On July 13, 2026, the Department of War suspended the Cybersecurity Maturity Model Certification (CMMC) Phase 2, the third-party assessment mandate that was set to take effect November 10.

Within days, managed service providers (MSPs) across the defense channel started fielding the same question from clients: does this mean CMMC is dead?

It doesn't. And the MSPs who answer that question wrong are about to hand their most defensible service line to competitors who read the suspension memo more carefully.

Reality check

Here's what actually happened. Department of War CIO Kirsten Davies suspended the requirement for defense contractors to pass a Certified Third-Party Assessor Organization (C3PAO) audit before winning Level 2 contract awards. She did not suspend Phase 1. Self-assessment, SPRS score submission, and annual affirmation obligations under DFARS 252.204-7012 remain fully enforced, and NIST SP 800-171 Revision 2 stays the standard the Department checks against through self-assessments and select government-led reviews.

The reasoning behind the decision was blunt. Davies told reporters “the math just simply doesn’t math” for the roughly 100,000 companies in the defense industrial base needing third-party assessment against the roughly 100 approved C3PAOs able to deliver it, with Small Business Administration data pointing to compliance costs approaching $7 billion a year for small and mid-sized contractors. A CMMC Reform Task Force review is due back to the Department CIO by mid-September, and officials have explicitly declined to rule out ending the third-party model altogether.

That's the pattern MSPs need to see clearly. The Department suspended a verification mechanism. It did not suspend the obligation that mechanism existed to verify.

Access controls

Here's where it gets uncomfortable for MSPs specifically. Self-assessment doesn't mean a client certifies in a vacuum. On most defense-adjacent accounts, the MSP is the party actually configuring the access controls, generating the audit logs, and often shaping the SPRS score the client submits to the government. When that score doesn't match reality, the False Claims Act attaches liability to whoever made the certification. Civil penalties currently run $14,308 to $28,619 per false claim, plus treble damages, regardless of whether a C3PAO ever shows up to check. The suspension removed the outside assessor who might have caught an inflated score before it became a submitted claim. It didn't remove the claim.

That's not theoretical. On June 18, 2026, the Department of Justice announced a $507,144 settlement with LOGZONE Inc., an Alabama defense contractor, over allegations it failed to implement NIST SP 800-171 controls required under two Department of the Navy contracts -- no C3PAO ever flagged the gap.

The case moved through DOJ's Civil Cyber-Fraud Initiative, which has settled fifteen cybersecurity-related False Claims Act cases since 2021, more than half of them in the past fiscal year alone. Many of these cases start with a whistleblower under the FCA's qui tam provisions, not a government audit, which means the C3PAO pause does nothing to shrink the pool of people who can bring one. The suspension changes who checks the box before awarding. It does nothing to the enforcement pipeline that starts after the box is checked wrong.

Reforming rather than removing

MSPs who read “Phase 2 suspended” as “stand down” are making the wrong bet twice. First, they're leaving a client's self-attestation exposure unmanaged during the exact window when nobody else is checking it.

Second, they're assuming the review ends in cancellation, when the Department has said only that it's reforming the model. Not abandoning the requirement to prove contractors protect controlled unclassified information. The 2021 transition from CMMC 1.0 to 2.0 set the precedent: the verification mechanism changed, and the underlying NIST 800-171 obligation never moved.

The MSPs who win this window aren't the ones still pitching “get certified before Phase 2 hits.” They're the ones using the pause to get the evidence layer right while the pressure is off. SPRS scores tied to real configuration data instead of a best guess, continuous monitoring instead of a point-in-time snapshot, and an audit trail that a future assessor can read without a client scrambling to reconstruct six months of change history. Build that once, on a platform that keeps every access log and configuration change in a single, unalterable record, and it holds up whether the Task Force brings back C3PAO assessments, swaps in a lighter validation model, or lands somewhere nobody has floated yet.

None of this requires exotic tooling. It requires the same discipline MSPs already apply to other compliance regimes. Version-controlled system security plans, POA&Ms with real remediation dates and supporting evidence, and SPRS scores a client's own configuration data that can reproduce on demand, not just defend on paper. Treating this as a documentation exercise misses the point. The documentation only holds up if it matches what the systems actually do.

That gap is wider than most MSPs assume. Kiteworks and Coalfire's State of CMMC 2.0 Preparedness in the DIB report found only 46% of surveyed defense industrial base organizations considered themselves ready for Level 2 certification. What’s more, just 44% had continuous monitoring in place across in-scope systems. Gaps that predate the suspension and that a pause in third-party audits does nothing to close.

The suspension bought the defense industrial base time. It didn't buy MSPs an excuse. The ones who spend the next two months building evidence architecture, instead of waiting on the Task Force report, will own the client relationship no matter what that report recommends.

Factors such as rising geopolitical tensions, cyber threats, energy instability, and supply chain disruption continue to reshape global technology. As a result, businesses are rethinking where critical workloads should sit.

Organizations are looking at data sovereignty to achieve greater control and resilience during turbulent times, shifting the concept away from a legal consideration and toward an infrastructure design decision.

In fact, sovereignty is cited as important to almost all (98%) IT service providers when choosing cloud or data center providers for their organization, according to our research. With many businesses opting for local data control, reassessing where their infrastructure, workloads, and critical data physically reside will be key.

The factors driving infrastructure changes

Geopolitical risk was once a secondary consideration in infrastructure planning, but it has quickly become a board-level concern. Now, 96% of IT service providers cite geopolitical threats when devising infrastructure strategies. They are thinking more about geographic exposure and the dependencies that sit underneath digital operations. The shift was already underway before recent geopolitical tensions intensified this shift. Gartner figures from 2025 showed that 61% of CIOs and IT leaders in Western Europe were looking to increase reliance on local cloud providers to protect their data.

The key threats shaping moves toward localization include energy price spikes from global conflicts (95%) and disruptions to shipping routes and cyber campaigns by hostile states (both 93%). Tightening data sovereignty laws and regulatory frameworks are also playing a part. For example, the ICO updated its international transfer guidance in January 2026, with the introduction of a three-step test to decide whether a data transfer should be restricted, such as when the UK’s GDPR applies.

Organizations want to know which jurisdictions apply when opting for a provider in a particular region, and whether clear evidence of data movement can be provided if regulators ask the question. 46% of IT service providers also cite ISO 27001/22301 and similar certifications as a main factor when it comes to choosing a UK data centre provider for sovereignty-sensitive workloads.

Compliance in an ideal scenario should inform infrastructure decisions from the very beginning, and certified, carrier-neutral data centres can play a big role here. They offer predictable governance and clearer evidence that regulatory requirements are being met, alongside low-latency connectivity to ensure innovation can continue to happen across borders.

Cloud strategies are evolving

Sovereignty concerns are greatly impacting cloud, colocation, and hybrid infrastructure decisions. In particular, cloud strategies are changing, with much more consideration around where workloads are being housed.

An often opted-for approach is the most sensitive data being kept in-country, while the less sensitive data is pushed out to the bigger cloud platforms. This distinction is important because the more sensitive data requires much tighter jurisdictional control, perhaps due to regulatory requirements or sometimes because of the market they serve. Global cloud platforms offer the needed reach for other services that rely on less-critical data.

Organizations must keep in mind that while sovereign cloud initiatives can enhance resilience and control, they must do so in a way that doesn’t foster isolated environments. Sovereignty should never be treated as a boundary. Of course, effective governance of data is crucial, but applications must continue to provide value and workloads that can move if circumstances change. When executed correctly, sovereignty should provide tested failover routes, jurisdictional control, and the ability to leverage the services offered by cloud and network partners.

With geopolitical tensions creating uncertainty, businesses want to be sure that if one part of their infrastructure is negatively affected by an incident, they can continue operating without losing control of sensitive workloads. Data centre interconnections support sovereignty by offering operational redundancy, such as multiple backup power sources.

The role of channel partners

Channel partners can play a central role in the sovereignty shift from board-level concern to practical infrastructure consideration.

As organizations look to achieve greater control over sensitive data and make use of secure access to cloud services, managed service providers (MSPs) and system integrators (SIs) have an opportunity to guide them through the right infrastructure choices.

Channel partners can essentially act more as strategic advisors, helping inform decisions around colocation, cloud connectivity, workload resilience, and secure data movement. The value is in helping those businesses to make sovereignty actionable.

How sovereignty’s success will be judged

With global risks escalating and compliance requirements tightening, data sovereignty is becoming a greater infrastructure priority. Local control is important, but it only creates value when supported by clear governance, strong security and the flexibility to adapt.

Careful decisions must be made around which data stays local and where cloud and colocation can provide value, alongside maintaining continuity during disruption.

For channel partners, this creates an opportunity to help customers connect sovereignty with resilience and performance. Overall, sovereignty’s success will be judged on how well it can support control, connectivity, and continuity.

Ten years ago, a server outage might have affected a single office or application. IT was simpler, stakes were lower and customers were willing, and able to accept a reactive relationship. Managed Service Providers (MSPs) built their value on ticket closure rates, uptime stats, and how quickly they could put out fires. It worked. But that era is over.

Today, a single point of failure can ripple across hybrid cloud environments, disrupt customer experiences globally and trigger regulatory risk. Businesses aren’t looking for faster helpdesks anymore; they’re demanding strategic IT partners that can provide true visibility into their environments and clear guidance on how to use technology to drive business outcomes. And they want all of this while budgets tighten and risk intensifies.

IT leaders are also operating under financial pressures. They’re no longer judged solely on system stability, but are expected to help drive revenue, support innovation and manage risk.

At the same time, many IT leaders are being asked to deliver AI projects, strengthen cybersecurity and drive digital transformation projects, without proportional increases in IT budgets. This is resulting in a more detailed examination of infrastructure spending, particularly around refresh cycles and long-term support strategies.

In this landscape, MSPs that still rely on a break-fix model aren’t just behind the curve; they’re becoming irrelevant. Support capabilities are still important, but the real difference now is made by those who go beyond fixing issues to become more of a strategic partner to their clients.

From visibility to insight

Today’s enterprise estates are fragmented by design, spanning on-premises infrastructure, colocation, multiple public clouds and an expanding edge. Layer in legacy systems, cloud-native applications and a patchwork of vendors and operating models, and the result is an environment that isn’t just complex; it’s opaque.

It is that opacity that’s the real challenge.

It’s no longer sufficient to detect when something breaks. By the time an alert triggers, the damage is often already underway. What IT leaders need now isn’t more monitoring noise; it’s clarity. They need partners who can cut through the sprawl to reveal how infrastructure is actually performing, where risk is accumulating and where inefficiency is quietly draining value.

This is where infrastructure intelligence comes in. Infrastructure intelligence goes beyond traditional monitoring tools to bring together data from across hybrid environments and layers in analytics, automation and contextual awareness. Rather than generating more noise, infrastructure intelligence is about filtering, correlating and interpreting signals in real time.

This enables MSPs to understand not just that something is happening, but why it’s happening and what the downstream impact will be. For example, instead of flagging a spike in CPU usage as an isolated event, it can tie that signal to broader workload behaviour, capacity trends or emerging resource constraints across environments.

This shift allows MSPs to move away from reactive incident management and towards predictive and preventative operations. Patterns can be identified before they escalate into outages, capacity can be optimised ahead of demand, and risks can be surfaced long before they impact users. In this model, insight replaces hindsight, giving both the MSP and the customer far greater control over performance, cost and resilience.

Redefining infrastructure lifecycle strategy

Traditional OEM-led refresh cycles are also coming under scrutiny. It no longer makes financial sense to replace hardware on a fixed timeline when it’s still running effectively. As a result, organizations are more likely to extend infrastructure lifecycles, provided they have the expertise to manage risk and performance. For MSPs, this creates an opportunity.

Partners that can help customers balance performance, reliability and cost optimization are playing a far more strategic role in IT decision-making. Third-party maintenance (TPM), once seen as purely a cost-cutting tactic, is now playing a key part in broader infrastructure optimisation. In hybrid environments, it gives organizations the flexibility to keep reliable systems in place longer, while putting their investment into the areas that really need it.

This allows MSPs to go beyond service delivery and play a more strategic advisory role, helping customers understand what to replace, what to keep and how to align support with what the customer actually needs. By combining lifecycle data, performance insights and support histories, MSPs can make far more informed recommendations about when to extend, when to replace and where to optimize.

This evolution doesn’t diminish the role of OEMs or traditional managed services. It reflects a shift towards the idea that customers now expect flexibility. In multi-vendor, hybrid environments, MSPs are increasingly judged not by vendor alignment, but by their ability to deliver outcome-driven, objective guidance.

The future of the MSP

The definition of value in managed services is being fundamentally rewritten. Closed ticket metrics still matter, but they no longer define the leaders in the market. Value is now measured by what doesn’t happen - outages avoided, inefficiencies eliminated, and unnecessary spend reduced. It’s reflected in better utilization, longer asset lifecycles and infrastructure that performs predictably under pressure.

To meet these expectations, MSPs need to evolve both what they offer and how they deliver it. They also need a mindset shift away from simply managing infrastructure and towards making sense of the data it generates and turning it into meaningful business insight.

This shift is changing the growth trajectory of the channel. MSPs that stick to a break-fix model risk being reduced to a commodity, competing primarily on price as margins continue to shrink.

The next phase of growth belongs to MSPs that can move upstream, translating data into insight, insight into action, and action into measurable outcomes. That requires building infrastructure intelligence capabilities that go beyond visibility, integrating optimisation and lifecycle management into a continuous, insight-driven model of service delivery.

As IT estates continue to expand and fragment, success will depend on the ability to provide direction as much as delivery. MSPs that can simplify complexity and help organisations make better decisions will move beyond day-to-day operational support to become true strategic partners, trusted not just to run infrastructure, but to help shape how it develops over time.

Most Managed Service Provider (MSP) service desks already have several layers of automation. From chatbots and self-service portals to AI routing and virtual agents, the tooling is widely used. Some of it resolves tech issues well, ensuring that skilled engineers are not wasting time on password resets and basic access requests.

However, problems usually start when a ticket is passed between multiple teams or arrives without the context needed for troubleshooting.

Even though MSPs are already tracking the usual metrics: ticket volume, average handling time, first-contact resolution, and technician workload, L1 teams can spend huge chunks of the day just trying to gather context. Some support teams jokingly call it the “20 Questions” phase. Who is the user? What device are they using? Has anyone already touched the machine? Did the VPN fail before the update or after it? Is this even the right queue?

A lot of that happens because support teams still lack clear visibility into what users are experiencing on the endpoint. Most MSPs now operate across ticketing, endpoint management, monitoring, remote access, and documentation tools that do not always share information particularly well. So technicians end up jumping between systems trying to piece together context that should already be sitting in front of them.

According to our analysis presented at the Gartner Digital Workplace Summit London recently, saving just one minute of context-switching time across 10,000 monthly tickets equates to 166 hours of recovered support capacity.

That is basically a full-time technician disappearing into tab-switching and context rebuilding, which is not exactly a great use of skilled people.

Escalation is where things really start getting expensive

In reality, many escalations just restart the troubleshooting process from scratch. Support teams have all kinds of names for this: verification tax, re-diagnosis, or ticket ping-pong. In some environments, AI-assisted triage has actually made this harder to spot because tickets arrive looking neatly categorized while still missing critical context.

Nobody fully trusts the notes attached to the ticket, so the next technician repeats the same checks anyway. And honestly, sometimes they have a point. By the third reassignment, half the ticket notes barely make sense anymore.

That gets expensive fast once senior engineers start getting dragged into tickets that never should have reached them. L2 teams can spend 15–30 minutes rechecking information already confirmed earlier in the support chain. L3 engineers may still insist on verifying the root cause themselves before touching anything important. Leaving some tickets basically on a doomed escalation path from the moment the initial diagnosis goes wrong.

If the underlying ticket data and context are weak, automation can just accelerate bad routing decisions. Tickets land in the wrong queues, bounce between teams, or get escalated before anybody has properly understood the issue in the first place. Some queues basically become dumping grounds for badly categorized tickets.

Why AI support struggles with unpredictable problems

Every MSP wants users to handle the simple stuff themselves rather than flooding the queue with password resets and printer tickets.

The trouble is that self-service tends to fall apart pretty quickly once the issue is no longer straightforward. Somebody reports a “slow laptop.” The system suggests a few generic fixes. Nothing changes. The ticket lands in the wrong queue anyway. Then an L1 tech has to start from scratch, figuring out whether the problem is Wi-Fi, memory usage, a bad update, or some background process chewing through the CPU.

Failed self-service gets expensive fast. Failed self-service attempts can push incident-handling costs from roughly $6 to $53 once escalation and repeated troubleshooting are involved.

Part of the problem stems from AI-driven support tools that are trained on historical ticket data and static workflows, rather than real-time device information. After all, real support environments drift all the time. Devices fall out of policy. VPN issues hit one office but not another.

That is where the bad assumptions creep in. Tickets look neatly categorized even when the underlying diagnosis is wrong. By the time the issue escalates, half of the support recommendations are due to AI hallucinations. Skilled technicians recognize that almost immediately. However, the other automations usually do not.

Reducing wasted effort in the service desk

Just throwing more AI at the service desk doesn’t fix the underlying diagnosis problem. In reality, technicians still spend way too much time piecing together context, rerunning the same diagnostics, and trying to figure out how a ticket even ended up in their queue after failing First Correct Assignment.

Smart MSPs are starting to tackle the problem at the source. They’re rebuilding their self-service portals so users can just explain what’s wrong in plain English, rather than forcing them to pick from clunky categories. After all, no one ever reports a “DHCP lease failure”; they say the internet’s down. L1 techs are also gaining real-time visibility into endpoints, rather than relying on patchy ticket notes and whatever the user happens to mention.

When you can instantly see failed updates, VPN drops, crashed services, or a machine grinding to a halt, you waste a lot less time playing detective. But even with those improvements, most MSPs still hit the same wall: all the important information lives in separate systems.

Ticketing, RMM, monitoring tools, and endpoint agents don’t communicate effectively. So every time a ticket escalates, the next person basically has to start from scratch. That’s why some of the better-run MSPs are now creating a single shared record for endpoint health and diagnostic history. When L1, L2, and L3 are all looking at the same up-to-date facts, you cut out the endless re-checking and stop tickets from getting stuck on a doomed escalation path.

At the end of the day, automation and AI are only as good as the foundation they’re built on. If self-service keeps generating dirty tickets, or tickets keep getting escalated too early, or rebuilt every time they move queues, AI is just helping you make the same mistakes faster. The teams getting real results are the ones giving every support tier access to the same live endpoint context; that’s when AI actually starts pulling its weight.

Netgear is making strides in helping businesses make the move into AI-powered network operations and management with the launch of Netgear Insight 10.0.

This next-generation cloud network management platform will be game-changing for small and medium-sized businesses (SMBs) and Managed Service Providers (MSPs), plugging the gap between need and resource, according to the firm.

Insight 10.0 is designed to support organizations through delivery of enterprise-grade AIOps, intelligence, and operational simplicity, helping them to make decisions faster and move their business forward.

One key benefit of the new platform is empowering network administrators to move from being purely reactive to being proactive, according to Luca Marinelli, Netgear’s head of Europe.

In terms of launches, Marinelli said this is a pretty significant one for the company and a key focus during his time with the business so far, following his appointment in October last year.

“The opportunity to have a single pane of glass, which will be managing simultaneously – like with multi-tenancy – several networks will free up time for [MSPs] to maybe start providing other additional services to attract new customers, which is always something very healthy to do in business.”

“[Also] if you perform certain types of activities in a reduced amount of time, your margin can be better. This results in a much more profitable business. So, there are multiple impacts [from] using more sophisticated state-of-the-art tools," Marinelli added.

"Sometimes the feeling is that AI is just a nice slogan that you need to just add in everything you say. [But] I think the important thing is to know what to do with this superpower. If you know what you want to do, it is extremely valuable.”

Outside of product innovation, Netgear has been heavily focused on how it partners to do business. Indeed, in November 2025 it unveiled changes to its partner program in a bid to make it easier to work together and drive joint success.

At launch, Netgear’s president and general manager, Pramod Badjate, said partners were at the center of everything the company does.

“Our big play at Netgear is delivering enterprise-grade products with the simplicity that the SME market needs. That all boils down to a product that is ready for those environments, but also, from a TCO point of view, fits that customer experience really well,” said Jordan Hobday, Netgear’s UK country manager.

“The Netgear Drive Partner Program is three tiers. It's there to really incentivize and reward our partners. There's a commercial benefit to that, but equally it's about how we [can] provide a good experience to our partners, like certifications, self-serve material, all the good things that you would expect.

“A big part for us is simplicity, and how easy it is to work with or do business with Netgear.”

Netgear’s EMEA business is in good health, according to Luca, but he said the company’s turnaround journey was not finished yet. Indeed, one priority for him is not just growing partner numbers for numbers' sake, but really focusing on deeper engagement.

“I think we have, in my opinion, enough partners that we are working with. The game is to keep them interested; I don't necessarily think we need to increase the number of partners broadly. It's going to be a very selective move in both the AV and IT markets to capture the real players that we need to work with, in a given territory, in a given market,” he said.

“We work with a lot of partners, but the number of partners we have this business intimacy with is not at all at the level where it should be. It’s about ways of working with partners; it's about tools that we keep evolving; it's about the value we bring to those partners and the way we spend time. We do spend time [with partners] already, of course, but [it’s about] the way we spend [that] time. It has to evolve.

“It's [about] more quality, more depth, more intimacy, more shifting the way we work with partners, which takes a little while. It doesn't happen overnight.“

Dropzone AI has announced an exclusive EMEA distribution partnership with QBS Software, in a move the company said will expand the availability of its AI-powered security operations platform to MSSPs and VARs across the region.

The agreement will see QBS distribute Dropzone AI’s Agentic SOC platform, which uses a team of AI agents to automate security alert investigations across existing security environments.

According to the vendor, the partnership aims to help channel partners address the growing demand for security operations capabilities as organizations contend with rising alert volumes, increasingly sophisticated cyber attacks, as well as an ongoing shortage of skilled SOC analysts.

For MSSPs, Dropzone said the platform can help scale managed SOC services without requiring a proportional increase in analyst headcount, while VARs will be able to offer the technology to customers operating in-house security operations centers.

"Security teams are under immense pressure to scale operations, meet increasingly stringent SLAs, and ensure regulatory compliance while maintaining resilience against rising alert volumes,” said Brett Candon, Dropzone AI’s vice president of international, in an announcement.

“Through this partnership with QBS, Dropzone AI will extend its reach to both MSSPs and VARs across EMEA. MSSP partners can scale service delivery and improve profitability, while VAR partners can help customers with in-house SOCs move from alert chaos to incident focus."

Dropzone’s Agentic SOC solution is built around its AI SOC Analyst, which investigates security alerts from across an organization’s existing security stack before escalating confirmed threats to human analysts for response.

The technology integrates with existing SIEM, SOAR, EDR, and case management platforms, allowing organizations to augment existing security operations without replacing current infrastructure.

Benefits for MSSPs and VARs

Dropzone said its platform will help MSSPs improve SLA performance, onboard customers faster, increase SOC capacity, and free up analysts to focus on high-value tasks while building higher-margin managed security services.

Meanwhile, VARs will be able to support customers operating their own SOCs by leveraging the offering to accelerate investigations, reduce false positives, ease alert fatigue, and address temporary cyber security skills shortages.

The companies said the agreement expands the channel opportunity across EMEA by enabling partners to support customers with managed, co-managed, and in-house security operations models while helping address the ongoing shortage of skilled SOC analysts.

"Our partnership with Dropzone AI strengthens QBS' security portfolio with advanced autonomous AI SOC capabilities that addresses a real challenge across the channel,” commented Tom Corrigan, chief revenue officer at QBS Software.

“By bringing category-defining AI SOC capabilities to our partner ecosystem, we're supporting growth, improving service delivery, and helping partners deliver stronger customer outcomes.”

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UK Managed Service Providers (MSPs) have embraced flat-rate support because it’s made delivery scalable: standardize the stack, package the service, and give customers a predictable monthly cost.

However, support has expanded faster than fixed fees can keep up with. Users expect instant fixes, boards expect resilience, and compliance teams, insurers, and auditors increasingly expect proof.

At the same time, the modern customer estate - SaaS, cloud, remote endpoints, third parties, and integrations - creates more noise, more incidents, and more out-of-hours work.

The somewhat predictable result is margin erosion: more tickets, more tools, more engineer time, and the same recurring revenue.

That’s why, for MSPs, observability needs to become a clearly defined, billable capability focused on outcomes customers recognize - fewer avoidable incidents, faster resolution, better user experience, and evidence that stands up in audits and insurance questionnaires.

Flat-rate contracts stay profitable when demand is reduced, not just responded to, and managed observability is one of the most practical levers MSPs have to do that.

