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Erick and Rich talk about why Slide’s Series B funding round, the MSP Well initiative, and GTIA’s 2026 Community and Councils Forum all underscore why community is more important than ever in the channel. Then Erick explains why reviewing client profitability on anything other than a company-by-company basis is guesswork, and Rich speaks with GTIA research czar Carolyn April about the 2026 State of the Channel Report. And finally, one last thing: the chicken-wing flavored, protein-packed espresso martini you never knew you wanted.
Discussed in this episode:
Buffalo Wild Wings unveils wing-flavored protein espresso martini
Some guests on this podcast are clients of Channel Mastered. Compensation plays no part in their appearance or the content of the discussion unless the episode they appear on is a “bonus episode” explicitly labeled as sponsored.
Transcript:
Rich: [00:00:00] And 3, 2, 1. Blast off ladies and gentlemen. Welcome to. Another episode of the MSP Chat podcast. Your weekly visit with two talking heads, talking with you about the services, strategies, and success tips you need to make it big and manage services. My name is Rich Freeman. I’m chief analyst at channel mastered of the organization responsible for the show.
I’m joined. Physically, side by your other co-host, our CEO and chief strategist at Channel Mastered. His name is Erick Simpson. Erick, the video audience knows exactly where we are right now because there’s signage behind this giving it away. But for the audio audience, where are we right now?
Erick: Rich. We’re smack dab in the middle of downtown Chicago at GTIA’s Councils and Communities Forum [00:01:00] 2026 event.
Rich: And community. Actually, I’m gonna dive right into the story of the week because community is gonna factor prominently in that in honor of the recently completed Winter Olympics here. Erick, I’m gonna attempt a triple axle right now.
This is gonna be tricky. Let’s see if I can pull it off. I’m gonna discuss two seemingly disconnected things, tie them both back around to this event. Let’s see if I can stick the landing on this.
Erick: A high degree of difficulty, rich.
Rich: Indeed. Let’s roll Indeed. Disconnected item number one. Slide. Now you might be familiar with them.
This is A-B-C-D-R vendor. It was launched about a year ago. Humility is an important quality, Erick. So I’m gonna exercise a little humility right now ’cause I believe there is this long term. Secular trend in the industry right now towards platformization and vendor consolidation and security. I’ve been arguing for a while.
You probably don’t wanna be a standalone BCDR vendor. And yet slide launched by Austin McCord, Michael Fast, formerly of Jato. They [00:02:00] are a year in market. They are at approximately a thousand MSPs. A good benchmark of success is three years to a thousand MSPs. They got there a year and this week they announced a $70 million series B funding round led by General Catalyst with Base 10 and a bunch of other people involved.
So this obviously is a great success story. The tech absolutely factors heavily into that, but so does the. Community, the spirit of community, the connection. These guys have been forging with their MSP partners and it was actually called out. It was nice to see quote unquote deep customer empathy, meaning partner or MSP empathy, called out in the slide funding round press release by General Catalyst as one of the things that makes this company special.
Item number one. Item number two. Also watched within the past few days you may have heard of MSP, mSP well is a nonprofit. It was created by James Manka [00:03:00] and Joe Usia. James is the CEO of Covelo data Security Posture Management vendor for ms. PS Joe is a an MSP in Canada nonprofit organization dedicated to mental wellness for MSPs.
It was created it came out of a conversation between James and Larry Meadow, who is the channel chief at Covelo. James was under a lot of pressure. He needed somebody to talk to Lowry, said, go ahead and talk to me. I will listen. This conversation with over James said that helped a ton.
And why isn’t this kind of thing more readily available? Because we work in a pressure cooker of an industry. And MSP well is an organization dedicated to helping people who need someone to talk to, need help, need mental health resources to find those resources. You can learn more about it at mspwell.com.
Again, spirit of community though we, you’ll remember we had Brad Gross attorney at law works exclusively [00:04:00] with MSPs. We had him on the show once upon a time. He said, these things don’t happen in the legal profession. They happen here. Last, but not least, we are at the Community and Council’s Forum, G-T-I-A event.
This is all about community and when Dan Wesley, the CEO of GTIA was on stage this stage yesterday, he pointed out rightly, I believe that there has never been a more important time for community in the channel then right now with ai. Upending everything. You really need to have other people you have access to people you can trade thoughts and ideas with.
The spirit of community and collaboration never been more important. This is the connection between these three seemingly disconnected things is the power and importance of community which has been an important. Idea and an important part of the channel for decades now, and it continues to be important now, and it is, you are seeing manifestations of that, [00:05:00] and in the case of slide, you are seeing it literally pay off in a big way.
Erick: Yeah. And. I think you’re on the, I think you’re on the podium, rich. I think you’re
Rich: 4.7. Four point.
Erick: Yeah. Yeah. I think you’re probably, competing for the gold on that one. Nice way to stick and connect that intricate weaving of these disparate. Types of organizations and tying it back together to community, which, as we always talk about on the show, it’s one of the things we love best about the MSP channel.
