The Hidden Industry That Controls The Tech Your Company Uses

23:00So it's verticalization is going to be so important in 2026 because it's how people are differentiating. And to Victoria's point, offering something like Harvey and not to not to I don't know anything about Harvey as far as, you know, not to give them a shine that they don't deserve. But if that is something that they realize they can offer at scale to law offices, then that is something that I can absolutely see become a differentiator for an MSP. And they go, oh, we want to be a part of that. We since we are very law firm specific, we can see this as being an offering. Let's work something out.

23:33That's why you're seeing a lot of ISVs now create their own channel programs. And for those who, again, letters, independent software vendor. An independent software vendor. A lot of them are creating their own channel programs to be able to connect with other MSPs. ISV is sort of this, I would argue to say, newer name in the channel as far as the MSPs, the VARs go. Those are old hat, but ISVs have kind of come in as AI has really ramped up. because they offer software, usually SaaS products that are built on top of a hyperscaler. AWS is very big on this because AWS is one of the first ones to market with this.

24:14And they have the marketplace where a lot of these ISVs can go and put their software, their offerings in, and then people can go and buy from it. So it's really easy to do. So a lot of ones that I speak to are hyper-verticalized or they really get into your CRM or they really get into your system in a very specialized way to make things easier on you with these big, very AI-intensive workloads, but they're built on top of AWS. So they basically say, we built a thing using your engine.

24:44Corey:Grant, these are the node companies I'm always talking about. Right, got it, got it. When you look at a company's tech stack workflow, you see all of these different nodes

24:54Grant:that are all different tools that it's running through. It's going to run through here.

24:58Corey:it's going to run through Kong and then it's going to go over here and it's going to run through this it's going to run through that and and that's those companies all over AWS that are yes hacked in their marketplace too it's a bunch there's so many startups right now this is this is like and I'm sure you're going to only see more this year same I agree that's I mean actually I think the the AWS marketplace example is a really great example too of how AI is changing the channel a little bit. And maybe changing is too strong of a word, but in that marketplace example, Corey, you as an end customer, right, actually much easier than ever before could go buy it direct.

25:35Yeah, that's a good point. That's the example, actually, Grant, to your earlier question, like why not just go do that? In some ways, that's gotten easier over the past five years. And so partners, and now this is where we get complicated, right? Because AWS doesn't want to lose its partner network because AWS can't just sell its core cloud on the marketplace in the same way because that's a much more technical deployment integration process right it is so aws has built marketplace to also support msp offerings so in the way that you can go into the marketplace and buy code from an isb to kind of keep it broad some msps that we speak to also offer their services through the marketplace so their customer goes into AWS marketplace to provision security services, the MSP gets a cut, AWS gets a cut, whatever ISV is involved in the middle there and making the product gets a cut.

26:33Everybody kind of wins. Yeah.

26:36Corey:Wow. I'm trying to relate this. And this is where when we talk about marketplaces, we also see marketplaces, cloud marketplaces, like Pax8, marketplaces that are out there that don't want to call themselves distributors and are also competing with distributors at the same time. It can get a little hairy, so we'll have to have a part two. But I say this because you see MSPs as needing to be, they want to make sure that they're showing up as that expert in whatever technology and field that they are focused on, which is why we got so into the vertical conversation. So that is where they're trying to continue to differentiate themselves by saying, I know you could technically go do this with one of these marketplaces, but here's why you should stick with having somebody else be a part of your team in a third party sense.

27:24Because we know what we're doing. You can concentrate on your business and we'll take care of the IT and everything involved in that.

27:31Grant:I was trying to relate this back to what I know on my domain here, which is the cloud service providers for, let's say you want to run an AI model over the cloud. There are a lot of what they're called like neoclouds or like, I guess, services that sort of run on top of an AWS or Microsoft Azure or something like that.

27:53Corey:Somebody who's buying space on top of AWS. Or they also have a channel program.

28:00Grant:okay okay well you're like what what about are you familiar with like fireworks or base 10 or any of these companies that are like selling the like tokens like directly basically and and and are they part of the channel or or i'm trying to figure out how this works with what they do and differentiate it that's a good question grant i i would have to check specific companies so i don't want to speak to you know specific organizations i think what i would say is you might be able to find specific avenues of tech. And I think AI is a good example of this where businesses don't necessarily need an MSP in the middle.

