A Generational Shift in the IT Industry
The MSP industry is in the throes of its most significant transformation yet. Moving beyond basic break-fix solutions and systems integration (MSP 1.0) and traditional managed services, cybersecurity, and technology strategies (MSP 2.0), the industry is entering a third era: MSP 3.0.
MSP 3.0 is redefining how IT services will be delivered and consumed. Traditional service delivery models, help desk support, and infrastructure management are giving way to AI-driven operations that will reshape MSPs internally – but even more importantly, this shift will affect their clients.
MSPs Will Become AI Orchestrators
During his CES 2025 keynote, NVIDIA's CEO, Jensen Huang, said “The IT department of every company is going to be the HR department of AI agents in the future.” We believe that’s just the start. MSPs won’t stop at the “HR” of AI agents; they’ll be AI evangelists, educators, engineers, and orchestrators. They’ll lead AI adoption efforts for their clients, making AI easy to understand and use.
"AI adoption is happening faster than executives can plan from the top down, because it's already being used from the bottom up,” says Hatz AI Co-Founder & CEO Jimmy Hatzell. More than 50% of the American workforce is using generative AI in some capacity, with or without company knowledge or endorsement. Because this rapid groundswell of adoption by the average small business poses unique security and shadow IT risks, MSPs are uniquely suited to guide their clients through the AI revolution.
At Hatz AI, we're seeing the role of MSPs evolving from managing technology to orchestrating digital workforces. Forward-thinking MSPs are already:
- Adopting AI internally
- Building AI tools for MSP-specific use cases
- Ensuring seamless integration between human workers and AI systems
- Creating automated workflows that transform business operations
- Serving as strategic advisors for their clients’ digital transformation
MSP 3.0 doesn’t just demand an upskilled MSP team. It also presents MSPs with an opportunity to open a new line of business alongside managed IT, cyber, and other standard MSP services: AI-as-a-Service.
Small Businesses Are Facing Their Own Transformation
Perhaps most critically, small and medium-sized businesses (SMBs) are entering an era where AI capabilities will determine competitive advantage. These organizations need their trusted advisors to help them:
- Adopt AI acceptable use policies and strategies
- Identify opportunities for AI implementation
- Select and deploy appropriate AI tools
- Integrate AI into existing workflows
- Train staff to work alongside AI
- Maintain security and compliance in an AI-enabled environment
Small businesses need MSPs to lead them through this transformation
They need partners who understand both technology and business strategy. They need IT providers who can help them compete in an AI-powered world.
Conor Towmey of AI One says, "The CEOs and CFOs that aren't afraid to talk AI strategy will be the leaders of tomorrow. Create a safe space to discuss AI without feeling patronized."
For small businesses, the message is clear: their IT providers should be talking about AI and automation. If they're not, it might be time to find partners who are prepared for this new era. The future of managed services is here, and it's AI-as-a-Service. The success of small businesses may depend on choosing IT partners who are ready to embrace this change.
MSPs have the opportunity to evolve from technical service providers to strategic business partners. The opportunity is enormous, but so is the responsibility. Those who don't adapt risk becoming irrelevant, while those who embrace this change will help shape the future of business operations.
The transformation is already underway. Progressive MSPs are having strategic conversations with clients, building partnerships with AI platform providers, and educating their own teams about AI and transforming internal operations as a proof of concept.
Successful MSPs in this new era will be those who:
- Invest in developing AI expertise now
- Build service offerings around AI implementation and management
- Help clients understand and embrace the AI revolution
- Transform their own operations using AI
- Prioritize opening a new line of business selling AI-as-a-Service
Hatz AI is ready to help your MSP build its AI future!
Special shout out to Josh Kotler, Operating Partner at Axial Reade Capital, LLC, for his insightful thoughts about MSP 3.0.