Support is scalable when demand is predictable

Flat-rate support only works when MSPs can predict and reduce demand. But customer estates keep getting more complex while contract values stay flat, so every extra ticket and escalation eats margin.The usual culprits are ticket volatility, tool sprawl that slows triage and drives up costs, and escalation creep that pushes routine issues onto senior engineers. When resolution slips, SLA penalties and reputational damage follow.

That’s exactly what observability should fix, preventing avoidable incidents and cutting time-to-resolution, but too often it’s treated as “free”, and the service desk absorbs the cost.

Observability becomes billable when it’s auditable

In the channel, monitoring can sound like a checkbox. Customers assume it’s already included, like antivirus used to be, until you translate it into outcomes they care about:

• Less downtime (and fewer productivity losses)
• Faster incident resolution (and fewer escalations)
• Better user experience (especially for SaaS and remote work)
• Evidence for audits, regulators, and cyber insurers (not just “we think it’s fine)
• Capacity and cost control (no surprise renewals, no shadow IT growth)

For many organizations, that evidence now affects audit outcomes and cyber insurance terms, including whether cover is available and how premiums are priced. That shift in language matters because it changes observability from a feature to a service line: something with a scope, deliverables, and a price.

Tier it: response vs assurance

MSPs don’t need to rip up contracts to monetise observability; they can add outcome-based tiers that make proactive work visible and separate reactive support from assurance.

A simple model:

• Baseline covers availability checks, basic alerting, and standard response
• Managed Observability is a paid add-on: alert tuning, SLOs, dependency mapping, service reviews, proactive fixes, plus monthly reporting that supports audits and insurer questionnaires
• Service Assurance is the premium layer for customers who need stronger governance: continuous optimisation, capacity planning, change-impact analysis, and board-ready resilience reporting

The key differentiator isn’t more alerts, it’s less noise and more action. Fewer false positives, faster diagnosis, and a credible narrative of what you prevented, not just what you fixed after the damage was done.

Packaging that doesn’t feel like platform marketing

The fastest way to make observability feel promotional is to centre it on a platform. The fastest way to make it feel valuable is to centre it on operations.

Three practical packaging moves MSPs are using:

1. Define the observable estate: Be explicit about what’s covered (networks, cloud, critical SaaS, key user journeys, core systems) so the scope is clear.
2. Make proactive work visible: A monthly assurance summary showing issues removed, top drivers, automation time saved, and early risks - reusable for audits and insurance.
3. Tie it to business-critical moments: Position it as risk control during migrations, site moA simple model: ves, mergers, major upgrades, and security hardening, not just BAU monitoring.

SLOs, not uptime: measure what users feel

Packaging won’t protect margins if the NOC is already drowning. Observability only becomes a revenue engine when it’s operationally credible, and that starts with alert quality. Duplicate, low-value alerts create noise, slow triage, and trigger unnecessary escalations, inflating delivery costs. Good alert hygiene means de-duplicating, setting thresholds that reflect real user experience, and tuning continuously based on what actually drives incidents.

Consistency matters, too: standard runbooks keep first-line triage predictable and reduce senior-engineer drag. Measure what customers feel with SLOs (latency, transaction time, failed logins, API errors), not uptime alone, and “single pane of glass” should mean one accountable operational picture, not one tool.

The unglamorous truth is that MSPs protect margin not by collecting more telemetry, but by turning telemetry into fewer tickets.

Compliance pressure is rewriting the value conversation

Budgets are tight, suppliers are being rationalised, and procurement is increasingly asking why they are paying if things still break.

Cyber insurance and regulation are sharpening that pressure. Insurers want evidence of monitoring and operational oversight, and frameworks like FCA operational resilience, DORA, and NIS2 are raising expectations for mapping and proof. In many cases, observability is moving from nice to have to a commercial or contractual requirement.

That’s why monetising observability works now: it shifts the conversation from reactive support to measurable assurance, differentiates you from low-cost providers, and protects margin without adding headcount by preventing failures from becoming tickets in the first place.

Analysts and Managed Service Provider (MSP) leaders have warned that the industry must evolve beyond traditional support services if it is to remain competitive in the AI era.

Speaking at Kaseya Connect Europe in Prague, Omdia principal analyst Maxine Holt described a move from “MSP 2.0” to “MSP 3.0” – a model built around platforms, automation, compliance, and business outcomes rather than reactive IT support.

“MSP 3.0 isn’t just about doing what you’ve always done, but with better tools,” explained Holt.

Instead, she argued, MSPs need to rethink how they create value for customers, moving from technology operators to strategic advisors.

The end of the traditional MSP?

Jack Peploe, founder of MSP Veterinary IT Services, agrees with the need to overhaul the services offered to customers.

“The world of an MSP is dying. I genuinely believe that,” he told Channel Pro.

Peploe points to how the traditional MSP model built around monitoring, patching, and first-line support is becoming increasingly automated - and MSPs are being pushed higher up the value chain. His own company has already removed its traditional first-line support team.

“We haven’t lost anyone, we’ve upskilled them,” he told ChannelPro.

For Peploe, success increasingly depends on understanding customer industries, workflows, and business challenges rather than simply managing technology.

“What [customers] want is someone that really understands them, gets them, understands what they can do, understands their processes, their flows, the inefficiencies,” he said.

AI adoption remains slow

While AI dominated discussions at the event, there were warnings that adoption remains slower than many organisations would like.

Omdia research presented at the event found that fewer than one in five AI proof-of-concept projects ultimately make it into production, highlighting the gap between experimentation and deployment. The biggest barriers include integrating AI with existing infrastructure, a lack of in-house expertise, and difficulties defining clear business outcomes.

Kaseya CEO Rania Succar argued that partners have an important role to play in helping customers bridge the gap between experimentation and deployment.

“The adoption of agentic solutions to date has been too slow,” she told ChannelPro.

Similarly, Holt suggested that customers need practical guidance rather than more hype around AI.

“SMBs don’t need more AI hype,” she said. “They need practical guidance on how to actually implement AI in ways that integrate with existing systems, deliver measurable value, and don’t require them to become AI experts overnight.”

Platforms become the foundation

Underlying many of these changes is the growing importance of platform integration. As MSPs adopt more automation and AI capabilities, fragmented toolsets are becoming increasingly difficult to manage.

“It’s not about the best tool for each of the areas operating independently,” said Holt, who said MSP 3.0 will be built on “fewer platforms with much better integration”.

She added, “MSP 3.0 providers don’t just respond to problems, they anticipate them. They don’t just implement solutions; they recommend strategies. And they don’t just manage technology; they enable business outcomes.”

Kaseya has outlined an ambitious plan to unify its sprawling product portfolio around a common data layer, open APIs, and AI-driven automation, as the vendor seeks to move beyond its acquisition-led past and position itself for what it calls the era of autonomous IT.

The announcement, made at Kaseya Connect Europe in Prague this week, marks a strategic shift for a company that’s spent much of the past decade expanding through acquisitions. Rather than adding more products, execs are now focused on integrating the technologies already inside the portfolio.

“We’re doing the hard work to connect the data and open up the APIs,” Kaseya CEO Rania Succar told ChannelPro.

Focus shifts to platform architecture

The strategy is being led by CTO Pratik Wadher, who joined the company last year and has been tasked with building a common platform architecture across Kaseya’s product set. The long-term goal is to create a unified data layer capable of supporting AI agents that can automate ticket triage, remediation, reporting, onboarding, and other routine operational tasks.

Succar argued that many vendors have focused on adding AI features without first addressing the underlying data challenges.

“We’re actually doing the hard work to connect the data and open up the APIs,” she said, adding that AI becomes easier once those foundations are in place.

Elsewhere, Kaseya is expanding API access to allow MSPs to build their own integrations, customer experiences, and business intelligence capabilities on top of the platform.

Larger MSPs in the spotlight

The move reflects a growing focus on larger and more sophisticated MSPs. Historically, Kaseya has been strongest among small and mid-sized service providers, but execs now believe larger MSPs increasingly want access to the underlying data and APIs to build their own solutions.

“We are going to really focus on helping the largest MSPs be successful,” said Succar.

Partners at the event suggested that many of the changes introduced under Succar’s leadership are already being noticed, particularly around openness, product integration, and a greater focus on engineering execution.

“That change of management has really seen that progressive change,” said Simon Gurner, managing director of UK-based MSP Sunrise Technologies. “They were very, very siloed before, and they’re really pulling together now.”

Execution remains key

Alongside the positive reception, MSPs acknowledge that delivering a truly integrated platform will take time.

Jason Fry, managing director at MSP Global Four, said his organization had already invested heavily in building its own automation and reporting layer across multiple Kaseya products. And while welcoming the direction of travel, Fry cautioned that the work is only just beginning.

“It’s going to take them another year or so to fully develop and get all of that in place.”

The first capabilities built on the new platform are expected to become available later this year, with Kaseya planning to expand the functionality over time as more products are brought onto the common architecture.

Supply chain cyber risk is now a top concern for managed service providers (MSPs) and their customers, according to new research from CyberSmart.

The cyber risk management provider’s 2026 MSP Survey found that 43% of MSPs and their customers experienced a cyber incident caused by or originating from a supplier or third-party vendor during the last 12 months.

Conducted by OnePoll, the research gathered responses from 350 MSP leaders across the UK and Ireland spanning a range of industries and customer sizes.

The results suggest that MSPs are becoming increasingly exposed to supply chain risk due to their privileged access to customer environments – making them attractive targets for cyber criminals seeking to use them as a gateway to potentially hundreds of organizations.

Among the respondents that experienced a supply chain incident, 39% said the breach affected only the customer, while 16% said it only affected the MSP. Meanwhile, 39% said both were impacted.

According to CyberSmart, this means over half (55%) of incidents involved the MSP in some capacity.

Despite this figure, the research found that 55% of MSPs still do not monitor for supply chain risk – while over a third (37%) only assess risk quarterly and 11% do so annually.

In terms of challenges, MSPs cited managing and enforcing security requirements in contracts (39%), third-party risk assessment and monitoring (37%), and the cost of securing and monitoring supply chains (36%) as the biggest hurdles.

“Supply chain risk has become a central concern for MSPs and SMEs as cybercriminals increasingly target interconnected business ecosystems,” commented CyberSmart CEO and co-founder Jamie Akhtar.

“MSPs sit at the centre of these environments, which means a single weak link can have far-reaching consequences for customers, suppliers and partners.”

Growing regulatory pressure

Elsewhere, the report also explored MSP preparedness ahead of the UK’s Cyber Security and Resilience Bill (CSRB), which was introduced back in November 2025 and brings providers into the scope of formal regulation for the first time.

The CSRB includes mandatory security requirements, stricter incident reporting, and greater accountability as MSPs become increasingly critical components of national cyber resilience.

According to the findings, 96% of respondents said they felt prepared for the legislation to a certain extent, while 45% described themselves as fully prepared.

Addressing key CSRB concerns

However, MSPs pointed to operational and organizational concerns rather than technology and software limitations as the biggest barrier to readiness.

Instead, they cited skills (41%), clearer customer expectations (41%), stronger support for managing third-party risk (41%), as well as better-defined roles and liability (39%) as key requirements going forward.

Increased liability and legal exposure emerged as the biggest concern linked to the new legislation, noted by 42% of the survey’s participants, with MSP leaders expressing concern over undefined accountability and how risk will be operationalized in practice.

Improving accountability and resilience

Despite these concerns, 77% said they believe CSRB goes far enough in helping to protect supply chain organizations – including MSPs themselves – from cyber risk.

When it comes to what can be done to improve protection for MSPs, participants highlighted clearer guidance and best practice standards (54%), stronger protections around shared liability (52%), and clearer regulatory frameworks specifically for MSPs (51%) as the top three potential improvements.

“What our research shows is that the industry understands the need for greater accountability and resilience, but MSPs also need clearer guidance, shared responsibility and continuous risk visibility to make that possible in practice,” Akhtar added.

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Kaseya has cut the ribbon on MSP Success, a new growth ecosystem designed to help managed service providers (MSPs) scale more efficiently through a combination of marketing enablement, peer collaboration, and community support.

The initiative unifies the firm’s growth and business acceleration programs, including MSP Success Digital Marketing, MSP Success Peer, and the Kaseya Community.

According to the vendor, the new-look ecosystem will help MSPs raise their competitiveness and drive measurable business outcomes at a time when customer acquisition remains a significant industry challenge.

Citing findings from its 2026 State of the MSP Report, Kaseya said 71% of MSPs identified acquiring new customers as their biggest hurdle.

Kaseya eyes pipeline growth with MSP Success

At the heart of the firm’s new initiative is MSP Success Digital Marketing, a new purpose-built platform designed to help MSPs strengthen their market presence and accelerate pipeline growth.

The platform equips partners with a host of tools and services, from search engine and answer engine optimization (SEO/AEO), content marketing, and email and social media campaign assistance, to reputation management, analytics, and lead capture capabilities.

MSPs also gain access to a dedicated marketing success specialist, Kaseya said.

“While MSPs excel at technology, many struggle with marketing in a challenging landscape,” said Kaseya executive vice president of channel, Dan Tomaszewski.

“That’s why we’ve built a team of experienced practitioners, along with the right tools and processes, to help MSPs grow and succeed."

Strengthening peer collaboration

Alongside the digital marketing program, Kaseya has also combined its MSP peer programs – TruMethods Peer and Technology Marketing Toolkit – into a single peer collaboration initiative, dubbed MSP Success Peer.

The combined program aims to provide partners with an improved platform for collaboration and access to a larger network focused on operational and business growth opportunities.

Through the initiative, MSPs can participate in quarterly in-person meetings across North America, EMEA, and APAC, as well as online sessions geared towards building community and accountability.

Expanding growth-focused leadership

To support the continued expansion of the peer program, Kaseya also announced the appointment of seasoned leader Jay Dixon as director of MSP Success Peer Education, with further additions anticipated in due course.

“Building strong leadership starts with people who have lived it,” added Tomaszewski. “Jay spent four years in our Peer program as a captain, exited his business, and is now coming back to help others do the same.

“His experience reinforces our approach to investing in leaders who understand what success looks like.”

Meanwhile, Tomaszewski will lead Kaseya’s wider MSP Success initiative alongside Greg Jones, senior vice president of MSP Success EMEA, and Mike Stodola, vice president of marketing enablement strategy.

According to the company, the program is backed by a global team of 140 employees focused on MSP growth trends, AI-driven business enablement, and partner community development.

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The majority (89%) of MSPs have adopted a vertical-specific market strategy, according to recent research we carried out with Omida.

The reason? As AI spreads, compliance and governance challenges have become more complex, particularly in regulated industries; that’s why more MSPs are tackling these challenges by offering integrated solutions that are tailored to meet the needs of specific verticals.

Governance and compliance are the top barriers to AI adoption

Governance and compliance have hindered AI adoption for years, as many end-customers have struggled to implement the technology securely, effectively, and broadly across sectors and regions.

In 2025, for example, Moody’s found that many organizations “have no rules in place to govern the use of AI,” an unambiguous indictment of how pervasive and serious this problem has become.

The Omdia research shows that these challenges are more pronounced than ever. Indeed, it found that over half of MSPs identify governance and compliance as the main barrier to AI adoption, surpassing technical concerns, including data and security management (14% listed as top barrier), value realization (14%), and technical expertise gaps (13%).

As AI becomes more advanced and deeply embedded across workflows and regions, governance and compliance will only become more challenging and important. The rise of agentic AI amplifies risk. According to one report, for example, less than half of agents are governed, while there are roughly 3 million ungoverned agents in the UK and the US alone. That’s why it’s crucial that end-customers get these problems under control quickly, and MSPs have a huge role to play in that transformation.

As Robin Ody, Practice Leader, MSP Analysis, at Omdia says: “One of the bottlenecks for end-customer AI adoption today is the operational burden of data governance and compliance, which has become more complex and essential as AI continues to spread.”

MSPs turn to integration and specialization to beat AI adoption woes

With legislation like the EU AI Act already in force, and new legislation like the UK’s new Cyber Security and Resilience Bill well on its way to becoming law, AI compliance and governance are only becoming more complicated, and research shows that more MSPs are turning to integrated platforms and specialized market strategies to deliver seamless and effective compliance and governance frameworks.

More end-customers and MSPs are turning to integrated data protection, governance, and compliance platforms to solve and preempt AI adoption challenges.

This is an acceleration of a trend that predates the AI era. End-customers have preferred integrated platforms for crucial functions like data protection for years because these platforms offer greater control and functionality than a patchwork of point solutions that might theoretically offer similar functionality. As AI spreads and adoption issues continue to mount, the push for an integrated, platform-oriented approach to data protection, governance, and compliance has become even more important, creating significant opportunity for MSPs that are able to capitalize on this demand.

Like platform integration, vertical specialization also simplifies compliance and governance, particularly when it’s paired with a platform-oriented approach. By tailoring their market strategies and service delivery to fit the compliance and governance needs of specific regulated verticals, MSPs can win and keep more business than competitors.

Challenges loom, but so does opportunity

Most end-customers still have some work to do before they’re able to use AI securely and effectively. That said, the problems driving stalled AI adoption have become increasingly clear, and MSPs have a leading role to play when it comes to meeting this demand, which is likely to represent a several-billion-dollar opportunity in the coming years.

By adopting an integrated, platform-driven approach to the related priorities of data protection, AI governance, and AI compliance, MSPs can meet end-customers where they are and drive long-term AI success while building reliable, recurring revenue streams.

We know what the market needs. Now, we have to work together to bring the right solutions and services to market and meet this opportunity.

Identity Access Management (IAM) is a key building block to successful risk management at a time when ID theft is a key route for threat actors into company networks.

Since 2020, successful cyber breaches leveraging identity theft have become widespread, with recent examples such as the Visa, Marks & Spencer, Jaguar, and Harrods cases illustrating how even well-resourced companies are not immune to these types of attacks.

These breaches were linked to the Scattered Spider group, which has undergone a merger with another prolific cybercriminal group known as ShinyHunters. In just four months, the new group has successfully targeted and infiltrated multiple targets across the US and Europe, including the March 2026 breach of the European Commission, resulting in a 350GB data leak.

The anatomy of an identity attack

In these Identity attacks, Social Engineering is the primary initial vector, with cyber criminals leveraging Vishing and Phishing attack vectors to bypass SSO and multi-factor authentication (MFA) identity access controls. Attackers will often masquerade as internal IT, calling users on their work or personal phones to re-enroll or reset their IAM credentials, then send a modified account reset link to bypass non-phish-resistant MFA.

With credentials successfully hijacked, the attacker can then replay the MFA token to access SaaS resources and exfiltrate corporate data for the extortion phase.

The Social Engineering vector is popular as it offers an easy way to understand a company’s internal structure by leveraging social media. Employee names are usually linked to job titles, which reveal potential access privileges. Personal posts, interests, and commentary give insight into effective tactics for acquiring personal data through phishing, and, as corporate email addresses follow well-known conventions, they are easy to determine.

With identity being a pillar of cybersecurity but also a key attack vector, there are some key capabilities that IAM should deliver.

Rethinking IAM for a more complex threat landscape

Identity access management is not a one-size-fits-all solution. Customer environments and business objectives determine which identity controls will be the most effective.

Nevertheless, there are key capabilities an IAM solution should provide:

1. Coverage based on thorough integration within the corporate environment ensures a ‘single source of truth’, allowing visibility over the whole network – including legacy systems.
2. Correlation of login data used to identify potential anomalies. The more complex the environment, the more important this capability. Automated analysis can flag potential issues to be investigated manually as a second step, to uncover more details.
3. Reporting that enables pertinent and concise alerts to be raised by the IAM solution and follow a clear escalation path to ensure key stakeholders have actionable intelligence for decision-making.

Out of these capabilities, it’s the correlation element that is most important for the early detection of potential breaches in IAM integrity.

To improve the chance of early detection, it’s more effective to focus on looking for anomalies within the environment. These could be related to the user identity behavior, such as “Impossible Travel”, the user identity “location” represented by changes in IP address, or the service identities in the environment spiking in activity during off-hours.

There are several strategies that organizations can adopt to identify anomalous sign-ins without disrupting user experience; these fall under the concept of Risk-Based Authentication (RBA). Organizations can implement User and Entity Behavior Analytics (UEBA), which creates a profile of user behavior and can trigger a biometric or MFA check if a user activity falls outside of the baseline of the usual profile.

Conditional Access is another option, triggering authentication when a user activity exceeds a defined risk score threshold. Integrating FIDO2 passkeys, either software-based or hardware tokens, with one of the above RBA methods will greatly improve the efficacy of RBA by eliminating 90% of the common “anomalous sign-in” flags generated by password guessing or phishing.

IAM as a managed service opportunity

With threats on the rise and limited in-house cybersecurity expertise, companies of all sizes increasingly rely on managed cybersecurity services to strengthen and maintain their security posture. The IT channel is in a privileged position to deliver tailored and effective solutions incorporating IAM as an essential element of corporate cyber-resilience. But what should a robust IAM managed service include?

A true managed identity service should include an MFA or Passkey (FIDO2) capability, allow for customized policy management, and be able to deliver identity services to both users and non-human systems. It should also be capable of risk analysis powered by machine learning and AI, and deliver workflow orchestration. The service should be continuously reviewed and updated to keep up with the fast-evolving threat landscape.

For partners building IAM-managed services, it is recommended that they first conduct housekeeping in their own environment. Supply chain compromise is one of the top concerns in 2026, and partners must be able to show that their own environments are secure.

Secondly, if you have access to multiple vendors, you should standardize your solution stack. Ideally, you would have two core identity platforms, with one likely to be Microsoft Entra ID.

Thirdly, you should develop a comprehensive onboarding blueprint. The success of the service will depend on a positive customer onboarding experience, minimizing any outages in the process to ensure business continuity.

Ultimately, identity is no longer just an administrative layer. It is central to how organizations defend their environments.

As attackers increasingly target credentials, access pathways, and identity stores, businesses need IAM strategies that combine visibility, detection, and strong authentication. For partners, the opportunity lies not simply in selling another security tool, but in helping customers build a more resilient and adaptive approach to identity-led risk.

Vendor satisfaction among service providers has fallen sharply.

Indeed, the proportion of ITSPs describing themselves as “very satisfied” with vendor relationships dropped from 37% last year to just 19% this year, according to GTIA’s State of the Channel 2026 report.

However, Carolyn April, VP of research and market intelligence at GTIA, said the findings reflect broader disruption rather than straightforward vendor failure.

“This isn’t a case of vendors failing their partners,” she said. “It’s more of the market, the landscape, the technology has changed so quickly and in such a way that there’s a misalignment between what partners need right now and what they currently offer.”

The research is based on a survey of 130 channel pros across the UK and Ireland conducted in December 2025. It suggests many MSPs are now wrestling with bigger questions about where long-term value sits in an AI-driven market.

Peter Strahan, director at MSP Lantech, believes the drop in vendor satisfaction reflects wider anxiety across the MSP market.

“MSPs are not suddenly upset because vendors forgot to send them a Christmas card,” he told ChannelPro. “I think it’s more to do with anxiety. AI is forcing a lot of providers to confront uncomfortable questions about what parts of their business will still hold value in three to five years.”

For years, many MSPs built successful businesses around service desk operations, endpoint management, and recurring software revenue. AI and vendor automation are beginning to challenge parts of that model.

“When businesses are asking those questions internally, tolerance for vendor friction drops quickly. Programme complexity, certification requirements, commercial changes, and unclear profitability outlooks may feel more painful when confidence is under pressure,” said Strahan.

“This is as much a confidence story as it is a vendor satisfaction story.”

A changing vendor landscape

GTIA’s April said that AI has triggered the biggest reassessment of vendor relationships the channel has seen in years.

Historically, many MSPs maintained relatively settled vendor portfolios, relying on familiar products and predictable commercial returns. AI has disrupted that stability by introducing new suppliers and entirely new categories of tools.

“There’s a lot of new vendors out there,” said April. “For the first time in a long time, you have a partner community and MSP community that has a whole host of newer products that are offering products that they want to look at, and so the vetting process has really ramped up.”

At the same time, some established vendors such as Microsoft and VMware have frustrated parts of the partner ecosystem through pricing changes and evolving licensing models. However, April argued the bigger issue is structural.

“What that does to business models, and what that does to the types of benefits the partners are going to be looking for, and what’s going to benefit them the most to help them drive growth for their own business – those things are misaligned with some of the older programmes partners currently have in place,” said April.

AI could reshape MSP pricing

One of the biggest unresolved questions emerging from the AI transition is pricing. Traditional MSP charging structures based on users, devices or labour are increasingly being questioned as automation and AI agents begin taking over operational tasks.

April said both vendors and partners are still trying to work out what sustainable pricing models will look like in an AI-driven services market.

“The pricing model or models that are going to work best are largely unknown, both on the vendor side and on the partner side. That’s going to be probably one of the biggest headaches that needs to be dealt with over the next couple of years,” she said.

