No Future for Traditional Managed Service Providers?

Managed service providers (MSPs) have played an important role in the organisation and administration of large IT infrastructures in recent years. In many cases, they have also become the most important providers of IT expertise, which has increasingly flowed from the companies into the MSP organisations.

Artificial intelligence will also cause upheaval in the business of MSPs, says Dirk Altgassen, Group CIO of Etex Group in Belgium. IT managers in companies will have to deal with because it affects their business.

It is undisputed that AI can take over many administrative and organisational IT tasks – for example in system monitoring, error detection and simple troubleshooting. Cybersecurity, data analyses and IT support will also become AI domains. One of the consequences could be: In the end, AI will know best about IT in the company; knowledge about this will flow directly from MSPs to LLMs without going through the companies.

For MSPs that deal openly with these changes, strategic tasks such as orchestrating increasingly complex IT infrastructures, change management or taking care of governance and compliance remain (under the leadership of the CIO). Dirk Altgassen, CIO of the Belgian Etex Group, for example, doubts whether they will survive – in his theses (see below!) he sees only a few MSPs as partners for the business transformation of companies in the future.

However, CIOs in large companies that are relying on the peaceful coexistence of MSPs and AI in the long term must prepare for these changes, as the transition from MSP to AI can lead to the company losing expertise in operational IT processes that was previously available in the company or provided by the MSP. They also need to redefine roles in IT and ensure that employees have the skills to work with AI-supported systems.

The discussion about the alignment of IT and business will also experience a new dynamic: The high entry costs for setting up an AI that can take over the tasks of MSPs will require investments in technology, training and infrastructure. The investments are under pressure to succeed: management rightly expects a return on investment (ROI) from their CIOs’ AI initiatives, and employees are demanding the responsible use of AI The good news, however, is that investments and managing the expectations associated with them are not new tasks, but have long been part of dealing with the hype triggered by GenAI.