Customers now expect DaaS vendors to provide "agentic AI" that automates and orchestrates the entire workflow—from data integration to delivering actionable intelligence. The vendor's responsibility has shifted from merely delivering raw data to owning the execution of a business outcome, where swift integration is synonymous with retention.

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.

Pure software-as-a-service (SaaS) companies are vulnerable to being replaced by foundational AI models that can replicate their functionality. A Sequoia partner suggests the defensible model is to become a services company that uses technology as a layer, focusing on implementation, strategy, and human expertise.

Shield Technology Partners is executing an AI-powered roll-up of IT Managed Service Providers (MSPs). Instead of centralizing operations, their model is to acquire successful local MSPs, keep their existing teams and customer relationships intact, and then layer on proprietary AI tools to enhance the service offering and drive growth.

Huntress discovered that simply finding threats wasn't enough for its MSP customers, who lacked specialized cybersecurity staff for remediation. The product had to evolve into a fully managed, human-powered service that handled the problem end-to-end, moving from alerts to a 'click a button to fix' solution.

SaaS companies are being disrupted not by better tools, but by AI that delivers the outcomes customers want. The winning strategy is to shift from selling software licenses to selling a guaranteed result, becoming an 'AI-native services business.' This changes the business model from high-margin software to a hybrid with lower but still scalable margins.

The future of service management is not about resolving tickets faster. It's about creating a connected system where AI constantly learns, sees patterns humans miss, and anticipates glitches before they become incidents. The goal is shifting from reactive fixing to proactive prevention.

History shows the greatest value is created by applications built on new infrastructure, not the infrastructure itself (e.g., Facebook on the internet, not Cisco). MSPs should focus on what new services they can offer *using* AI, rather than simply managing the underlying AI tech. This is where the long-term profit will be.