Customers are also likely to question why pricing should remain unchanged if AI reduces the amount of human labour involved in delivering services.

“In the old way of doing things, the per-user, per-device model – I think that’s going to get blown up,” said April.

That may accelerate the move towards consumption-based or outcome-led pricing models, something the industry has discussed since the rise of cloud computing but never fully embraced.

Hybrid models remain dominant

Despite years of discussion around the move to pure-play managed services, GTIA’s findings show the UK and Ireland channel remains firmly hybrid.

Most providers still combine managed services, consulting, product sales, and project work. Rather than converging around a single model, MSPs appear to be diversifying revenue streams to manage uncertainty and changing customer demand.

Austen Clark, CEO at Jera IT, explained to ChannelPro that vendor relationships have shifted significantly over the past five years as suppliers matured and became increasingly investment-focused.

“One point of view is that this is very welcome; we have stable and reliable solutions that are deployed repeatedly at a competitive rate,” he said. “The other view is we have seen a decline in product innovation and advancement – more tinkering with updates to front interfaces than step change progress.”

Clark also pointed to growing frustration around cybersecurity tooling, where overlapping products and market saturation have made it harder for MSPs to differentiate.

MSPs rethink where they add value

The findings suggest the vendor satisfaction decline is less about individual suppliers and more about uncertainty over where MSPs fit in an AI-driven market.

Clark believes AI is already reshaping how MSPs engage with customers. “The MSP industry was born out of ‘solving’ problems,” he said. “There is evidence with the development of AI that this has changed; problems once again are being solved by MSP organizations through engaging with their clients.”

That may also explain why vendors are coming under greater scrutiny. MSPs are no longer just looking for reliable technology platforms or predictable partner margins. Increasingly, they are evaluating which suppliers can help them stay relevant as customer expectations evolve around AI adoption.

For Strahan, that uncertainty sits beneath much of the frustration reflected in the GTIA data, concluding: “AI is creating genuine opportunity, but it is also forcing many MSPs to ask some difficult questions about their own future business models,” he said.

Periods of high demand, whether driven by seasonal spikes, major events, or unexpected surges in usage, are no longer just a test for end-user organizations. They are also a direct test of the partners and providers responsible for keeping critical systems running.

When things go wrong during these high-pressure periods, the impact can be significant. The 2025 cyber attack on Marks & Spencer reportedly affected its H1 2025 performance, while the effects of the Jaguar Land Rover attack rippled across its supply chain.

As IT environments become more distributed and interconnected, the responsibility for maintaining uptime, performance, and security increasingly sits with Managed Service Providers (MSPs), network providers, and other channel partners. When outages or cyber incidents occur, customers expect immediate response, rapid recovery, and minimal disruption.

From service provider to operational owner

Rapid digital transformation is sweeping across businesses, with 94% of private sector IT leaders being familiar with smart spaces. Modern environments rely on a complex mix of cloud platforms, IoT devices, remote endpoints, and real-time applications.

These systems are deeply interconnected, with network performance underpinning every business function – so the need for strong, secure connectivity has grown in parallel.

MSPs are no longer just providers; they are embedded within customer operations. When something fails, they are expected to respond, coordinate, and resolve issues as part of a broader operational responsibility.

Complexity at scale

Today’s IT environments are more complex - and more fragile - than ever. During peak trading periods, network traffic can surge unpredictably, cloud services must scale in real time, distributed workforces require secure, reliable access, and connected devices continuously exchange data across environments.

These connected systems also magnify the consequences of any network failure. When connectivity falters, the impact is immediate and widespread, affecting productivity, service delivery, and customer experience.

At the same time, every endpoint and connection increases the potential attack surface. Security and networking have become interdependent challenges that must be addressed together.

For MSPs and connectivity providers, managing this complexity is now a core part of the value they deliver.

Network connectivity to power resilience

Traditional approaches to networking, which focused primarily on uptime and capacity, are no longer sufficient. Environments must now be designed with disruption and dynamic responses in mind.

Most organizations require dependable networks to keep operations running smoothly, particularly during high-demand seasons when every minute of downtime can impact revenue and customer experience.

High-capacity 5G connectivity offers the speed, reliability, and scalability needed to support IoT devices, mobile (POS) systems, digital signage, and other emerging technologies. Its adoption can also help organizations consolidate network providers, simplifying management and freeing up budgets that can be reinvested into innovation.

Hybrid working has reshaped operations across both the public and private sectors. Head office teams, customer service staff, and fulfilment managers often operate from different locations, all relying on cloud-based systems to access sensitive information. This makes secure access an essential requirement. Robust, always-on networks ensure that all parts of the business remain operational.

Investing in network infrastructure capable of supporting emerging technologies such as AI and IoT gives businesses the flexibility to scale operations and adapt quickly during trading peaks while preparing for future innovation.

Mapping your network

To survive busy periods, leaders must treat connectivity not as a technical upgrade but as a strategic investment. Infrastructure resilience begins with understanding where weaknesses exist, whether through outdated networks, insufficient bandwidth, or fragmented security policies.

Scalable connectivity technologies, such as SD-WAN and high-capacity 5G, allow networks to adjust dynamically when demand spikes or primary circuits fail.

At the same time, managing the growing number of connected devices is critical. Platforms that centralise IoT and smart devices reduce operational complexity and prevent issues being overlooked that could lead to unpatched vulnerabilities.

Security is an essential part of resilience. Secure Access Service Edge (SASE) integrates networking and security into a unified framework, providing centralised control over access, identity, and data protection.

Combined with scalable connectivity, SASE ensures that IT teams can maintain operations, safeguard sensitive data, and respond rapidly to emerging threats, keeping systems online and customer experiences seamless, even during peak trading periods.

The power of networks

Busy periods place extraordinary pressure on networks at precisely the time when cyber threats and IT faults pose the greatest risk.

What was once considered background infrastructure is now a direct driver of revenue, brand reputation, and operational continuity.

By investing in strong network foundations today, organizations of all sizes can safeguard their most critical trading periods and build the resilience needed for long-term innovation in an increasingly digital future.

Managed Service Providers (MSPs) are operating in a tougher market where customers are more price sensitive, competition is intensifying, and winning new business is becoming harder.

But according to Kaseya’s SVP of MSP enablement, Greg Jones, the top-performing MSPs are responding very differently from the rest of the market.

Speaking at the MSP Show 2026 in London last week, Jones said the sector is facing growing pressure despite strong demand from SMEs.

“We’ve never seen SME spend outpace enterprise spend before,” he said. “However, it is harder to win new business out there. We’re being challenged on price.”

Rather than cutting prices to stay competitive, Jones argued MSPs need to become far more focused on value, outcomes, and operational maturity.

Here are the five biggest lessons Jones believes MSPs should focus on.

1. Run the business on data, not instinct

The exec said too many MSPs are still operating reactively rather than using meaningful operational metrics.

“A lot of MSPs run their businesses on gut feel anymore. That’s not good enough,” he said.

Top-performing MSPs are tracking detailed KPIs, including ticket volumes, technician utilisation, revenue per employee, and profitability thresholds.

According to Jones, some providers are now supporting between 400 and 500 endpoints per employee by using automation, AI, and machine learning more effectively.

“How are they doing that? AI, machine learning, model change,” he said.

2. Be more selective about customers

Jones warned MSPs against trying to appeal to every type of business.

While many providers define customers by company size or vertical market, he argued the best MSPs go further by identifying organisations with the right growth mindset.

“What you’re trying to do is weed out lifestyle businesses. We’re interested in businesses that want to grow and scale,” he said.

Those customers are more likely to see MSPs as strategic partners rather than simply a supplier to negotiate down on cost.

3. Treat sales and marketing as a growth engine

“The biggest players out there are the ones focusing on sales and marketing,” said Jones, who also argued many MSPs lack a clearly defined sales process.

“When I ask MSPs what their sales process looks like, they don’t actually know,” he said.

Instead, he urged providers to create structured sales playbooks tied to measurable activities, including outreach, events, and pipeline targets.

“You can never fully control the sales numbers. However, you can control your actions today,” he told attendees.

4. Capitalize on AI and compliance services

Jones identified AI and compliance-as-a-service as two of the biggest commercial opportunities currently available to MSPs.

“AI at the moment, and compliance-as-a-service, is the biggest offering at the moment,” he said.

He argued that growing regulatory and governance pressures are creating demand for MSPs that can help customers manage compliance more effectively.

At the same time, AI is helping top MSPs scale operations more efficiently and support larger customer estates without dramatically increasing headcount.

5. Focus on customer experience, not just SLAs

Traditional service desk metrics alone are no longer enough, said Jones. While operational KPIs still matter, customers increasingly expect consumer-style digital experiences, rapid responses and seamless service delivery.

That shift is being accelerated by younger business leaders who are digital natives and expect technology to work instantly and intuitively.

Jones said MSPs must stop focusing purely on tools and technical delivery, and instead concentrate on the business outcomes customers actually value.

“Nobody wakes up in the morning looking for your services,” he said. “Businesses wake up looking for the outcomes of working with an MSP.”

Small and medium-sized businesses (SMBs) are increasingly prioritizing operational challenges over cybersecurity concerns, new research shows, and this trend is creating new opportunities for MSPs.

That’s according to the CyberSmart MSP Survey 2026 report, which surveyed 350 MSPs across the UK and Ireland. The study found that 46% of MSP customers are now more concerned about issues such as inflation and rising costs than security risks, despite growing threat levels.

Meanwhile, MSPs themselves identified AI-driven threats as the number one security challenge facing the channel, with almost half (49%) ranking AI as their top concern for the second year running.

Inflation and increasing costs jumped from fifth to third place (38%), likely driven by geopolitical instability and economic uncertainty.

MSPs also remain a key target for cyber criminals, the study found, with three-quarters of respondents revealing that they were hit by at least one breach over the last twelve months.

Over half (54%), meanwhile, said they had experienced two or more breaches over the same period, while 32% reported three or more incidents.

CyberSmart said the findings highlight the growing disconnect between rising cyber risk and the day-to-day operational pressures being faced by SMB customers.

“Cyber risk and economic pressure are now inseparable,” commented Jamie Akhtar, CyberSmart’s CEO and co-founder. “MSPs can no longer sell cybersecurity in isolation when rising costs dominate customer priorities. The real challenge has moved beyond the tech stack into liability, compliance and accountability.”

Notably, more than half (59%) of MSPs believe their customers are now at a greater cyber risk than they were a year ago.

Despite this, 46% of respondents said inflation and spiraling costs are now viewed as a greater threat to customers than ransomware and malware (41%), emerging AI threats (37%), and supply chain risks (25%).

Increased demand for compliance support

According to CyberSmart, the role of MSPs appears to be evolving beyond traditional IT and security services amid growing customer expectations around compliance.

The survey found that 61% of customers now expect MSPs to assist with these requirements, with providers responding by increasing investment in compliance and regulatory services.

CyberSmart added that MSP spending in this area has increased from 64% to 72% year-on-year.

With this greater demand, many MSPs are now positioning themselves as managed compliance service providers alongside their cybersecurity and infrastructure roles – particularly as frameworks such as Cyber Essentials are adapting to keep companies accountable for security commitments.

Shifting MSP investment priorities

As SMBs increasingly seek support in maintaining compliance throughout the year, MSPs said they are prioritizing investments in staff training (51%), continuous monitoring capabilities (46%), as well as proactive risk management (44%) across the next one to three years.

Amid this shift, the study also revealed that scrutiny on MSPs may be beginning to stabilize, with 70% reporting increased customer oversight in 2026 – down slightly from 77% last year.

CyberSmart said this decrease suggests security and compliance expectations are becoming a more standardized element of procurement and vendor management processes.

“For SMEs, the key is embedding security into day-to-day operations and working with trusted partners to maintain resilience without adding unnecessary complexity or cost,” Akhtar added.

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Managed Service Providers (MSPs) face growing pressure from surging AI workloads in data centers in their network. They have grown accustomed to predictable planning and forecasting, delivering infrastructure as required.

But, if the current pressures from AI highlight anything, it is simply that data centers are unequipped and are operating with the wrong infrastructure.

This leaves MSPs at risk of losing revenue and also means that operators cannot confidently adapt to meet changing demands at the speed required.

Now, unpredictable demand and sudden spikes are creating a significant dilemma where MSPs who overcompensate could lose revenue, whereas those who have insufficiently prepared may jeopardise customer retention.

With AI infrastructure requiring operational expertise, it is difficult for MSPs to address gaps by solely optimizing capacity. This change further brings about the need for heavy asset models, such as advanced cooling and GPUs.

The MSPs who continue to employ older GPUs will experience reduced performance and processing power capacities, which in turn can adversely impact client retention and future revenue. Ultimately, high-density workloads are not merely testing whether data centers can meet the new demand; they are assessing whether existing models can survive this transition, and the next.

Where cooling comes into it

Traditional cooling approaches, in particular, are being pushed beyond their limit. Not only do AI workloads operate at extremely high-power densities, but they are characterized by their highly concentrated heat generation, which air cooling cannot handle.

Direct-to-chip cooling was once a niche engineering solution, but it’s now a key consideration for MSPs as GPU manufacturer demands grow and the need to increase processing density becomes more prevalent.

There are varying levels of compromise to make regarding making updates to existing cooling infrastructure, for example, Rear Door Cooling and Liquid-to-Chip 'Side Cars' are two different approaches, though both fall short of true direct-to-chip cooling.

Sidecars, for instance, deliver coolant directly to the chip via a cold plate, but reject that heat back into the room air to be handled by conventional CRAC or CRAH units, making them dependent on the very air-cooling infrastructure they are meant to supplement.

Cooling requirements now impact site selection and speed to deployment, so these decisions clearly go beyond the data center. MSPs can no longer consider direct-to-chip cooling as a mere technical upgrade for data centers, as it has undeniably become a strategic business decision that directly impacts growth and risk and promotes long-term viability.

On average, direct-to-chip can support 60-120+ kW per rack, which is far more effective than traditional air-cooling methods. The MSPs that don’t act and make this change will significantly limit their densities and overall output.

In basic terms, the direct-to-chip method delivers coolant directly to processors, removing heat more efficiently than traditional cooling frameworks. In the past, direct-to-chip cooling was exclusively used in high-performance computing and specialist environments.

The high up-front costs and complexity meant it wasn’t suitable for traditional data center environments. Even today, the decision to adopt direct-to-chip cooling is not straightforward, with in-rack and in-row CDU options to consider, as well as how the technical loop is configured, which directly affects integration risk.

AI workloads continue to make this cooling method an invaluable and core aspect of data center infrastructure and a resource MSPs must strive to be familiar with.

Traditional cooling methods cannot withstand increasing AI workloads due to airflow constraints that struggle to transfer the dramatic increase in heat effectively.

Air cooling was not designed to handle the high rack densities and energy consumption that come with today’s level of AI usage. Data center operators and MSPs that do not upgrade their cooling infrastructure put their facilities at risk of thermal throttling and failures, which not only reduce performance but also increase energy costs over time.

Addressing cooling throughout the lifecycle

Cooling decisions have a big impact across multiple stages of the data center lifecycle. The direct-to-chip cooling method eliminates common problems often felt by operators by providing stable thermal environments, reducing component degradation, and offering a range of sustainable benefits.

This cooling system not only operates at higher temperatures, which reduces the need for mechanical cooling systems, but it also maximizes free cooling and provides 'heat reuse' opportunities for integration and alignment with local communities. Poor cooling decisions can shape the financial lifespan of a data center, so it is paramount to make changes early on.

Aside from operational benefits, external factors are pushing MSPs towards adopting direct-to-chip cooling for their data centers. Regulatory pressures are intensifying reporting requirements concerning energy consumption, water usage, and carbon emissions, which highlights a clear strategic implication.

Across EMEA, the percentage market for direct-to-chip is much less than in the US, and there is still high demand for air-cooled densities up to 75kW per rack, so MSPs and operators need to have a 'Liquid Flex' or 'Hybrid' model to address customer demand. These cooling techniques feature direct-to-chip cooling alongside a mix of other cooling types, which can support different workloads and provide flexibility when scaling.

Cooling methods now also determine where centres are built in relation to power sources and water, meaning some regions will be unsuitable for AI workloads. Speed-to-market can be impacted by the complexity of cooling infrastructure, influencing build times and the suitability of retrofits.

Within the last few years, changing regulatory standards have raised questions regarding the environmental impact of cooling systems. When poor cooling choices are made, regulatory pressures for MSPs will inevitably increase.

Site selection is also driven by cost, energy, and carbon impact. Direct-to-chip cooling requires less white space, but more grey space to support the increase in capacity. So, it’s clear how cooling now impacts where and when centres can be built and whether they can meet demand.

Adapt to survive the shift

Cooling is becoming a pressing consideration, and there is no room for error. When advanced cooling is not considered or implemented, MSPs will struggle to operate their centers at full capacity and face thermal bottlenecks that compound operational instability.

However, risks extend far beyond performance alone. Inadequate cooling systems can introduce operational exposures, including downtime and chemical imbalance within the technical loop, which can cause damage in the long run.

Without robust isolation strategies, these risks can disrupt the entire data center lifecycle. From a business perspective, failure to adopt direct-to-chip cooling may not only impact revenue and capacity but also enhance the risks of system compromise and regulatory non-compliance. Now more than ever, cooling is a critical point for resilience, long-term viability, and growth.

As AI workloads inevitably increase, traditional cooling systems will fail to sustain performance, meet sustainable guidelines, and eradicate unnecessary risks.

The MSPs that make the right decision early on and adopt direct-to-chip cooling will remain competitive and ensure sustainable compliance and performance is upheld. Those leading the way will undoubtedly be best positioned to scale AI infrastructure efficiently and sustainably.

For several years, vendors have pushed Managed Service Providers (MSPs) and integrators to sell AI. Yet, while enterprise demand for platforms like Azure OpenAI and AWS Bedrock is surging, the resale economics remain fundamentally unbalanced.

Gartner forecasts global IT spending will hit $6.15 trillion in 2026, driven largely by an unprecedented appetite for AI infrastructure. However, this boom disproportionately benefits the hyperscalers and major SaaS vendors, capturing the direct licence revenue. Much of this growth is down to hyperscalers increasing their artificial intelligence (AI) compute capacity. John-David Lovelock, distinguished vice-president analyst at Gartner, said: “Demand from hyperscale cloud providers continues to drive investment in servers optimised for AI workloads.”

However, partners are left doing the heavy lifting of integration and day-to-day management for razor-thin margins. This dynamic is forcing a strategic rethink. Rather than chasing low-yield AI resell volumes, forward-thinking MSPs are turning the technology inward. By embedding AI to automate their own operations, service providers are transforming artificial intelligence from a low-margin SKU into a high-impact engine that drastically reduces their cost-to-serve.

The shift from selling AI to running on it

To reclaim profitability, the channel is shifting its focus inward. There is an argument that the industry is moving past generative chatbots and embracing "agentic AI", autonomous agents embedded directly into service desks, Network Operations Centres (NOC), and Remote Monitoring and Management (RMM) workflows.

Unlike basic query-answering bots, these systems are proactive. Agentic AI does not just answer questions; it takes actions, orchestrates workflows, and self-corrects. This represents a fundamental shift in the MSP business model. It turns AI from a low-margin resale product into an operational engine that drastically alters this cost-to-serve.

Early deployments, and recent IDC data on channel partners’ AI investments, suggest that automation and AI agents are already helping service providers handle more work per technician and improve response times. In this model, AI shifts the focus from chasing thin software resale margins to building higher‑value, AI‑enabled managed services.

Inside the AI-enabled service desk

The most immediate impact of agentic AI is felt at the service desk. At scale, AI copilots and agents are now capable of handling the majority of routine queries, from password resets and account changes to basic troubleshooting and Knowledge Base (KB) lookups.

This automation of Tier 1 support deflects ticket volumes significantly. McKinsey & Company reported that AI-enabled customer service transformations typically result in a 40% to 50% reduction in service interactions and a more than 20% reduction in the cost-to-serve.

AI-assisted workflows are elevating junior staff to "Tier 1.5" technicians. With virtual agents now resolving up to 65% of initial contacts without human intervention, the AI acts as a sophisticated copilot, automating triage and surfacing remediation steps. This shift is profound: as Forrester notes, staff previously tethered to routine ticket logging are upskilled to focus on root-cause analysis and complex exception handling, moving the service desk from a reactive cost centre to a proactive, consultative partner.

Self-healing networks and the AI-driven NOC

Beyond the helpdesk, AI is redefining infrastructure management. The traditional NOC relies heavily on reactive alerts, but AI and policy-driven automations are enabling an era of autonomous remediation.

Modern tools can detect anomalies, pre-empt incidents, and trigger self-healing actions, such as automatic server restarts, configuration drift corrections, and patch rollouts, before a client even notices an issue. AI-driven remediation playbooks allow MSPs to maintain 24/7 operations without proportionally scaling their headcount.

By trusting automation to handle repetitive infrastructure maintenance, smaller teams can cover far more endpoints. This dynamic allows MSPs to retain strategic control over critical incidents while allowing AI to absorb the operational load of constant monitoring.

How AI rewrites MSP margins

The financial implications of running an MSP on AI are profound. Automation targets the very core of the service provider economic model: the cost-to-serve.

By reducing the cost-per-ticket and increasing the number of endpoints an individual engineer can support, MSPs can realise tens of thousands of pounds in annual savings per service desk. However, capturing this value requires a shift in how services are sold. As technology budgets evolve through 2026, analysts argue that MSPs will need to move away from task‑based billing and hourly rates, instead adopting outcome‑based pricing tied to uptime guarantees, Mean Time to Resolution (MTTR), and security outcomes.

Automation gives MSPs the operational breathing room to repackage their value, and analysts note that AI‑driven managed services are shifting profit pools from simple cost‑cutting to differentiated, outcome‑based offerings that command premium margins.

The automation-first divide in a record-spend market

While global IT spending is hitting all-time highs, this capital is not distributed evenly. Spending growth is heavily concentrated in cloud platforms and AI infrastructure, totalling trillions over the next few years.

This creates a sharp divide in the channel. On one side are automation-first MSPs aggressively adopting agentic AI to scale operations without linear headcount growth. On the other are labour-heavy MSPs who remain tethered to traditional, ticket-heavy models.

The latter group faces mounting margin pressure as customer expectations for uptime and responsiveness increase faster than what manual processes can economically support. Providers that fail to modernise their service delivery and pricing models risk being undercut by more automated rivals that can handle more clients with the same workforce while protecting profitability.

Before taking AI to market, MSPs must get their own house in order. Apply automation internally first, across ticketing, documentation, and finance. Because AI relies on clean data and strict Standard Operating Procedures (SOPs), perfecting these internal workflows is a prerequisite.

Once mature, these tools cease to be a disparate line item. Instead, they become the foundation of high-value retainers, packaged to clients as AI-assisted help desks, self-healing networks, and continuous compliance monitoring.

Risks, limits, and the human factor

Over-automation is a costly trap. Hallucinations, misrouted tickets, or the perception of being "abandoned to a machine" will rapidly erode client trust. AI must augment, not replace. Human engineers remain essential for complex edge cases, critical infrastructure outages, and relationship-building.

Critically, MSPs must resist the urge to chase immediate, revolutionary gains at the risk of operational stability. Forrester principal analyst Julie Mohr emphasizes the need for a more pragmatic approach to AI integration, noting:

“The AI-centric service desk blueprint is sound, but successful execution requires patience, investment, and realistic expectations. Early adopters have proven the concept while providing the roadmap for sustainable implementation at scale.”

For service providers, this means the "human factor" is now a strategic investment. Forward-thinking MSPs are treating AI implementation as a long-term evolution rather than a quick fix. Success is found by upskilling staff who previously handled routine password resets to focus on root-cause analysis, process improvement, and complex exception handling.

This transition requires significant investment in training and a cultural shift, but it is the only way to ensure AI serves as a powerful lever for the business rather than a point of friction. Furthermore, robust governance, stringent data residency policies, and transparent client communication remain non-negotiable foundations for maintaining trust in this new operational paradigm.

As the Digital Operational Resilience Act (DORA) and the Network and Information Systems Directive 2 (NIS2) reshape Europe’s regulatory landscape, data sovereignty is no longer a legal abstraction - it is becoming a practical and operational responsibility for Managed Service Providers (MSPs).

Customers are no longer asking where their data is stored. Instead, they are asking who controls it, how quickly it can be recovered, and whether that recovery will stand up to regulatory scrutiny.

These questions are landing directly with service providers managing SaaS applications, backup, and critical data environments. Sovereignty is no longer a compliance checkbox; it needs to be a core part of the service MSPs are expected to deliver.

From infrastructure management to data custodianship

For many organizations, MSPs now sit at the center of the data protection strategy. They manage SaaS environments, oversee backup, and ensure continuity in the event of disruption. This shifts their role significantly, meaning MSPs are no longer just operators of infrastructure; they are custodians of data control.

