anaged services has become one of the technology market’ s sweet spots. Enterprises are outsourcing more of their IT operations, while shortages of skilled professionals in areas such as cybersecurity and Artificial Intelligence are making it increasingly difficult for organisations to build every capability internally.

The scale of the opportunity is significant. According to Canalys, now part of Omdia, the global managed services market reached $ 608 billion in 2025, growing 13 % year on year. Its research tracks more than 340,000 companies offering managed services globally, including around 96,000 generating more than 30 % of their revenue from recurring services.

But AI is beginning to change what customers expect from those providers.

The traditional MSP proposition was largely built around keeping technology running. Providers monitored infrastructure, responded to tickets, patched systems and stepped in when something went wrong. AI creates an opportunity to shift that relationship from reactive support towards proactive value creation. That transition starts inside the MSP itself. AI can automate many repetitive operational tasks, including patch management, system updates, routine diagnostics and network performance monitoring. Applied effectively, automation can reduce manual workloads and errors while allowing engineers to concentrate on more complex customer requirements.

This has important implications for margins. MSPs operate in an increasingly competitive market where simply adding more people as customer environments grow is difficult to sustain. Automation offers an alternative model in which providers can support more customers without increasing headcount at the same rate.

But automation alone will not create a successful AI-era MSP.

Providers need to rethink where human expertise delivers the greatest value. As routine activities become increasingly automated, skills will need to move towards areas such as cybersecurity, AI governance, architecture, optimisation and strategic advisory services. Finding and retaining that expertise will remain challenging, but it also gives MSPs an opportunity to differentiate themselves.

Pricing models may have to evolve as well. If AI enables an MSP to resolve an issue in minutes rather than hours, traditional models based heavily on labour and time become less relevant. Providers will increasingly need to price around service levels, outcomes and business value rather than the amount of human effort involved.

There is also a larger opportunity emerging on the customer side. MSPs already understand their customers’ infrastructure, applications and business processes. That puts them in a strong position to help organisations identify practical AI use cases, deploy the necessary infrastructure and manage those environments securely.

AI is not yet a mainstream production technology for every MSP. Leading providers, however, are already using it to improve their own efficiency while experimenting with customer-facing applications.

The winners will not simply be MSPs that use AI to cut costs. They will be those that use automation to create capacity, invest that capacity in higher-value expertise and ultimately move from managing technology to continuously improving what technology delivers for the customer.

Jeevan Thankappan Managing Editor jeevan. t @ intelligentglobalmedia. com

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