It’s the community, it’s the collaboration co-opetition in a friendly way, sharing, growing. I know, I benefited from that in my years as an MSP and afterwards I’ve tried to pay it forward. Really great. And what’s really interesting is two very different. Companies coming in to provide services.
One more of kind of a traditional approach and the other one being all about, human beings and, wellness and helping. Like you said, cope with the pressure [00:06:00] cooker. That is, the channel, especially for MSPs in turbulent economic times when they’re, when competition is very high, trying to create distinct distinction, differentiation between themselves and their competitors.
And again, trying to find some sort of balance. Having someone to reach out to, to speak with that gets you right. This is the one thing that, I’ve experienced in the channel, rich. It’s, they’re not, a lot of industries like ours and leaders that are the sole leader in an MSP practice really don’t have anyone that.
Typically they can relate to on a moment’s notice or reach out to. And just talk about the things that, at that level that where the, the other folks understand what you’re going through. So yeah, it’s it’s great. And what’s next, like what other, types of services that aren’t directly related to the technology that MSPs [00:07:00] deliver and provide to their clients?
Will we see coming into the channel? That would be interesting now that. We’ve seen this first attempt at something that is can apply to any business, but starts here in the MSP channel.
Rich: Yeah. I had a chance to interview Larry about this yesterday and my first question to him basically is, why did it take.
This channel, this industry so long to create something like this, something so needed and so clearly needed. And yeah. I’m with you. Let’s see, what else? What other gaps get filled this way, but hats off to the folks who are responsible for MSP. Congrats to the folks slide.
Thank you to the folks at GPIA for bringing this community together at a time when we need community. Community matters, Erick. But let’s face it, profit matters as well and managing your profit and you can’t manage what you don’t measure, which brings us to your tip of the week.
Erick: Let’s dive into the pressure cooker, shall we?
Rich? The tip of the week is something that, we’ve talked about on the show before. I promote and work with [00:08:00] MSP partners to really identify, like you said, I mean measuring what matters. And if you’re not measuring profitability, not at a company level, I’m talking about next level deeper per client agreement.
If you’re not me reviewing profitability by client, you’re guessing, and you could be there, there could be underperforming client relationships agreements. That when we look at just overall company profitability, those can be masked, right? When we’re looking at it from a kind of a blended perspective.
So let’s dive into, the reason why revenue can look healthy at one level, but when we start digging deeper, profit can quietly erode based upon just maybe one or two unprofitable clients. So just a couple of tips, three things we can do. Today as MSPs is just run a profitability [00:09:00] snapshot that you can break down by client.
So it’s simple math, ri rich what we took in what we what it cost us to deliver service. And just get a thumbnail view and just at that level just say, oh, my. And however we categorize clients, we always talk about A, B, C, right? A clients, hey, probably the most strategic, growing, profitable clients BS with a little, more attention and support from MSPs can also.
Be very profitable clients, c customers. You may, might even have levels inside of there where you’ve got, if I can say maybe the a’s of the C’s, the B’s of the C’s, and then the C’s, D’s and F’s of the c’s. So run that snapshot, get an i a, an eyeball on where your clients lie.
Flag those bottom 20%. Those are the ones that need additional scrutiny. Like what? What is it that creates this less than median [00:10:00] profitable client? And determine how long that has been going on, and is there anything that can potentially change that relationship, that client, that situation in the near term?
If not, then start taking steps to. Potentially find another home for that customer making room for more higher, profitable strategic clients, and then that create that plan and then execute that plan on a regular basis. If you’ve got a lot of clients that are, dragging down your profitability, you may do it semi-annually.
Heck, you might do it quarterly in extreme situations, but at a minimum annually, and this is more about. Those clients that you create a process around that you scorecard and it becomes a part of your ongoing business reviews with these clients and customers over time.
Rich: Yeah. And that, that [00:11:00] last point is a super critical one.
You, you wanna do the analysis, you wanna identify the most and the least profitable customers. You wanna form a plan coming outta that, and you absolutely wanna execute the plan. It’s one thing to know who the problematic customers are, but you really wanna do something about it before they kick us off stage.
So the conference can begin. Give us one tip, because there are two ways you. Identify those least profitable customers. There are two ways to deal with it, and one is to just exit them out, and another is to address what’s making them unprofitable so that they’re more profitable. How should folks in the audience think about which way to address those customers?
Erick: I lean more towards the, being as valuable and consultative and assistive. Of every client, no matter where they’re, you’ve served these clients, you have a relationship with them. At some point, I think it just, takes the conversation in a different way on your next QBR or schedule a meeting just to review performance and, just be open about the [00:12:00] direction that you’re moving your organization towards and ask very deep questions about where they’re moving their organizations towards the first time we had to do this, rich and my MSP.
It was hard. It’s hard to have a critical conversation with a client that you have a relationship with and to, introduce the fact that, they may be better served with another provider or set of providers. So the tip that I have is, make sure you understand who your competitors are, who who are other.
MSPs that would love to work with those clients because that’s who they serve now at that level of their business growth and maturity and, we’ll be happy to assist them. And I think that’s part of what we’re talking about here in the overall picture of building relationships, community, a network of folks that can help you along the way.