28:36And so there isn't necessarily a channel like one-to-one connection in those cases. But if you are a company that's heavily invested in the AWS ecosystem, just to stick with one example, odds are you do have an MSP who's handling at least part of your environment. So they might be responsible for your cloud compute. They might have built your environment and your storage capacity. And so you might be kind of piecemealing some things on the side or working with other businesses and startups on things, but like your core operations that all of that kind of has to integrate into at some point is probably a channel relationship.

29:19Grant:Right. It makes me think of Vercel. Vercel would be another one, right, in this instance, where Vercel basically handles all of the AWS stuff.

29:29Corey:Yeah, they handle your AWS. They handle your Superbase.

29:36Grant:They handle your Redis.

29:37Corey:They handle a variety of other little tools where when you go and, say, you're Vibe coding in v0 and you need a database, it's like, hey, we got you. Bam, done. Right. And it's all in this one ecosystem that's tied together and you're just doing it through them, which is really quick, easy and painless and large. I don't know if that's directly the same thing we're talking about, but it certainly feels like we're in the realm. This is where AI has been making this into such a rock spider, right? This is where AI has come in the last few years, who created these businesses or led to the creation of these businesses that are also trying to get a foothold in the market.

30:18So they have to go to some of the bigger dogs or they have to form a channel program because then if you're without a network, who are you selling to? So that is that, I mean, to the point of where we're kind of going, okay, you know, like Charlie Day in front of the wall trying to like connect all the dots here. This is that because that is what AI has done to this space. So the acceleration, the confusion, the questioning, that is all directed back to what AI and ultimately what OpenAI a few years back when they introduced ChatGPT for the first time and has kind of accelerated all of this, what that has done to the channel.

30:51Grant:That's actually a good question. Go ahead.

30:53Corey:Are there pathways through the channel where you can buy OpenAI? I mean, they're tied to Microsoft as well. And I've wondered, like, you know, obviously Microsoft's going to offer Copilot, but are things from their partners generally available or is it often a here's a specific offering that's available? I was just curious kind of how that works. Do you get the whole catalog or? I mean, OpenAI is actively forming their channel program or trying to build it out right now, which some of the, you know, so if you're a channel chief that wants to even work for four weeks and make more money than you ever have, I suggest going over and trying to apply for those roles that are opening up over there.

31:32But Victoria, I'll pass it over to you on a more literal sense of what we're seeing of how you can procure that technology. Yeah, I would say anything really at the broadest level, any product solution that has kind of an enterprise license component is probably fair game for a channel partner to be reselling in some capacity. That is typically because, again, MSPs and channel relationships are a B2B venture, right? So when we talk consumers, we're talking employees and businesses. So there needs to be kind of a business focused tooling here. But to Katie's point, Anthropic has announced and opened quite a few partnership facing roles.

32:14So those VP titles are joining some of the bigger AI platforms. And when they hire for partner roles to really blow everybody's minds and confuse everybody some more, because that's what channel tools do, those partnerships are also like integration agreements. So like OpenAI and Microsoft, well, that's a bad example because of the money involved. But like, that's a proper problem. But like, Anthropic and things like that announce you can use us and X tool together. Right.

32:47Grant:Well, yeah, Microsoft and Anthropic just had a deal like that, right? So those agreements and relationships and mutual outcomes are also indirect channel partnerships. Gotcha. They usually are all housed within the same system, right? So when Microsoft talks about its ecosystem of partnerships, we're talking the open AIs and the Anthropics and all the security tools that they integrate with, et cetera. And you're talking indirect resellers and you're talking cloud providers.

33:15Corey:And everything available in Azure, I assume, which is essentially their AWS. It's a different flavor.

33:23Grant:Microsoft AWS. I'm sure they'd love that. Yeah, they're going to love this whole conversation. uh but no to your kind of question you can lightly procure chat gpt specifically from an msp but to the kind of earlier conversations we've had i think many of those partners are being heavily influenced by the big three hyperscalers to keep customers in-house reported quite extensively again to plug channel insider on how microsoft is doing that through its partner network there's a whole slew of rebates and incentives and structured deals that get more appealing to an MSP if you're getting your customers on a co-pilot.

34:08Corey:Yeah. Because of course they would. Correct. Yeah. The channel is, I always say, as much if not more a business conversation as it is a tech conversation. So yes, it's important to MSPs that their customers are using good technology and doing so securely, efficiently, et cetera. But I'm also as an MSP concerned about whether my vendor relationships are happy because that's where my margin is.

