MSPs: Leading the AI Revolution (EP 864)

Hello friends, Uncle Marv here with another episode of the IIT Business Podcast with continuing coverage at PAX 8 Beyond here in Denver, Colorado. And we are on the back end of day two, finishing up the vendor hall and all of the gadgets are out. People are sitting in front of us playing with the robotic dog.

So if you hear it get loud, that's probably what it's going to be. But we'll keep on moving on. I have with me now, Greg Donovan, Chief Experience Officer at PAX 8. Greg, how are you? I'm fantastic, Marv.

Thanks so much for having me on. Welcome back to the show. Absolutely.

I had to request you. You weren't on my list. Oh, I'm glad you did.

It's good to be here. I had a good interview last year. I want to try to do that again.

Okay, great. So, of course, yeah, all the big announcements and stuff like that. Let me just ask you, from your perspective, first I'll ask you about the conference and then what do you think has been the biggest outcome so far? Yeah.

I mean, the conference has just been beautiful. I think the energy is great. As always, the community has shown out.

And I think this is my favorite window of the entire year because it's a chance I get the entire community together. We can hear feedback. We can hear those great conversations.

It's been really just a next level engagement with our partners. Okay. In terms of the biggest sort of revelation, it's been, I think, the theme of BEYOND right now, which is when those moments where we have something that's happening in the world that sort of is colliding at the same time with BEYOND.

This is the sort of agentic reflection point, this revelation. Where's that phrase? You're going to hear it again. You're going to hear it a lot.

And the reason I think that you're hearing it so often is because we believe it is that important for the channel and for MSPs. Okay. Right.

And so everything you're seeing, so many of the announcements, so many of the innovations are all sort of shaping around this idea of what's happening within the channel and trying to make sure that our partners are there to transform and lead this revolution. Okay. So, yeah.

So Libby brought that up and, of course, in her mind, she's thinking that's a tough thing to say. It's got, it doesn't have that roll of the tongue there, but it sounds like people are starting to get it. Everybody's been able to say it, agentic inflection.

They have. They have. Now, most of us have looked at it from simply a product point of view.

How is this going to disrupt our industry? PAX 8, it feels, has flipped the script on that and said, okay, we're not going to let it disrupt us. We're going to take charge. We're going to be out in the forefront of understanding what it is, helping partners understand what it is, who can then turn around and explain to customers what it is.

That's right. I think that this is, I think that this certainly will be a disruptive technology and there are some things that are going to change everything, but there's such an unbelievable opportunity for our partners right now to be the ones that lead it. And so when you look at something that's this disrupted, you've got a couple of interesting forces working in our partner's favor.

One, I think historically technology has always started out in the enterprise because it was expensive. It's complex. It's hard.

And so like security, they started the enterprise first and then they slowly start to trickle down until they get the MSPs. The MSPs have to bring it to the customer. AI has completely flipped that script.

Absolutely. It's starting at the SMB. It's starting at the household and at the consumer level.

Everybody's already using chat GPT, they're using mid journey, they're using all these fun tools. It's almost as prevalent as mobile technology. The consumers get it.

And now they're pushing up and the larger enterprise can't adapt fast enough to change the processes and move with it. And this is where I think increasingly the customers are going to start pulling this from the MSPs and demanding some help here, but they're going to need help. And the threat vector is only getting bigger, the compliance, the governance, the challenges are already increased.

And who's been there solving those problems for customers for the last several decades? It's the MSP. And so they are perfectly primed to be the shepherds of this next journey for our customers. So you made a comment there about the way that it's been brought down in the past, top down.

This is now going bottom up. And we saw that with the BYOD, bring your own devices, stuff with the phone to the tablets. Hey, I'm using this, why can't I use this at work? You're right.

That is a terrific connection. And they're doing that with AI now. I'm using ChatGTV at home.

I'm using it everywhere else. Why can't I use it at work? Why are you putting guardrails on? That's exactly it. That's exactly it.

