual land largely faded away. Then came the infrastructure-as-a-service revolution, taking MSPs with gross margins in the mid-50s down to sub-10% resellers scrambling to add value and dealing with skyrocketing complexity. We survived that, too.
The industry has been here before and will be here again. No doubt it will be a long and arduous haul, but it’s not as though we haven’t done it before. It’s time to stop the hand-wringing and get on with the change we all know needs to happen. As they say, if something is going to take a long time, you’d better get started now.
This article first appeared on LinkedIn on 12 May 2026.