And in fact, that happened in reverse with us after we started doing this regularly, [00:13:00] we. Had been sharing and introducing some of these customers to other MSPs around us. And then once or twice I can remember specifically where a couple of MSPs sent us a client that was too much for them to handle and said, Hey, I’m gonna connect you with Erick.
He would be a better fit for you. So again, just paying it forward and back and forth that way. Spirit of the MSP channel.
Rich: See that folks, Erick stuck the landing too. The both of us I think get high scores from the judges on this. We’ve got more good stuff for you coming from the GTIA.
CCF conference right after the break we’re about to take here. I will be joined by Carolyn April. She’s the Vice President in charge of Research and market Intelligence at GTIA. Right here on this stage. Yesterday, she delivered her 2026 State of the Channel report. We’re gonna get into some of the findings and what’s significant about it for you coming your way after the break.
Stick around. We are gonna be right back
Erick: from Chicago,[00:14:00]
Rich: and welcome back to part two of this episode of the MSP Chat podcast, our spotlight interview segment where I’m very pleased to be joined by Carolyn April. She’s the Vice President of Research and Market Intelligence at GTIA. Yesterday, about 24 hours ago, she presented GTIA’s 2026 State of the Channel report to the audience here at the Councils and Community Forum.
Interesting data as it always is for me, it’s always the highlight of this show. Oh,
Carolyn: Thank you. Not that I have anything to do with it, but the data is very interesting. Yes. Yeah,
Rich: it is indeed. Now last week’s guest on the show was Robin oti. He’s an analyst from oia. Yes. Formerly canals.
One of the highlights of their recent research was that in a best case scenario they’re anticipating 10% growth for MSPs. So double digit growth. That’s good.
Carolyn: Right.
Rich: But that’s down a little bit from what we’ve [00:15:00] seen before. It’s actually even just a little bit behind growth for the IT industry overall.
You had some channel health data in, in, in your study. How healthy is the channel out there right now?
Carolyn: Yeah. The channel is stable, would be the best way I would describe it. But in a period of disruption. It’s not stable at a time where we really should be anticipating. A lot of growth because we’re in a period of time where the channel is trying to absorb a new pivot to ai and that’s gonna take some time.
And during transitions like this, you often will be in a period where you are in between your old way of doing things, the new way of doing things, and figuring out how you’re going to bridge. From one side to the other. And that’s the period of time that we’re in right now. So often companies and what we see in the data is they are, doubling down on what’s paying their bills today.
So they’re making sure that the infrastructure business that they’ve been successful with some of the things that they’ve counted on in the past remain healthy and solid as they are [00:16:00] beginning to take whatever they’re going to do with AI from an experimental stage where most of them still sit to some.
Monetization be able to generate revenue from it. So I characterize the channel as healthy right now and, but changing in many ways. But right in the middle of that change where you’re not seeing tremendous numbers on the growth side. Double dig, double digits. Growth is good. What you just cited is very reasonable and fits in right about where we’re seeing growth happening.
Of course, there are always gonna be outliers. There are gonna be people that are doing gangbusters and then there are gonna be laggards that are not in that growth thing, but on average around 10 to up to 15% growth for the average MSP or other channel companies. What we are seeing.
Rich: The, there was a slide you presented yesterday where, so the top four anticipated growth drivers among the people you surveyed in order, if I’m remembering were AI, security cloud services and managed services. And there were large numbers of [00:17:00] people who are anticipating growth from each of those. But those numbers were down a little bit year over year. They
Carolyn: were.
Rich: Talk a little bit about you, you discussed this on stage.
What do you think accounts for that change?
Carolyn: So again, you need to understand that the question is an expectations question. So these are the projections that these companies are making for how much these areas are going to grow. And I think what we’re seeing in looking out ahead to 2026 and how it plays out, is there some level of uncertainty with the macro.
Economic situation going on in, in this country and in the global economy right now. And so there are going to be more conservative bets out there, I believe, on things. So you’re still seeing, and those numbers show of the four categories you just cited, big growth. They’re expecting, they’re expecting to grow, but they may be.
Taking a little bit of a step back in terms of their expectations based purely not on those markets, but on what’s going on in the greater world with respect to the economy. I think everybody, it doesn’t matter whether you’re in the tech industry, the AI [00:18:00] industry, or anything else, generally speaking, people are taking a little bit of a cautious wait and see approach, I would say.
Rich: And that was something I was gonna ask about is how much of the the sort of stable health. Situation as opposed to explosive growth. How much of that is global turmoil economic, uncertain, all the stuff that we’re familiar with, versus maybe people dialing back their expectations around ai, for example.
Like maybe I was overexcited about it.
Carolyn: Both of those can be true and that’s actually the case. I think. Most companies in, in as a whole in general, are uncertain about where we’re going economically and what global geopolitical situation is gonna be six months from now, a year from now.
So you can say that’s affecting everybody. But there are also companies out there who may have, and this is very, I did say this on a stage yesterday, this is often true with newer technologies, is there are subsets of channel firms, MSPs that go. [00:19:00] Out of the gate very quickly, and they’re real excited and they’re ambitious and aggressive and they bite off a little bit more than they can chew.
