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As the managed service provider (MSP) landscape rapidly evolves, staying ahead of the curve is more crucial than ever. Pax8 Beyond 2024 offered a comprehensive glimpse into the future, highlighting the explosive growth and opportunities for MSPs. The key takeaways from the event provide invaluable insights for MSPs looking to thrive in a competitive market long into the future.
Takeaway #1: The Pax8 Partner Community Is Growing Fast
With over 1,600 partners (more than doubling last year’s total) from 70 countries attending, Beyond 2024 is a testament to Pax8’s success in fostering a connected and supportive partner ecosystem. But the number of MSPs in attendance represents a tiny sliver of Pax8’s total partner base. According to Pax8’s newly minted President and Chief Commerce Officer Nick Heddy, the company is supporting 35,000 partners, who in turn support 550,000 SMBs across the globe. In total, Pax8 and its partners are now serving over 15 million unique users who are consuming 60 million licenses, and the Pax8 partner ecosystem has a total economic impact north of $12 billion.
Takeaway #2: The MSP Opportunity Is Enormous
Based on the data that Jay McBain, Chief Analyst at Canalys, brought to the presentation, it’s a good time to be an MSP. McBain said that $5 trillion dollar tech and telco industries are growing at 6%—double that of global GPD!—and noted that customers are spending $2 on service for every $1 on hardware and software. In fact, the ratio of services to hardware/software spend is increasing, and McBain admitted he wouldn’t be surprised to see it reach $3 service to every $1 in hardware/software revenue in five years.
“For all the great vendors here that sell hardware and software,” he said, “MSPs are outgrowing them.”
McBain thinks that the market is primed for enormous growth over the next 12-18 months. As more Millennials make up a higher percentage of tech buyers, their preference for digital-first experiences, subscription models, integrated solutions, and online marketplaces will propel managed service revenues to new heights. According to McBain, managed IT, cybersecurity, and artificial intelligence (AI) services will grow at 12%, 15%, and 59%, respectively (McBain predicts that online marketplaces will grow at an astonishing 86% CAGR on the back of the managed service revolution). McBain believes that, given the current market conditions, it’s not unreasonable to think that a competent and trusted managed IT, cybersecurity, and AI services provider can grow their business by 30% to 50% in the next 18 months.
Takeaway #3: AI Is Going to Change Everything
The folks at Pax8 had a lot to say about AI, and why not? After all, industry leaders think AI represents a $7 trillion opportunity (and that’s just in chips). AI’s rapid growth is like nothing we’ve seen before in the tech space, with capabilities doubling every four to six months, according to Pax8’s CEO Scott Chasin.
During his segment of the keynote, Chasin emphasized AI’s exponential growth and its far-reaching impact on the future, predicting that it could achieve artificial general intelligence (AGI) within a few years. Once AGI is reached, the focus will shift to scaling and evolution, potentially leading to superhuman levels of intelligence within the next decade.
In the near term, Chasin forecasts that AI will become a standard practice in business operations and decision-making. Take cybersecurity, for example. Attackers are already utilizing AI in campaigns, and MSPs will need to adopt AI to defend against these advanced threats. Chasin said that AI will play a crucial role in enabling defenders at MSPs to detect anomalies, identify problems before they occur, and even predict attacks. AI will also have an impact in your business operations, notably in sales and marketing. Chasin foresees the rapid development of bespoke and adaptive marketplaces, offering curated solutions tailored to customer needs.
Within the next two years, Chasin predicts, AI will accelerate consolidation and we will see our first billion-dollar revenue MSP. Looking further out to 2030, Chasin thinks that autonomous MSPs—operating with minimal human intervention—will become a reality. MSPs will evolve from being mere service providers to becoming strategic business partners, focusing more on driving clients’ business strategies. Global collaboration networks among MSPs will form, sharing resources, services, and clients, while partner-to-partner marketplaces will enhance collective success through shared opportunities and innovations.
In the long term, Chasin envisions the embodiment of AI. This involves AI systems with a physical presence that understand and interact with the physical world, leading to the creation of robots capable of working in place of or alongside humans. The market will also see the rise of remote robotic management, where fleets of robots are overseen and controlled from afar.
Keypoint Intelligence Opinion
If you’re not selling managed IT, cybersecurity, and/or AI services, then it’s time to start—if not to get yourself a slice of the massive managed services pie, then to make sure that your business will remain viable in the future. Remember, customers are spending $2 on service for every $1 they spend on hardware and software, so they need help from tech providers to get the full value of their investment. If you can provide the hardware and software but none of the services to make them work and perform as expected, your customers will leave you for someone who can.
Starting a managed services business is no easy feat, especially with all the anticipated consolidation within the MSP market. But you don’t have to do it alone as vendors like Pax8 are highly supportive—participating in an ecosystem like Pax8’s can provide access to an array of resources, support, and potential business opportunities. Engage actively in this community to stay informed about industry trends, share best practices, and form strategic partnerships.
Regardless of what you choose to do, there is one requirement: Business owners must prioritize the integration of AI into their operations to stay competitive. This includes adopting AI-driven tools for cybersecurity, decision-making, sales and marketing, customer service, and other areas of your business. AI can help automate routine tasks, improve outcomes, and provide tailored solutions to customers. And by embracing strategic insights and preparing for the future, business owners can navigate the evolving landscape of the MSP industry and drive sustained growth and success.
Learn more about the Pax8 partner ecosystem here.
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