34:36Grant:Well, I mean, OpenAI and Anthropic have both made it very clear that this year is the year that they're competing on Enterprise. I think last year they were all competing on coding. I mean, coding is part of Enterprise, but I think this year OpenAI is like, we're here to play when it comes to enterprise yeah so what what in your mind does that change for everybody else in the ecosystem

34:56Corey:if anything i would also add to that real quick that you know that goes far beyond api usage as well you know i think in the ai space there's a tendency to refer to enterprise as api refer to api use as like the extent of enterprise but i mean there's also the you know there's that element as well as the element of what do we want to provide to our 2 ,000 employees, I think. Right. Sorry. I just wanted to tack that on there before we got an answer. Yeah. No, I mean, that's a great point. I think, Grant, to your question, the answer is yet to be determined. Fair. In the channel conversation specifically, I would say there are so many players already in that I find it, I will find it very interesting, I'll say this, to watch how an open AI and Anthropic, et cetera, kind of enter enterprise now, for lack of a better term right now.

35:56That's not to say companies don't switch tools. They do by all means, right? So we could absolutely see a world where everybody goes, Anthropics, a lot better, and we're going to switch. But the odds are enterprises already have some form of AI that they're experimenting with, if nothing else. right and on in the enterprise level the channel conversation is also you know i have probably 50 tools in my tech stack already yeah i'm already overwhelmed with all the legacy burden of tech i have right i put something new in it has to integrate with everything i'm already using because from a data perspective and to cory's point from an api perspective if i bring something in and it doesn't play with everything else then i can't use it right i mean the ai is data first and foremost if all my data is over here right i need a partner to come in and say okay your crm and all of your you know csm platforms and your help desk that has all your ticketing information when things go wrong like all of those are going to have to integrate with whatever you bring in and i think increasingly enterprise leaders who are hearing from the board that they need ai at all costs but who are hearing from their cios and security teams that ai at all cost is breaking things, you might not want to then go, all right, let's move everything over to something else.

37:15Yeah.

37:16Grant:Right. Let's take another six months to deploy this in the way that everybody's comfortable with. Right. So that by July, when inevitably the next new thing has arrived, because there will always be a next new thing. Yeah. What are we going to do? Move it again? Like, I think.

37:32Corey:You're going to be catching your competitors. That's what you're going to be doing. Right. And so I do think 2026 might be the year that we, at least from a channel conversation, start to see some camps emerge of like, I'm a partner of XYZ, right? Microsoft, AWS, Anthropic, whoever it is. If you want to be my client and you want to buy AI from me, I'm using these guys because I know them. I can call them when I have questions and I understand the product. And if you want something else, Mr. Customer, please don't. get it on your own you're gonna have to go figure that out then because i'm not 50 different ecosystems because 50 different people want 50 different versions of a model you know right something that could be problematic there is that one of the things we're really seeing in the ai space is that what works best for one department doesn't for another like you know what software engineers are using versus what a writer's using versus what a finance team is using operations team uh it's a really big deal and i think it points to that drive for like microsoft's added a bunch of flexibility into copilot like now you can use open ai models you can use microsoft models you can use anthropic models yeah google even all of those right there in one tool at one price uh i can see the attraction to that for a company where you have that flexibility among your teams to be able to take, you know, the approach that works for you.

39:02Corey:And the truth is, we don't know what those are yet. It might be that tomorrow, what's right for software engineering is different. What's right for writing might be different. And it may just continually flip forever. I don't know. I don't know how it's going to go. All I know is right now it's with the velocity of a top fuel dragster. And Grant and I regularly feel like we're the umbrella on the back.

39:28Corey:You can hold it up. Just taking a face full of this AI air. Yeah, I know what that's like. I think to the point of where we're also seeing the partners come into the conversation, and like you said, Victoria, splitting up into potential camps, like going into who they're going to side with and focus on that selling. Training is a big part of the offerings that managed service providers have in their portfolio. And if they can show that they can not only it's not a one and done conversation, training is an ongoing thing. So if they can show that they can have success training. And when I say training, I should be specific for your audience and saying training the users, not training the models in this case.

40:08So you're going to want to have managed service providers who say we are accredited and we are licensed in being able to train on the anthropic model or to train on chat GPT for your company. especially because you're going to have a lot more companies who are going to lock down what LLM they can be using. So even if your teams are using different brands, essentially AI brands across the board, I don't see that as being something that's going to continue, Corey. Maybe that's me being pessimistic, but only because from a top-down business conversation, nobody has time to apply compliance and governance of all different forms to several different LLMs across the board.

40:51So if somebody comes in and says, not only are we going to lock down the compliance and the governance for you, we're also going to continuously train your employees on how to use these programs as new models come out or as new generations of those models come out every month or every quarter, whatever we're going to see. And that's why you should go with us. And that's going to definitely be a selling point for why they are going to continue with one of the many at this point and the growing AI providers. So I definitely see as far as that goes, you're going to see a lot more people have to get, again, really granular with what they're offering with that training and who they pick.