And then in year two with say, this happened with cloud in particular we did study on cloud. There was a segment of the respondents that were going very aggressively into areas of cloud. And then in year two and even into year three. That same group had dialed back their expectations of what they were gonna earn that year, what their revenue was gonna look like that year from those services.
And a lot of it was they had gone out too fast, realized that there were some steps that they had jumped right over in terms of making sure they had the right foundation, they had the right people in place. All of sometimes we tend to skip ahead and we go from step one to step. Six, and we didn’t really do 2, 3, 4, 5, and realized that was gonna set us up for, a failure or not the greatest situation.
So I definitely saw some of that happening as well with ai.
Rich: There was something ever so slightly ironic in the data that you were [00:20:00] presenting yesterday. ’cause so much of what we’re talking about here at the conference this week is about the change and the complexity that AI is introducing into this industry.
And yet the number one reason that the people in your survey felt. Conditions are good for the channel was complexity,
Carolyn: right?
Yes. That is ironic for sure.
Rich: Yeah. So talk a little bit about that, the good and the bad of complexity
Carolyn: now. Yes. So that, so what as I often say, the word complexity usually conjures something negative to people, they think, that means.
It’s hard, it’s difficult. It’s something I have to wade through or work out. But for those of us in any industry really where you are the experts, complexity can be your friend in terms of you are needed, it generates demand for your expertise. If you are in the medical industry and you are a specialist in a certain area of medicine complexity, you understand it, it scares the heck out of your patients, but you are the one who’s gonna solve their problem.
That’s not, not. Not unlike what goes on in technology. So if you’re a channel company, that should be the brand [00:21:00] that you lead with. It’s we can untangle these problems for you, or we can explain the mystery of AI to you, or whatever it happens to be. Or we can make sure that your network is secure and we understand the steps you need to take to do that.
However, even experts need to train up and get an understanding. So new complexities come into the fray with new technology cycles and. Technologists don’t just learn by osmosis. They start and they’re at the beginning with a lot of ai and they’ve gotta learn it too. And I think one of the mistakes is going out to market before you really do understand what you’re talking about.
Where before you really understand the set of services and products that are available, what some of the ramifications of applying AI to your your customer’s environments is going to be. Just because you happen to be an ex. At, this portfolio today does not mean, and we know in the tech in industry, things change so rapidly.
The next big shiny thing, you need to get up to speed on it before then you go out to your customers. So complexity affects companies in the channel both ways. They [00:22:00] need, they, they have to wade through their own complexity and then they can benefit from the complexity that their customers are feeling because they’ve already gone and done the hard work and they can now be the expert that helps the customer.
Rich: So this is ever so slightly ironic as well, it, there’s all of this AI driven change of many kinds going on in the industry right now. And yet the the data that you presented yesterday reflected in a number of different ways. Something that you encapsulated like this operational soundness, as boring as that does sound, is really what’s going to matter most here.
So define operational soundness. Sure. And then talk a little bit about why that really is so important at a moment of change. Like this one.
Carolyn: Correct. What. Is it really goes back to what I was just saying about getting out over your skis with some new technologies, companies that have good fundamentals in place already, so basic business practices that they are good at, so they understand the fundamentals and the foundation of finance, operations, sales.
Marketing, [00:23:00] legal, all of the things that you need to do to run a small business. And I will take a step back and say there are many people that start small businesses because they’re very good at technology, but they really don’t understand the business part of it. They’re like I’m super with computers.
I should be able to open a computer. Company of my own. And we’re talking about many channel firms that are small companies. And it turns out they didn’t really understand some of the basic business practices that need to be in place around how to run a company, how to how to evaluate a company, how to do their financials, how to make sure that they, engage with a tax attorney, how they do all of those things that matter.
One of the proof points of how important operational fundamentals are and being in the fishing company came during the pandemic, and I mentioned this yesterday, is that what we saw, the world shut down, things were nutty and their customers were no longer buying supply chains were all clogged.
And it was a very difficult time for a lot of companies in the IT channel. Those that we saw emerge from that couple of years of unprecedented kind of. [00:24:00] Conditions tended to be the ones who emerged tended to be those companies that were already built, very resilient. They had good business practices.
They ran very healthy businesses, and so they were able to even, they may not have been super successful during the two year pandemic period, but they tread water and they were able to get out of it. Fully ready to swim again. And some of them actually did well, they were profitable and they were, and they actually grew their companies.
But all of that kind of fell back to a company that had adequate cash flow already in place, lines of credit. And they were in good shape. They had the right staffing in place so that they didn’t have to go through some wave of layoffs of people. They had just the right amount and they were very good about how to have the right resource utilization in place.
That’s what I mean by having good operational soundness. And so when you’re going to enter into a new market like ai, that’s gonna be massively disruptive on so many fronts, technol, technologically disruptive, workforce level disruption is gonna happen. Competitive level disruption is gonna happen.