And then I think where it shifts and I think where the challenge for the MSP is going to be is it actually shifts a little bit of the skill set. So they've got the opportunity, they have the relationship, they have the trust. But AI very quickly is less of a technology problem and it's actually much more of a business and a workflow problem.

Because the AI starts to handle a lot of the technology components. And so the MSPs have sort of gone through a migration where first they became the virtual CIO with managed services. They were that outsourced IT and then they became the virtual CISO and managed security.

At this point in time, they're almost going to become the chief workflow officer where they're going to understand their clients and what disruption could look like and what transformation could look like and then start to bring in these tools. And so it's going to be much more consultative, much more custom, still building on that trust and security that they've always had. Right.

I was just trying to go back and look at what the term that they used here is the managed intelligence. That's right. Managed intelligence provider.

Intelligence provider. That's right. Instead of the MSP because it's going to change that much.

Along with that came this whole idea of the managed intelligence toolkit. That's correct. Now, I've been stuck out here at the booth so I didn't get to hear the full thing.

I've had a little bit in the press briefing and stuff, but can you describe this toolkit? Is it something that is in the process of being developed or have you guys started to put some stuff in concrete form? We have some things in concrete already. And so the idea of the managed intelligence toolkit is it's bringing all of these pieces together so that we can help our MSPs lead this transformation. And so there are technological components.

One of the big announcements that Libby had today is we've actually stood up an MCP server in front of the marketplace. So this is like a USB drive in front of APIs that allows multiple agents to seamlessly connect into a technology system. So what it actually allows is our partners can now start to use their own agents that they're sort of bring your own AI, like a BOD, so your own LM, your own agents and start to interact with our marketplace that way.

And so imagine now using natural language through chat GPT or through Microsoft CoPilot and finding out which licenses are coming up for renewal in the next month, asking the system to help you build out a QBR for your customers and we're leveraging the power of opportunity explorer along with all the licenses, all flowing in there that now MSPs and MIPs will start to connect into the other tools that are all flowing into that ecosystem. So as part of the managed intelligence toolkit, we've already pre-integrated Microsoft CoPilot, Azure Foundry, stood up the MCP server. There's also a whole layer of education and enablement.

And this was the other big announcement we had, which was the guided growth journey around artificial intelligence and the transformation into MIP. And so that today is over 100 courses along with assessments that actually help break those 100 courses into bite-sized learning tracks. So we find out where the partner's at, what do they want to learn, where are they at in the journey, and we start serving up that content.

And it could be technology, like connect to that MCP server, build an agent. It could be commercials, like how do you find a customer, how do you price, how do you build an AI strategy, how do you do the transformation elements. So all that's coming together in one toolkit to help our partners be successful.

And is that toolkit available under Pax 8 University? Yes, so different components of it. So it's more of the concept. So the guided growth is right there, part of Pax 8 Academy.

And then the technology, they can get registered for through our beta programs and connect to that through the marketplace. Okay. So Libby, of course, came at this from the technical standpoint of all of that stuff.

You're coming from the experience side, and I'm going to ask a question later that I'm not sure you'll appreciate, but let me get to this. In terms of the experience, the tech sounds great, but what is going to be the actual experience in terms of how partners, not just only access that stuff, but truly use it and make it a part of their stack, for lack of a better phrase? Yes, I think partners have got to go through the same journey, frankly, that we went through. Where phase one is you sort of have to start to use it yourself.

You get comfortable with the tech, you start automating some things, you start finding some ways to apply some of those advanced agents to start automating your workflows, and then you can start pivoting it out and advising your customers on how to start transforming those workflows. And when I look through from an experience perspective, there is a shift in how partners are going to start to think about AI and the opportunity in front of them. I think it comes through five basic streams.

The first is what I'd call transformation. Okay. So they need to transform their own thinking, they have to start to transform their business and start to think about how do you transform how you interact with those customers.

Again, it's much more workflow-driven, outcome-driven versus tech and tool-driven. Then they're going to have to figure out how do they buy and acquire new out-of-the-box ready agents. So that could be, you know, we'll be launching a agent marketplace in 26, so we want to provide those agents, but there's going to be other places they're going to be acquiring those agents.