41:27Because nobody has time to go through all the ones. So there will be a little bit of infighting amongst the AI brands.

41:33Grant:So all of this makes me wonder, and I'd love to get both of your thoughts on this. how does the concept of people like creating their own software and bringing their own software to work change this equation a little background you know a lot of people have been using cloud code as not just a coding agent but a general purpose agent because it can manipulate files on your computer there's this new one that's even more extreme than that called cloud bot that basically has access to your entire computer very scary security people are absolutely gonna go like

42:03Corey:crawl in a hole and give up on life.

42:05Grant:But then now Claude Anthropic just released a new version called Claude Cowork that makes it even easier for you to create files, even if you're a non-engineer, you're not familiar with the terminal. So what are both of your thoughts on that? Like, how is that going to impact the channel and how we're selling software? I mean, to give a few examples of what I heard you can do with that particular platform, I haven't tried it yet. myself. But in this context, I've heard people being able to spin up a website super fast and that totally eliminates their needs for website hosting platforms like Wix that require them to then pay for every month.

42:46And they're like, why would I do that when I could just make my own? And it's worked out pretty well for them. So I consider in the channel, there's a couple of ways that you can pay for certain things, whether it be pay as you go or pay for what you use. I can imagine that something like that really disrupts what they're paying for on a monthly basis if they discover there's an aspect of it that they can just make themselves. So I imagine that this could really disrupt the way that software companies or more specifically how we provide different software or SaaS tools. I think SaaS tools in general could be in trouble in my opinion.

43:24and a lot of what the channel sells are SaaS applications or are ISVs who provide SaaS applications. That's some of my two cents. But I do think that we are kind of on the cusp of just learning about this now. So I don't want to create an economic panic for anybody in the audience. I'm just one girl. So that's my opinion. But Victoria, I'd love to hear your thoughts on that. I think, Grant, maybe without meaning to, you've kind of hit at like one of the existential questions of the channel right now, which I kind of find fascinating because to your point, you know, end user customers, right, the kind of people and employees within businesses who are going, oh, I watched the Neuron and they told me I can go use Claude Code for XYZ.

44:13And so I'm playing around with it. Now I've created these things there, I think, much more inclined now than ever before to go and rethink their entire approach to tech. Right. Like, I think this the last 18 months to two years, maybe let's just put it in context there, has really been this kind of like consumer driven culture around technology because ChatGPT went consumer before it went business. Right. We'll talk a little bit later about how this kind of relates to other shifts in technology over the years and cloud and security and things. People use these tools outside of work and within work, whether their IT teams are telling them to or not.

44:54So I think what that creates is this culture then from a leadership standpoint of I've paid for this for 10 years for you to do it for me on a monthly basis. Do I still need you? And MSPs need to figure out what the answer to that question is going to be. Because I would argue that they are still needed because for all the shadow AI risks that we can talk about and for all of the kind of wraparound ongoing support things, you do still need somebody. And, I mean, we could also talk about the efficacy of, you know, 15 different employees doing 15 different things and not sharing those outcomes and not kind of solidifying what a business does holistically.

45:33But if MSPs can't sit in a business review meeting and articulate their value in a new way, then I do think actually some of them are going to face some issues if for no reason other than business leaders and employees feel a lot more comfortable with this tech than they have, I think, with previous kind of, I don't understand IT, so I'll just do what they tell me to do. Like I don't, AI is a fundamentally different approach now because people do feel empowered to go build their own things, to go use these products. And frankly, you have CEOs in the tech space telling them to, right? Like it's not all employees find these things on their own.

46:12They're reading the news. They're watching, you know, some of the biggest names in the business go, I did this in an hour and it used to take me, you know, four years in an advanced degree. Like, isn't that great? If you're listening to the rich man tell you that, you're probably doing it too. So I think AI has fueled much different conversations, and I think the next step of that process now is whether things tangibly start working. Yes.

46:36Grant:Right.

46:36Corey:I think that's true. I think it really applies especially to solopreneurs and really small businesses. If you make your money, you know, if you're a SaaS tool focusing on companies with less than 20 people or something especially, I think that area that's already cash-strapped, that has only so much budget, they're looking to do what they can. They don't want most of the features in blah, blah, CRM anyway. For the most part, what they want is something that'll keep track of X and to add a few features that are specific to them. And, you know, Vibe Coding unlocks a lot of that to normal people.

