We kicked off the conversation by exploring how the MSP sector is currently valued at a staggering $548 billion, with an annual growth rate of 12%. This growth is particularly significant given the challenging global economic environment. Jay emphasised that the demand for managed services continues to rise, with 82% of businesses now outsourcing some or all of their IT needs. This shift marks a dramatic increase from a decade ago when only 30% of companies outsourced IT services.

One of the key drivers behind this surge in demand is cybersecurity. Jay pointed out that even the largest banks and government institutions have admitted that they cannot manage cybersecurity alone. This has led to a growing reliance on MSPs, making cybersecurity a fundamental component of their service offerings. As the threat landscape becomes more complex, the need for specialised managed security services is paramount.

Jay also highlighted the significant generational shift in the MSP market. Millennials, who are now the majority buyers of technology services, have different expectations and buying behaviours compared to previous generations. They prefer digital-first or digital-only interactions and are more comfortable with subscription and consumption-based models. This demographic change requires a shift in how MSPs approach their clients, focusing more on seamless integration and user-friendly solutions.

The conversation then turned to the impact of AI on the MSP sector. Jay noted that AI is not a standalone product but a feature that enhances various aspects of technology services. He provided a fascinating perspective on how AI is evolving at an unprecedented pace, with each iteration becoming exponentially more powerful. This rapid advancement means that AI is becoming an integral part of many software solutions that MSPs use and manage. 

However, Jay cautioned MSPs against rushing to get certified in AI technologies prematurely. He suggested that while AI holds tremendous potential, its immediate application for MSPs will be more about internal optimisation rather than client-facing services. MSPs can leverage AI to improve their marketing, sales, customer support, and operational efficiency. He believes the true managed services opportunities related to AI, particularly at the edge where most data reside, are still a couple of years away. 

We also discussed the evolving nature of vendor relationships in the MSP space. Jay shared a candid view on the role of private equity in scaling MSP tools and platforms. As MSPs grow, they often find themselves transitioning from family-run businesses to larger, more corporate entities. This shift can lead to changes in how MSPs interact with their vendors, moving from personal relationships to more structured, professional engagements. Jay advised MSPs to remain flexible and open to adapting their toolsets as the industry evolves.

A significant takeaway from our discussion was the importance of building robust ecosystems and partnerships. Jay encouraged MSPs to engage with various stakeholders, including digital agencies, accountants, and other tech service providers, to create a comprehensive support network. By doing so, MSPs can tap into new business opportunities and enhance their service offerings.

Feel free to connect with Jay McBain through his LinkedIn HERE 

Connect on LinkedIn HERE with Ian and also with Stuart by clicking this LINK 

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Until next time, look after yourself and I’ll catch up with you soon!