How you interact with the vendors and the other people [00:25:00] in your ecosystem is gonna be disrupted. You are gonna be in much better shape if the way that you run your business today. Existing operational model is not. Part of what’s going to give you any trouble going into something new.
Rich: There were several data points in the study that established a correlation between operational soundness and ai adoption AI growth.
Carolyn: Yes.
Rich: Is there any sort of a correlation is not causation correct. Is there
Carolyn: yes.
Rich: Any kind of causational relationship between those two things? Or does that data reflect the fact that operationally sound businesses tend to be more sophisticated business?
Carolyn: You’re right about causation.
I agree. But we have found in this, not just in this study, but when we do a study of any newer technology or more successful revenue generating businesses or who’s more profitable, any sort of superlative that we’re examining, the companies that have. Good operational foundational practices tend to be the ones that are on that leading edge.
So you can, you can talk [00:26:00] correlation, causation, but I see it over and over again and it really becomes a proof point to me. It does not surprise me at all that the companies who tend to be beyond experimental stage and into revenue generation with ai those who would describe themselves as an AI driven business already those who have higher satisfaction rates with their vendors ’cause it.
Picked and choose the right vendors to work with respect to ai. Doesn’t surprise me that those, also, the companies that tend to describe themselves as more expert in their running of their own business and tend to be doing better. They have higher profit margins. They tend to be generating bigger revenue numbers per year and they have more operationally sound practices within their business.
So you can, you can draw, I think it’s safe to say you can draw those direct lines between that correlation.
Rich: So evidence of progress made and progress still to come on, ai, I, if I remember right, close to a hundred percent of the channel partners in your survey sample are using AI in some, correct?
But [00:27:00] only 20% are using it strategically, correct. So define strategic usage. And then talk about the importance of that, the advantage that somebody who is using strategically enjoys.
Carolyn: Yes. We talk about that a lot. Strategic usage means that your company has in some way wrapped some formal.
Process around the use of ai, whether that’s just the internal use or as you go out to customers. And by that, it means it’s not just every individual employee is playing around with chat, GPT or co-pilot or whatever, but that there’s actually been somebody in many cases, one of the hallmarks of having a strategic use of AI is assigning an AI officer, somebody who works within your company.
You either hired them, you designated them, or it’s part of one of their roles, but a leadership. Position that is taken on the job of being the AI architect for your company. So companies that have strategic use of ai we know they have a leader in place. And from that leader, that top down leadership, you will see process and policy being built.
’cause policy [00:28:00] is very important. And these are the fundamentals that I talk about that the companies skip, who end up. Going back to square one with AI in year two that came fast outta the gate. You need to build policies. You need to build those for your employees to make sure they’re only using the tools that you have vetted and approved for ai.
There’s a lot of cybersecurity implications that come with ai, so policies need to be built around the use of AI and cybersecurity. Protections. And so all of those things need to be in place. Then your workflows are affected by ai. So that would be another piece of the strategy is that making sure that if you’re gonna be using ai, it is built effectively into each workflow.
And so if you add an AI component to this piece of the workflow, whether that’s billing or invoicing or just, name a business function, that you don’t look at the downstream ramifications of what that’s going to do to affect a different, another workflow that touches. The one that has ai. Now, all of these things need to be in place to be, really a company that has a str strategic approach.
So formal leader [00:29:00] policy process rules around the use of ai. The companies that are doing that before they ever try to take AI out to market are the ones that are gonna have the most success with taking AI out to market and being able to generate it generate revenue from it.
Rich: And that sounds like operational soundness.
It does, yeah. There were four sort of categories around AI that you slotted channel partners into. There was AI phobic, AI curious, AI invested, and AI driven,
Carolyn: right?
Rich: Give folks an idea for what each of those four categories mean, a sense for what portion roughly of the channel fits into each of those, right?
And then why. Ascending to AI driven the highest of those. Tiers might be a beneficial thing.
Carolyn: So the AI driven categories is the highest. Those are companies that already have that str strategic structure in place. They went ahead and and built, and they got a leader.
They built policy, process, workflow, all of those things. And they’re generating [00:30:00] revenue. So they’ve got a fully engaged internal use of ai and they have a revenue. Engine that is happening with ai. So they’re selling solutions to customers and they’re fully engaged. It’s now part of their portfolio.
It’s not something that they’re tinkering with anymore. The next category down would be, and it’s AI driven. And now you’re testing me here. AI driven and AI invested. No invested. That category. Those are folks that are working on their strategy plan right now. They are in full experimentation and rollout within the internal part of their business.
Their employees are using ai, they’re building policies, a process, they’re on their way. Some of them may also be, selling it in some areas, not generating a ton of revenue yet. But they’re like at step two. To getting to the top. The AI curious folks, they know they need to be in the market.
They know they can’t ignore ai. They are experimenting with it, but they are wary. They’re not sure where to place their bets, their investments, how much to spend, which vendors to work with. They’re very much in the beginning phases of trying to [00:31:00] figure out how AI is applicable to their specific company.
