AI will improve MSP profitability

The vision at Kaseya has been to improve margins for managed service providers (MSPs) through a combination of reducing the price of kit and increasing efficiency through automation.

The responsibility for delivering the second part of the equation involves artificial intelligence (AI) and the firm’s IT Glue business, which uses the latest AI innovations to reduce the burden of document management for MSPs. Letting the technology take the strain enables MSP engineers to put more hours into supporting customers and improve the bottom line for many partners.

Nadir Merchant, general manager, IT operations suite, Kaseya,  said that using AI had the potential to transform an MSP.

“I believe that AI is going to revolutionise the way that IT is done,” he added. “Our goal is to deliver value to IT organisations by making their technicians more efficient, making their operations smoother and making them run their businesses more effectively so they can grow faster or be more profitable.

“There’s two sides of changing the unit economics of an MSP – one is by lowering their direct kit cost, which is what we’re doing with Kaseya365 ... reducing the amount of money that they’re spending per endpoint or per user. And then with AI, we’re trying to make them more efficient per endpoint or per user,” he said.

Merchant said that the firm was continuing to bang the drum about the impact AI could have on MSPs, and that the results of using the technology appeared fairly quickly, with even those hesitant about the technology needing to accept this was the future.

“Transformation is coming, whether we like it or not, and we have to get used to the fact that the world for IT is going to look different now than it did before. So, the best way to prepare for that is to get educated and to understand the capabilities that are there today and where we’re going,” he said.

“Learn about what the potential for AI is and start to understand and learn about the security and privacy aspects of it, so you can be educated with the information. Ask the right questions of your vendors to learn about the boundaries of these technologies and what you need to be concerned about, and you can use them in the most pragmatic way for your organisation. If we just stay intimidated by them, and we don’t embrace the technology, the world’s going to pass us by.”

He said that SMEs relied on MSPs to cover their technology needs, so it makes sense for the channel to be as efficient as possible, and that foundations remained in place to support further growth in the managed services community throughout the rest of this year.

“The MSP markets are growing really well, and I don’t see that slowing down – the underlying driver of this is that small businesses are adopting technology at a rate that we’ve not seen before, and I don’t see that changing anytime soon,” he concluded.

Fred Voccola, CEO of Kaseya, has been a strong advocate of changing the economic model for MSPs and improving their profitability to levels enjoyed by other SME-focused suppliers in the legal and accounting industries.