AI in Managed Services: Strategies for MSPs to Thrive Amidst Disruption with Stephen Hinch

Business of Tech: Daily 10-Minute IT Services Insights

Stephen Hinch, an expert in managed services and author of "Winning Through Innovation," discusses the challenges and opportunities for innovation within the corporate business model, particularly in the managed services provider (MSP) sector. He highlights the "curse of the corporate business model," where large corporations prioritize predictable profits over disruptive innovation. This focus often stifles creativity and risk-taking, leading to a reliance on incremental improvements rather than groundbreaking advancements. Hinch emphasizes that while corporations can excel in incremental innovation, they struggle with disruptive changes that require longer-term investment and risk.

As the conversation shifts to the current landscape of managed services, Hinch notes that many MSPs are still small, often relying on vendors for innovation rather than developing it themselves. He points out that while there are around 40,000 MSPs in the U.S., a significant portion of them are not profitable. This situation creates a competitive environment where smaller MSPs must find innovative ways to attract customers and differentiate themselves from the larger, investor-backed companies that provide the tools they use.

The discussion then turns to the impact of artificial intelligence (AI) on the MSP market. Hinch believes that AI represents a disruptive technology that can enhance service delivery, particularly in automating tier-one support tasks. However, he cautions that MSPs should not expect to develop these AI solutions independently; instead, they should look to their vendors for advancements that can improve efficiency and service quality. He advises MSPs to engage with their suppliers about how AI can be integrated into their operations in practical and beneficial ways.

Finally, Hinch encourages MSPs to focus on foundational innovations and automation before diving into more complex applications of AI. He stresses the importance of maintaining consistent uptime and predictable performance while leveraging AI to enhance these core values. By asking the right questions and seeking sustainable innovations from their vendors, MSPs can position themselves to thrive in a rapidly evolving technological landscape, ensuring they do not fall victim to the pitfalls that have affected other industries in the past.

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