Our recent articles have discussed the approaches a technology service provider could take to become a Strategic Technology Partner (STP) for customers in the AI age. There is little argument that the wave of AI-enabled, agentic delivery models for IT service management presents both the challenge and the opportunity to the service provider community. Our underlying thesis is that those who lean in and embrace strategic change in their business will be better placed than those who only react and fast-follow. That’s because engagement models, commercial terms and meaningful value delivery are all up for grabs.
The apocryphal tale goes that in 1519, on landing in Mexico, the Spanish conquistador Hernán Cortés ordered his fleet burned, so that defeating the Aztecs was the only way forward for his army. In truth the ships were scuttled, not burned, but the phrase persists as a way to capture a forward-only approach to change. By removing the way back to the past, pushing through the change becomes the only mission, and it must succeed.
The transformative opportunity AI and automation present to business is broadening to encompass many industries. And for many, as they move from proof of value to production, the penny has dropped that managed services are key to driving security, scalability and integration with core systems. That means MSPs must now rapidly reposition their offerings to show how they fit into an AI-driven technology landscape. At the same time, expectations that the cost of delivering the ‘baseline’ services MSPs have traditionally focused on will fall are finding their way into conversations and contract negotiations.
It might be tempting to ‘tweak’ offerings with AI terminology and position those baseline services as critical to delivering AI outcomes, but as a proportion of the value delivered, these services alone are seen as commodities now more than ever. Realistic or not, assumptions abound that customer-side automation and AI can deliver many of these traditional outcomes – networking, cyber security, identity and infrastructure management – disintermediating traditional service providers. We know that to work cohesively as part of core enterprise infrastructure, these broad horizontal managed offerings must integrate up into AI-driven, highly dynamic applications that become more esoteric in a fail-fast environment. What’s more, the AI-driven automation customers are embracing may seek to control this infrastructure directly, in ways that defy the risk-managed change cycle.
The challenge and the opportunity lie in bringing baseline capabilities together into a cohesive platform of modular, integrated services that can support application-level automation and AI. Many MSPs profess to have done this; few actually have. The fearsome complexity and tension between vendor-specific automation and AI, and enterprise-side systems management, present huge challenges to service providers every day. What we do know is that services offered today that look like yesterday’s are not going to cut it, as organisations seek new services they can’t yet really define.
This is where co-delivered outcomes become necessary, to meet the rapidly changing needs of organisations rebooting and rebuilding their processes around AI. Commercialising those needs is even more challenging, because the value delivered can be elusive in the short term. Strategic Technology Partners need to find a way to anchor commercials to longer-range value outcomes rather than atomic IT activities, whose number may skyrocket even as their nominal cost to deliver falls. As these new commercial arrangements are discovered and negotiated, the traditional ways of pricing and modelling are obscured.
If current MSP pricing models are the smouldering boats, then new approaches to market – ones that capture the value delivered to the organisation, embrace the rapidly falling effective cost of IT delivery, and keep the customer engaged and focused on the partner’s relevance to its new operating model – are the victory needed for survival. As the service provider community navigates this space, those whose focus is laser-sharp and forward, knowing there is really no way back, will win.
This article first appeared on LinkedIn on 20 April 2026.