47:15Corey:Like, I can't stress enough that Grant and I have built software.

47:22Grant:Not your background in it, but not anywhere near the level that I am capable of creating. Oh, yeah, I had a MySpace page, too. I know how to code. Yeah. That's right. No, totally get it. GeoCities for the win.

47:37Corey:Yeah. Oh, my gosh. To Victoria's point, actually, about the consumer-driven rise of AI tools, that I think is kind of a new frontier for the channel to be facing because, as I've mentioned before, channel partners are coming to their customers as that trusted advisor. You hear those words a lot. Trusted advisor is the title that they want to be for customers because it's what differentiates them from just a regular break-fix shop or a help desk. so they're able to walk them through. What was really startling for a lot of them is that a lot of the customers and their businesses in general with their employees came to them saying like, we've tried this new tool before they could even bring it up.

48:20Like the customers know a lot more about AI than they did during the last sort of evolution in the channel involving cloud. So there was a lot of confusion around cloud or hybrid cloud or even multi-cloud. So this is really kind of a strange element where we see the channel providers needing to almost catch up a little bit. And that brings it back to why they're focusing so much on verticalization, why they're focusing so much on niche application uses and being the trusted advisor for something very specific because you can't go broad in this. Like there's too many tools and there's too many use cases.

48:57And at the same time, everybody wants more and more and more. So you have to protect yourself. That's been an interesting thing to watch from our viewpoint between Victoria and I and the rest of the Channel Insider team is to see people as in partners go, okay, why do my customers seem to have more questions than I have answers about AI? Because they've been using it a little too much outside of the guardrails. So there definitely is kind of a walking it back sort of focus right now.

49:23Corey:Yeah, and it's tough for your customers to come to you and talk to you about something where they understand it and you don't have an answer. Or alternatively, I would posit, think that they know. Yeah. Think that they understand. That's fair. And that's not to say there are absolutely leaders in SMB and in all forms of business who are very kind of tech enthusiastic and are probably playing around and have probably found use cases and things before their partners did. Absolutely.

49:54Grant:Yeah. I think what's much more common is that many business leaders are reading headlines, feeling very behind and feeling like they need to do whatever to catch up. And so they enter a business meeting with their trusted advisor, MSP, and going, well, I heard so and so down the street say that they're using XYZ for all these things. And if you as a partner, either A, generally haven't understood AI yet, or you from maybe a security and a compliance mindset go, right, okay, they shouldn't be doing that, though, right? I don't care. They think that they're doing better now financially than we are.

50:31That scares me as a business owner. You as the MSP then have to be the bad guy that's like, right, but if they get hacked, they're screwed. Yeah. You don't want to be them, right? But then that goes back to the security conversations that are always very like if something happens and AI is going tangible short term. I use the thing. I create the thing. That's much more appealing to a business owner than the well on the off chance that something occurs to you three years down the line. You'll be grateful that we stopped you now. And that's like the fundamental business question for most SMBs is I don't know if I have three years.

51:11Grant:That's a good call. You're right. And it's like I'm getting disrupted right now. I don't want to worry about cybersecurity. And then to Corey's point, when we hopped on here, right, like security professionals are sticking their heads in the sands and going, oh, my God, we still don't listen. Right. Because now it's just the next evolution of the conversation of nobody's taking the security seriously.

51:32Corey:And if you do, you're left in the dust is the other thing. You know, the truth is, if you're willing to worry a little less about security, there are some serious, serious advantages you can unlock right now.

51:46Grant:Sam Altman just said that in a town hall. He was like, yeah, I was really worried that I was never going to install this thing on my computer and give it full access. And that lasted two hours. And I did it because the tradeoff is just to have so much more power. It's just too high. Yeah.

51:59Corey:Like there's the stuff I run that I should not run. But, you know, it just unlocks things that are worth it. I think Omar and our IT team that's listening to this right now. Sorry, Omar. We love you, man.

52:12Grant:Uh-uh, yeah.

52:13Corey:Not on my work computer, I promise. There you go.

52:16Grant:Yeah, I was going to say.

52:19Corey:Oh, well, from there, I have another question. So does the channel kind of protect small businesses from that hype, or does it amplify it?

52:30Grant:I don't know. I think it could be a little bit of both. in my opinion from what I've seen when done right because we have to recognize that there are still MSPs out there that are probably not doing some things the correct way whether that be because of staffing whether that be because of talent or whether that be because of the pressure to keep up that does happen in every industry you have somebody that would rather be first than correct I think the ones who do it well, and I have a lot of friends out there in the channel that I really, really respect because they run their businesses the right way, because that's how they know they're going to get more clients through word of mouth.

