The MSP community operates on a "rising tide lifts all ships" principle. Instead of struggling with in-house skill gaps for new technologies like AI, MSPs are encouraged to find and outsource to other MSPs with the needed expertise, marking up the service for a profit without direct investment in hiring.
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Companies are increasingly opting for high-impact services over software subscriptions or expensive full-time hires. They would rather pay a fractional expert $10k/month for targeted results than commit to a $300k annual salary, creating a win-win economic model.
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 traditional MSP 2.0 model of reselling software seats is no longer profitable. The next evolution, MSP 3.0 or "BSP" (Business Solutions Provider), focuses on consulting and managed services to solve core business problems, shifting the revenue source from software margins to service-based value.
The modern talent landscape is defined by an abundance of accessible experts, not scarcity. This allows leaders to design bold, ambitious projects first and then assemble the perfect on-demand team in minutes, rather than limiting scope to the talent currently on payroll.
Instead of replacing junior hires, AI creates a new opportunity: empower high-agency junior talent with powerful AI tools. This strategy creates a force-multiplier effect, allowing a small, specialized team to achieve outsized results by giving them "nuclear power" to tackle complex problems.
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.
A holistic talent strategy requires a dual focus. An 'External Talent Cloud' provides on-demand access to specialized global skills, while an 'Internal Talent Marketplace' unlocks hidden skills within the current workforce. Operating both creates ultimate flexibility, allowing talent to flow seamlessly into and within the organization.
According to an MIT report, enterprise AI projects led by external vendors are twice as likely to succeed as those built by internal teams. This is primarily due to a talent gap, as top-tier AI engineers and developers are concentrated in startups, not large corporations.
Similar to how "born in the cloud" MSPs disrupted the channel ecosystem, a new category of "born in AI" partners is now emerging. These specialized firms are built from the ground up to deliver AI solutions. Legacy partners must adapt by building or acquiring AI practices to compete with these new, highly focused players.
In a world where AI makes software cheap or free, the primary value shifts to specialized human expertise. Companies can monetize by using their software as a low-cost distribution channel to sell high-margin, high-ticket services that customers cannot easily replicate, like specialized security analysis.