Okay. The next step is build. You're going to either build your own, or they're going to start to enhance some... What's already out there.

What's already out there. Okay. Or probably more often the case, sort of orchestrating that connective tissue, pulling several together, creating a cohesive solution.

Right. Now they've got to figure out how to sell it, and they're going to have to think about completely new ways to sell and monetize this, because the old models of per-seat pricing will not work in an agentic world. Right.

And then finally, how do you... And I think this is where so much of the value of the MIP comes from, is management, right? You need to... With all these new agents flowing around, the security vector, the governance, the compliance needs are only increasing. There's also, once you get past the sort of chatbot and even the first level agents, and you actually start letting some agents be autonomous, somebody needs to be paying attention to these autonomous agents and ensuring that they're still doing what the customer wants them to. Right.

And that was the thing is, people are going to be a little afraid to let that autonomy go. That's right. And so where I think it's an interesting mind shift that we've started to approach, I think this is where a lot of MSPs and the MIPs will certainly move into, is the role starts to become that of a hybrid manager, where you're managing both human and agentic talent.

And how do those interact? That's the workforce coming together. Yeah. And they're going to need to prove that to their customers downstream, that the agents are not just proving ROI, but that they are doing what you want them to do, and only what you want them to do.

So it's weird because, in a sense, we've already gone through these stages before when you talk about automation. Correct. You know, yeah, a lot of it was just simply machine automation that didn't think.

We've gone through scripting. Yes. We've gone, all of these things have kind of led us to this.

I think that the problem now is, the scripts can think. That's right. And that's where, you know, Terminator, that's where Terminator fears come into play.

That's right. And you know, I think, certainly I understand the fears, but I do believe that there's still this place, and there will always be a place for the human connection to provide the oversight, provide the strategy, and sort of connect those in. And so I think that that's where we've shifted that management intelligence.

Again, it's more about understanding what the customer needs, and then understanding what those workflows are, and those steps are, and then figuring out how do you solve those together. Yeah. Okay.

Now, here's the question I'm going to ask you to gingerly answer for me. So, I've already gotten some direct messages and some discords and stuff about the announcements, and they're like, Marv, we know you're at PAX 8, we know it's a love fest there right now. It hasn't been that way for the past year.

Some partners haven't been happy with some changes and stuff. Everything's great and rosy now. You've had to go through that year to get to this point.

Tell me about that journey. I mean, it's a tough thing to go through. No, that's a fair journey.

I mean, I think that we've gone through a lot of changes, whether we're talking the Voyager, and I know that there were some pricing model changes in there, along with credit card fees and some of those other elements. That was a shift that was needed so that we can continue to invest to get to where we're at today. And that's where a lot of that, the results of some of those early decisions you were seeing now, in terms of the innovation that you're seeing in the platform, the innovation around the agent of future, certainly want all of our partners to have an amazing experience.

And we continue to try to evolve that. Sometimes we miss the mark. Sometimes we run into some challenges.

Billing has had some challenges for us over the last six months or so. It's a complex ecosystem. That was the big thing.

I agree with that. That is one of the biggest ones. And, you know, it's a very complex ecosystem with 150 vendors, and API is changing, and product skew is changing, and sometimes we've made our own mistakes, both in terms of the technology and, you know, certainly sometimes mistakes in how we communicate.

Right. We have learned a lot from this, and we are rebuilding the system and rebuilding all of our internal processes. I'll be honest, the billing has been the number one issue on my plate since February.

Okay. It's a shared initiative between myself and Rob Belgrave, our COO. We probably talk about this two to three times a day and have every day for four months.

Probably getting sick of it. I will not be sick of it until it is resolved. Okay.

I believe that an accurate bill is foundational to our value. Right. Everything else builds on top of that.

And if partners can't trust it, then we've got an issue. Because at the end of the day, it becomes an issue of trust between them and their customers. So they use our bill to invoice their customers, so we need to have that smooth, predictable, and something they can rely on.