They’re going there. And then the fourth category, you can guess AI phobic. And it’s a very small sliver of the market, almost negligible. If you look at the the margin error for statistics are companies that are choosing to. Pretty much put their head in the sand when it comes to AI and say, not for me.
Now, I will with a caveat, say there are some companies in that group that are getting ready to sell their business, and I mentioned this yesterday. So these could be companies that really are on their way out exit wise, who are just choosing not to dive into ai. ’cause they know they’re gonna be putting this, their company on the market and the next six months and the investment is not worth it.
Or they don’t wanna, they don’t wanna change, focus. So you. So not everybody is just ignoring ai. Some people are ignoring it for a reason.
Rich: I don’t know if you have a thought about this or not. I’ll just share something that was striking to me and I can’t. Quite explain it, but it just strikes me as interesting.
You were talking about the different ways that channel partners are using ai. And [00:32:00] 51% of the folks you surveyed are using it for coding.
Carolyn: Yeah.
Rich: Which, if you look at the AI usage in the corporate world at large, that certainly sounds cons. That’s one of the big biggest use cases. But historically in the channel software development, un, unless that’s really what you do.
Carolyn: Is not a big thing.
Rich: It’s not a big thing. Agree. 51% are using it that way. And only if I’m remembering right, 31% are using it in relation to PSA and RMM. And that’s all the vendors wanna talk about right now. Yeah. What do you think accounts
Carolyn: for that? It’s interesting now, I don’t know if you’ve read, there’ve been a number of articles and I’m not gonna take a position here on this one way or the other, but that the ability to use AI to build little software couplets and applications and do coding.
To create an app that works to fulfill a business function that you specifically need for your company. Could. Hurt the SaaS industry, if you were able to. And I think that some channel companies are figuring out, there’s applications that we can sell to customers that we manage, a SaaS [00:33:00] business function, an accounting function or whatever.
Or this customer really only needs this one little action that’s important to them for their company. We know it takes this document to this, and then it’s. Goes off to the bank or whatever, function. It happens to be, we could use, we could write that with ai, we could vibe code that as they say, and I suspect that there’s a little bit of that going on in the channel and they’re gonna be able to leverage the ability to write code.
Whereas code was too hard before and that’s the reason a lot of people in the channel weren’t doing it. Yeah, it’s a specific. Discipline that was never traditionally part of the channel or very infrastructure focused, very hardware focused, traditionally. And not a lot of software developers that were working at their companies.
Now all of a sudden they’ve got this capability. If they’re using ai, why not? And why not? Try, it opens a another market to them entirely. So it’s gonna be very interesting to see where it goes. And if app dev then becomes a staple within the channel going forward because they can do it using ai.
Rich: There was something that you spoke about yesterday that [00:34:00] was interesting, that there’s some nuance to it. We wanna be very clear about what this data is and is not telling us, but there is a degree of slippage basically in terms of partner satisfaction with vendors and vendor partner programs.
Yes. Right now, and it’s not you and your colleague Nancy Hammer, emphasize it’s not that the vendors are screwing up and correct. There’s an AI related issue though, so talk a little bit about that issue and how you’re seeing that in the partner sat data.
Carolyn: Yes. So to be clear, overall vendor satisfaction is still a.
Pretty consistent year over year, but we do break it down into into five different areas and there’s, very satisfied or significantly satisfied, which is the most superlative satisfaction rates. Then there’s just satisfied, and then you’re in the middle somewhere, and then there’s dissatisfied and then very significantly dissatisfied.
So the category that dropped. By more than half year over year was the number of partners who say they are very satisfied, significantly satisfied. So fewer people [00:35:00] are, off the charts, happy with their vendors than they were last year. But as a whole, those who are satisfied is pretty consistent.
So I just need to get that outta the way first. But the reason for that is there, because of ai and because of a lot of other things, just the way that the channel is changing and business models are changing the things that. Partners prioritize from their vendors is changing. So this, the staples that you would find in a normal everyday partner program, many of those don’t check boxes for a lot of channel companies anymore.
They’re not the things that they need the most. Most channel firms who have really embraced services now, they go to market with their own brand. They’re the face to the customer. They’re not selling the vendor anymore. And when I first came into this. The vendor was who you sold.
You had, your business cards. If you were, so and business solutions, you were selling hardware and you had, IBM and HP written right on your business card. That is not the world that we live in anymore. And increasingly with ai, the abstraction of the vendor on the backend, the manufacturer from the customer is getting [00:36:00] even.
Wider. So that means that the channel partner in the middle is really the brand. And the more and more they are the brand things like, vol, volume discounts and margin points, and some of the MDF benefits and other things are less enablement. Stuff that’s in, in a lot of partner partners is less important and partners wanna be rewarded on customer outcomes.
Which is very hard to measure sometimes. There are new points programs based on steps along a customer journey that you could be rewarded on. I was the one who initially introduced this customer to this security firm. I’d like some points for that, and then the security form fulfills some kind of product sale and they get points for that.
All of that is changing very rapidly and I think vendors are struggling a little bit to figure out what the best partner program looks like for the. Most partners that they’re able to reach, and AI is a piece of that as well. As partners struggle to figure out what their new business models look like with respect to ai, that’s gonna change the interactions that they have with vendors and what the programs are gonna look [00:37:00] like to reward AI based types of partners.