The challenge is that sovereignty is still often framed as a question of jurisdiction. However, in reality, it is operational. It depends on whether data can be accessed, controlled, and recovered when systems fail or access is lost.

From uptime and capacity to resilience

Historically, MSP offerings have been built around availability, performance, and cost efficiency. Uptime and capacity defined value, and backup was often treated as a background function.

That model is changing.

Regulation and customer expectations are driving a move toward demonstrable resilience. It is no longer enough to say data is protected - MSPs must prove that it can be recovered, within defined timeframes, and under real-world conditions.

Operational data reinforces this shift. We recently published the Keepit Annual Data Report 2026, which shows that:

• Some 90% of restore actions are single-file recoveries, reflecting how frequently real-world data loss occurs
• Most restore activity happens during working hours, highlighting that recovery is an everyday operational need, not a rare event

Resilience is not theoretical; it is tested daily in small but critical ways, and MSPs are increasingly expected to support that reality.

The hidden dependency risk in SaaS

The widespread adoption of SaaS has made recovery more complex.

Most organizations rely on multiple SaaS platforms to run critical parts of their business, often assuming those platforms provide comprehensive data protection. In reality, responsibility is shared.

SaaS providers ensure availability, but long-term data protection and recoverability often sit elsewhere. For MSPs, this introduces a dependency risk that is not always visible to customers.

If access to a SaaS platform is disrupted, whether by cyber incident, misconfiguration, or outage, recovery may be constrained by the platform itself. This creates the sovereignty gap: the difference between having data stored somewhere and having meaningful control over it when it matters most.

A maturity gap and an opportunity to guide readiness

Restore behavior scales with organization size, according to our research. Indeed, 28% of SMBs restore regularly, versus 91% of commercial and 95% of enterprise organizations.

This is often a natural outcome of resourcing - larger firms have more dedicated IT capacity, while SMBs may treat restores as an “as-needed” task. Even major outage events didn’t produce a measurable increase in restore testing, showing that awareness alone doesn’t create routine readiness.

That’s where MSPs and vendors can make the difference: lightweight, guided recovery checks that build confidence quickly and raise maturity over time - supported by assistance that helps admins take the right steps when it matters.

Designing services for sovereignty

Closing the sovereignty gap requires a rethink of service design.

Sovereignty cannot be addressed through policy alone. It must be embedded into how services are built and delivered. That means:

• Ensuring data can be recovered independently of the primary SaaS environment
• Reducing reliance on single vendors or platforms
• Regularly testing recovery processes
• Providing customers with clear visibility into recovery capabilities

It also means answering increasingly detailed questions. What happens if access to a SaaS platform is lost? How quickly can data be restored? Where are the dependencies in the recovery chain?

These are no longer theoretical scenarios. They are becoming part of standard due diligence, particularly in regulated industries.

From service provision to assurance

As expectations evolve, so too does the role of the MSP. Providers are moving beyond managing infrastructure to delivering assurance.

Customers are no longer simply buying services; they are seeking confidence that their data is protected, operations remain uninterrupted, and regulatory obligations are met.

Conversations that once centered on speed, capacity, and cost are now shifting toward reliability, governance, and responsibility.

For MSPs, this shift presents a clear opportunity. Those who can define and deliver a credible sovereignty strategy will stand out in a market where performance alone is no longer enough. The ability to demonstrate ownership, stability, and continuity is becoming the differentiator.

Sovereignty redefined

Data sovereignty is evolving. It is no longer defined solely by where data resides, but by whether organizations can truly manage and restore it when it matters most.

For MSPs, this is a turning point. Those that move beyond uptime and capacity, and instead design for continuity, autonomy, and restoration, will be best placed to meet both regulatory demands and rising customer expectations.

Partner accreditation didn’t used to mean that much. Badges signaled little more than alignment with a particular vendor. But the landscape has changed.

Today, accreditation from Microsoft isn’t just about positioning, but rather a meaningful indicator of capability. It shows not just that you work with a brand, but you are invested in and trusted by it. So, when you earn Microsoft Modern Work, Azure Infrastructure, and Security designations, it’s something worth talking about. It requires operational, technical, and commercial buy-in, and few people really understand what goes into the process.

The shift from accreditation to differentiation

Microsoft’s partner model has evolved enormously in recent years. It began as something that was at least theoretically accessible to all Managed Service Providers (MSPs), but has become closer to an elitist framework.

Certification is performance-driven. It prioritizes measurable outcomes over theoretical expertise. And this is entirely in keeping with wider changes within the wider tech environment. Customers are no longer interested in credentials; demonstrable results matter more.

So, while Microsoft solution partner accreditation used to be awarded based on headcount - the number of team members who had passed Microsoft exams - a lot more is now required. Instead, businesses must exhibit a blend of technical skilling, customer adoption metrics, and verified project success. And that makes accreditation significantly harder. But, on the plus side, it also lets customers know that the accreditation is worth having. Which for MSPs, makes it into a competitive differentiation.

Holding one designation may indicate competence in a specific domain. Holding all three suggests an ability to deliver more. Integrated, end-to-end solutions that span productivity, infrastructure, and security.

So when an MSP can claim triple Microsoft designation, they stop being a simple service provider and can claim the role of strategic partner. A company able to support its clients through complete digital transformation, and every associated challenge.

The real cost of capability

Achieving triple designation demands substantial internal investment across people, processes, and platforms.

The first step is a commitment to continuous skilling. All members of the team - engineers, architects, and consultants - must maintain up-to-date certifications across multiple Microsoft technologies. And this must be further supported through the development of robust operational frameworks that live up to Microsoft’s expectations around compliance, governance, and security.

The security designation can be particularly challenging. Businesses must be able to demonstrate capabilities in a whole range of areas, from identity management and endpoint protection to threat detection and response. This can mean a lot of investment for many MSPs, ensuring that they not only have the security operations capabilities, but also the tools and teams to manage them.

Commercial alignment also has to be considered. Microsoft’s model is intended to reward partners who drive customer consumption of its cloud services. That’s the whole point of the system. So for businesses seeking accreditation, that can mean a complete change of go-to-market strategies, including pricing and customer engagement.

Ultimately, all of this is a significant commitment for any company.

Metrics that matter

The focus on performance metrics has come to define Microsoft’s partner program in recent years. MSPs must meet specific thresholds across skilling, customer success, and performance to attain and maintain partnership status.

While skilling metrics are relatively straightforward, focusing on the number and level of certified professionals within the organization, customer success metrics are more nuanced. They require partners to demonstrate real-world impact through customer deployments and usage.

Performance metrics tie these elements together by measuring overall business growth within Microsoft’s ecosystem. What makes this more difficult to achieve is that Microsoft regularly updates its criteria to reflect market trends and strategic priorities. This means that achieving designation requires ongoing optimization and improvement.

Beyond the badget

For MSPs willing to invest, the benefits of triple designation are manifold. Internally, the process drives greater discipline, consistency, and alignment, helping businesses to initiate and maintain best practices. While externally, it enhances trust. Customers increasingly look for partners who can demonstrate proven expertise across multiple domains. Triple designation provides a clear signal that an MSP has met rigorous standards and delivered measurable outcomes.

Perhaps most importantly, it positions MSPs to compete in a market that is becoming more demanding. Customers want and expect more. In meeting the exacting standards of Microsoft, businesses are positioning themselves to be able to deliver it.

The rise of triple Microsoft designation as a benchmark reflects a broader development of the managed services industry. Customers expect more, technologies are more complex, and the stakes are higher. In this environment, superficial credentials are no longer enough.

By tying accreditation to real-world performance, Microsoft has effectively raised standards for all MSPs. It’s down to the individual companies whether they wish to accept that challenge and maximize the potential of the business, or to take the easy path and consistently underachieve.

“Unprecedented. I’ve never seen anything like it in my entire IT career.”

That’s how Ian Thompson, senior vice president of business delivery at Managed Service Provider (MSP) Assured Data Protection, sums up the current state of server pricing.

“Prices are incredibly volatile and only going upwards, while availability is also unpredictable,” he said.

“Quotes that used to be valid for weeks are now valid for days, and sometimes even hours…it’s definitely far more chaotic than normal market fluctuation.”

Across the channel, partners are grappling with a perfect storm of memory shortages, AI-driven demand, and dynamic pricing models that are upending how infrastructure deals are usually priced, quoted, and delivered.

While pricing cycles are nothing new in IT, many in the channel believe this time is different. Rene Klein, executive vice president for Europe at distributor Westcon-Comstor, said volatility is no longer a temporary disruption – it’s becoming embedded in how the market operates.

“What we’re seeing goes beyond the usual market cycles. Price volatility looks set to become a structural feature of the market… fundamentally changing how the channel operates,” he said.

At the heart of the issue is price uncertainty, he added.

“Quotes no longer represent certainty in the way they once did. Partners have to think earlier about deal structure, timing, and commercial exposure.”

Dynamic pricing reshapes the deal cycle

A major contributor to that uncertainty is the rise of dynamic pricing, where hardware costs can change right up to the point of shipment. Vendors, including Cisco and HPE, have already updated partner terms to allow price adjustments between quote and delivery. Indeed, HPE has explicitly reserved the right to reprice orders up to the day of shipment and shortening quote validity windows to as little as two weeks.

For partners, that creates a real challenge: how do you quote a deal when the underlying cost base is moving?

Chris Gilmore, CTO at Axians UK, says the result is a shift in how resellers approach commercial risk.

“Resellers are increasingly backing their own quotes off to vendor terms, rather than absorbing risk themselves. That means shorter quote validity, explicit pass-through pricing, and tighter alignment to vendor conditions,” he explained.

The traditional model, where partners could confidently quote weeks in advance, is quickly disappearing.

“The net effect is a more cautious commercial model replacing the stability we’d historically expect,” said Gilmore.

Margins under pressure

That shift is putting margins under strain, particularly for partners reliant on hardware resale.

“Margin pressure is a real challenge when pricing changes after a customer quote has been issued. We increasingly see partners exposed to repricing late in the process,” said Klein.

Analyst data suggests this pressure is unlikely to ease soon. Omdia has warned that ongoing memory shortages are squeezing margins across the supply chain and forcing vendors to pass on higher component costs.

Some partners are mitigating risk through planning. Thompson said his firm has taken the unusual step of ordering hardware up to 12 months in advance, compared with about one month historically.

“That agility gives us confidence we’ll be ahead of many organizations,” he explained.

Memory shortages at the core

Gilmore points out that the biggest driver of volatility is strong demand for DRAM and high-bandwidth memory as AI workloads consume global manufacturing capacity. That pressure is cascading across the stack.

“It flows into storage, especially SSDs, and into networking and security platforms that rely on the same supply chains,” he said.

Thompson agrees, describing memory and flash as the “major pinch points” affecting server builds.

“Memory is used in everything – smartphones, tablets, set-top boxes. Demand is huge.”

Analysts warn that continued AI-driven demand for DRAM, NAND, and high-bandwidth memory is outstripping supply, creating sustained pricing pressure across server and storage markets.

Customers caught off guard

For many end users, however, the scale of the disruption hasn’t fully landed.

“There’s still a lot of denial in the market. Customers assume they can order a server and have it delivered within a few weeks at a predictable price,” said Thompson. “When they discover the real lead times or fluctuating costs, it comes as a shock.”

That disconnect is making it harder for partners to advise customers and lock down project budgets.

“Customers still want predictable outcomes, but the market is delivering variable inputs. That’s why transparency matters more than ever,” said Klein.

The impact is already being felt more broadly. Omdia forecasts a 12% drop in global PC shipments in 2026 as rising memory and storage costs force vendors to prioritize higher-margin systems.

Adapting to a new reality

Faced with ongoing uncertainty, partners are being forced to adapt. Some are stockpiling equipment, others are broadening supplier options, or turning to refurbished hardware. But the bigger shift may be strategic.

“We’re continuing to move toward services-led models,” said Gilmore, who noted that managed services, lifecycle support, and automation are areas less exposed to hardware volatility.

Klein sees a similar trend at the market level, with early signs that customers are shifting away from hardware-heavy models toward software, cloud, and consumption-based approaches.

“Forward-thinking partners will focus on evolving their commercial models rather than waiting for stability to return,” he said.

No quick return to normal

If partners are hoping for a return to calmer conditions, they may be waiting some time. Omdia expects memory pricing to remain elevated through 2026 and into 2027, indicating that volatility is not a short-term spike but a longer-term shift.

“I don’t think we’ve even reached the peak of it yet,” said Thompson, predicting continued price increases through 2026 and potentially beyond.

Gilmore is slightly more measured, suggesting the market will eventually rebalance – but not quickly.

“This is demand-led, driven by global AI investment. The market will stabilize, just not immediately,” he said.

For now, however, the old rules no longer apply. In a market where prices can change overnight and quotes expire in hours, the ability to manage commercial volatility as much as technical risk is becoming one of the channel’s most valuable skills.

Kaseya has officially moved beyond AI advisory tools, unveiling its new "agentic" IT management platform.

The new platform, which is powered by a proprietary engine dubbed Kaseya Intelligence, was announced at the firm’s Connect event in Las Vegas. It is designed to break the cycle of "alert fatigue" by moving from AI that simply surfaces recommendations to a system that autonomously executes tasks across IT operations, security, and backup.

The company is positioning this as a fundamental architectural shift. It says that many vendors have spent the last year bolting AI features onto disconnected tools. This, Kaseya argues, is an approach that often backfires, providing inaccurate recommendations based on partial data.

"The industry doesn’t need another AI feature bolted onto a disconnected tool," said Rania Succar, CEO of Kaseya, in a statement.

"What MSPs and IT teams need is a platform that runs their operations, one that sees across every system, understands context, and acts autonomously. That’s what we’ve built. Kaseya Intelligence is the engine. The platform is the operating system. And the outcome is IT that manages itself."

Closing the loop with ‘agentic’ AI

The platform’s core differentiator is its scale. Kaseya Intelligence is trained on a massive, purpose-built dataset including over 1 billion help desk tickets, 3 exabytes of backup data, and 17 million managed endpoints.

Unlike standard AI layers that hand off tasks to humans, Kaseya’s new agentic approach seeks to "close the loop." By executing actions, such as triaging a ticket or containing a threat, and then validating the outcome, the platform aims to function as an operating system for IT rather than a collection of utilities.

Dermot McCann, executive vice president and general manager for Kaseya in APAC and EMEA, talked about the need for this shift at the firm’s event in London earlier this month.

"You don't have time to be messing around with stuff,” he said. “Everybody is under pressure. Everybody's busy. Our role is to make sure that the technologies that you pay us for work in the way that you need them to work."

Three pillars of the new platform

The vision for this autonomous platform is being delivered through three major product launches unveiled today. First, the company introduced Agentic Digital Specialists, who are designed to handle high-volume, repetitive tasks. The first of these focuses on "Ticket Triage," a feature that automatically categorizes and routes incoming tickets, a process Kaseya claims can reduce downstream billing and routing errors by up to 80 percent.

The second pillar is Unified Cyber Resilience, a release that consolidates on-premises, SaaS, endpoint, and cloud backup into a single portal. By eliminating tool sprawl, the platform aims to provide AI-driven screenshot verification with 99.9 percent accuracy while offering expanded support for Azure and Hyper-V environments.

Rounding out the trio is Kaseya Security Information and Event Management (SIEM), which targets the complexity and high cost typically associated with traditional security operations.

This new SIEM correlates signals from more than 60 data sources to provide full-surface attack visibility. It is designed to be accessible to standard IT teams without requiring a dedicated staff of security engineers, featuring automated threat containment and 400-day out-of-the-box log retention to assist with compliance requirements.

An operating system, not a tool

The release signals a clear attempt by Kaseya to commoditize feature-based AI while claiming the high ground of autonomous operations.

"This is the difference between AI as a feature and AI as an operating system," the company stated in a press release detailing the launch. By embedding this intelligence across its entire portfolio, Kaseya aims to enable MSPs to scale their service delivery without the proportional need for human headcount.

"We notice that it wasn't architecturally possible to keep up with this emerging threat [using traditional tools]," McCann added. "We have to capture [innovation], then we have to put some structure around it, governance around it, and determine whether they fit in our roadmap. These types of technologies are really driven because our customers are saying, 'Can you do this for us?'"

With this launch, Kaseya is betting that the future of the MSP market won't be won by those who provide the best AI suggestions, but by those whose platforms can actually do the work.

Integris has announced plans to acquire Australian MSP First Focus, as the US-based provider looks to expand its international footprint and broaden its services for small and medium-sized business (SMB) customers.

The proposed deal, which is subject to regulatory approval, will see Integris gain a significant presence across Australia, New Zealand, and the Philippines, further extending its reach into key growth markets.

Founded in 2003, First Focus serves more than 800 organizations across the region, providing expertise spanning managed IT, cybersecurity, cloud, AI, and software development, alongside support services for mid-market customers.

The company employs almost 400 staff across its operations.

In an announcement, Integris said the acquisition will bolster its ability to deliver enterprise-grade technology to SMB clients operating across multiple regions as demand for secure, scalable AI capabilities continues to grow. Financial terms of the deal were not disclosed.

"This acquisition represents a meaningful step forward in our long-term vision to build a truly global platform MSP focused on the needs of small and midsize businesses," explained Rashaad Bajwa, chief executive officer at Integris.

"As AI rapidly reshapes how organizations operate, scale, and compete, this combination allows us to accelerate our ability to deliver secure, governed AI capabilities globally—while maintaining the high-quality, people-first service our customers expect."

Integris eyes international growth

Headquartered in New Jersey, Integris provides managed AI and IT services to SMBs, helping organizations modernize their technology environments and improve operational performance.

The company’s planned purchase of First Focus marks its first international acquisition as part of its broader plans to scale its AI and IT services offering globally.

Integris said the move will position it as one of the largest global MSPs focused on the SMB segment, with the additional resources expected to improve its ability to support clients operating across multiple regions while continuing to deliver localized service and expertise.

Upon completion of the deal, First Focus will continue to operate under its existing leadership team, with both companies planning to focus on integration efforts such as knowledge sharing and operational alignment while maintaining continuity for customers.

"We see this partnership as a strong cultural and strategic fit," commented First Focus CEO Ross Sardi. "Integris brings the scale and long-term approach to help us grow our people and deliver even more value to our clients—while staying true to who we are."

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The IT channel has spent the last year riding the unpredictable wave of artificial intelligence hype. But according to Dermot McCann, EVP and GM, EMEA and APAC of Kaseya, the industry is now firmly crossing the threshold from speculation into a living, breathing reality.

Speaking to a room of managed service providers (MSPs) and channel partners at Kaseya's Local Connect event in the London Docklands Museum on Tuesday, McCann delivered a keynote that looked past the daily grind of ticketing and patch management. Urging the channel to prepare for a profound shift driven by AI, data unification, and evolving customer demands.

While acknowledging the vital importance of day-to-day operational quality, McCann spent much of his address focusing on what will dictate the future survival and profitability of the MSP business model.

Evolving business models picture the MSP as an AI consultant

The traditional role of the MSP is fracturing and expanding. According to McCann, the conversations channel partners are having with their end-users have fundamentally changed.

"Nine out of ten of the customer conversations I'm having at the moment are about your end customers asking you for your opinion on AI," McCann noted. "How are you going to deliver AI to the services?"

This shifting dynamic presents both a challenge and an opportunity. McCann pointed out that many partners are pivoting heavily into professional and consulting services to meet this demand for AI guidance. However, he warned against abandoning the foundational recurring revenue model. The true opportunity, he argued, lies in leveraging AI internally to expand margins, eliminate "day-to-day friction," and deliver consulting services without losing sight of the core managed services that differentiate an MSP's business.

Fighting fire with fire

With innovation comes immense risk. McCann was frank about the dark side of the AI revolution, noting that the threat landscape is currently a "hacker's dream."

"We know that AI is perpetrating significant threats and significant attacks on our partners," McCann explained, highlighting the dramatic increase in automated brute-force attacks. To combat this, the channel must fundamentally change its defensive posture. "We're having to fight fire with fire."

However, McCann cautioned MSPs against hastily bolting AI capabilities onto their existing tech stacks or trying to build homegrown AI tools without the proper foundation. The biggest risk in the AI era isn't a lack of innovation, it's a lack of compliance.

"Unless you've got the security posture in place to support it, it comes with a lot of risk," McCann warned. He stressed that any AI integration must be underpinned by rigorous security and compliance frameworks, such as SOC 2, GDPR, and PCI compliance, noting that playing fast and loose with AI data "scares the living hell out of me."

The power of the connected data layer

So, how do MSPs safely harness this technology to automate at scale? For McCann, the answer lies not in isolated niche products, but in a holistic, API-first ecosystem.

Kaseya's overarching philosophy for the future relies on a "connected data layer." By moving away from fragmented, multi-vendor environments and embracing a unified platform, the channel can tap into an unprecedented wealth of anonymized telemetry.

"If you can measure that data that you have, then you can manage it," McCann explained. "Once you can manage it, then you can make decisions on it, and that decision is made through an automation. And that's really the final piece of how we think about this AI during the future."

This interconnectedness is what will allow MSPs to move from reactive break-fix cycles to proactive, automated service delivery. When an RMM, documentation tool, and cybersecurity suite share a single brain, the economies of scale multiply.

An aggressive but secure adaptation to AI for MSPs

Ultimately, McCann's message to the channel was one of aggressive, yet secure, adaptation. The AI revolution is no longer a buzzword reserved for future-facing whitepapers; it is an everyday reality dictating the pace of the market.

For MSPs willing to embrace a unified platform approach, prioritize robust security compliance, and step into the role of AI consultants for their clients, the future could be a bright one.

Being a Managed Service Provider (MSP) no longer means providing reactive support or solving clients’ technology issues as they happen. Instead, the most successful MSPs now mine the data available to them to anticipate their clients’ requirements, optimize their business operations, and proactively address challenges before they arise.

More business processes than ever before live on digital platforms. Remote Monitoring and Management (RMM) and Professional Services and Automation (PSA) platforms are ubiquitous in the MSP space, while some providers also have separate Customer Relationship Management (CRM) systems, billing, accounting, and finance software, and IT documentation solutions.

Together, these tools hold a wealth of data that can give MSPs valuable insights into how well their business is doing, as well as crucial information on how to improve client acquisition, service delivery, profitability, help desk productivity, and more.

Too many MSPs, however, never find the time to review these metrics. Overloaded with the day-to-day running of their business, they miss the chance to take a step back, analyze the data available to them, and act on it. Business decisions are made on gut instinct rather than hard evidence. This reliance on guesswork comes with risks and lost opportunities.

Flying blind

A lack of insight is particularly evident in sales and marketing, traditionally a weak spot for many MSPs. Although most have a CRM system or use CRM features in their PSA platform, only a few actually study the data. As a result, an MSP may not know where their sales come from, whether their marketing campaigns have been successful, or whether their lead generation activity is delivering. They may be able to track the number of leads but have no insight into lead quality, or no understanding of the cost of acquiring new customers.

Without this awareness, much of an MSP’s growth planning will be based on speculation rather than hard facts.

The issue is not a lack of data. It’s about not taking the time or making it a priority to query it. The data could, for example, reveal that it would make more business sense to outsource certain lead-generation activities or automate marketing processes.

Equally, analyzing support tickets alongside customer retention and satisfaction could flag risks of customers churning as well as upsell opportunities, allowing MSPs to act early on these to strengthen customer relationships and protect or even boost their bottom line.

How to become more data-driven

Mining the data already available to them to understand strengths and weaknesses and pinpoint areas for improvement could be a game-changer for many MSPs. Better business insights lead to better decisions, more predictable growth, and ultimately, a healthier business. Plus, keeping a close eye on service desk activity can help predict and pre-empt client needs and measure outcomes, in turn allowing the MSP to prove the value they deliver.The most data-driven providers already use analytics, automation, and AI insights, as well as industry benchmarking, to be smarter. They base business decisions on verified facts, regularly review key performance metrics, and hold their teams accountable to agreed standards.

Deciding what data to track will depend on each MSP’s individual circumstances. A good starting point is focusing on metrics related to business health, such as growth rates and monthly recurring revenue (MRR) projections, productivity statistics such as ticket close rates and time spent on each ticket, sales and marketing success figures, and financial data.

Evaluating these numbers and comparing them to how peers perform will allow an MSP to identify areas for improvement, verify perceived issues, and review whether their current business strategy needs adapting.

Where the data displays unexpected patterns or unusual trends, such as a spike in help desk requests or recurring service tickets, it is worth carrying out root cause analysis. Does the data suggest bigger problems down the line? Are there bottlenecks that could be removed? Does a client’s infrastructure need an upgrade? And, are there any recurring tasks that can be automated or supported by artificial intelligence (AI)? By using data insights to anticipate issues and optimize labor-intensive tasks, MSPs can free up valuable engineer time.

