Businesses’ Generative AI Needs Create MSP Opportunities

The fast growth of generative AI across business applications and customers in the last 18 months is creating a steady rush of new opportunities for MSPs that can pivot quickly to serve their customers with the GenAI services they are demanding.

That is the conclusion of a new ISG Market Lens GenAI Use Case Study, which in August asked 201 IT and business decision-makers at Global 2000 enterprises across the Americas and Europe about how they are supporting their internal GenAI initiatives. Some 65% of the respondents said they are working with MSPs on their GenAI projects to gain immediate expertise and knowledge and to address in-house skills limitations, according to the study by the global technology research and advisory firm.

“I think the most important finding for service providers is that the research shows relatively little agreement about which use cases for GenAI will be the most successful long term,” Alex Bakker, an analyst for ISG, told ChannelE2E. “All the evidence we have so far has been accumulated over a fairly short period of time and represents a very dynamic period in the development of AI technology. As the tools mature and more use cases are tested, we will have a better idea of where businesses need to start to guarantee specific benefits.”

The study also found that 45% of enterprises still struggle with finding the right AI skills for their businesses and that enterprise spending on GenAI initiatives is expected to rise by 50% in 2025. 

To meet these growing GenAI demands from businesses, MSPs need to prepare more GenAI service assistance offerings to be able to support and aid their customers, said Bakker.

“In the meantime, organizations are pursuing many simultaneous small projects, with the expectation that some of them will pay off,” he said. “For service providers, it’s a time when they can focus on accelerating and enabling the experimentation, but also leveraging the visibility they have across clients to help all clients converge on successful technologies, processes and approaches.”

How MSPs Can Be Preparing Now for GenAI Services Growth

In the short term, said Bakker, there are opportunities in the way AI is enabled that MSPs can be exploring and building today, while the actual use of AI tools may grow to be more important in the longer term.

The study shows that MSPs are already supporting application development, infrastructure support, and data management for customer AI projects, said Bakker. “Given that AI’s success hinges on its ability to support an existing business process, streamlining it into existing applications and making it aware of existing data are critical steps to generating ROI, and service providers have already begun to build the capacity and skills to help with that kind of work,” he said. “As demand ramps, we expect service providers to continue to prioritize training and upskilling to drive AI differentiation.”

One of the major reasons that enterprises have been working with MSPs on their GenAI projects is that by bringing in partners that already have skilled IT workers in the GenAI field, they can dive into their projects more quickly, leaving competitors behind, said Bakker.

“Our study showed that the companies that had already leveraged MSPs were those prioritizing the immediacy of access to talent, and in fact, hoped that those skills would help kickstart their own talent development,” he said.

How GenAI Services Can Deliver Recurring Revenue for Growing MSPs

Those businesses that want to take advantage of GenAI in their work but do not have the internal capabilities and skill sets to make it happen are generating opportunities for MSPs to boost their all-critical recurring revenue streams.

“Data management and the broader ecosystem of software and business processes that are needed to ensure successful governance and use of data present a great opportunity for recurring revenues,” said Bakker. “However, in the long run, if AI proves effective at changing the delivery economics for MSPs, it may unlock longer-duration modernization and development services that are currently too expensive,” boosting MSP business opportunities even more.