So again, I consider this more of an alignment and an alignment issue is the best way to put it. I think it’s more of an alignment issue than it is a dissatisfaction issue. Like you said, vendors aren’t doing anything wrong, but we are all in a period. And to take us back full circle, we’re in a disruptive period right now where people are figuring it out and and so there’s gonna be mistakes made.
There’s going to be experiments that are gonna, some of them are gonna work out, some of them are not gonna work out. And that’s gonna be true across all of the various areas that we. Track in the industry, including vendor partner collaboration.
Rich: And so there, there is you are detecting an appetite among channel partners right now for more recognition, for more contributions along the lifecycle that they may
Carolyn: Absolutely.
Rich: And the vendors just really haven’t caught up.
Carolyn: Yes, and it’s not, I think that the vendors don’t buy into that. I think it’s that it’s, that’s a difficult thing to figure [00:38:00] out how to I. It’s not as easy as saying, we’re going to pay you X percent on the number of desktops you sell. That’s a really easy number and formula to try to figure out.
Trying to figure out how to reward along each of these kind of intangible sometimes steps along the customer journey that’s a little bit muddier and it’s gonna take some sitting down to figure it out. And a lot of it may be customized because what. Fits one partner and the way that they work with customers is not necessarily gonna be cookie cutter for every single partner.
So I, I think it’s just complex to get back to our conversation of complexity, right? It’s one of those, this is a, an example of pro perhaps not so fun complexity for the channel.
Rich: How does AI fit into that phenomenon, though? Are partners looking for different forms of compensation around AI that they’re not getting?
Are they looking for enablement resources that the vendors aren’t providing solutions?
Carolyn: Right now, I think we’re at the stage where they’re looking for more help with ai. So you know, if [00:39:00] vendors are going to AI infuse all of their products, et cetera, and expect partners to understand how to sell them and work with them, I think the vendors need to do a better job of bringing their partners up to speed.
So we definitely see a training and enablement deficit. That needs to be bridged. With respect to ai, you also have the issue, and this is new, real new. So we haven’t seen how this is gonna play out, but when agentic AI really gets applied that’s gonna shift a lot of things between vendors and partners and vendors and partners and customers for that matter.
If you’ve got agents that are doing a lot of the work for you in an automated way and not humans how do you price around that? How do vendors reward. They’re partners for for accomplishing something with a customer that was done via an agent versus done via a sales or marketing person, for instance.
So I think these are a lot of the questions that remain unanswered that we’re gonna have to work out.
Rich: Alright I’ll be back in 12 months to see how much headway. I know you have it
all
Carolyn: figured out by then. Oh yeah, of course. Sure. [00:40:00] Yes. Oh, always pleasure, rich.
Rich: Yeah. No, and pleasure is always mine.
Carolyn and April, vice President, research Market Intelligence at GTIA. For folks in the audience here who might wanna get in touch Sure. Learn more about you or should they go?
Carolyn: Okay. You can read, you can learn everything you need to know about GTIA, just by going to GTIA. Dot org. We are a member association, so if you’re not a member today and you are A-I-T-S-P, you’re a vendor, you’re a distributor out there, please consider joining.
It’s a great resource for all of you and you can find all those details on our website. And you can additionally find me on LinkedIn and you can find me at c april at g tia dot. Thanks.
Rich: And can they find the 2026 State of the channel report at G Tia?
Carolyn: They will be able to, the report will be available in about two to three weeks time.
It’s in the, the creative process right now and it will be available on our member portal. So I believe you do need to be a member in order to get access to it, although it will be available through the media as well. You’ll have your hands on it and all that. So [00:41:00] there are ways to read it and and then look for it in a couple of weeks.
Rich: Okay. Excellent. Carolyn, thank you for joining us.
Carolyn: Always pleasure. As I said.
Rich: Folks we’re gonna take a quick break now. When I come back on the other side, I’ll be rejoined by Erick. The two of us will share some thoughts about this conversation with Carolyn. Some other thoughts, have a little fun wrap up the show.
Stick around. We’re gonna be right back
and welcome back to part three of this episode of the MSP Chat podcast. And for those who are. Carefully keeping track or watching on video. Erick and I began the episode on stage together at the G-T-I-A-C-C-F event. Then it was me one-on-one with Carol and April in a corridor at that event. And now both Erick and I are back home recording from our our normal home studios here.
So you’ve been tracking our movement across the week. Over the course of the show here. One last big thank you to Carolyn, April. The [00:42:00] CC event F event is obviously a big deal for her and the entire GTIA team. So I appreciate her making some time to talk about that data with me and lots that we could talk about then there.
Erick, I will say as we’re recording this, I’m in the midst of working on a post from my blog channel Pollock, that is about the data we just discussed with Carolyn here on the show here. One of the things I say there is something nice, something a little bit refreshing about there being a strong, solid business case for the idea that what the folks in our audience most need to be thinking about and prioritizing isn’t necessarily revolutionizing everything.