Adding AI to the mix

For MSPs who are not sure where to begin, AI can be helpful in deciding which KPIs to monitor. From reconciling and modelling financial data to summarizing support ticket histories and finding patterns in the smallest details, GenAI tools are powerful at analyzing and making sense of data. By interrogating AI, MSPs can review where their challenges are, diagnose business symptoms such as cash flow shortages or declining profit margins, and determine relevant statistics to track.

Many MSP tools already have built-in AI capabilities as well as consoles for monitoring vital metrics and creating automated alerts. In addition, customizable dashboard solutions help aggregate data from multiple sources. Once established, keeping an eye on the important business parameters won’t take much time. The key is to decide where to focus – and to keep the desired business outcomes in mind.

The question should never be whether there is time for data analysis, but how to make it a priority. Those MSPs that invest the time and resources will gain a significant competitive advantage by using the insights to operate more efficiently, fuel growth, and deliver a better service.

Over the past year, organizations in the UK have faced several high-profile cybersecurity incidents costing millions in lost revenue and operational disruption. While the headlines focus on the scale of the breach or the sophistication of the attackers, the real lesson tends to emerge later. Many organizations were simply unprepared for what happened after the intrusion occurred. 

The impact of these incidents has rarely come down to a single failure. Instead, it is usually a combination of factors: attackers gaining access to systems more easily than expected, threat actors using technology to accelerate their activity, and organizations lacking the resilience needed to contain and recover from an attack. 

For managed service providers and channel partners, this changing landscape has shifted expectations. Preventing cyber incidents will always remain a priority, but customers are increasingly judging their partners on something else as well - their ability to guide organizations through a breach when prevention fails. Incident response has moved from being a “nice to have” to a core operational capability

Accepting the reality of the threat landscape

Security teams often talk about tools, such as endpoint protection and monitoring platforms, but tools are only one part of the picture. In practice, cybersecurity relies on three broad categories of risk controls: physical, technical, and procedural. When those layers work together, organizations build what’s commonly referred to as a defence-in-depth strategy.

Technical controls usually receive the most investment. Identity and access management systems, multi-factor authentication, cryptographic protection, and immutable backups all play a critical role in protecting sensitive data.

However, technology rarely determines the outcome of a cyber incident on its own. What often makes the difference is the third layer: procedural controls. These include policies for business continuity, disaster recovery, and, most importantly, incident response. When those procedures are missing or poorly defined, even strong technical controls can’t prevent chaos once an attack unfolds.

The gaps MSPs repeatedly overlook

In conversations with service providers, the same weaknesses appear again and again. The first is treating incident response as documentation rather than an operational process. Many organisations have an incident response policy sitting in a compliance folder somewhere, but the people responsible for executing it have never walked through the plan step by step. 

The second gap is unclear escalation. When suspicious activity appears in logs or monitoring systems, teams may not have clear thresholds for when an event becomes an incident. That hesitation can waste critical hours.

The third issue is communication planning. During an incident, organizations often need to coordinate between IT teams, executives, legal advisors, regulators, and sometimes customers. Without predefined communication roles, technical teams can find themselves answering questions they weren’t prepared for while trying to investigate the attack itself.

Finally, many MSPs underestimate the importance of testing the plan. Incident response documents are written, approved, and filed away, but never exercised. When a real incident occurs, teams discover too late that the procedures don’t reflect how their systems or responsibilities actually work.

Frameworks help, but they aren’t a shortcut

Every organization needs an incident response plan, regardless of whether it is a small business, a global enterprise or a managed service provider. However, the effectiveness of the plan depends on how well it reflects the realities of the organization it is designed to protect. 

Frameworks such as those provided by the National Institute of Standards and Technology (NIST) or the UK National Cyber Security Centre (NCSC) offer valuable guidance for building structured incident response processes. They provide proven frameworks that organizations can use as a foundation. What they are not intended to be is a template that can simply be copied and pasted.

Effective incident response planning requires a detailed understanding of the organization’s environmental operations priorities and regulatory obligations. For MSPs, that also means understanding the businesses they support and the risks those clients face. Attempting to shortcut that process with generic templates of automated prompts may produce documentation, but it rarely produces a plan that will stand up to the pressures of a real incident. 

What an effective incident response plan includes

While every organization’s response plan will look slightly different, effective incident response strategies tend to share several core components. 

Clear escalation procedures are essential. Teams need to know when an event becomes an incident and who has the authority to make critical decisions as the situation evolves. Equally important is a well-defined communications strategy. Cyber incidents often require coordination across technical teams, leadership, legal advisors, regulators and sometimes customers. Without a structured communication plan, confusion can escalate quickly.

Operational guidance also plays a major role. Detailed runbooks, checklists, and response templates help ensure that key steps are not missed in the pressure of an unfolding incident. These structured processes also make it easier for teams to respond consistently and efficiently. 

Finally, incident response planning must be treated as an ongoing process rather than a static document. The threat landscape evolves rapidly, and response strategies must evolve alongside it. Modern frameworks from both NIST and the NCSC emphasize continual improvement, encouraging organizations to refine and adapt their plans as news risks emerge.

The MSP opportunity in incident readiness

For MSPs and channel partners, strengthening incident response capabilities is not just about risk reduction.

Customers already assume their provider has the technical controls in place. What they increasingly want to know is whether their partner has a clear, tested plan for the moment those controls fail. That is where real differentiation lies, and where the most forward-thinking partners are already pulling ahead.

The organizations that invest seriously in incident response preparation today will be the ones clients trust, retain, and recommend when the pressure is on.

Since artificial intelligence (AI) first hit the mainstream, its capabilities have evolved significantly. AI adoption has become widespread; a McKinsey report found that 62% of organizations are experimenting with AI agents to boost productivity, increase efficiency, and enable creativity across multiple businesses.

This boost in AI adoption presents a significant opportunity for Managed Service Providers (MSPs) to position themselves as trusted experts guiding customers through the AI adoption process. With proper preparation, this can help them stand out from the competition and foster long-term relationships with their clients.

Why AI is crucial for MSPs

As AI becomes commonplace, customer expectations are growing. Almost three quarters of small-to-medium businesses (SMBs) are currently experimenting with AI, with 83% of high-growth SMBs in the adoption stage. Ninety-two per cent of MSPs say that their own business has expanded as a result of an increased interest in AI.

In today’s surging market, MSPs must be prepared with an AI-ready offering to maintain their market position. Failing to do so significantly limits potential revenue and the risk of losing clients to competitors that are ahead of the curve.

Legal challenges in the AI era

Many companies are overlooking the risks of shadow AI, the unauthorized use of AI tools or applications within an organization.

The spike in interest in AI among SMBs indicates that MSPs’ customers are likely beginning to use AI tools at work. The downside of this trend is that it raises concerns about the security of sensitive information that they neither own nor have the right to share.

An accidental confidentiality breach is often the result of human error. For example, users may be unaware of the risks of integrating personal AI tools into their work, or of the sensitive content they are dealing with.

Businesses must ensure that privacy and HR policies are airtight and well communicated across departments. Alongside this, the ever-changing landscape of AI regulation means legislation and guidance must be regularly reviewed to stay on track.

The benefits and challenges of Copilot

Designed specifically for business use, Copilot operates as an isolated instance of AI per business, enabling secure access to internal data with a reduced risk of data leaks compared to traditional OpenAI sources.

As part of the Microsoft 365 suite, Copilot ensures secure access to all data and environments, streamlining administrative tasks and saving businesses valuable time and resources.

Despite its advantages, Copilot comes with its own security challenges. Given that it draws upon an organization’s internal data to form answers, there is always a risk that sensitive data could end up in the wrong hands.

Such breaches leave data vulnerable to being maliciously exploited, potentially leading to devastating consequences. To mitigate risk, MSPs must ensure their customers’ Microsoft 365 tenants are secured in accordance with best practices before rollout. Microsoft data must be properly secured and strengthened access controls to prevent unauthorized users from accessing sensitive information.

Once deployed, education is paramount. MSPs should properly educate customers on how to integrate Copilot into existing processes to optimize efficiency effectively. For instance, customers should understand how Copilot integrates with the rest of their business data in Microsoft 365.

How to become AI-ready

MSPs must understand their customers’ business goals, analyse their data environment, and develop an intuitive deployment plan for Copilot ahead of selling AI services. MSPs that succeed with AI services won’t be those who rush to roll out subpar agentic enablement services. Assessing what drives business value and defining use cases is key.

Proactively reviewing customers’ data environments to ensure that their security posture is up to scratch is critical. They should have established content management practices and data governance and carry out a thorough audit of security policies, including data access controls, retention policies, and sensitivity labels.

These are managed and updated centrally and rolled out across their Microsoft 365 environment. If security gaps are uncovered, this is a good opportunity to upsell the benefits of a Microsoft 365 Business Premium license, which provides access to Entra ID for identity access management, Purview for data security, and Defender for ransomware and device protection.

Once it’s established that the tenant is secured, MSPs can help customers to identify champions for Copilot within their organization. A small group of employees can initially test Copilot, demonstrating its potential and driving wider adoption by becoming advocates. This approach enables the organization to make the most of its 365 licenses.

Today, MSPs must not only be prepared to leverage AI internally within their operations, but also ensure they are well-equipped to support and guide customers as Copilot becomes central to their technology stack.

Managed Service Providers (MSPs) are increasingly being asked to do more than shift products. Clients want complete development stacks, and rely on their channel partners to provide a secure, reliable, and fully-featured line-up of systems. In the age of AI-assisted development, that expectation is becoming a liability.

The speed at which AI code generation tools have been adopted is remarkable. The risk embedded in that adoption is not yet well understood, particularly by the channel partners who are recommending and deploying those tools on behalf of clients.

Buy efficiency, inherit vulnerabilities

A study by CSET found that nearly half of AI-generated code snippets contained security vulnerabilities. That alone should give channel partners reason to pause. The problem compounds when you consider how few organisations are asking the right questions before deploying AI tools: the World Economic Forum found that 67% of organisations fail to assess the security of AI tools before deployment.

The AI tools generate flawed code, and most organisations are deploying them without proper validation. For the channel, there creates double exposure: you recommend the stack, and in many cases, manage it too. So if it’s not trustworthy and reliable, you’re left carrying the risk.

The reasonable assumption has been that, as AI models grow more sophisticated, the quality of their outputs will improve accordingly. That assumption doesn’t hold in practice OpenAI's own reasoning models found that hallucination rates more than doubled between o1 and o3, rising from 16% to 33% on factual accuracy benchmarks. The smaller o4-mini model hallucinated at 48%. More capability has consistently led to more errors.

In code generation, a hallucination is not immediately clear. It looks like a complete, well-structured function that compiles and often passes a surface-level review. Then it fails in production, or introduces a security vulnerability that sits quietly until someone finds it. By then, the damage is often already done.

AI Risk: What it means for channel partners

MSPs now operate in a market where clients expect AI to be embedded in the development toolchain, and the partners who can deliver a coherent, integrated AI development stack will win the business.

But partners who win business without understanding what they are recommending are creating a problem for themselves. When a client's code is compromised because an AI tool produced insecure authentication logic, the conversation about responsibility will ultimately come back to whoever put the stack together.

This is an avoidable problem, and with the right approach, creates a commercial opportunity. MSPs who get ahead of AI governance can both protect themselves and strengthen their market position. Clients are increasingly aware that AI tools carry risk; most simply don’t know what to do about it. A partner who can articulate that risk clearly and demonstrate a clear way to manage it becomes indispensable.

Building a secure AI development stack: what it takes

The key is a strong foundation. Before recommending any AI development tool, MSPs should ensure clients have deployed strong pipelines to catch risks early, clear policies that limit exposure, and have trained their teams to work securely with AI.

Modern Continuous Integration and Continuous Delivery (C/CD) platforms must be a part of any development stack, providing the infrastructure that reliably detects issues before they reach production. These should be supported by strong DevOps practices that map workflows, standardise processes, and bring code generation and integration into one system.

Shadow AI (use of AI tools without approval or insight) is an immediate threat to this foundation. Development teams routinely adopt tools without procurement or security review. Code written with unapproved tools ends up in production, and the intellectual property generated with those tools may not be fully owned by the client. MSPs managing development environments need tooling that surfaces which AI tools are actually in use, not just what’s approved, but what developers run day to day.

The pipeline itself also needs to be designed for AI use. Modern CI/CD platforms can apply specific scrutiny to AI-generated code: automated vulnerability scanning calibrated for LLM failure modes, static analysis capable of detecting AI-generated patterns, and mandatory review checkpoints before AI-assisted code reaches production. These are capabilities that already exist; they just need to be configured with AI outputs in mind.

The crucial point is that AI-generated code tends to look clean, which is precisely what makes it so dangerous. Developer-written code, with its visible imperfections, prompts scrutiny. AI-generated code does not, and teams unconsciously extend the trust it has not earned. Building structured review into the pipeline is not a drag on velocity. It is the only way to deploy AI at speed without accumulating technical and security debt that compounds with every release.

Building differentiation through security

MSPs are well placed to turn AI governance and validation into a core service offering. Clients are already aware that AI tools carry risk. What they lack is a partner who can quantify it and help them manage it without slowing things down.

Partners that provide that clarity will own the client relationship in the future, setting a high standard of trust that no product margin can buy.

Managed Service Providers (MSPs) are seeing operational sprawl across nearly every client environment. Duplicate SaaS tools, unused licenses, shadow contracts, and unmanaged permissions create waste and hidden security gaps.

Making vendor sprawl one of the biggest destroyers of margin in managed services. It’s time to step back from the impetus to keep acquiring more tools and lean towards a more controlled, optimized ecosystem.

Why is vendor sprawl happening?

For years, the MSP value proposition was the ability to solve problems quickly. And tools were the answer. Whatever the issue, whether it was the need for better endpoint protection or problems with collaboration gaps, SaaS platforms and access tools were the go-to solution.

Individually, these decisions made sense. But collectively, over time, they created environments that are expensive to manage and hard to secure. Funds are being drained through disused and forgotten contracts, while neglected permissions are creating extensive gaps in both security and compliance standards. And with budgets tightening, IT leaders and MSPs need to regain control.

The real impact of vendor sprawl on MSPs

The obvious impact of vendor sprawl is inflated software bills, but that’s just the start; mismanagement of SaaS tools, licences, and permissions directly affects MSP operations. Each additional platform introduces complexity: separate consoles, unique update cycles, inconsistent APIs, and different support models.

For service desks, this translates into longer resolution times and higher ticket volumes. Technicians need broader (and shallower) expertise across dozens of tools instead of deep mastery of a focused stack. And for security teams, it creates blind spots. Unused or forgotten SaaS licenses often retain active user accounts. Departed employees keep access. And permissions drift over time, with users accumulating privileges they no longer need. Every unmanaged app becomes a potential entry point for attackers, and a liability for the MSP responsible for the environment.

There’s also the commercial impact. Managing too many vendors erodes partner margins through fragmented billing, lost volume discounts, and increased administrative overhead. Instead of predictable, scalable operations, MSPs end up spending valuable time reconciling invoices, tracking renewals, and responding to audits.

Consolidation is now essential

Consolidation sounds like a lot of hard work that can result in a loss of functionality or in making do with one-size-fits-all solutions. But it’s actually about deliberate design; using fewer, strategically chosen vendors to create tighter integrations, simpler management, and better outcomes for both MSPs and their customers.

A consolidated tech stack reduces context switching for technicians, which lowers operational friction and improves service quality. Integrated platforms share data, automate workflows, and provide a more complete view of the environment. And from a security standpoint, fewer identity silos and better visibility into access and usage make it easier to enforce least privilege and detect anomalies.

There’s also the financial benefit; when you consolidate, your margins grow. MSPs can negotiate better partner agreements, standardize deployments, and reduce the hidden costs of supporting niche or redundant tools. Customers benefit too, with clearer value, fewer surprise renewals, and a more transparent technology roadmap.

Frameworks MSPs can use to regain control

Controlled structure is the antithesis of vendor sprawl. Successful consolidation typically starts with three foundational frameworks:

• SaaS visibility: You can’t optimize what you can’t see. MSPs need a clear inventory of every application in use, licensed or not, across each client. This includes usage data, ownership, and integration points. Visibility often reveals surprising redundancies and tools that no one remembers approving.
• Contract and license rationalization: Once you know what you’re dealing with, MSPs can assess which tools deliver real value and which simply persist due to a lack of action. Are multiple products doing the same job? Are licenses consistently underutilized? The point of rationalization is to ensure that the business has the tools it needs - and no more.
• Permission audits: Sprawl isn’t just tech-related, but use-related too, and they tend to be interlinked. Regular audits help MSPs reduce unnecessary privileges, remove unused accounts, and enforce consistent access policies across platforms and across the business. This not only improves security but also simplifies compliance.

The strategic advantage of consolidation

Consolidation isn’t just about the benefits it brings to your company, but how it impacts your customers. When MSPs focus on optimization instead of deploying endless tools, they move from being tied to the provision of reactive support to providers of strategic guidance.

The emphasis moves from “which tool?” or “what outcome?” as MSPs begin to help clients in far more qualitatively valuable ways. And that builds loyalty.

It’s a tough business climate right now, making differentiation more important than ever. Consolidation is a step towards MSP maturity; a move away from the “pile it on” mindset, towards efficiency, security, and long-term value.

Autonomous systems in businesses are no longer experimental. Robots now work alongside humans in warehouses, retail stores, and hospitals, frequently deployed and supported by channel partners who never expected to become advisors on fleet operations and security inside customer networks.

This evolution is creating both opportunity and exposure. Robotics-as-a-Service and robotic deployments are becoming part of the managed service stack, yet few frameworks exist to guide customers on how they should be secured, audited, or governed. This raises new questions in the adoption process: “Should I trust it?”, “Who has access to the data?”, and “What happens when something goes wrong?”

When scale expands the attack surface

Automation within customer environments blurs the line between IT and OT (operational technology) responsibilities. Treating them as a shared domain is key to preventing blind spots.

Deploying a robot at one site is manageable for IT and OT groups to handle. Managing hundreds of thousands of robots across multiple retail or logistics locations -- that’s the challenge that customers are facing today. Each new machine deployed adds potential risk to a customer's infrastructure: misconfigured WiFi, outdated firmware, and insecure update channels all present meaningful vulnerabilities.

This is where Robotics-as-a-Service offerings can cover this gap and minimize risk. The robotic provider’s fleet management services should provide each channel partner and customer with:

• Visibility: A complete inventory of devices, software versions, and configurations.
• Integrity: The Robotics-as-a-Service offering should perform updates and end-to-end monitoring for any unauthorized access.
• Agility: Ability to monitor performance and make remote edits for operating within dynamic environments.

Each robot should be designed to operate fully autonomously without requiring broad or sensitive access to customer networks, and should maintain strict security boundaries. This ensures the robot does not introduce new risks for IT and OT teams.

Data governance in motion

Robots challenge traditional data governance programs because of the sheer diversity of information they collect while operating in public and dynamic spaces. A single robot may generate events, points of interest, telemetry, imagery, and mapping data — each with different formats, storage needs, retention profiles, and compliance considerations. Data is often distributed across multiple locations, aggregated at different layers, and subject to handling rules that depend on the specific sensor or subsystem producing it.

For channel partners and customers, the ability to understand these data types, sources, locations, and flows — and ensure they align with relevant frameworks — is foundational to creating trust at scale. Documenting the full data flow is the first step in governing any autonomous system. If you can draw the flow, you can govern and secure it effectively.

From there, security-by-design and least-privilege architecture form the backbone of good governance. These practices ensure that data access is intentional, restricted, and auditable, supporting data quality, transparency, and accountability across the fleet. In robotics, a few principles consistently reinforce trust:

• Purpose limitation: Sensors capture only what is required for navigation, safety, task validation, or product improvement.
• Image anonymization: Any incidental human imagery is blurred before presentation or review.
• Encryption and access control: All data is encrypted in transit and at rest, with access tightly governed by role-based permissions.
• Retention discipline: Data is kept only as long as it provides operational or product value, then securely deleted.

When providers explain these safeguards in plain language, governance becomes an enabler rather than a constraint — and trust becomes a differentiator rather than a hurdle.

Governance as a service differentiator

As deployments grow, governance becomes a competitive edge. Customers no longer just want performance metrics; they want assurance that their automation ecosystem behaves predictably and securely.

Robotics providers should demonstrate that assurance by:

• Providing access to a centralized data governance, privacy, and compliance repository for documentation, such as a Trust Center, that includes diagrams, security controls, and other architectural insights.
• Sharing third-party attestations or certifications, such as UL safety certification for key components and SOC 2 for cloud-based robotic services.
• Offering whitepapers or other published documents that clarify the robotic data flow, including how and where data is processed, transmitted, stored, and for how long.

When you can show exactly how data moves and who can access it, trust stops being an abstract goal and becomes part of your value proposition.

Preparing for a new regulatory landscape

The regulatory landscape for AI and robotics is maturing quickly. In the EU, new risk-based frameworks are formalizing documentation, transparency, and post-deployment monitoring. In the US, state-level obligations for companies using AI and autonomous systems continue to expand, with similar patterns emerging globally.

The best way to stay ahead is to engineer for principles, not headlines. Autonomous systems that already minimize, anonymize, encrypt, and evidence their decisions will adapt naturally as new laws arrive. Document how the system makes decisions—even reactive ones like obstacle avoidance—and make audits part of routine operations rather than exceptional events.

For the channel, readiness isn’t about predicting every regulation. It’s about building around stable, durable principles: minimization, encryption, explainability, and documented accountability. Autonomous systems grounded in these fundamentals can shift with whatever policy comes next.

Trust as operational ROI

Every managed service provider (MSP) knows the cost of an outage or breach. The same applies to autonomous systems. The more predictable and transparent your deployments are, the faster customers will adopt and renew.

Trust reduces friction across every stage of a partnership: procurement, onboarding, compliance, and support. In practice, that makes trust a measurable form of ROI.

The future of robotics in the channel won’t be defined by who moves fastest, but by who moves most responsibly.

Artificial Intelligence (AI) is now perceived as essential for the success of modern enterprises. However, we are seeing a disconnect between what many of these tools promise for enterprises and what they actually achieve.

Rather than identifying specific business problems that AI can realistically solve, enterprises are getting caught up in the hype - or suffering from ‘Shiny Object Syndrome’. Our 2024 study found that fear of missing out (FOMO) played a big part in AI investment, with 63% of respondents reporting they are worried their company will be left behind if they don’t use it.

With a wealth of providers out there promising the world, clients are looking to Managed Service Providers (MSPs) and channel partners for guidance on evaluating and securing AI tools.

Before advising whether to buy or build AI, channel partners must first help clients answer a far more important question: what problem is AI expected to solve?

The level of customization

Buying AI tools means fast set-up and deployment, but customization is limited to what the vendor offers or allows. How much the solution fits a business’s unique needs, or integrates with their current IT, is limited.

Building tools themselves offers more flexibility to enterprises, and each feature of the tools can be tailored to match specific needs. However, this level of customization demands in-house skills, more development time, strong security and compliance knowledge, and continuous maintenance.

In many cases, for the AI use cases enterprises actually need, buying AI tools is a practical choice. For better customization, you can combine tools to get the best out of them - often, the best compromise is using an existing foundation building on top of existing “developer-friendly” AI APIs, tools, and models. This delivers differentiation where it matters — without burdening the business with full model ownership.

Combining tools can be the answer to many of the problems enterprises are facing. Our study found that nearly a third (31%) of businesses are struggling to train Generative AI models, and 21% report that staff are misusing the tools. However, it adds that leaders are already taking steps in the right direction by looking at closing these gaps by incorporating other technologies – for example, process intelligence, document AI, and retrieval-augmented generation (RAG).

Organizations that adopted this integrated approach reported higher consistency in outputs, stronger governance, and clearer cost control. In fact, 98% of businesses using blended AI stacks reported satisfaction with their generative AI initiatives — underscoring that orchestration and context, not raw model power, are now the primary drivers of success.

The cost

Cost is often positioned as a simple build-versus-buy calculation, but in reality, it is a balance of upfront investment, time-to-value, operational risk, and long-term scalability. There’s no one answer when it comes to the cost of these tools. Building AI is more expensive at the start, as enterprises will need to invest significantly in talent that can handle the job. Over time, security, compliance, and maintenance are ongoing considerations, but generally owning their own AI technology can help enterprises create new, bespoke ways to keep earning.

Buying AI tools usually costs less at the start and helps you get results quickly. You also don’t have to invest in a big in-house specialist team or infrastructure, as security, compliance, and maintenance are taken care of on your behalf. As enterprises’ needs grow, however, monthly subscription fees and add-ons can start to add up.

It might not seem intuitive, but blending AI tools for a more purposeful, problem-focused strategy can cut costs. A good example of this is for Know Your Customer (KYC) compliance. Financial services firms might use one AI provider for document scanning and data extraction, and another for ongoing checks and workflow. One delivers the “brains” for understanding documents, while the other provides the industry expertise and regulatory context. Combined, they create a KYC process that’s better than either tool on its own.

