NextGen 101 MSPs Tackle AI Adoption, Innovation, Cybersecurity

The use and development of AI applications among smaller MSPs is still in its infancy. But many say their deep expertise in IT and close client relationships give them an advantage over other businesses − and even vendors − when it comes to creating and implementing the right AI tools end-users will eventually need. 

“We have a lot better tools than a lot of other verticals out there. Their knowledge base and document management systems are not as structured,” as those compiled, created and managed by MSPs and other types of technology service providers, said David Payne, CEO of Payneless Computer Solutions, an MSP based in Melbourne, Australia. The company is developing an in-house AI service desk agent. In beta form, the agent so far has reduced the time of client on- and off-boarding by up to 90%. 

“We want to use the systems we have internally, create the solutions and then take it to market,” he said. 

Payne and other MSPs that earned a spot on the Channel Futures NextGen 101 ranking (an MSP 501 list) of top up-and-coming managed service providers recently met at the Channel Futures Leadership Summit in Miami where they shared their insights on trends surrounding innovative technologies such as AI, best business practices and overcoming the issues and challenges many MSPs face today.  

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Left to right: ProdigyTeks' Paco Lebron, Payneless Computer Solutions' David Payne, Reformed IT's Joe Burns, The Computer Guys' Roman Golshteyn and Beyond Computer Solutions' Chris Noles at the 2023 Channel Futures Leadership Summit, Oct. 31.

Payneless is working on integrating a natural-language chatbot into the agent that will connect the MSP’s knowledge base with its technicians to help them solve a number of technical issues in natural language. In part, the AI tools aim to lower the learning curve and help customer service agents and lower-level techs, even those that rank as “zero level,” quickly learn to perform tasks similar to those typically assigned to more experienced employees.  

“It’s a system that didn’t exist,” Payne said. “Now it’s opening up all these opportunities.”  

Many MSPs are following the same journey in developing and rolling out AI-related tools and solutions. They’ve begun by using AI technologies in-house to see which applications work best and then sharing those results with their clients, with whom they are consulting to figure out how AI solutions fit within their businesses. While many MSPs say it’s still too early in the AI life cycle to begin rolling out solutions for clients, they’ve found the technologies are benefiting their own businesses in many ways.  

“We’re using it to try to automate as much as possible,” said Roman Golshteyn, president of The Computer Guys in Sterling Heights, Michigan. “We didn’t have that capability until recently.” 

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That happened after a new hire expressed interest in exploring AI and showed a talent for developing related solutions. Golshteyn developed AI projects with him by stating the business objectives he wanted to achieve and the pain points he had in achieving them in the past. 

“He started creating things we didn’t have access to, but he was able to connect to them through APIs,” Golshteyn said. “He has really helped us out. Now I’m thinking about the kinds of business problems we can help other MSPs solve.” 

Some MSPs say delivery of AI solutions to customers could happen relatively soon, especially as more end-users start using and discovering the capabilities of the Microsoft 365 Copilot AI intelligence assistant, which leverage OpenAI’s GPT-4 large language models. 

“Copilot is going to change the entire landscape,” Payne said. “It’s like everything Microsoft does out of the box; it exposes the gaps where people need to customize and expand applications. Once people get exposure to interacting with their data in natural language, they’ll start banging down the doors in the next six to 12 months trying to get that rolled into their organization.” 

AI-enhanced features embedded in popular applications, such as customer service chatbots recently introduced by Salesforce, will spark strong customer demand from MSP clients, the NextGenners said.  

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“When the end-user finds Copilot helps create a smarter search engine, one that’s actually an interaction that finds better tailored information, it will allow them to better understand AI,” said Paco Lebron, CEO of ProdigyTeks, in Chicago. “Then they're going to start asking us questions, and that will help us understand their needs. That’s when the solutions will start to come.” 

What Is Innovation? MSPs Look Inward

AI solutions are among the most innovative MSPs are exploring today. It’s difficult to identify others, now that most MSPs have developed robust cybersecurity stacks and mature offerings that dominated the last round of IT innovation. 

“Everything we do seems to be innovative at the moment, and then three months later it gets hard to answer that question,” said Ashu Bhoot, president of Orion Network Solutions in Washington, D.C. “When you start doing it, you think, 'This is great, this is innovative, this is cutting-edge.' But once you integrate that into your day-to-day, it’s no longer such a big thing.” 

Instead, much of the innovation takes place today with the in-house development of AI and automation tools, streamlined business processes and operational efficiencies. 

“Internal innovation for us is improving our operational maturity,” Golshteyn said. “It’s re-evaluating every single process we have on the service side and the project management side, and seeing them flourish. Client satisfaction goes up, technicians’ stress goes down, the flow of everything becomes very smooth. I’m not saying this is something new. But as a small MSP, changing and improving operational maturity to align with what larger MSPs do is giving us this ability to gain traction to go to the next level.” 

Many smaller MSPs also lack the resources and R&D budget to develop what would be considered a truly innovative product, Lebron said. But he and other NextGenners note that new companies started by former MSPs, such as Rewst and audIT (recently bought by Kaseya), often create exceptional products and partner programs because they are built by and for MSPs.  

“Those types of products help other MSPs, but right now we’re still trying to explain to many clients what the cloud is,” Lebron said.

Major Challenges: Some Old, Some New

MSPs are still struggling with hiring issues, increased competition, tighter client IT budgets and other challenges. But one of the biggest concerns for Chris Noles, president of Beyond Computer Solutions in Canton, Georgia, is ensuring his company is protected if one of its clients suffers a security breach, especially if the fault lies with a large vendor and not the MSP. 

“Let’s face it. Some of the big PSA and RMM vendors have suffered some kind of breach. So it’s really important, now more than ever, not only to implement cybersecurity tools but to review our terms and conditions,” Noles said. “They could be written in such a way that lets the client know if a large tech provider suffers a breach [that affects the client], then you’re not responsible for any type of litigation. It sounds complicated, but it could be as simple as asking your insurance provider for a template. That’s what we did to harden our security.” 

ProdigyTeks takes that measure a step further. Not only do Lebron and his staff regularly review T&Cs, but they also include in every client invoice links to the company’s T&Cs and to those of each vendor used in a solution. The vendor links are especially helpful, Lebron said, because more clients are required through their cybersecurity insurance to list those in the solutions they use. 

“It’s essentially like, here’s the vendor and here’s what they say if something happens,” Lebron said of the links. “With our initial master service agreement, plus the scope of work, plus with you paying the invoice, we’re constantly reminding clients: 'Here’s the link to the vendors, which is dynamically updated.' Granted, anyone can get sued for anything, but the idea is that not only are we mitigating risk, we’re trying to make our clients as defensible as possible so they’re not deemed negligent by their end-users. It’s the same for us. So long as it’s documented, you’re in a winning position.”