53:16So the reason I say all this and temper myself is to say, in my personal opinion, I think that it protects small businesses from the hype. Because especially in a world where the cyber attacks are not targeting large businesses anymore, it is open season. Schools, hospitals, children's hospitals, it doesn't matter. They're going for everybody.

53:39Corey:If the door's open, they're coming in. Exactly, exactly. We're seeing a blurring of the lines between nation state and, you know, rogue gangs like Scattered Spider. So I think that it's important to the safe option is to go with an MSP, especially for a small business, a small to midsize business, which could be anywhere from 25 people, even up to 500 people in quite a bit more than you would assume still counts as a small to midsize business. I think going with an MSP, going with a provider and solution, solution and service provider is the smart thing to do. I think it's going to protect them.

54:16And I think it's also going to introduce things that perhaps they would not have thought to introduce. Because you have everybody using the Kleenex of the AI system right now, OpenAI's ChatGPT. They might not even know anything about Claude. And it could be, you know, 10 times better for their use case than they realize. So I think that it's important to consider at some point, like you got to have people in there that aren't just going to say yes to everything. You really need to ask the tough questions here. But I also think it matters that you interview properly. It's very much like dating, like interview these MSPs that you could partner with, like really figure out, are they the ones that are going to just sell you something or are they going to be a true guide through the journey?

54:58Your own shaman, your AI shaman. Who wants me to hit their quota this month? Yeah. Yeah, yeah.

55:02Grant:Who wants me to hit their quota this month? and who wants to work exactly that is that is actually i forget who it is maybe you can help me out victoria somebody has like a sherpa as their their uh sort of mascot to lead through

55:13Corey:i have a plushie oh my gosh i love that remember yeah i do i agree with katie's point i think that on the whole having just even another person at your c-suite level meeting once a quarter to be like well did you think through xyz before you solidified that plan right like i think that's a level of protection that otherwise you as an smb owner tech leader etc are probably doing what the rest of us are doing which is either asking google or asking chat gpt what should i buy for my business or to go back to my earlier point you're trusting you know brian down the street who may or may not be somebody you should listen to, right?

55:56So I think from that perspective, it's a layer of protection. But I will say MSPs are not some kind of group of geniuses who don't also fall for hype cycles, right? And they're being sold probably harder, actually, than SMBs are being sold on some of this tech. Because a lot of the big companies in particular have really, frankly, bet a lot of their businesses on whether these tools get adopted, right? And they know that their channel partners are who's going to get them across the line. Microsoft has a vested interest at this point in co-pilot working.

56:30Grant:Right, right, right. It's not going to get co-pilot to work unless its partners go do that on their behalf. And so Microsoft is coming down pretty hard on their partners. And then if you're an MSP, maybe you do kind of just go, well, co-pilot must be great.

56:47Corey:That's a good call. And that's not to say that it isn't. I'm not making a judgment call on that. But it's a very interesting moment in time for all of the businesses involved in the chain that is the channel. And so within that, there's a lot of opportunity. And I think within that, there's also a lot of, I don't know what's going on. And everybody tells me if I don't adapt, I'm going to be out of business in a year. So we're just going to do it. We're just going to do it and let the chips fall as they may. Right. Well, because what's the alternative? You listen to people and go, all right, I'm out of business?

57:24That's not appealing to anybody for obvious reasons. No, no, of course not. Yeah.

57:28Grant:Why do you think AI is stressing the system differently than cloud or SaaS or previous cybersecurity waves? Is there anything fundamental about it other than what we touched on, I guess? I will say I think the only thing other than the kind of the way the conversation has shifted is there are elements of AI as a technology that feel very fundamentally different from like a use case perspective. So like cloud and the infrastructure conversation, right? Because when we say cloud, what we really mean is the shift from on-prem to cloud and what that entailed was not like the sexy thing that anybody actually wanted to think about.

58:09You need your infrastructure in place, but nobody's drooling over an on-prem conversation. Those are not the things.

58:15Grant:Other than investors on CNBC. I remember when they were on that at that time. There's a reason this is called the Neuron and AI podcast and not the Neuron, a cloud podcast. Yeah. Yeah. It was one of those out of sight, out of mind things. Security, like we touched on, is the same way. You need it. It's like going to the doctor once a year. You know you're supposed to. Nobody wants to. Right? But AI people want, and AI kind of provides itself, I think, in ways that the others don't. Like, to your point, there's open source now that didn't exist before for some of the other technologies. And you do feel like with the onslaught of agent-to-agent protocols that are starting to be promised, the kind of shopping experiences of will this all be integrated?

