AI Is Reshaping the MSP Playbook – And Pax8 Wants to Lead the Rewrite

AI isn’t just changing the game for businesses, it’s rewriting the rules for MSPs. As SMBs get smarter, faster, and more AI-aware, they’re demanding more than tools. They want partners who can deliver answers, not just software. That’s forcing MSPs to rethink how they sell, support, and scale - and pushing vendors to show up with substance, not just slide decks.

That’s where Pax8 is leaning in. We first spoke with Rob Rae in 2023, shortly after he joined Pax8 as the company’s new VP of Community and Ecosystems. Two years later, he’s helping lead the company’s next big bet: managed intelligence. It’s not just a buzzword; it’s Pax8’s vision for how MSPs can turn AI into a revenue stream and a competitive edge.

I sat down with Rob to talk about how partner expectations are evolving, why billion-dollar MSPs are just the beginning, and how Pax8 plans to keep the channel ahead of the curve.

ChannelE2E: You joined Pax8 in early 2023 with a strong focus on partner experience. How has your role evolved over the last two years, and how do you see Pax8 fitting into the MSP landscape today?

I started with Pax8 in February of 2023, so it's been almost two and a half years now. My role has evolved a little bit. I came in with a good understanding of the community, and over time I’ve been able to understand how Pax8 fits well into that community. When you're learning a new organization and its priorities, it takes time to translate that into value for partners.

We’ve been on a journey of disruption. Pax8 first disrupted the market by focusing distribution around what MSPs needed - recurring revenue, month-to-month billing, and SaaS applications. That started around 2018. Now, we’re focused on a second wave: transitioning from traditional distribution to a true marketplace. We're leveraging tech, data, and AI to improve the buying experience for MSPs and their customers.

More recently, at our Beyond event, we introduced another disruption — what we're calling managed intelligence. We believe this is the next big revenue stream for the channel, alongside cybersecurity and cloud. As Pax8 continues to innovate, my job is to talk to the market, help partners understand what we’re building, and bring those conversations forward.

ChannelE2E: What major shifts have you seen in how MSPs operate today compared to two years ago? What are they expecting from vendors now?

The market itself has grown — more MSPs, more vendors, more SMBs. The pandemic fundamentally changed how people consume technology and understand cybersecurity. It’s become a higher priority, with more investment behind it.

Another shift is demographic. The end user is getting younger, Gen Z is starting businesses, running them, and making tech decisions. That’s forced the entire ecosystem to adapt how we engage and sell. Today’s buyers want to do their own research, read reviews, and avoid sales calls.

We’ve also seen the rise of large-scale MSPs. We now have billion-dollar MSPs in the market, which I never thought I’d see. It used to be exciting to meet a $5 million MSP, now we’re talking billions.

AI is changing everything. It’s going to redefine jobs, allow small businesses to scale faster with fewer people, and drive the creation of new small businesses. That creates more demand for IT services, especially around AI, and that’s where MSPs come in.

ChannelE2E: How is Pax8 helping MSPs align with the evolving needs of SMB customers?

One of our biggest advantages is data. We have deep insights into buying trends across both MSPs and SMBs. We can help MSPs identify new opportunities based on what’s working, and what’s not, in the market.

We also have a unique ability to bring emerging technologies to market, especially in AI. There’s a lot of innovation happening, but not all of it is accessible yet. Pax8 can bridge that gap, connecting technologists with MSPs who are ready to sell.

The evolution of our marketplace plays a big role here. We’re giving MSPs tools like storefronts, which let them sell to customers without old-school tactics like Zoom demos or in-person pitches. Buyers want more control, more information, and less friction, and we’re helping MSPs deliver that.

ChannelE2E: Do you think the shift toward AI will redefine managed services entirely? Will we start seeing ‘Managed Intelligence Providers’ instead of MSPs?

Maybe. The key thing is that managed intelligence is going to be a new revenue stream. Whether it becomes the whole business or complements cybersecurity and other services remains to be seen.

What’s important right now is that we’re having the conversation. We’re still early in this journey. It's not about buying a product today — it's about awareness, education, and training. The pace of AI adoption is going to outstrip what we saw with cloud or cybersecurity. We want the channel to be ready for that.

ChannelE2E: Pax8 has also launched an AI Guided Growth Assessment for MSPs. What’s the goal there?

It’s a free tool, not tied to Pax8 products, that helps MSPs benchmark where they are on the AI journey. It shows if they’re ahead or behind, and recommends training or tools to help them move forward. Again, it's about preparing the market before the next wave really hits.

ChannelE2E: What does success look like for Pax8’s partner engagement efforts in the next 3 years?

Three years from now, I see managed intelligence as a normalized revenue stream. MSPs will be the go-to experts for AI solutions in the SMB space. Vendors will rely on MSPs to deliver their AI innovations to end customers. Managed intelligence will become as common and seamless as cloud services are today. I think the intimidation factor will fade, and it’ll become a well-worn, well-loved part of how this industry operates.

ChannelE2E: Anything else from the Beyond event or otherwise that you'd like to highlight?

This AI journey is moving very quickly, and we want Pax8 to be the guiding light for the channel. It’s not about selling a product; it’s about leading an industry transformation. We’re hosting Pax8 Beyond in Amsterdam this October. Even though it’s just months after our June show, the pace of change means the content will be new. We'll have actual product updates around our agentic managed intelligence efforts. There's a lot more coming, and I'm excited to see where it leads.