Channel Brief: The MSP tool stack is eating margins

The MSP cost problem is pretty obvious if you look at the numbers. Proofpoint’s MSP Playbook The MSP Playbook for Working Smarter, Not Harder says MSPs now typically spend 20% or more of revenue on software tools. That is exactly what is plaguing MSPs as they keep adding tools to cover skill gaps, meet compliance demands, and keep up with cybersecurity requirements. At some point, the stack stops being an advantage and starts eating into the margin.

The playbook explains how MSPs got here, pretty simply. The original MSP model was built for on-premises infrastructure. Then came the cloud. Then ransomware. Then compliance. Then cyber insurance. Each shift added more work, more risk, and more tools, but many MSPs did not change their pricing or operating model fast enough. AI is now adding another layer of change, and this one is moving even faster.

For MSPs, the most important thing is stack consolidation. The playbook says the largest MSPs may work with as many as 70 vendors, while the average MSP works with about seven. Either way, more vendors usually means more portals, more contracts, more training, and more gaps between tools. MSPs now need to standardize and build an integrated security suite that is easier to manage, easier to sell, and much better for margin.

This Week's Tech, Channel, and MSP News

ClickHouse launches partner program: ClickHouse has launched House Mates, its first formal partner program, as the company looks to support global expansion and growing demand for real-time analytics, AI, observability and data-intensive workloads. The three-tier program is designed for reseller, technology, ISV, service and consulting partners, with resources for deal registration, onboarding, joint go-to-market, training, certifications, co-sell support and integration development. ClickHouse said the program gives partners a more structured way to work with the company as enterprise customers adopt its cloud database platform for AI and analytics projects. House Mates is launching with more than 60 partners, including dbt Labs, Grafana Labs, IBM, Confluent, Fivetran, Cognizant, Presidio and DoiT, while ClickHouse is also developing a framework to help service partners support AI-based migrations.

Hyland has launched the Hyland Global Partner Network: Hyland has launched the Hyland Global Partner Network, a rebuilt partner program designed to help partners sell, deploy and manage agentic enterprise solutions at scale. The program brings Hyland’s global partner ecosystem into one consistent framework with tiered partner levels, multiple engagement models, published policies, a modern partner relationship management platform and clearer visibility into pipeline, performance and joint execution. Hyland said the new structure is meant to reduce friction, improve transparency and align partners around cloud adoption, content intelligence, industry-specific AI and enterprise governance. The program also introduces a partner economic model tied to measurable outcomes such as deal registration, growth and new customer acquisition, positioning partners to help customers move from isolated automation projects to governed, AI-enabled operations.

Lemhi launches a new platform for MSPs: Lemhi has launched a new platform aimed at helping MSPs turn AI advisory work into recurring revenue. The startup’s first offering, Engage, gives MSPs frameworks, assessments, roadmaps and customer engagement tools to package “managed AI” as a repeatable service rather than relying on one-off readiness projects or custom consulting work. The platform is designed to help account managers and sales teams lead AI strategy conversations with customers without needing deep technical expertise. Lemhi also plans to launch Compass later this year to help MSPs manage AI programs across their customer base, track adoption, monitor governance and provide virtual chief AI officer-style guidance.

Pax8 has overhauled its Partner Advisory Council: Pax8 has overhauled its Partner Advisory Council to give MSPs a larger role in shaping the company’s strategy, product development, and future investments. The revamped council now includes about 150 partners across North America, Europe, Southeast Asia, Australia and New Zealand, replacing earlier topic-specific groups with a broader global forum. Pax8 said the new structure brings partners into discussions earlier through virtual meetings, in-person gatherings and quarterly insight surveys tied to priorities such as AI adoption, partner enablement and marketplace strategy. The move also supports Pax8’s broader push to help MSPs evolve into “managed intelligence providers,” with guided growth programs designed to help partners assess AI readiness, identify skills gaps and build customer-facing AI services.

Cisco expands Cisco IQ as an AI-powered intelligence layer for partners and customers: Cisco is expanding Cisco IQ as an AI-powered intelligence layer for partners and customers, with planned general availability for partners in Q1 FY27. The platform uses Cisco telemetry, purchase history, contract data and support expertise to surface asset, renewal, vulnerability and infrastructure insights before they become urgent customer issues. Cisco said select resale and partner-branded partners will enter additional Early Field Trials this quarter, following general availability of the SaaS deployment mode on April 24. Cisco IQ can help move support from reactive break-fix work to proactive lifecycle services by automating routine tasks, speeding up assessments and giving partners a clearer way to identify refresh, security hardening, configuration and renewal opportunities across customer environments.