59:03Can I go tell my chatbot to go buy something on my behalf? Like that stresses an MSP out because if my customer thinks that they can just program something to go provision, that's like 90 percent of what they think I do for them.

59:19Grant:Yeah. And that wasn't a concern with security and that wasn't a concern with on prem to cloud. I do think there's something fundamental about AI that is potentially encouraging people to rethink the very nature of business relationships right now, and that feels very scary.

59:38Corey:that's the that that existential element that that that tends to hang around ai no matter what field you're in you know i mean we've felt it as as journalists uh software engineers fill it uh you know there are people saying that even executives aren't going to be safe at some point from what this can do that the truth is it's going to be better than the average executive you

1:00:01Grant:would go higher uh you can argue it's there today and it may be there today that's the other thing Average executive. Average executive. Yeah. Politicians. Sorry.

1:00:16Corey:But, you know, I think that's a very real concern, a very real fear, that I feel like overlooking and just pretending isn't the case is probably the wrong answer. You know, I mean, as a rule, denial is not a good strategy.

1:00:34Grant:It's the first stage of grief and transformation. The first stage of grief. You have to get through it as quickly as possible to then move on.

1:00:41Corey:Yeah, and I think that's really important. What's one signal that will tell us whether AI is strengthening or weakening MSPs? Victoria, I'd like for you to kick us off with this one. Because I want to make sure we don't say the same thing. I got a couple. I think I'm going to take a real boring business answer here first. Okay. to some degree valuation. The kind of other aspect that we haven't necessarily talked much about in this conversation is that the channel is undergoing a real wave of mergers and acquisitions activity. A lot of it being by private equity and by venture capital. Those organizations are looking for AI to be everywhere.

1:01:29Whether they know what that means tangibly or not, frankly they they want to see it if they're going to invest and there are plenty of groups that are very active within the channel right now buying up msps rolling them up into kind of these larger platform organizations there's a lot of consolidation in the industry and i think i think msp owners are at a real kind of crosshair at the moment in do i spend the capital to invest so that I'm more appealing two to three years from now for an exit? Do I spend the capital now because I want to be able to compete against the larger players that are being built because everybody else is exiting?

1:02:09Do I want to just sell as is and get what I can get and get out of town because this is all very stressful to me? And this industry kind of started really at a pivotal moment about 20 to 30 years ago, and many of those people were 20 to 30 years old at the time, and so retirement's looking really good right now.

1:02:26Grant:Yeah. So there is this kind of layered process of cash infusion. And I think over the next 8 to 12 months into 2027, where those numbers start to lie is going to be the real sign of what this means from a business perspective for MSPs. So how highly or not highly they're valued a year from 18 months from now? Yeah. Katie, what's your take? I definitely agree with the valuation. I think the rate of acquisitions and consolidation that we see kind of uptick in the channel will definitely be an indicator. I think how long that goes on for is going to be a more important indicator because every year we do see kind of this ramp up of consolidation and we go, oh, like what's driving this?

1:03:14So I do think you'll see, at least for the first half of the year, a lot of businesses, including MSPs, buying up smaller shops that are more focused on certain niches, certain AI verticals, certain use cases. I definitely think, though, for what's going to indicate success for me, that it's helping the channel, is you're going to see more line items added to portfolios that have to do with very specific use cases. not long ago on Channel Insider Partner POV, which you can listen to on YouTube as well as all your major podcast platforms and ChannelInsider.com. Thanks. Yeah. Do it. I had a great conversation with the founder and CEO of Data41, Hans Mies.

1:03:58He sort of stumbled into realizing that he can apply AI tools in a very unique way to tissue banks that are looking to be able to speed up their processes of going through healthcare records, going through health records, going through all the data in which donors come in. And to be very clear, when I say donors, I mean bodies that come in and they're trying to figure out what their lives looked like so that they can essentially get the organs harvested and over to the people that need them much faster, which is honestly one of the very few use cases that I've heard out there of AI making our lives better, like literally making human lives better.

1:04:36he went to a conference after this and then it was just like he's like this is all we do now this is the life sciences boat that we have raised our flag on because it's gone so well so i think you're when you see more of that when you see more line items and use cases added to their portfolios and you can say like this is exactly where this is going to go and how it's going to help you um i think that's going to be a big strength a strengthener less ambiguity about like yeah, we can work with your AI and do services towards your AI. Less about that and much more saying, here's what we can do. Here are the use cases that you can expect from us and how we're going to build on that over time with our business.

