Managed Services

The Generative AI Opportunity for MSPs and the Channel

Every single big tech vendor has been talking about generative AI and how its become central to their road maps. But does that necessarily mean there’s a channel opportunity here?

At the recent VMware Explore conference we asked that question about the channel opportunity for generative AI, and came up with a multi-faceted answer.

Now channel-focused analyst firm Canalys is weighing in with its view of the channel opportunities for generative AI.

Canalys believes that generative AI will amount to a $15.4 billion opportunity for the channel ecosystem this year alone and will grow to $158.6 billion by 2028.

The Short-Term Generative AI Opportunity for MSPs

But how will that growth be felt by MSPs and MSSPs? Canalys chief analyst Jay McBain said in a LinkedIn post that while the opportunity is massive, it won’t be spread evenly across all partner or services types. MSPs can stand down for the moment.

“For example, the opportunities for global systems integrators (GSIs) or ISVs (independent software vendors) far surpasses the near-term (next 18 month) opportunity for MSPs or VARs,” he said. “In fact, with the difference in opportunity costs, MSPs may be better suited to invest more in security skills and practices over that timeframe.”

The Canalys brief states that it’s the GSIs, RSIs (regional Sis), niche consulting firms, professional services firms, ISVs and companies that develop software and applications that are best positioned to capitalize on generative AI services over the next 18 months.

However, the firm also stated that “every type of channel partner can improve productivity by integrating generative AI into their internal operations. This move can automate business functions, enhance client services, and create competitive advantages.”

Four Categories of New Services in Generative AI

Canalys identified four categories of new services in the generative AI space. Those are the following:

  • AI Services
  • AI Software
  • Advanced Data Services
  • Selling (reselling, co-selling, or upselling) generative AI products and offering services around them

Where MSPs, MSSPs Fit

AI services and AI software will generate the highest revenue and will benefit SIs; boutique AI/ML, data and analytics firms; professional services firms; and ISVs.

Advanced data services will generate slightly less revenues, but MSPs are among the partner types that are poised to benefit. This work will include data collection, integration, management and optimization, data lake and warehousing services, advanced analytics, data science, AI, ML, and BI services.

Reselling will generate the lowest revenues and partners poised to benefit include professional services organizations, VARs, distributors, MSPs, and MSSPs, according to Canalys.

Advanced Data Services – A Good Opportunity for MSPs

Data management classically fits into the IT realm in the enterprise so it makes sense as an opportunity for managed service providers that are interested in extending their businesses.

Canalys says that data services such as data collection, integration, management and optimization, data lake and data warehousing services, custom modeling, and advanced data science, AI, ML and BI services all present opportunities for the channel, including MSPs.

Canalys also offers recommendations for channel partners including MSPs and MSSPs to create and implement their generative AI strategies.

Jessica C. Davis

Jessica C. Davis has spent a career as a journalist and editor covering the business of technology including chips, software, the cloud, AI, and cybersecurity. She previously served as editor in chief of Channel Insider and later of MSP Mentor. She now serves as editorial director for CyberRisk Alliance’s channel brands, MSSP Alert and ChannelE2E.