To grow beyond common revenue plateaus, MSPs must shift focus from their technology stack—which customers don't care about—to professional and managed services. Growth and margin come from selling solutions like managed cybersecurity or AI deployments, not from the specific tools used to deliver them.

The financial incentive for resellers to transition to a Managed Service Provider (MSP) model is stark. Top MSPs operate at 50-60% margins, a completely different league from the 8-20% margins typical for project-based resellers, which often yield only 1-3% EBITDA.

Traditional revenue tiers (Gold, Silver, Bronze) are vendor-centric. A more effective approach is to classify partners by their business model. For example, an MSSP needs predictable upfront costs to build a service, while a value-added reseller may prefer volume-based rebates. Tailoring your program to their model, not just their size, is key.

AI is making core software functionality nearly free, creating an existential crisis for traditional SaaS companies. The old model of 90%+ gross margins is disappearing. The future will be dominated by a few large AI players with lower margins, alongside a strategic shift towards monetizing high-value services.

For owners planning a future exit, the MSP model is far superior to a reseller's project-to-project structure. The stable, predictable monthly recurring revenue (MRR) from multi-year contracts is highly attractive to investors, creating a sellable asset independent of the owner's sales prowess.

Managed Service Providers become indispensable to vendors like Microsoft and Google by adding $7-11 of high-value services for every dollar of product revenue they generate. This value creation gives them significant leverage and makes them a more respected and crucial part of the vendor's ecosystem.

To successfully sell complex solutions like process automation and AI, resellers must first apply these principles internally. By re-engineering their own business to an MSP model, they gain the experience and credibility needed to guide clients through a similar journey, moving from vendor to trusted advisor.

Businesses previously considered non-venture scale due to service-based models and low margins, like Managed Service Providers (MSPs), are becoming investable. By building with an AI-first core, these companies can achieve the high margins and scalability required for venture returns, blurring the line between service and product.

Move beyond selling features by offering a "Business Process as a Service" (BPaaS) solution. This involves contracting directly on the business outcomes clients care about, such as cost savings or revenue optimization. This model delivers an end-to-end capability and aligns your success directly with your customer's, creating a powerful value proposition.