1:05:18So that's what I think is going to be an indicator. If we don't see enough of that in the first six months, I'll panic a little bit, but I think that if it's going to be successful, we're going to see that.

1:05:29Grant:Cool. Just to make sure I understand. So it would basically be like niche use cases as opposed to just AI for AI's sake. I just think more use cases in general. I think a lot of people are still struggling with how to get ROI from their AI investments. A lot of people are like, look how much time it saved me on this task that I totally was like looking for it to save me time on. I think now people are looking for how do I integrate this into my business process to just make this make sense and get something out of it, whether that be time to value or literal money. So I just want to see more use cases that have nothing to do with kind of the it proofread.

1:06:06It wrote me an email. It finished my sentence. Like a little bit more of those. It fought for me.

1:06:12Grant:Yes. It's taken over my body. Yeah, it got me a heart faster. That's literally, that's what I want to see is more intensity. Yeah. Well, any advice for SMBs trying to decide how to buy AI in 2026? Find an MSP. I would say, I mean, yes. The data suggests if you're an MSP, especially, if you're an SMB, see, too many acronyms. Too many words. Too many. Fair enough. The data suggests if you're an SMB, especially in North America, you are probably already working with an MSP to some degree or a reseller. Yeah. Most SMBs in the country work with at least one outsourcing partner at this point. If you are not already talking to them or they are not coming to you and talking to you about AI and what it means for you, you might be in the market for a new partner.

1:07:06I think now is the time to get serious about thinking about what you want to get out of this technology. I've spent a lot of time talking to partner executives, to SMBs themselves, to vendors, who are, I think, all coming around to this idea that 2025 was a lot of AI for AI's sake. to Katie's point, to Grant's point, and that's not going to be sustainable. Avoiding it entirely is probably not sustainable either, right? So like maybe for once in our lives, we'll get to something called nuance, which I think we've all forgotten. That would be my advice. If you are at this point, anybody on planet earth, please, let's just, I know it feels impossible.

1:07:52It feels impossible for us covering it. Take a breath. Think a little and then let's move forward. Right. Let's say, yeah, this is working, so I'm going to invest more heavily in it. We tried this and my employees actually revolted because they felt like they were given no instructions other than use this thing or you're not valuable here. Find the middle ground and build a path forward that makes you confident in what you're doing. Because ultimately the goal for everybody involved in a channel is that that end business stays in business and grows and that then up the stream, everybody grows along with them.

1:08:33So that would be my soapbox for the day. Can we please -

1:08:36Corey:Then we will all be fruitful and multiply and - Yeah, but like, you know, defensively with some - Well, Victoria, Katie, thank you so much for joining us today. This has been an absolute blast. I knew this would be an interesting conversation.

1:08:50Grant:I'm so glad. I learned a ton. No, I learned a ton. Same.

1:08:55Corey:Same. Lots to take away and better understand and kind of look at how things are framed. But thank you. Where can people go to follow Channel Insider's coverage? Yeah. Victoria, kick us off. Yeah. So first of all, we are at ChannelInsider.com. That's channel how you would normally spell it. C-H-A-N-N-E-L. Yes, that's how you spell channel. It's been a long day. ChannelInsider.com. Follow us on LinkedIn and on all of the social platforms as well for all of our written coverage. But if you would like to see Channel Insider partner POV, which is our maybe less exciting, but I think just as cool version of the neuron, you can head over to where, Katie?

1:09:35You can head on over to ChannelInsider.com to find where you can watch it. You can also head to youtube.com. We're at channel insider underscore news and trends. And you can listen to us on all the major podcast platforms. We're literally on all of them. Apple podcast, Spotify, the list goes on. And you can always come follow us on LinkedIn as well as X. Those are two major social platforms. And you can follow me too at Katie Bovoso, pretty much in all the places that I just said. So please come on over. We put out new episodes every other week. so we'd love to have you. You can also subscribe to our weekly newsletter.

1:10:10We send once a week on Wednesdays. So if you head to channelinsider.com, you'll find the link right at the top of our page. Weekly news, friends, insights, analysis, you name it, we've got it, or at least we try to, right to your inbox.

1:10:24Corey:Excellent. And the same stands for the Neuron. If you haven't yet, please take a minute to like and subscribe today. Also pop by the Neuron.ai and sign up for the newsletter that started all of this for us here. We'd love to have you as a reader and have you be a part of our community. But for today, that's it. Farewell for now, humans.