Using purpose-built AI tools like these will mean less manual input and fewer errors in customer onboarding, speeding up the process and reducing the need for large compliance teams. The downstream impact is measurable: lower labor costs, fewer re-checks, faster revenue realization, and improved regulatory confidence.

Channel partners are the glue

The success of an AI project that is bought, built, or combined hinges on the importance of channel partners and MSPs for translating what’s possible with AI into what’s right for each client’s context.

Their value no longer lies in simply reselling licenses — it lies in architecting outcomes, rather than just selling a one-size-fits-all solution that won’t give clients what they actually need. Good partners don’t just resell, they curate, bridging the gap and working with clients to develop the AI solution that works best for them.

MSPs play an important role in helping clients decide whether to buy or build AI tools. They help weigh up the pros and cons based on the client’s goals, budget, and skills, and can advise when it makes sense to mix off-the-shelf solutions with custom-built ones.

Sure, if they have the capital and skill, enterprises can build their own AI stack. However, many are unknowingly reinventing capabilities that already exist in mature, battle-tested platforms, when tools already exist that will do the job. It’s just a case of knowing who to partner with, or which complementary tools will solve problems.

More often than not, guiding clients toward a carefully selected ecosystem of complementary AI partners will deliver outcomes that are faster, more secure, and far more sustainable than any standalone solution.

Ransomware is accelerating at an alarming pace. Europe is headed toward its worst year yet for ransomware incidents, up about 80% in 2024, with 2025 already breaking previous records. 

Downtime caused by these attacks, not just the ransom, is one of the most damaging outcomes. For many mid-market organizations, losing access to critical systems for days or weeks can mean disastrous financial, operational, and reputational damage. This also causes a strong impact on IT staff mental health, where 84% of IT professionals feel uncomfortably stressed at work amid rising cybersecurity threats.

Immutable backup storage is one of the most effective defenses. Once data is written, it can’t be altered or deleted, meaning it’s always available for recovery after an attack. However, enterprise-grade backup storage has sometimes been seen as out of reach for small and medium-sized organizations, with unnecessarily high entry points in terms of capacity and capital expenditure.

Now, that’s changing. Consumption-based subscription models are breaking down these barriers by bringing enterprise-level protection to a much wider range of businesses. By offering predictable monthly billing, these models are levelling the playing field, and for channel partners, they’re also creating new recurring-revenue opportunities.

Ransomware protection for all

Ransomware is no longer a problem that only hits large enterprises. With Ransomware-as-a-service platforms, attackers can automate campaigns and scale their reach across businesses of every size. Mid-market firms, often seen as ‘too small’ to attract sophisticated attacks, are increasingly in cyber criminals’ crosshairs because they may have fewer protections in place.

This shift puts the channel in a pivotal position. Managed service providers (MSPs), value-added resellers (VARs), and system integrators (SIs) can now deliver enterprise-grade ransomware protection to clients of any size through consumption-based models.

Instead of large capital outlays, partners can help customers deploy immutable backup solutions on a predictable, subscription basis, reducing friction and speeding up adoption.

It's not just about affordability. This model fosters long-term recurring revenue and deeper customer relationships built on ongoing protection rather than one-off sales. In an era where trust and resilience are critical, that combination of commercial and security value is compelling.

Backup as the new frontline

The modern approach to ransomware must start with the assumption that a breach will inevitably happen. Preventative tools remain crucial, but downtime from attacks, even when ransoms aren’t paid, can be devastating.

Immutable backups shift the focus from reactive recovery to proactive assurance. By ensuring data cannot be encrypted, deleted, or modified once written, businesses can be confident they have a reliable way to recover after an attack. That confidence is invaluable for IT teams facing today’s constant threat pressure.

For the channel, it’s also an opportunity to evolve conversations from “prevention” to resilience. Partners can help customers build recovery strategies that meet compliance and insurance requirements, while delivering managed backup and recovery services that generate recurring revenue. Immutability, once a niche enterprise feature, is fast becoming a core managed service differentiator.

Immutability for the mid-market

Smaller firms face a unique challenge; just like larger enterprises, they handle sensitive data, but often lack the resources to secure it to the same standard. Attackers are aware of this and increasingly target mid-market organizations because they often represent ‘low-hanging fruit’.

Consumption-based subscription models help partners close that gap. They can offer mid-market customers enterprise-grade immutability and recovery to remove any budget hurdles that originally slowed down adoption.

For MSPs and VARs, this flexibility creates tangible business advantages. They can scale protection alongside their customers’ growth, adjust resources, and bundle ransomware protection into broader management. The result is therefore a sustainable service model where customers gain accessibility and partners gain reliability in revenue.

Insurance-ready backups

Cyber-insurance requirements are tightening, which means insurers increasingly demand verifiable, immutable backups and tested Recovery Time Objectives (RTOs) as conditions for coverage. Firms that cannot demonstrate these capabilities may face higher premiums or denied claims.

Immutable backup solutions simplify this process and position partners to help customers meet insurer expectations. By offering managed immutable backup and recovery services, MSPs can support compliance reporting while delivering faster recovery and strengthening clients’ security.

This builds trust with customers and insurers, enhancing both protection and revenue for the channel.

A model built for resilience

Today, ransomware does not discriminate. Every organization and every partner serving them faces the same pressure to recover quickly. In the fight against ransomware, no partner or customer stands alone. Resilience grows from collaboration, a connected ecosystem where vendors, MSPs, and customers all play their part.

Consumption-based immutability makes resilience achievable for all. It allows partners to deliver enterprise-grade backup protection to any customer, regardless of size, while building steady revenue streams. Predictable billing supports long-term customer relationships and margin planning, turning security into a shared business goal between provider and client.

As ransomware threats continue to rise, recovery readiness will define resilience, not just prevention alone. Immutable backups delivered through flexible, subscription-based models ensure that every organization can restore operations swiftly whilst protecting reputation and maintaining trust. For the channel, that’s not just a service opportunity; it’s also a chance to lead in shaping the next era of cyber resilience.

Having access to the right technology is a driving force that can make the difference between success and failure for small and medium enterprises (SMEs) today. They must keep pace with digital transformation, cybersecurity threats, remote work, and the rise of artificial intelligence (AI). All this creates immense pressure to constantly evolve their infrastructure and business models.

The biggest mistake that vendors and integrators can make, however, is to assume that the right technology for large companies will work for SMEs, just on a smaller scale. Disparities in resources, business goals, and organizational structure inevitably lead to implementation and operational challenges, such as longer lead times, heavier resource demands, and prohibitive licensing costs.

For many SMEs, productivity is hampered by outdated infrastructure that is often pushed to capacity by ever-increasing user loads and unwavering uptime demands.

Because SMEs often lack the internal resources to deploy and support complicated, labor-intensive networking solutions, they are reliant on integrators and Managed Service Providers (MSPs) to install, maintain, and service networks.

This equates to a strong demand for solutions that are reliable, scalable, easy to deploy, and great value for money. Unfortunately, many integrators struggle to find the right fit, let alone a channel strategy that will support this segment of the business market.

Equip partners with more than just tools and support

Integrators and MSPs continue to play an essential role in the networking space, but this doesn’t mean they have always been provided with the necessary tools and support to make them successful. Serving SME needs can make them susceptible to high ongoing operational costs and continued demands for technical support, which easily absorb the slender margins available.

If vendors truly value their MSPs, they need to reevaluate their partner programs and ensure they are fit-for-purpose for the SME market and the partners that service it. ‘Partnership’ is the operative word. This, of course, means equipping them with streamlined tools, training, and enhanced technical resources.

There’s more to it than that,t though. These things take time. Netgear’s own Drive partner success program, for example, was a whole year in the making. Our MSPs provide customers with the solution they need at the right price point, with comprehensive support at every stage, fully backed by us. The really important element here is to ensure the customer experience remains front and center.

Given that SMEs currently make up 90% of all businesses globally, providing more than 50% of jobs worldwide and contributing up to 40% of national income in emerging economies, integrators and MSPs must really stand out in a highly competitive market.

How do they do that? By aligning more closely with customer needs and delivering exceptional value and expertise. This is only possible with committed, collaborative support from vendors.

But there’s another benefit to aligning partner programs with SME needs, which is the value that vendors gain in return. Partners possess deep insight into the challenges SMEs face and the technology and support they require to meet their goals. When partnerships are truly collaborative, those insights can flow more effectively back to vendors, informing their planning and strategic direction.

Building for SME needs

Vendors can do more by providing solutions designed for SMEs that are the right fit for their market, and that can be easily managed using a unified multi-site/multi-tenant, cloud-based platform. This helps maximize partner margins and helps to limit the need for repeated visits by MSPs or hours spent delivering technical support.

Providing the right stack for the SME market means filling in gaps in IT or security knowledge, along with specifying the right tools, roles that in larger enterprises would be met by dedicated technical departments. It’s why there is a growth market for smaller manufacturers and MSPs to work together, delivering end-to-end services of which networking is a key component.

Vendors serving SMEs today can’t just focus on segmented, fragmented solutions. Instead, they need to deliver enterprise-grade, reliable, fit-for-purpose technology that is quick to onboard and easy to troubleshoot. Simplicity is the key to success in this growing, changing market.

Partners at the center

For vendors, the SME market is rich with opportunity – but capturing it means building a strong partner ecosystem. One where partners lean in and lead with a specific vendor because the solutions are the right fit, but also because they are confident that the vendor is with them, supporting them every step of the way.

Alongside networking solutions tailored to the specific needs of SMEs, vendors must do more to empower partners and drive mutual value.

Changing the emphasis from selling to delivering value at the right price is a new approach, but it will forge a relationship that benefits both the vendor and the partner. Ultimately, it will deliver a better service to the SME customer.

Small and medium-sized enterprises (SMEs) are central to the UK economy, making up 99% of UK businesses and contributing around half of private-sector turnover. Yet, confidence within the sector has weakened over the past year.

In the months leading up to the 2025 Autumn budget, 76% of leaders doubted that it would bring the support they needed – and many still question if government action will go far enough to drive long-term growth. Rising costs and unpredictable inflation have made it harder for business owners to plan, and many now find themselves concentrating on keeping cash flow steady to protect the progress they’ve already made.

The way smaller businesses think about technology is changing. It now sits at the centre of how they operate and compete, shaping everything from the services they offer to the experience they deliver. But turning that ambition into reality isn’t easy. Research shows that 70% of digital transformation efforts fail, often because smaller firms don’t have the time or in-house expertise to manage them.

This is where the channel, especially managed service providers (MSPs), can make a real difference. Through guidance and practical support, MSPs are helping SMEs embed technology into the way they operate, helping to build confidence and create space for growth.

Helping SMEs modernize

Research from the British Chambers of Commerce shows that around a third of SMEs are now using AI in some form. It’s a small rise from last year, but still far below what’s needed to make a real impact on productivity.

As smaller firms look for ways to modernize, many are now trying to understand how technology can support their wider goals rather than just individual tasks. Budgets are tight and margins thinner than they’ve been in years, so every investment decision now feels more deliberate.

For many SMEs, 2026 will be shaped less by new purchases and more by how effectively they can use the systems already in place to work more smoothly and therefore reduce strain on teams. The focus is shifting towards tools and approaches that free up time and introduce more consistency across operations.

As SMEs take these steps, the channel can support them in a way that feels more connected to their long-term plans. Providers are working alongside firms to ensure technology sits within a clear direction of travel, helping SMEs think about technology as part of their overall strategy rather than a series of separate fixes. Automation is being used to simplify processes, while advances in cloud and security are giving smaller firms the confidence to work more flexibly and keep data protected wherever people are. These changes don’t happen all at once, but when they start to settle in, SMEs will begin to feel the benefits of calmer workflows and a more predictable performance.

What comes next will hinge on how well technology decisions reflect the realities of running a smaller business. Smaller firms often want fewer technical discussions and more help understanding how technology fits into their goals.

When MSPs understand the rhythm of how a business works, they can translate this into something that feels manageable. Automation is already changing how services are delivered, though its real benefit shows up in the space it creates for people to think differently and plan with greater confidence.

Even with this support, smaller firms still need clear signals from the government that modernization is worth the effort. Policies that encourage investment and build confidence around technology adoption would make this process easier for SMEs. A stronger sense of direction would help to reassure businesses and allow them to think with the ‘long-term’ in mind, rather than relying on short bursts of improvement when budgets allow. Progress doesn’t need to be fast to be effective, but steady improvement can help build the foundations for more confident growth.

Guiding SMEs towards success

As automation and AI become part of day-to-day operations, many smaller firms find that progress depends as much on clear guidance as it does on the technology itself. Support that feels thoughtful and well-timed helps change feel less overwhelming and gives teams the confidence to move at a pace that works for them. When that support is consistent, businesses will begin to notice a steady shift in how they work – and that shift makes all the difference.

For the SMEs, the year ahead offers a chance to strengthen how they work and compete, supported by channel partners who can help bring those ambitions to life.

Managed service providers (MSPs) that offer cybersecurity solutions are in a unique position. They are trusted to protect their customers’ operations from malicious cyber activity, yet at the same time, they are also a high-value target for threat actors seeking to gain access to their systems and the businesses they protect.

For MSPs, a breach not only risks damage to revenue and operations but can also have a lasting impact on reputation. As the industry grows more competitive and regulations and insurance requirements become stricter, MSPs must protect themselves as much as they protect their clients.

This urgency has only increased with the Cyber Security and Resilience Bill (CSRB), recently introduced into Parliament, which sets clear expectations for organizations providing or supporting critical national infrastructure.

Heightened external pressures now mean a single breach can irreparably damage customer trust. Strong cybersecurity, built on advanced protection measures, skilled employees, and proactive, layered defences, is now critical.

The death of basic endpoint protection

Cybercriminals are growing more sophisticated, carrying out advanced attacks that are faster, more targeted, and technologically complex than ever before. Traditional defences, such as basic endpoint protection, are no longer enough to combat them.

This landscape has made layered security and proactive threat hunting vital. Combining advanced phishing protection, ransomware remediation, and AI-driven security creates a multi-layered defence that detects and prevents attacks before they can escalate into a full-scale breach.

For many MSPs, this also now includes strengthening continuous detection and response capabilities – often through managed detection and response (MDR) – to identify, investigate, and contain threats that bypass initial defences. MDR supports a more proactive posture by combining automated analysis with human expertise, ensuring suspicious activity is assessed quickly rather than relying solely on reactive alerts.

In parallel, MSPs that embrace proactive threat hunting shift their positioning from reactive response to active discovery, seeking out hidden or anomalous behaviour rather than waiting for alerts to fire.

Given their central role in the supply chain, this approach is critical, and MSPs must assume threats may come from any direction. The CSRB reinforces this reality by broadening the scope of national cyber regulation and bringing more service providers, including MSPs, into sharper regulatory focus. The death of “basic” endpoint protection is here. Future-proofed, advanced security is now the only viable path to protecting customers and maintaining credibility in a rapidly evolving threat landscape.

Closing the cybersecurity skills gap

Despite its growing sophistication, technology alone isn’t enough. Tools, no matter how advanced they are, can be deemed ineffective if the people behind them aren’t properly equipped to use them to their full potential and respond confidently to a breach.

Unfortunately, the cybersecurity skills gap is now one of the biggest challenges MSPs face. Competing with large-scale cyber companies that often have the ability and budget to offer more enticing employee packages continues to prove a significant hurdle.

As demand for specialist expertise rises, MSPs are struggling to fill roles that manage modern, complex environments. As a result, existing teams are stretched thin, expected to defend broader attack surfaces with fewer resources and rapidly evolving skill requirements.

This shortage can dramatically increase risk. Overextended teams are more likely to miss subtle indicators of compromise, delay routine security tasks, or become overwhelmed by alert noise, creating the openings that attackers are constantly on the lookout for.

MDR can also help out here by taking on consistent monitoring and the initial investigation of threats. This helps to reduce the everyday cyber admin burden on overstretched teams, allowing them to focus on higher-value work like client support, strategic planning, and improving service quality.

MSPs can also look to channel-first partners who offer comprehensive support to bridge this skills gap. These partners can also offer bespoke training programmes, through e-learning platforms and face-to-face consultant-led training, to ensure employees are supported beyond tick-box exercises.

By working with cyber companies that tailor to the specific needs of the MSP, employees are more likely to build practical, lasting cyber hygiene habits.

Regulations and requirements are reshaping MSP security

Governments are placing greater emphasis on resilience through demanding improved data protection, clearer incident reporting, and stronger oversight of supply chain risks.

The CSRB exemplifies this shift. By focusing on the interconnected nature of modern digital operations, it recognises that critical national infrastructure is only as secure as the MSPs, datacentres, and service providers underpinning it.

At the same time, insurers are tightening their criteria. Continuous monitoring, privileged access controls, and clearer security processes are increasingly prerequisites for cover.

Premiums continue to rise, but organizations that implement stronger controls, including XDR, MFA, and vulnerability scanning, have seen reductions of up to 75%, proving that mature security directly supports insurability.

For MSPs, strengthening detection and response capabilities is no longer just about risk management. It’s becoming essential for meeting regulatory expectations, satisfying insurers, and supporting clients with their own compliance obligations.

Future-proofing cybersecurity

Across the channel, the role of the modern MSP is changing. Growing regulatory expectations, tightening insurance requirements, and increasingly sophisticated threats mean providers can no longer rely on basic protection to secure either their own environments or those of their customers.

Advanced, layered security, proactive threat hunting, and well-trained teams are essential to deliver the level of resilience clients expect. But given the talent constraint that MSPs are being challenged with, working with channel-first cyber companies is becoming necessary as they seek to bridge the skills gap and provide more robust training for employees.

What’s more, by investing early in prevention-first approaches, MSPs strengthen their own defences, support customer compliance, and position themselves as trusted, long-term advisors in an industry where confidence and capability are critical to sustained success.

Mobile-first ICT services provider Abzorb has launched its new Partner Clinics initiative to help channel partners identify and convert new opportunities across their existing customer base.

The clinics will provide MSPs and resellers with flexible, on-demand support, enabling sales teams to triage live opportunities and receive guidance on navigating deals across mobile, IoT, hosted telephony, and connectivity.

The program aims to eliminate hesitation, accelerate adoption, and open new revenue streams for partners by providing them with direct access to experts working with these technologies on a daily basis.

According to Abzorb, the clinics mark the next phase of its commitment to supporting the channel through practical education and hands-on enablement. With its new clinic model, the firm said it is bolstering guidance and support to compliment its range of connectivity solutions.

Mobile impact

The new partner clinic sessions are available now to both existing and prospective Abzorb partners looking to expand their portfolios or launch new services.

In its announcement, Abzorb highlighted early adopter Digital Space’s success with the clinic model, with the initiative already helping to facilitate higher mobile adoption across the firm’s customer base.

“Being able to check in and triage deals with those who are working them daily has been invaluable for growth,” commented Louise Purdie, Abzorb’s head of Indirect. “It’s helped our teams build confidence quickly and identify opportunities we may otherwise have overlooked.”

Hosted telephony

Throughout January 2026, Abzorb’s clinics will be based around hosted telephony, shining a light on the untapped potential for channel partners that may find themselves questioning the level of support they receive from their current provider.

According to Purdie, the aim is to help MSPs and mobile resellers capture “huge opportunities” to cross-sell hosted telephony solutions to their existing customers, while also exploring alternative vendors.

“The aim of the Clinics is to bridge that gap, giving teams the confidence, clarity, and hands-on guidance they need to nurture these opportunities and deliver something genuinely competitive to their customers,” she added.

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For years, it felt like we were slowly but surely gaining ground in an uphill battle against ransomware. Attack numbers were cooling off, organizations were getting smarter, and defensive tools were maturing.

But, for the first time in years, the momentum has shifted, and not for the better. Researchers are ringing the alarm: ransomware is climbing again, attacks are getting smarter, and adversaries are adopting artificial intelligence (AI)I faster than many defenders can keep up.

For channel partners and Managed Service Providers (MSPs), this isn’t just another moment in the news cycle. It’s also an opportunity to educate their customers and provide them with the solutions they need to combat cyber threats more effectively.

Ransomware’s quiet comeback

What’s striking about the latest wave isn’t just the increase in the volume of activity, but how rapidly attackers have evolved. Ransomware groups have regrouped, retooled, and are now operating with a new level of sophistication that we have never seen before in cybersecurity.

Attackers are leaning heavily on automation, AI-generated phishing, and coordinated extortion operations. Phishing appears to have re-emerged as the most reliable doorway in, not because people are less cautious, but because the lures are now much more difficult to distinguish from legitimate communication. AI has given cybercriminals a frightening edge: scale and believability.

The new attack playbook

Phishing remains the most reliable and familiar workhorse for most ransomware crews, but that’s only part of the story. Stolen credentials, session hijacking, and compromised endpoints are playing a bigger role than in previous years.

Ultimately, attackers have concluded that targeting identity and access management tools often yields a far higher payout than hammering at technical vulnerabilities.

Many of these techniques are now automated, meaning small businesses, especially those relying on outdated filtering or inconsistent endpoint practices, are increasingly caught in the crosshairs.

Organizations are clearly hungry for modern defenses to meet these modern challenges, but they often don’t know where to start. Right now, MSPs have an opening to step up their game by offering their customers more advanced identity protection, AI-enhanced email security, and automated phishing-resistance training that puts them ahead of the curve.

The cyber insurance safety net is fraying

Organizations sometimes assume cyber insurance will save them when the worst happens, or that it cuts back on the need for other forms of protection. But that assumption is incorrect.

Recent insights highlight a common theme: policies are getting stricter, premiums are climbing, and insurers are pushing back on payouts when the right controls aren’t in place.

This shift means companies can’t “insure their way out” of ransomware. MSPs are increasingly being asked to help customers weigh the cost-benefit of insurance versus strengthening resilience, and, in many cases, proactive security investments win out. The fact is that companies are increasingly unlikely to qualify for cyber insurance if they do not have robust cybersecurity systems.

Recovery is improving, but not fast enough

Don’t despair: there is some good news. With a few years of experience under their belts, organizations are getting better at detecting and containing attacks quickly. More companies now have dependable and immutable backups, disaster-recovery playbooks, and the confidence to avoid paying ransoms.

But the human side of security hasn’t kept up the pace the way that it needs to. Leaders still underestimate how much risk comes from everyday behaviors. An employee who approves a fake MFA request, a manager who reuses passwords, or an intern who clicks a well-disguised link can set into motion a domino effect of consequences with massive ramifications.

In many cases, training programs exist, but they’re ineffective or outdated. “Check-the-box” security awareness simply can’t compete with AI-powered attacks designed to mimic real people.

This is where MSPs can have an outsized impact, by offering cyber awareness training that’s automated, personalized, ongoing, and tied to tangible threats happening in real time.

Even with the most sophisticated firewalls, human error has a way of resurfacing as the most common source of breaches. In this scenario, expertise and cyber-resilience are more valuable than ever, and MSPs are in a great position to offer access to this.

What this all means for MSPs and channel partners

We’re entering a different era of ransomware in which the quantity and quality of attacks are no longer mutually exclusive. Hackers are creating traps that are more convincing than ever, and they’re doing it at scale.

But it’s also an era where MSPs have more tools, intelligence, and AI capabilities at their disposal to help customers build real resilience. So, what can you do?

For one, MSPs can focus on offering clients expertise in addition to next-gen tools. Providing integrated protection can help to solidify a business’s reputation as a trusted guide in precarious times.

It also falls on MSPs to help client organizations understand what “good security” really looks like beyond the safety blanket of insurance.

Finally, it is up to the MSP to make the most of AI-powered tools and take advantage of their capabilities to detect, prevent, and respond to threats faster than ever.

The resurgence of ransomware isn’t a sign that cybersecurity is failing, only that the threat landscape has shifted. And channel partners who help customers adapt to this new reality have an opportunity not only to better protect their clients, but to establish themselves as authorities in this new domain.

Organizations of all sizes and sectors rely on the expertise of MSPs to guide them through an increasingly complex cybersecurity threat landscape.

It’s an environment shaped by threat actors who can act fast and with great precision, using AI tools to improve the speed and efficiency of their attacks. This includes automated phishing campaigns, highly targeted identity attacks at scale, and even convincing deepfakes.

As the digital attack surface continues to expand, new security gaps appear and the opportunities for exploitation also rise. MSPs play a critical role in supporting customers in facing these challenges.

There are significant growth opportunities for providers that can offer scalable security, round-the-clock protection, and the advanced skillsets that customers need to be cyber resilient.

Supporting customers’ evolving needs

The near-universal need for support from MSPs was evident in research we conducted this year into the security challenges and experiences of organizations. For example, we found that 96% of the organisations surveyed were either already working with MSPs or planning to do so.

