MSP software and business automation: the case for AI


The MSP industry sees itself as a well-oiled engine. All the cogs and wheels seem to turn as they should. Why bother with AI — a technology that isn't mature? Let's find out.

It is the year 1973. A young engineer named Steven Sasson goes to work for Eastman Kodak. His manager hands him a newly invented device from Bell Laboratories and is tasked with examining the imaging performance of CCDs (charge-coupled devices). He keeps at it until he realizes the potential of the device. Two years later, the 24-year old would go on to invent digital photography by creating the world's first digital camera.

But Kodak wasn’t really excited about the prospect of an industry-changing breakthrough.

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Steven Sasson

Institute for Advanced Discovery & Innovation

When it comes to artificial intelligence (AI), the story of Kodak is close to what's happening in the MSP industry. (Mind you, when I say AI, I am not referring to algorithms or automation, I referring to true AI — machines that can self learn and self heal.) What worries me is the general sentiment around AI within the MSP community — there is neither excitement about nor resistance to the prospect of an industry-changing breakthrough. The sentiment is one of dismissal. This Reddit user's comment echoes this sentiment perfectly.

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AI is talked about far too much in my opinion. It's a marketing buzzword that, contrary to popular belief, doesn't yet exist. "Neural networks" with copious amounts of training that consistently struggle with pattern recognition. Snake oil if-then decision trees labeled and sold as AI. We're still in the very early days of smoke and mirrors.



It probably might seem like a buzzword today but it won't be in the near future. When every software maker is racing towards AI, only the MSP software makers seem to dilly-dally their way to the game. What bothers me more is that there aren't many managed service providers either demanding AI in the software they use.

Ever wondered why AI isn't as hot a topic it should be in the MSP industry?

If you think about it — Kodak had a virtual monopoly on the US photography market. They made money every step of the photographic process. It was a brilliant business model. Kodak saw no reason to change. Why bother with a technology that isn't mature?

Similarly, the MSP industry sees itself as a well-oiled engine. All the cogs and wheels seem to turn as they should. No reason to adapt to changing technology. AI isn't here yet is what we tell ourselves. Why bother with a technology that isn't mature?

But there is a problem with this thinking and it is two-fold.

MSP vendors don't provide AI capabilities in their software because they have been busy expanding their MSP software business through private equity buyouts.

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I haven’t seen MSP software vendors stake out a leadership position in the AI journey.

Joe Panettieri

Co-founder, MSSP Alert

Now that some of them have the basic MSP software blocks like RMA, PSA, IT documentation, CRM, etc., they are now looking to plug AI components into their product portfolio. Well, I have news for you. Having worked with AI experts and building AI models, I can tell that's not how true AI works; it needs to be built with the software blocks from the ground up.

MSPs on the other hand don't ask for AI capabilities. All existing MSP software keeps MSP businesses operational. Nothing needs changing. Truth is, it feels like a trade-off to switch MSP tools today because every tool comes packaged with its own set of customer grievances, resulting in vendor fatigue. I often hear managed service providers saying, 'Why fix it if it isn't broken, right?'

Additionally, from a service delivery perspective, I speculate, this has to do with the maker-assembler mindset. As Dave Sobel, a Channel veteran and MSP expert, rightly points out managed service providers are like assemblers who assemble tools for their clients and deliver it as a service. If the makers don't make tools with AI capabilities, how will the assemblers assemble those tools?

Are we sleepwalking into failure?

In 1981, a study led by Vince Barbara, Kodak's CEO, showed that digital photography had the potential to replace Kodak’s established film-based business eventually. It had a 10-year window of opportunity. But it did little to prepare for the digital disruption.

Kodak made the mistake that George Eastman, its founder, avoided twice before — to be unwilling to embrace change.

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Kodak management’s inability to see digital photography as a disruptive technology, even as its researchers extended the boundaries of the technology, would continue for decades until Eastman Kodak filed for bankruptcy in 2012.

Chunka Mui


Similarly, the MSP industry seems to be in a state of denial about the AI disruption that is coming. It bothers me that we might stay this way for a long time unless something breaks. But why wait until something breaks before we can fix it? What if its breaks so bad we can't even fix it?

Change isn't an option

Be it the economic crisis, the pandemic, or our mindset, change isn't an option when we are faced with the threat of becoming irrelevant or outdated. We have always believed we will survive financial and natural catastrophes. Why should the technological disruption of AI be any different, you ask?

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Organizations need the capacity to adapt, and leaders should be barbarians at their own gates.

David Gann

VP, Imperial College London

Because today it isn't about just staying afloat and surviving radical changes. It is about thriving and staying relevant in a world that's setting up for the biggest digital transformation in human history. The power of AI to process large volumes of data and automate decisions will influence your revenue, improve productivity (not take over your jobs), reduce customer churn, and give you a competitive advantage over your peers.

Remember the move to the world wide web in the 1990s, the mobile revolution of the early 2000s, or the race to the cloud earlier this decade? Well, the AI revolution has already begun. By being an early mover in the AI market, you will be poised for success.

To be or not to be an early mover

Let me try and answer that question. There are three different business designs namely make-and sell, sense-and-respond, and anticipate-and-lead. This of course depends on the market's predictability. Kodak was unwilling to make-and-sell film in the face of new digital technologies. Hence it lost its chance to adopt an anticipate-and-lead design that could have secured it a leading position in digital image processing.

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Any time you’re inventing anything, you look at your invention. But realize that the rest of the world’s inventing along with you.

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Steven Sasson

Institute for Advanced Discovery & Innovation

MSP software makers have the opportunity to make-and-sell MSP software with true AI capabilities. They have the chance to anticipate-and-lead MSPs to greater success. is at the forefront of making, selling, anticipating, and leading that change.

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