It is, you know, something that is as important as everything we've announced this week. It is certainly something we are focused on, and we've seen some massive improvements over the last quarter, and I continue to drive this until this is clean and predictable and something we don't have to talk about. But I welcome any conversation with any partner about this subject.

I want to own this one. So, I was going to add to that, you're not the only ones to have this issue. Sure.

There have been other vendors. You know, the bigger you get, the harder it is to manage all these things. And we know that marketplaces are pretty much the future.

Yep. There's going to be some pushback by some partners that are like, ah, I don't like it. Have you been able to chat with partners, explain, you know, these issues along the journey and gotten them to, you know, stay the course, hey, look, it's going to be better on the other side.

Trust us. This is, you know, this is for you, not necessarily for us, because that's, you know. Sure.

They think, oh, you know, Pax 8 is going to go public and make a lot of money and then leave us behind. Yeah. And that's just not in our DNA, but that's the fair question.

And this is, again, I've mentioned before, but there's nothing I love more than this channel. I love the people in it and I love how they interact. And one of my favorite things is actually that they get it.

This is hard. Mistakes happen. Issues run into it.

And when we are transparent and when we communicate and when I've had the opportunity to have those conversations, partners understand. Yeah. They get it.

And so we continue to, when I talk about some of the change we're making, it is not just on the technology and resolving the issues, but also how we're interacting, how we're communicating. And actually, all of this has led to one of the big announcements for me this week here, which is, you know, the partner experience is central to everything we do. And where we take this has to be tightly in line with what partners think.

Right. And so I think we all can recognize that Rob Ray is the voice of the channel. There's nobody more trusted.

Nobody has a better instinct on what partners need, what they're feeling, and how to connect and build for them. So Rob has recently, as of this week, accepted some new responsibility. Yes.

In addition to his current charter. Did he really accept? He did. I asked and he was more than happy to lead us in this new direction.

And so we're now merging in all of the community and ecosystem work that he's currently doing with partner experience. Okay. And so Rob Ray will now be leading the direction.

This includes things like the Voyager program, rewards, guided growth, all the enablement, professional services, all that will now start to flow through Rob. Okay. I know he's held that stature, that face.

He's smiling. Sometimes you're like, okay, is that Rob really what he wants? But I think he does. He does.

I think he does. I mean, the nice thing is that we've shrunk the gap so that Rob can hear that feedback directly, have those conversations that you're talking about. And now he owns the ability to go drive it forward.

Well, here's the thing. He's already heard those conversations. Now he's in the loop to kind of help, like you said, close that gap.

I'm really, really appreciative and honored that he's willing to take this on for us. So I want to say now, thank you for answering those questions. Of course.

Some people don't like to and some people are afraid to ask. I'm really glad you did. And this is a subject that, honestly, I'd love to lean in at any point in time.

Okay. Now let's get back to the conference. We're getting ready to close out.

The big announcement of who the talent is will happen soon. It's been touted as, well, let me rephrase that. I have heard people have talked about how smoothly this conference has run, even though it has gotten bigger, more complex.

It has been amazing. I've been to some other big conferences outside of tech, and this has probably run just as good or better than some of those. That's amazing.

I can at least say you guys have done a fantastic job. We have a really incredible team led by Henry and Jim Bedell. Yeah.

Henry Snaus and Jim Bedell pulled all this together, and they did some amazing job work for this. So I'll ask you this because I can't ask Rob. Why move? Why go to Salt Lake instead of staying here? This is a well-oiled machine.

Yeah. I mean, I think certainly I would have to defer, frankly, to Rob on that. I think that's more on his camp.

All right. But I certainly love Denver. This is home for me, so this makes it a pretty easy commute.

Yeah. Okay. Greg, thank you very much for making time and stopping by.

Like I said, I had to request you. I'm glad you said yes. Anytime.

And we will make the trip to Salt Lake next year. Let's do it again. All right.

Thank you, sir. Thank you so much. Appreciate you.

That's it, folks. And I'll be back with more from PAX 8 Beyond in Denver. We'll see you soon.

Holla. That was great.