How AI is changing the MSP-buyer market, with Pax8’s Rob Rae

I think the conversation is more about how MSPs need to continue to stay relevant and ahead of where their customers are.

The way in which small businesses want to engage with technology and with MSPs is impacting the way in which the MSP needs to engage with the channel. It’s not so much that the channel has or MSPs have older tools or need to evolve or change. It’s more understanding their buyer’s journey and how that is going to change and evolve. Ultimately, it’s more of an evolution.

That means going where the buyers are going. In the pandemic, we all had to change the way we consumed things. Organizations increased and improved their online presence. Fast forward to now, that buyer experience got so good that we continue to use it.

SMB IT is not going to be any different. We need to go to where the buyer journey is going. That’s the biggest thing for me—the MSP looking at the evolution of how they’re going to sell things.

The MSP’s role is going to change from being a provider of technology to a consultant of business practices. So that’s assessing a small business and saying, “I can help you leverage technology in this space, so that you can move these people into higher revenue-generating projects or roles”.

The MSP is primed to make all the money because it’s not going to be a vendor developing a technology, and an MSP selling it to an end user. The MSP will be able to develop agents in the AI world. They’ll be able to customize solutions for their end users. And they’re not going to have to rely on a vendor to go and do that. So there’s the opportunity for the MSPs to actually create something along with the service delivery.

The journey for technology is traditionally always enterprise-first because they are the people that can afford new technologies and innovation. AI is a game-changer. AI could revolutionize the small business space before it even ever revolutionizes the enterprise space because the applications that you can have in small business are so much greater, and there’s more desire within that space to save more money by leveraging technology. It’s a brilliant opportunity for MSPs.

The important part right now for MSPs is to be the subject matter expert when it comes to AI. The key is these AI applications are going to get simpler and business desire to use them is growing.

Everybody wants the MSP to be the person that they call to do that. And the only way that that’s going to happen is if we start establishing ourselves as the experts now. That’s where I see MSPs needing to constantly remind the end user that they are the go-to for AI. That way you can fend off any organization that wants to come in and sell directly, or any small business that wants to go and get it themselves. We want businesses to think AI and go to their MSP.

 It’s hard to say anything but AI, right?! What I think MSPs should be most excited about is the productivity gains. The MSPs that I’m talking to understand that conversation and understand how AI technology can leverage that.

The even cooler part about that is how much money and how much opportunity there is. It makes the sale a little bit easier. I’ll give you a specific example: I run into this MSP that does this assessment of a small business and how they can leverage AI. They do an assessment, and they determine that with this type of investment, they can save the small business about $1.5 million a year in improved efficiency.

Where the challenge is, is that they billed the end user $10,000 for that project. But if I told you that I could save you $1.5 million and you’re going to give me half of that, you would do it—saving you this amount of money, and I’m going to get paid from that. I think demonstrating the value of what AI can do is going to make MSP sales a lot easier.

This gets me excited. We’ve talked about how the buyer journey is changing, how the end user is going to consume things differently. A lot of that is going to be triggered by the fact that people don’t like talking to salespeople anymore. They want to make buying decisions on their own with their own research.

Today, I can shop globally online for the best technology that fits exactly what I want, and I can buy and have it delivered without talking to a single human being. I think the way in which technology is going to be consumed is going to be very similar.

There’s this old marketing adage that says to turn a prospect into a buying customer, you have to touch them between seven and nine times. I read the other day that that number is closer to 25 now. That’s because we can all do research online. These are the types of things that MSPs need to be thinking about.

The marketplace journey that we’re on now is going to be the future of how people are going to consume things. What we have done at Pax8 is build a marketplace that MSPs can use for their end users, so that they can have that research journey and consume technologies without having to talk to a salesperson, but the MSP is still in the driver’s seat.

We have built the Model Context Protocol (MCP) server into our marketplace. It acts as a bridge between an MSP’s chosen AI tool and its Pax8 information, and the MCP server translates the data that Pax8 have into actionable items for the MSP. So if an MSP says, “Help me identify three things that should be of interest to this end user based on what they’re consuming today”, and it will take all of the data that we have and translate it back into actionable things for the MSP, so they can have a better conversation—or consultation—with the end user.