The reasons for this reflect the complexity that security teams face in protecting their ever-expanding network, applications, and sensitive data. We found that trying to support and manage an ever-growing number of – often disconnected – security tools was the main reason organizations turn to MSPs for help.

Many businesses are also looking for strategic support. Around half (51%) of the organizations surveyed are looking to MSPs to help them address the security challenges of growth. Nearly half (45%) would consider switching to another MSP if they cannot see clear evidence of robust security skills, expertise, and 24/7 support.

MSPs need to get their own house in order to win customer trust

In a competitive market, understanding the factors that influence customer relationships and hard-won trust is essential. This matters even more as expectations continue to rise, and customers increasingly rely on their providers to demonstrate strong security capabilities. Confidence in a provider’s security posture directly affects customer retention.

A security breach poses a serious threat to maintaining strong client relationships, with 40% of respondents saying they would change their MSP following a breach or other cyber incident.

Transparency between providers and clients builds trust, with 38% of decision makers concerned about MSPs that lack transparency around their own defences. It follows that providers that can demonstrate they follow the same best practices they recommend are better positioned to maintain long-term relationships.

Encouragingly, nearly all the factors that could derail a relationship are issues MSPs can address by investing in their own security resilience.

Cloud marketplace and distributor Pax8 has issued a warning about a security breach that saw data on around 1,800 customers exposed.

An email was sent to 40 of the company's UK-based managed service provider (MSP) customers with an attachment generally used for day-to-day operational reporting.

This contained Pax8 pricing and program-related information associated with 17 stock-keeping units within four Microsoft Modern Work product categories.

Almost all the customers whose data was shared were UK-based, with one located in Canada.

The email, titled "Potential Business Premium Upgrade Tactic to Save Money," was sent on January 13 and contained more than 56,000 entries in all. A follow-up email was sent immediately requesting deletion of the email, and asking recipients not to forward it.

Pax8 insists the breach did not involve any personally identifiable information (PII), authentication credentials, payment data, or any information that could enable system access.

However, the leaked data could reveal to the 40 competitors with which it was shared the MSP’s full client portfolio, what licenses they hold, and when these are due to expire, along with internal Pax8 pricing and margin information.

Threat actors are approaching affected MSPs

The data leak could help the victims' competitors poach customers by revealing which organizations use Pax8 as their distributor, the size of each customer's Microsoft environment, the timelines for contract renewal, and potentially the pricing tiers being paid.

A more sinister development has unfolded in the wake of the incident, however, with cyber criminals apparently capitalizing on the situation. According to reports from BleepingComputer, threat actors have approached some of the affected MSPs and offered to buy the data.

This information could be used by cyber criminals to craft convincing phishing attacks, for example by allowing an attacker to email a company just before their contract renewal date, pretending to be their MSP and requesting payment.

The company said it has launched an internal review to work out how the breach happened and plans to ramp up its safeguards and processes to prevent a similar incident taking place in the future.

Access instructions have now been sent to affected partners, the company revealed, allowing them to securely review information that may have been shared.

That access will be limited to the Pax8 Marketplace Primary Partner Admin and/or Partner Admin for each organization.

"Our focus continues to be on responding directly to partner questions and supporting impacted partners as they review their data and follow up with us," said the firm. "In parallel, our internal review remains ongoing as we continue to strengthen safeguards and processes."

Pax8 said partners with questions or concerns should submit a Support ticket through the Pax8 Marketplace referencing UK Partner Information Incident – Jan 13, 2026.

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The channel is at a turning point. Managed Service Providers (MSPs), Value-added Resellers (VARs), and integrators are finding that the tradition of transactional projects, delivery by volume, and land-and-expand resourcing will no longer sustain their growth.

Clients increasingly want a different approach: a trusted partner who stays aligned with their goals and delivers outcomes consistently.

This shift has given rise to a new delivery model, one built on partnership, collaboration, and shared accountability. It’s a model that helps channel firms differentiate themselves, retain clients for longer, and generate repeat, predictable revenue streams, without exhausting their sales and marketing function.

Why the partnership approach matters now

As channel providers, we find ourselves working with more sophisticated clients than ever. Technology touches every part of their business, yet many lack enough senior engineering or product capability in-house.

As a result, they expect deeper involvement from their external suppliers and more flexible ways of working.

The partnership approach is designed for this environment. Rather than dropping in a team, delivering a scope, and moving on, firms work closely with clients, adapt continuously, and remain aligned with business strategy. The focus is on momentum, clarity, and collaboration, not transactions.

The pitfalls of the traditional channel model

The traditional approach holds the channel back. This approach includes:

• Rigid resourcing and junior-heavy teams that require a lot of supervision
• A “land-and-expand” mindset that pushes headcount, not value
• Slow mobilization and inconsistent delivery quality
• Premium rates combined with high client ownership of risk
• Documentation-heavy processes and multiple approval layers

These issues create frustration across every level of a client’s business. When teams are so often stretched internally, they don’t want a vendor they have to spend time managing. They want capability, clarity, and trusted expertise. They want a partner.

What a partnership model looks like for the channel

A partnership-led consultancy looks very different from the outset. Engagements are designed to be collaborative and outcome-driven rather than resource-led.

As an example, for us, this means smaller, senior-led teams who embed closely with internal teams from the start.

Key features of the partnership model include:

• Expert-only teams (5+ years’ experience minimum)
• Joint ownership of outcomes, not just contract outputs
• Daily standups and clear communication rituals
• Tech that adapts to the business (instead of forcing new behaviors)
• Internal teams treated as equals, not spectators

This model reduces oversight overhead, lowers risk, and accelerates delivery momentum, which leads directly to stronger client relationships and recurring engagements.

Why this resonates with MSPs, VARs, and Integrators

Channel organizations serving the mid-market and enterprise (50–1,000 employees) are well-positioned to benefit from this approach. These clients often lack sufficient senior engineering and product leadership in-house, yet urgently need help with end-to-end delivery.

What they value most is speed, clarity, and accountability, not lengthy documentation or multiple layers of approval. They want partners who can help with strategy, architecture, build, and implementation without full consultancy overheads. They want someone to tell them when the brief is wrong, not blame them when the outcome is not what was anticipated.

Crucially, this model unlocks new revenue streams, such as ongoing support, modernization plans, AI integration, legacy system upgrades, and digital performance monitoring. It turns one-off projects into longer-term programs, without needing to re-pitch for every engagement.

Collaboration drives repeat revenue

When clients actively collaborate (joining standups, reviews, and retros), quality improves immediately. Decisions happen faster. Internal domain knowledge meets external technical capability. Delivery friction reduces, and a sense of shared ownership takes hold.

This naturally leads to stronger retention, referrals, and repeat engagements, which is where consultancies that adopt this approach gain the most value. Trust becomes a commercial asset.

Where the partnership model works best

The model is especially effective for:

• Net-new builds and platform launches
• Cloud modernization and legacy remediation
• AI adoption and integration strategies
• Multi-system digital transformation programs

In these environments, clients want reduced risk and predictable momentum, not vendor churn or resourcing roulette.

The strategic role of AI

AI is increasingly part of channel conversations, but it must be handled correctly. Under a partnership approach, AI is treated as a tool to be applied carefully to real business problems, not as a buzzword to justify new spend.

Senior-led teams can help clients understand where AI adds operational value, how it integrates with legacy environments, and how it can support, and not disrupt, existing workflows. This prevents hype-led investment and ensures technology adapts to the business, not the other way around.

Why channel firms benefit from this model

The shift to partnership brings a number of immediate advantages to MSPs, VARs, and integrators:

• Differentiation – clients can feel the difference between vendor and partner
• Retention – deeper engagement means lower churn
• Predictability – risk and oversight costs decrease
• Scalability – relationships replace acquisition cycles
• Growth – referrals come naturally when clients trust the partnership

This isn’t just an operational decision; it’s a route to long-term commercial resilience.

The channel’s next competitive edge

The future of the channel won’t be won on volume, headcount, or hourly rates. It will be won through deeper collaboration, senior expertise, and a shift towards shared accountability.

The consultancies that embrace the partnership approach will build stronger foundations, reduce delivery risk, and create repeatable revenue models, without competing in a race to the bottom.

The channel has always been about solving problems. But today, it’s not just about solving them faster; it’s about solving them together.

Managed Service Providers (MSPs) are invaluable partners for businesses as they grow, innovate, and transform. They provide organizations with a cost-effective way to outsource critical areas of business to streamline processes and stay compliant in areas of speciality, like IT and cybersecurity.

The support provided by MSPs is especially critical for time and resource-strapped small and medium-sized enterprises (SMEs). Indeed, many MSPs work with SMEs to provide and administer vital resources from office software packages to awareness training and network security needs. As of 2024, it was estimated that globally there were roughly 130,000 MSPs, a market that was valued at over $340bn. By 2026, MSPs are tipped to be worth €234.2 billion to the EU economy.

In 2025, the role of the MSP changed significantly, as more customers flocked to these providers for specialized cyber support to cope with the increasing sophistication and volume of threats. At the same time, MSPs themselves faced more scrutiny as critical parts of the wider supply chain. So, what does cybersecurity look like for MSPs and their customers in 2026 and beyond?

MSPs are being targeted more frequently

MSPs hold a unique position within the IT ecosystem, as they are often responsible for managing and supporting the IT infrastructures, cloud services, and cybersecurity of many different organizations. These trusted partners often have privileged access to the inner workings of the organizations they support, including access to the critical systems, sensitive information, and intellectual property of their clients.

As such, they’re seen as very valuable targets for cybercriminals. Breaching one MSP can give a malicious actor a foothold into a vast network of that MSP’s customer base, along with their data. This allows them to inflict widespread damage and maximise financial gain. Worryingly, MSPs are being targeted more frequently.

Our 2025 research revealed that 69% of MSPs had reported being breached two or more times in the last 12 months, with nearly half (47%) of MSPs admitting to experiencing three or more breaches. As a result, customers are putting the security of MSPs under more scrutiny.

MSP security practices are under the microscope

In recent years, security threats have increased across the board for all organizations - not just for MSPs. Supply chain attacks and their wide-ranging impact are frequently in the news. Take the 2023 MOVEit attack, for example, where the Clop ransomware group exploited a zero-day vulnerability within its MOVEit Transfer software, used for secure file transfers. They used the vulnerability to steal sensitive data from thousands of organizations, including the BBC, British Airways, and Boots, and nearly 100 million individuals, then demanded ransoms to prevent data leaks. This and similar incidents shine a spotlight on the criticality of supply chain security. As a result, positively, awareness of cybersecurity among end users has undeniably increased.

As a result, organizations are vetting the partners they trust with their data and critical systems more, and MSPs are no different. In a recent survey of MSP professionals globally, 77% of respondents said scrutiny of their businesses’ security capabilities had increased, suggesting that MSP customers (current, potential, and otherwise) are more aware of the importance of good cyber credentials in a potential partner.

To reflect this demand, many MSPs are retooling and expanding their internal and external cybersecurity operations, with 81% of the MSPs we surveyed saying they’d increased spending on specialist cybersecurity hires in the past 12 months and 78% saying they’d upped spending on their security capabilities, such as training, defenses, or products and services for customers.

Whilst the security of MSPs is being called into question more frequently, organizations are also calling upon MSPs for support with cyber more often, too. But what has driven more organizations to seek specialist security support?

Threats are increasing, and organizations are seeking advanced help from MSPs

More than ever, cybersecurity requires specialist support, with threats becoming more sophisticated (no doubt thanks to AI) and increasing in volume. No organization is too small a target, either, with SMEs taking note of the increasing risk of an incident.

Research shows that over half of MSP leaders globally believe that their customers are at more risk today than this time last year when it comes to cyber threats, with AI-based attack vectors, ransomware/malware, and insider threats the most commonly faced threats.

As a result of this uptick in threats, more organizations than ever are leaning on MSPs for cyber support. In fact, in 2025, 84% of MSPs managed either their clients’ cyber infrastructure or their cyber and IT estates combined. This increased significantly, from 64% the previous year.

What this shows is that SMEs are realising that they cannot handle cybersecurity alone, turning to MSPs for additional help. Cybersecurity is no longer an optional extra or add-on; it’s becoming a core, expected service for MSPs. MSP leaders are transitioning from general IT support to becoming essential cybersecurity guardians.

The future for MSPs

MSPs that adapt by investing in specialized cybersecurity expertise, advanced technologies, and a proactive security posture will thrive, becoming indispensable partners to businesses navigating the complex world of cyber risk. Those who don't may find themselves increasingly vulnerable and less competitive.

The stakes are high. Client breaches increasingly reflect on an MSP's reputation and liability. They're prime targets for cybercriminals seeking access to an extensive supply chain of clients and data.

Combating sophisticated, AI-driven threats demands MSPs critically elevate their own internal security and move beyond reactive measures, becoming indispensable cybersecurity support.

Many small and medium-sized businesses (SMBs) might struggle to afford third-party relationships - like those with channel partners - or have a specific need or capacity for models that see someone closely manage their technology for them.

Instead, they might want to do it themselves, creating a DIY-style initiative that builds a system with parts from many different platforms, tools, or cloud services.

Could such an approach be dangerous? Essentially, bringing with it risks to security, among other issues for internal operations such as compliance, delivery, and productivity. Or, is it entirely possible? And, if it can be achieved, how would this be done?

Eleanor Watson is a member of the IEEE, the world’s largest technical professional organization dedicated to advancing technology for the benefit of humanity. As an AI ethics engineer, she works principally as a machine intelligence researcher.

Watson is in agreement that for SMBs with limited budgets, the use of channel partners “might not be feasible”. She believes the DIY approach is sound and can work for SMBs but only “when treated as a disciplined strategy, rather than cost-cutting”.

“As a first step, businesses should map business-essential functions (finance, HR, sales, compliance) and assign clear ownership for each system’s uptime and data security,” she explains.

“Invest in architecture first: build a clean, modular stack using open standards (SSO, OAuth2, API-first systems), and document relentlessly. Begin with a manageable scope – self-hosted basics or low-code automation – while maintaining flexibility to integrate external providers later.”

That’s not to say there won’t be any challenges with such an implementation, as Watson is happy to concede. “Achieving interoperability without fragility is the primary challenge,” she warns. “Vendor APIs evolve; dependencies break. Without dedicated integration expertise, SMBs must maintain test environments and version control for configurations.”

Cybersecurity resilience is “equally demanding”, she adds, stating: “A single ransomware incident or supply-chain compromise can cripple an unsegmented network. Apply zero-trust principles – robust identity management, privilege separation, encrypted backups – as foundational defaults, not afterthoughts.”

Risks vs rewards

The most common types of IT channel partners are the likes of value-added resellers (VARs), systems integrators (SIs), managed service providers (MSPs), managed security service providers (MSSPs), and consultants. Vendors they use often include AWS, Google, IBM, and Microsoft, and a channel partner usually provides online training and certification to an SMB.

Ian Anderson, senior director of partner sales at Park Place Technologies, understands the “temptation” of DIY but concurs with Watson, believing the risks must be clearly identified and understood first if SMBs push ahead with this approach.

He cites how a good partner might “understand the business, environment, and resources in a way a DIY approach never can,” but does admit: “The reality is most channel partners have gaps in their service range. They can’t be experts in everything. This is why the smartest SMBs look for partners who are, in turn, supported by specialist service providers to fill those gaps – whether professional or managed services.”

However, for those who still wish to go it alone, Watson has more advice to follow. “Meaningful savings come from open-source platforms, consumption-priced cloud services, and internal automation replacing external consultancy,” she explains. “AI copilots for documentation, compliance drafting, or troubleshooting can substantially reduce administrative overheads.”

Watson also points to the issue of believing you are making savings when actually you might cost yourself more in the long run, adding: “The real economic advantage is agility: direct system control enables rapid iteration without vendor lock-in. However, cheap setups requiring costly rescue operations are common – beware of these false economies.”

Smart work vs hard work

The risk of a DIY approach is greater for mid-sized organizations compared to those smaller businesses, according to Matt Fox, chief operating officer at technology consultancy TXP.

“If mid-sized organizations are to avoid a piecemeal approach to IT modernization, they require a joined-up approach to technology and people,” he says.

“Mid-sized organizations can work smarter, not harder, by working with an external IT provider that has the skills and resources required to fully address their IT needs.”

Fox adds: “However, channel providers need to go beyond simply augmenting team numbers or selling products to provide a transformational service. A successful relationship with a channel partner will involve at least some element of knowledge transfer as experts share their expertise with their partner’s team.

“This ‘teacher-learner’ relationship brings value beyond a simple transaction to working with the channel, and it ought to be the gold standard when working with partners for IT implementation.”

In the real world, there are no clear rules on when to DIY, when to begin with a channel partner, or when to move from doing it yourself to getting third-party help and guidance.

But Siyar Isik, CEO of Eskritor, an AI-powered writing assistant tool, believes DIY is possible when the right guardrails are in place. “Not every small business has to lean on channel partners for IT,” he admits.

“Some can manage on their own, but only if they stay realistic about what is possible.”

Isik’s first advice would be “to start simple” with tools like Google Workspace or Microsoft 365, which have been built with small teams in mind.

“They come with great support communities and plenty of clear documentation. That takes a lot of pressure off the team,” he says.

While it is possible to reduce overheads by cutting costs and avoiding long contracts, there are clear areas where it would be dangerous to compromise, according to Isik.

“Data protection, backups, patching, and continuity planning need to be airtight,” he insists.

“Skipping those is like skipping insurance. A DIY approach can work, but only if a business goes in with clear eyes about its limits and refuses to cut corners on the areas that matter most.”

Weighing up the time outlay

Watson is also concerned about other pitfalls. “Most DIY IT failures stem from underestimating complexity debt,” she explains.

“Integration across accounting, customer relationship management (CRM), and inventory systems can spiral without professional oversight. Security hardening, patch management, and compliance consume more time than expected. Staff turnover erases undocumented expertise, orphaning systems.”

And although the use of Agentic AI tools in an SMB setting might offer simplified management, these can also “amplify errors when unsupervised”, Watson warns.

“Autonomous misconfiguration – AI making confident but destructive changes without full context – is an emerging risk,” she highlights. “Governance remains essential regardless of tooling intelligence.”

There are also real benefits, however, according to Watson. These include full control over architecture, data, and priorities, plus faster iteration and innovation cycles. Deep understanding of your digital infrastructure and reduced dependency on opaque vendor ecosystems are two more.

“Properly managed, DIY IT builds organisational technological literacy – a durable competitive asset,” she adds.

At BI Worldwide, a partner with 300+ Fortune 500 clients, there is clearly an appetite for help from customers who do not wish to go down the DIY path or can’t do so. Deborah Watson, its client and solutions strategy director, suggests asking what a good partner might “bring to the table” before choosing one.

She explains: “This means asking the right questions: is your partner part of a programme that rewards them for investing in training, support, and customer success? If not, you may not be getting the full benefit of what a channel relationship can offer.

“SMBs should ask whether their chosen partner is part of such a programme – it can be a strong indicator of the quality and reliability of the support they’ll receive. Understanding whether their partner is supported in this way can help assess the long-term viability of a DIY approach versus a channel-supported model.”

Planning for growth

For Colin Crow, managing director at digital transformation specialist Nexer Enterprise Applications, the big risk with DIY is “you only know what you know”.

“You might be fortunate enough to have a small team of tech talent in-house, but that doesn’t necessarily mean they are experts in the specifics of the new system you’re implementing or on how to manage the change across the organization,” he says.

“With a partner, you can get the best of both worlds: control over your vision, with expertise on tap to keep you on track.”

However, Zayed Ahmed – who started as a call center agent before founding outsourcing company ASL BPO – believes the go-it-alone route has plenty of positives. They believe it’s just about understanding where the pitfalls are on your journey that might then mean you need greater levels of outsourced help.

“I see very few who succeed with a pure DIY approach,” he says. “They often start there, setting up basic tools like email platforms, cloud storage, or password managers. It feels manageable at the beginning and helps keep costs down.

“But as soon as compliance or security comes into the picture, things change quickly. Most internal teams cannot keep up with constant updates in regulations or the latest cyber threats. Missed patches, poor backup routines, or weak access controls can cost far more than what was saved upfront."

That is why Ahmed suggests SMBs heed this piece of advice: “The question should not be ‘DIY or partner?’ but ‘what mix works best for your stage of growth?’”

Today, a large share of organizations operate with multiple unified communication as a service (UCaaS) vendors, coupled with a plethora of other apps and tools. This type of fragmentation is both a blessing – because many companies require it to meet new demands or reach new customers – and a curse, for the companies themselves, and for managed service providers (MSPs) and value-added resellers (VARs).

End-user companies essentially pay a ‘fragmentation tax’ on the complexity of their environment, while MSPs and VARs are forced to find ways to accommodate the complexity while also minimizing its appearance, cost, and burden.

What’s driving fragmentation?

Roughly half of organizations are operating a fragmented unified communications (UC) environment, and there are many reasons why this has come about. The transition from on-premises solutions – or even multiple on-premises solutions – to the cloud is among them. So too was the scramble to adapt to remote and hybrid working, forcing companies to move quickly without as much consideration for integration. Mergers and acquisitions have also historically been a driver for fragmentation.

Let’s not forget a crucial reason, though: best of breed. No single vendor can meet all of an organization's needs. Different departments may require different functionality, and niche solutions are likely to help only those with niche problems. Most organizations, therefore, must build up a suite of different applications to meet the needs – and address the problems – across the whole of their business.

The blessing is that with best-of-breed solutions, companies can excel in certain areas. The curse is that fragmented systems lack integration, which disrupts workflows and massively decreases overall performance. It’s also an administrative burden, with companies expressing frustration with managing multiple platforms, billing systems, and support contracts.

Why does fragmentation matter for MSPs and VARs?

The fragmentation of UC and other applications means that for MSPs and VARs, the traditional single-vendor strategy is no longer a viable approach. By aligning too closely with one vendor, both VARs and MSPs risk being replaced due to their inability to accommodate the diverse needs of their customers. Customers expect their suppliers to support their needs and chosen platforms, and when you don’t, your customers will start to seek a partner who can.

In an environment where customers want more, vendor lock-in is also a risk that can compress margins. Single-vendor strategies create a dependency that’s burdensome, leaving MSPs and VARs vulnerable to changes in their vendor contracts or price increases that are beyond their control. If your company is only aligned to one of the ‘big players’, then you’re effectively at their whim.

The complexity of the multiple applications also places additional burdens on MSPs and VARs, driving up operational costs and reducing margins. To support a customer who uses Zoom for meetings, Teams for internal chat, and Webex for a call center, for example, a VAR must hire, train, and certify staff on multiple platforms. This drastically increases operational cost. Likewise, an MSP must now troubleshoot and fix issues across multiple systems. This reduces the efficiency of management and pushes up the cost when those systems aren’t integrated into a unified platform.

Moving forward with choice and simplicity

MSPs and VARs have a choice: they can be skeptical in the face of fragmentation, wait for the trend to pass, and bury their head in the sand, or they can be agnostic – capable of working with whatever comes their way and with whatever their customers need. By taking a vendor-agnostic approach, VARs and MSPs can embrace the change while effectively carving out a lucrative niche within the market.

Taking an approach like this helps to retain customers because they’re not going to shop around for more flexibility: you provide enough for them already. It can also help to protect margins from compression as it lets MSPs, VARs, and their customers change vendors if they create less favorable terms.

Comms complexity causes knottiness for MSPs and VARs, but they can minimize that with the use of single-pane-of-glass management tools that can simultaneously monitor and report on the performance of multiple UCaaS and collaboration tools. This allows VARs and MSPs to meet any customer requirements without having to become a direct partner with every single vendor or train staff on their many platforms.

Ultimately, once VARs and MSPs have taken the new approach and invested in UC management platforms that span multiple vendors, they can start to position themselves as integration consultants – much more than simply resellers or managers. This is what the data shows companies want, too.

Research from Cavell and CallTower highlights that, for companies of all sizes, when they operate multi-vendor environments, they overwhelmingly want to purchase from (and work with) a single provider. They want best-of-breed functionality, and they want it from one best-of-breed partner.

MSPs and VARs that can accommodate the fragmentation of communications will succeed, where those who shy away from it will struggle. But simplifying the complexity internal to their organizations, without passing it on to customers, is a precondition of success.

Santa Clara, California headquartered, 100% indirect Pure Storage added 12% year-on-year to its $3.17 billion revenues for full-year 2025, and to its Q1 2026 revenues of $779 million. Product sales rose 5%; subscriptions 22%.

Founded in 2009 by John Colgrove and John Hayes as Os76 before branding as Pure Storage in 2011, Pure is 6000 employees strong, led by CEO Charles Giancarlo. The focus is on flash and data management, integrating storage hardware, embedded licensed software, and services. Partners like Kyndryl, Tech Mahindra, and NTT are joined by resellers like Bechtle, CD,W and ePlus.

