The Future of Managed Services: AI Integration and M&A Trends with Industry Experts with Abraham Garver and Howard Cohen

Business of Tech: Daily 10-Minute IT Services Insights

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3d ago 36:46

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This episode features a deep dive into the evolving landscape of managed services, focusing on the insights of industry experts Howard M. Cohen and Abraham Garver. The discussion centers around the significant shift towards service-oriented models within the managed service provider (MSP) sector, highlighting the importance of artificial intelligence (AI) and the ecosystems that are driving growth. Cohen emphasizes the three main categories of services that are currently profitable for MSPs: managed services, project services, and the emerging field of AI-driven solutions.

Cohen and Garver explore the challenges MSPs face in integrating AI into their offerings. While some MSPs are beginning to adopt AI technologies, many are still grappling with how to effectively implement these tools. Garver notes that the financial metrics of MSPs, such as EBITDA, remain largely unchanged despite the incremental benefits AI may provide. The conversation also touches on the potential commoditization of certain services, particularly in help desk operations, as AI technologies become more prevalent.

The experts discuss the competitive landscape, particularly how larger, private equity-backed MSPs may have an advantage in leveraging AI due to their resources. Smaller MSPs may struggle to keep pace, leading to a potential widening of the gap between them and larger players. Cohen argues that AI could serve as a great equalizer for smaller MSPs if they can effectively automate processes and reduce reliance on human resources.

Finally, the episode highlights the importance of peer groups and community support for MSPs looking to grow and adapt in this changing environment. Both Cohen and Garver agree that engaging with trusted peer networks can provide invaluable insights and strategies for navigating the complexities of the managed services market. The conversation concludes with a preview of an upcoming interview focused on practical applications of AI in enhancing productivity and streamlining workflows.

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