Geoff Greenlaw, EMEA and LATAM channel sales vice president, says it's expanding flash into historical disk use cases, leveraging its flash software as well as quad-level cell (QLC) flash.

General manager, commercial, Amy Fowler, oversees regional channel heads, including Greenlaw, the Americas' Hope Galley, and Andrew Fisher for Asia-Pacific and Japan (APJ).

Key offerings

Within the Pure Storage platform and Pure's Enterprise Data Cloud concepts are several offerings expected to power partner revenues. And in June, Pure announced various updates targeting volatile, power-hungry workloads.

Within the Pure Storage platform and Pure's Enterprise Data Cloud concepts are several offerings expected to power partner revenues. And in June, Pure announced various updates targeting volatile, power-hungry workloads.

FlashBlade hardware - unified file and object storage for unstructured data. For instance, the FlashBlade/EXA storage platform is being marketed towards AI deployments seeking to make better use of organizational data.

As Greenlaw tells ITPro: "{FlashBlade's] very focused on very high-end performance and throughput. It can become very big in healthcare where there's high volumes, very large volumes of data that need storage for long-term data retention."

FlashArrays C and X - "We're pushing on with our FlashArray tech, which is really about database[s]. In addition, we have major enhancements to our X and XL range, which is up to 30% faster than its predecessor. That's mission-critical in the world of database[s]," he says.

Portworx - a cloud-native container data management platform for Kubernetes.

"We're seeing companies increasingly competing with Broadcom VMware," Greenlaw adds. "VMware has drastically increased the price of their licensing, and customers are looking for alternative virtualized environments."

Partners are seen as drivers for seamless mobility, cost optimization, resiliency, sustainability, consistent storage services, and unified data environments, including tailored and certified offerings for AI and high-volume data. In addition, Pure Fusion v2 software caters to AI-focused data management, with Pure1 AIops included in active subscriptions and support contracts.

Pure Storage in the news

• Founder John Colgrove, in June, talked up an all-flash future, with Pure also doubling down on data management.
• Also in June, Pure//Accelerate showcased its high-performance flash hardware, broad software stack, STaaS, and Enterprise Data Cloud (EDC) for combined data storage and management.
• January 2025 saw Pure announce its hyperscaler 'design win' licensing deal as hastening the death of disk.

Pure Storage for partners

Greenlaw says February's partner program update will fuel profitability for partners and Pure as changes bed in, while tech alliances with vendors such as Rubrik and CrowdStrike will further enhance its portfolio with regard to gaining net new logos (adding new customers).

"We're really doubling down on fewer, bigger bets within our channel to make Pure far more relevant to them, rather than spreading our revenue across 1000s of partners."

Partners lead customers through data storage transformation, leveraging the Pure Storage Platform for solution-specific use cases from AI to cyber-resilience. Data access, preparation, and management often bar AI success, for instance.

Also, partners will be incentivized to replace disks with Pure flash, with new solution-oriented training and enablement.

Partners are crucial to Pure's sustainability push, Greenlaw says, not least because data centers suck 2-3% of generated electricity worldwide, with datacentre storage, cooling, and space comprising most of that.

Services remain "highly relevant" to partners too, including storage as a service (STaaS) EverGreen//One, //Flex, and the more traditional //Forever.

Meanwhile, Pure's Service Specialization Program means partners can offer their own branded professional and support services for Pure technology.

In the partner program announcement, channel chief Fowler said the "reimagined" program experience will position partners for rapid growth and customers for "a sustainable future".

"Pure Storage is deeply committed to driving shared success with its partners," she says.

Partner programs, tiers, and partner types

• Partners are divided into resellers, distributors, global systems integrators (GSIs), and managed services partners (MSPs). In addition, there are Services specializations, and technology alliance partners for jointly engineered solutions.
• Tiers are Elite or Preferred, based on annual dollar values booked and technical certifications, with Elite partners eligible for higher back-end rebates and more investment in training and certification.
• Pure Storage Global Enablement certifications last two years.
  • FlashArray Architect Associate
  • FlashBlade Architect Associate
  • Platform Solutions Associate
  • FlashArray Architect Professional
  • FlashBlade Architect Professional

Partners should first qualify for the Pure Platform Positioning Certificate on explaining and selling Pure, then choose from product-focused learning paths and assessments, with or without additional training as required. Exam ordering instructions are here.

• IT professional services certifications.
  • Associate (data storage)
  • Professional (FlashArray, FlashBlade, Portworx, data protection)
  • Specialist (FlashArray and FlashBlade implementation or support, cloud block store, migration)
  • Expert (platform architect)

Further benefits, rewards, and incentives

• Individual and entity rewards for Preferred and Elite partners with partner-sourced competitive take-out deals.
• Rebates for Elite partner subscription bookings and new or strategic solutions sales.

Beyond the above, other rewards or benefits won't apply to all regions or partners, Pure says.

• Deal registration.
• Pure Digital Master Services Agreement (PDMSA) - margin for self-service purchases.
• Pure Partner Intelligence - real-time insights and analytics dashboard.
• Pure Realize - support for use-case proposals, price quotes, and solution expertise.
• Configure, price, quote (CPQ) tooling.
• Pure Storage digital badges.
• Partner Library of resources and info - log in here.
• Training catalog via Pure's Partner Academy page - log in with Partner Account details.
• Further enablement via the Partner Central partner
• Collaborations with the Technical Services teams.
• Collaborations with Business-Critical Services teams.
• Pure360 demos, videos, and test-drives.
• Pure Storage Partner Finder listing.
• Monthly cost estimator for Evergreen//One partners.
• Cost calculators for cloud block storage, STaaS, and FlashBlade//S.
• Remote installation support for FlashArray and FlashBlade.
• Further online resources - online solution briefs, how-tos, webinars, blog posts, e-books, and whitepapers.

Sign up and get on board

To become a partner, explore program details and express interest by contacting Pure Storage through its website. No membership fee is required just to join; eligibility is determined by actual sales activity. Send an enquiry on this page.

For support and questions, try this web form, or contact sales in the US by phoning 800-976-6494 or emailing info@purestorage.com.

Pure Storage is also on LinkedIn, X, Instagram, YouTube and Facebook.

If 2025 had a theme tune for the IT channel, it would be the sound of partners enthusiastically unboxing “AI opportunities” while quietly checking the invoice to see who actually got paid.

Because, yes, AI dominated everything. Vendor keynotes. Distributor roadshows. Strategy decks. Every conversation that began with “we’re seeing a lot of interest in…” inevitably ended with “…AI”. But for many partners, 2025 wasn’t the year AI transformed the balance sheet, but the workload.

AI investment first, reward later (maybe)

Analyst research from IDC showed most channel partners investing in AI practices, embedding AI into services, and pursuing specialisation. High-performing partners, in particular, were already using AI to differentiate through things like vertical expertise, outcome-based delivery, and automation.

However, at the Canalys Channels Forum EMEA, Omdia analysts noted that while the AI opportunity is enormous, the rewards are uneven – and not always flowing to the channel.

As a result, 2025 became the year partners stopped asking “how do we sell AI?” and started asking “how do we survive with AI?” The answer, increasingly, was specialisation, managed services, and embedding AI into delivery rather than pitching it as a shiny standalone thing.

Partner programs: simplification, but not serenity

If AI defined partner strategy in 2025, programme change defined partner headaches.

Microsoft’s CSP updates landed with familiar force. New revenue thresholds, stricter compliance requirements, enhanced security expectations, and more scrutiny around Partner of Record (PoR) all reinforced a single message: Microsoft wants partners to own the customer lifecycle, not just transact licences.

However, many MSPs argued that licensing margins are now so thin, and competition from larger CSPs so aggressive, that the incentive to stay in the licensing game at all is questionable.

Cisco, meanwhile, went big with Cisco 360 – collapsing multiple incentive structures into a single framework designed around lifecycle value, cross-portfolio selling, and AI-ready infrastructure. The retirement of legacy designations (including Gold) signalled that sentimentality has no place in the AI era.

Microsoft and partners: “it’s complicated”

Nowhere was the strain in partner relationships more visible than in Microsoft’s dealings with MSPs.

Throughout the year, MSPs publicly criticised Microsoft for failing to protect pricing parity in the CSP ecosystem, allowing large licensing players to undercut smaller partners and then leverage those relationships to capture services revenue. The result, according to many MSPs, is a race to the bottom on licences – followed by awkward conversations about “partner-led growth”.

Microsoft insists partners remain central to its strategy. Many partners don’t dispute that. They just question whether the incentives, protections, and economics still line up with the rhetoric.

By the end of 2025, the Microsoft-partner relationship wasn’t broken – but it definitely felt like it needed couple’s therapy.

Servers are back – maybe

One of the quieter surprises of 2025 was the resurgence of hardware, driven almost entirely by AI infrastructure.

Server sales surged as hyperscalers, enterprises, and governments raced to build AI-capable data centres. GPU-accelerated systems dominated growth, and for the first time in years, “servers” felt exciting again. Almost.

So, is hardware officially back? Yes and no.

For partners, AI infrastructure has created real opportunities around design, deployment, networking, security, storage, optimisation, and managed services.

The complexity of AI environments plays directly to channel strengths. But the biggest server deals increasingly go direct. Hyperscalers and mega-buyers dominate the top end, while vendors themselves have been more willing to bypass indirect routes to market. Add rising component costs – including a notable spike in server prices – and hardware margins remain fragile.

M&A: consolidation with intent

Finally, there were the acquisitions — lots of them. Channel M&A accelerated throughout 2025, particularly among MSPs and technology advisors.

Deals like boxxe’s acquisition of CAE Technology Services, pushing it towards the £1 billion revenue mark, and the long-anticipated Trustmarque-Ultima merger underlined a clear trend: scale is no longer optional.

Security-led MSPs continued to roll up the market, too, with Ekco completing its third acquisition of the year, while names like Focus Group, Redsquid, and Flotek quietly kept hoovering up smaller peers. Even distribution got in on the act, with

Northamber buying Nuvias UC’s hardware division to broaden its portfolio.

Security remained the most consistent deal driver, but AI capability increasingly sat just beneath the surface of many transactions. Building those organically takes time. Buying them is faster.

The 2025 verdict

The big takeaways from the channel this year? AI stopped being optional. Vendor programmes stopped being forgiving. Infrastructure boomed – but unevenly. Consolidation accelerated because standing still stopped being viable.

Put simply, 2025 wasn’t the year the IT channel made its fortune from AI. It was the year it rearranged itself, so it still has a seat at the table in 2026.

What makes you, you? In the physical world, identity is layered with memories, choices, and relationships. Online, all that is stripped away. To a computer, you are not your story. You are a login. A password. A browser cookie. A code was sent to your phone. And if an attacker can obtain those same fragments, the system treats them as you.

Identity online is not who you are; it is what the system accepts as proof of you, and that gap is exactly what the attackers take advantage of. Across devices, networks, and SaaS platforms, what is accepted as proof will vary greatly. That inconsistency is where attackers thrive, bypassing weak or uneven multi-factor authentication (MFA) implementations and exploiting the cracks between systems.

For managed service providers (MSPs), this fragmentation isn’t just a challenge. It gives them an opportunity to deliver differentiated identity protection services that will unify and strengthen what their customers are struggling to do on their own.

Why MFA matters and why it’s often misunderstood

Most people still think of identity as a username and password. But that is like locking your front door with a simple latch. It might keep the wind out, but it will not stop a burglar. MFA is supposed to fix that by requiring more than one type of proof, typically something you know, something you have, or something you are. PINs, biometrics, push approvals, hardware keys, and device checks all fall into these categories.

However, not all factors are created equal. A unique, strong PIN is a lot better than a four-digit code that is reused everywhere. A fingerprint scan backed by the secure hardware on modern iPhones is better than the old swipe pattern on an Android screen that anyone could smudge-trace. A FIDO2 hardware key is significantly more resistant to attack than SMS codes that are inherently vulnerable to SIM swaps.

For MSPs, the ability to help customers understand the strongest versions of these factors, combined with what works for the business, and then guiding them toward the right combinations, is a powerful value-add.

Where MFA works well and where it breaks

The challenge for MSPs is that MFA isn’t consistent across platforms. Each login will have its own rules, capabilities, and points of failure, which is why simply “turning on MFA” rarely means true protection.

When it comes to mobile devices, at the lock screen, Apple and Google only allow a single factor - a PIN/passcode or biometric. You can’t stack multiple MFAs before the unlock. Strong passcodes and secure biometrics are the best you can enforce. Then, if the device is stolen, remote lock or wipe are the only remaining controls.

Desktops and laptops give you more options. Windows Hello, Touch ID, and passwords form the base layer. MSPs will be able to add second factors for their customers, such as push approvals or hardware keys. Hardware tokens also introduce revocation and re-issuance workflows that MSP customers often can’t manage alone.

Wi-Fi and office networks typically authenticate with either passwords or certificates. Passwords are easier for onboarding and change, but they’re also easier to phish. Certificates bind identity to a device and are more secure, but revoking them after compromise can be complex. This means MSPs must ensure that they balance security with operational overhead. The ability to do this well is itself a differentiator.

VPNs provide the greatest flexibility. MSPs can enforce multiple checks, such as passwords, MFA challenges, device posture, and even behavioural signals, before granting access. Because VPNs often serve as a gateway to sensitive resources, strengthening authentication here is important.

SaaS applications are where identity is most fragmented and also where attackers often strike first. Some apps support WebAuthn and FIDO keys; others support only passwords or basic MFA. Working with a centralized identity provider will enable MSPs to unify these experiences, enforce consistent MFA, and block the credential-stuffing and session-hijacking attacks that plague cloud services.

Context, behavior, and devices

Beyond basic MFA, there are contextual and behavioral factors such as your location, your device health, and your activity patterns. These may add even more strength, but support varies widely.

Mobile lock screens offer strong biometrics but limited context awareness; operating systems may allow geo-location checks or behavioral signals, but it is inconsistent; network infrastructure can evaluate IP or traffic patterns, but rarely user identity context; SaaS platforms may support conditional access, but only if tied into the right identity provider.

For any of this to work, MSPs must also manage device posture. This means OS updates, app patching, certificate health, domain join status, NAC policies, and more. Compromise will often need revoking not only user credentials but also device-based trust. This is something customers are often unprepared for. MSPs add value when they can step in with managed identity lifecycle services.

MFA everywhere is harder than it sounds

It is tempting to think MFA is just a feature you turn on that makes you more secure. But every platform has limitations. Some factors can be reset with a click. Others, such as certificates or hardware keys, need careful revocation workflows. Some support modern, context-aware signals, others don’t.

Attackers know this and specifically target the weakest link, for example, a phishable Wi-Fi password, an unprotected SaaS login, or a stolen session cookie that bypasses MFA entirely.

MSPs, however, can see across the whole environment. They can:

• Map where identity is weak or fragmented
• Recommend the strongest possible factor for each context
• Unify authentication through an IdP
• Manage factor resets, revocation, and device health
• Deliver identity protection as a recurring service with clear value

And this is where the real differentiation for MSPs is possible.

Identity won’t be perfect, but consistency and coverage are practical goals MSPs can deliver today. Start with an identity map and a pilot on high-risk users and apps.

By mapping where identity is weakest, centralizing authentication through an IdP, enforcing strong, context-aware factors, and owning revocation and device posture, MSPs turn MFA into a dependable, recurring service. The result for customers will be fewer breaches, faster recovery, and lower helpdesk churn. And for the MSP, it is new recurring revenue.

The role of a managed service provider (MSP) is far more complex than ever before. IT estates are becoming more complicated and larger than ever, meaning that MSP teams have an ever-growing array of devices, software, apps, and networks to manage, protect, and maintain.

Their responsibilities are growing, too. MSPs are also expected to be on the front line, helping secure an increasingly complex and hybrid client environment, from the endpoint to the server, as flexible and hybrid work continues to become the norm.

This has resulted in the growing market for MSP solutions. Indeed, research shows its global worth is projected to exceed $500 billion by 2029. This is a significant market opportunity for MSPs, whose offerings can be a huge value driver and cost saver for clients.

At the same time, however, MSPs also face unprecedented pressures. They need to scale operations, protect and help grow margins, and meet ever-changing client demands - all while facing the pressures of navigating an increasingly fragmented IT stack.

In this environment, MSPs need to be able to quickly, accurately, and reliably operate across multiple parts of the IT estate. This means working towards a single view of all workflows is a critical consideration for many MSPs. As a result, consolidation is a key concern, as the ability to manage a customer’s full IT estate from a single platform doesn’t just streamline operations for the MSP, it also unlocks significant differentiation from competitors.

What’s stopping consolidation?

The current picture for many MSPs is far from the ideal goal of consolidation. Most are operating a patchwork of remote monitoring and management (RMM), professional services automation (PSA), and endpoint tools.

They’re jumping between multiple dashboards and systems trying to resolve queries, while also facing inefficiencies and growing ticket lists. It’s an approach that also creates an increased risk of duplicated or faulty work, due to operating across multiple systems, meaning there’s a higher chance of human error.

It’s not the fault of hard-working agents, but the unwieldy web of solutions they’re having to wrangle. MSPs need to consider alternative solutions to the challenge of increasingly complex IT estates, rather than just letting the platforms pile up.

This is where consolidation comes in. It's often misunderstood as a cost-cutting exercise, but in 2025, it is actually far more strategic. These solutions stop tool sprawl and help rebuild tech infrastructure to suit the purposes of growth. architecture that was never designed to work as one

The power of purpose-built platforms

A successful consolidation strategy isn’t about replacing logos. For MSPs, a purpose-built, all-in-one platform can reduce operational drag. It also increases technicians’ productivity, allowing them to work from a single, multi-purpose system that enables all key operations.

A purpose-built platform can help MSPs manage day-to-day operations across clients. This ranges from technician workflows and asset visibility to endpoint protection and network health monitoring.

Taking a modular, cloud-native approach to architecture can also help support fine-grained role-based access control. This is particularly important in today's complex threat landscape. MSPs are required to safeguard their clients' endpoints from cyberattacks as well as shield them from the relentless evolution of malware, viruses, ransomware, and other threats.

What should MSPs look for in their unified solutions?

When evaluating unified solutions, the three most important capabilities to consider are true multi-tenancy, native AI, and modular architecture.

Robust multi-tenancy is crucial to maintaining strong service across a growing customer base. A modular architecture enables the business to scale up operations and add new capabilities as required, without sacrificing the benefits of the single platform.

As for native AI, the sky’s the limit. AI-powered automation can help operators to accelerate workflows with ticket summarisation, sentiment detection, alert correlation, and predictive thresholds. AI capabilities can speed up the repetitive work of technicians, meaning they can accurately prioritise the most important tickets and then deliver rapid solutions for selected tickets.

It’s also crucial that MSPs can add clients and capabilities on a truly scalable, seamless basis. This means the ability to integrate with third-party systems is also important. It can help them to connect seamlessly with tools across IT, security, and business ecosystems via open APIs and pre-built connectors.

Standing out

If MSPs want to enable long-term scale, security, and competitive differentiation, they need a platform that can adapt to their growth. As such, bringing standalone MSP tools together under a single platform can help support their preferred tools and remove friction, and drive scalability.

It’s these capabilities that will be crucial to achieve competitive differentiation in a crowded market where demands on MSPs are only growing. By improving visibility and adding intelligent AI-enabled tools, MSPs can not only deliver rapid results for customers but also ensure that their offering is future-proofed.

Cloud commerce marketplace Pax8 has announced an expansion of its alliance with Microsoft to help MSP partners drive new growth and differentiation.

The agreement sees Pax8 become one of the first of five partners to integrate with Microsoft Marketplace, alongside the introduction of Pax8 OneCloud Guided Growth, a new initiative designed to help partners such as managed intelligence providers (MIPs) build and scale the entire Microsoft Cloud stack.

“With Microsoft, we’re not just building technology, we’re building the future of managed intelligence,” said Nick Heddy, Pax8’s president and chief commerce officer, in an announcement.

“Our joint innovations in AI, security, and cloud orchestration are redefining what’s possible for MIPs and the SMBs they serve.”

Marketplace integration

As one of five global launch partners, Pax8 is integrating the Redmond giant’s unified Marketplace platform – which combines AppSource and Azure Marketplace – into its own offering to help partners access and resell AI applications, as well as bundle third-party apps with their own offerings.

The integration will enable partners to offer solutions that are pre-vetted for Microsoft compatibility, resulting in a streamlined implementation process and reduced deployment friction.

Pax8 said these new initiatives represent an opportunity for channel partners to speed up time to market, while taking advantage of higher revenue potential through diversified Microsoft practices.

“By embedding Microsoft’s Marketplace into our own, we’re giving partners a powerful new way to scale their offerings and reach new customers faster while supporting a key initiative of Microsoft,” commented Oguo Atuanya, corporate vice president of Vendor Experience at Pax8.

OneCloud Guided Growth

The expanded alliance also sees the introduction of OneCloud Guided Growth, a new phased enablement journey designed to help MSPs build and scale the entire Microsoft Cloud stack – including Microsoft 365, Dynamics 365, Azure, Security, and Copilot.

First unveiled at Pax8’s Beyond EMEA 2025 event in Amsterdam, the program includes a five-phase curriculum with tailored assessments across strategy, operations, technical readiness, sales, and go-to-market.

MSPs can also leverage more than 110 courses and over 20 learning paths aligned to partner maturity and growth goals, enabling further strategic differentiation and greater recognition.

Commenting on the initiative, Pax8’s chief experience officer, Craig Donovan, said partners now seek a roadmap to growth as opposed to simply looking for new tools.

“We are always looking for ways to enhance our partnership with Microsoft to benefit our collective partner ecosystem,” he said. “OneCloud Guided Growth equips MSPs with the strategy, support, and confidence to expand their Microsoft offerings and deliver transformative value to their customers.”

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Channel partners and managed service providers (MSPs) have always been on the front line when things go wrong with technology, and none more so than with third-party software. A vendor failure - whether through insolvency, acquisition, resource withdrawal, or a critical failure - can trigger immediate disruption to businesses, resulting in missed SLAs, lost data, and reputational damage.

Yet many partners still underestimate how fragile the digital supply chain has become. As business operations increasingly depend on SaaS platforms and niche software vendors, the risk of instability has grown sharply, and when a vendor collapses or stops supporting a critical system, it’s often the channel partner left trying to pick up the pieces.

Why vendor instability is a continual risk

Vendor instability is now one of the biggest hidden threats facing both end customers and the partners who serve them. Supply chains that were once linear now span multiple cloud providers, open-source components, and small, specialised vendors.

This complex digital web is made even more fragile by the fact that many suppliers are early-stage businesses, often operating with a lean team and limited financial buffers to weather a corporate storm. A single resignation, compliance issue, or loss of funding can bring operations to a standstill.

For MSPs, this risk isn’t abstract and far removed. In fact, when a vendor fails, customers won’t be calling the supplier - they will be calling their trusted partner; and even if the failure is entirely outside the partner’s control, their reputation can take a hit. It’s not just about downtime, either. A software supplier's collapse can trigger data access issues, unresolved security gaps, and legal disputes over intellectual property.

From my experience working across regulated sectors, very rarely has a vendor failure stemmed from a single event. They’re often the compound result of financial stress, untested dependencies, and a lack of oversight.

The trusted advisor role

This means we’re seeing MSPs being positioned as trusted advisors who need to be able to provide collaborative and consultative advice to clients. And, perhaps most importantly, guide customers through the hidden layers of their software ecosystem. It’s about helping them ask the right questions at the right time: Who owns your production environment? Are you managing increased concentration risk in extended supply chains? What happens if you fail to manage this risk?

By helping customers plan for these scenarios, partners can turn resilience into a value proposition – not a cost. It strengthens renewals, reduces churn, and builds long-term trust. It also protects the partner’s own recurring revenue, because the fallout from a vendor collapse can be just as damaging for the service provider as it is for the client.

In an increasingly competitive market, the partners demonstrating proactive resilience are the ones who stand out.

What being a trusted advisor means in practice

So what does proactive resilience look like in practice? Escrow gives partners a tangible way to preserve access through verification by securely holding a vendor’s source code and documentation. It’s a practical solution that turns uncertainty into control.

We’re seeing more MSPs and resellers include escrow agreements directly into their vendor management frameworks as a sign of operational maturity. It’s a simple but powerful way to demonstrate to customers – and regulators – that resilience has been considered, contractually defined, and independently verified. Of course, escrow works best as part of a wider strategic approach to operational resilience and risk management. That includes stronger vendor assessments, where partners evaluate the financial stability, technical dependencies, and long-term viability of their suppliers, and smarter contracts that define what happens if a vendor fails or exits the market.

It’s clear that resilience is no longer just a technical issue - it’s a commercial one. The best MSPs are those that can demonstrate they’re equipped to advise customers on vendor failure, helping them to have proper governance and encouraging the use of vital risk management tools, such as software escrow.