With ai, you absolutely need to be investing in ai. And getting through this inflection point this time of pivot that Carolyn was talking about. But really the single most important thing you can do is just focus on fundamental operational basics of running a sound business, [00:43:00] hiring, retention, sales, marketing, customer satisfaction operational rigor, financial discipline.
Get the house in order ’cause that’s gonna help you weather this AI storm that we’re in the midst of right now, which is also a larger geopolitical storm and an economic storm. It, it turns out that the stuff people presumably still get taught in NBA programs still matters.
Managerial competence still matters very much and it’s something. That the folks in the audience here really need to be thinking about. And then the other thing, I won’t spend much time on it, but this is maybe more relevant to our clients at Channel mastered, Erick, but I do think while you don’t wanna read too much into it and you don’t wanna make a bigger deal of it than it is that the facts, that there has been some slippage in terms of partner satisfaction with vendors right now, and that is coming out of.
The changes wrought by AI and changing expectations from vendors as a result, that is a warning [00:44:00] flag for the vendors and our audience here. It’s not as if you’re. You’re screwing up. And and it’s not as if you’re in huge imminent danger, but there is clearly a disconnect between what you’re doing and what you’re delivering and what partners want.
And before that becomes a serious issue for you wanna kind of dive into that and make the necessary changes.
Erick: Yeah. Richard very good insights there. I think on both sides of the channel, right? For MSPs it’s like. Business resilience 1 0 1. Whether it’s AI or something else that comes down the pike, we’ve seen this in the market for the last 20 years, right?
New technology, new changes, but the MSPs that succeed and build this business, resilience are really focused on the fundamentals, financial acumen, making sure that we’re keeping an eye on the story, if you will, making sure that we’re meeting our margin expectations, making sure that we’re not growing too fast.
And taking on ideal, less than ideal clients because we think top line revenue is the goal, when [00:45:00] in fact it’s not. It’s bottom line profitability. And, sometimes we get in over our skis, rich and stop, we’re focusing on these new clients, yet we’re not helping grow the existing clients that have been so good to us all the way along and maybe are more profitable.
And then we churn those out, right? Overloading our techs, right? Because we’re doing these things. So really good insight there. Just the basic business fundamentals for MSPs. That way you’re resilient no matter what. Technology comes along and building those right client relationships where you can have those strategic conversations in the boardroom that really matter to clients from a business outcome perspective.
And then yes, for the vendors AI is taking over all the new cycles and things like that other than, the other stuff that’s going on right now. The most important thing here, I think, for vendors is to really, remain strongly connected to their partners, making sure that you’re engaging with them and your partner advisory boards or councils, and getting that feedback.
Organizations like GTIA has [00:46:00] tremendous research for vendors as well. I had a chat with Dan Wesley on my way out the other day, and he reminded me, Hey Erick, are you taking advantage? Especially for Channel Match, out of all the. The vendor research that we do, hey we wanna make sure that, you’re giving us feedback on that and we can help improve that.
So there are lots of things to think about but, we’ve gotta stop and be logical about it rather than continue just going a hundred miles an hour in one direction.
Rich: And on one brief self-congratulatory note, before we move on, I’ll just point out that one reason you in our audience are clearly smart because you are in our audience is.
Erick does a tip of the week, every episode of the show, and nine outta 10 times it is in that realm of operational maturity and running a sound business. So this is a good place to come for experience based tips on on running, getting the fundamentals right. So with that folks, we have time for just one last [00:47:00] thing and Erick, do I like chicken wings?
You bet I do. Do I like martinis? I absolutely do. Gin tu offs, please. Espresso. Can’t get through the day without it. Do I want all three of those things in the same restaurant dish? No. No. I don’t think I do. Exactly. And yet. So first of all, thi this right here was new to me. March 15th. It turns out.
Erick is National Espresso Martini Day.
And in honor of National Espresso Martini Day our good friends at Buffalo Wildlings are releasing a quote unquote wing flavored espresso proteiny. As in protein. So this is a, an espresso martini may infused with buffalo dry rub and jam packed with 10 grams of protein.
So you get your caffeine, your espresso, you get your alcohol. And the in the martini, you get buffalo dry rub for [00:48:00] some reason or other in there too, and 10 grams of protein. It’s good for you, Erick. I if anyone here in the audience tries this out please drop us a line and let us, assuming you survived the experience, let us know how it went.
I will just take your word on it. ‘Cause I’m not planning to go.
Erick: Yeah. You be the Guinea pigs for us. That sounds awful.
Rich: Happy national espresso martini day though. Folks,
Erick: I’ll do the espresso martini, I’ll do the espresso martini. Just save all the protein and dry rub, put that on the food.
Rich: Yeah. Too much of a good thing. Sorry.
Well folks, thank you so much for joining us on this episode of the show.
Erick and Erick are gonna be back in a week with another episode for you. Until then, I will simply remind you, this is both a video and an audio podcast, which means if you’re watching us right now that you’re into audio podcast, you can go to Spotify, Google, apple, wherever you get your. Audio podcast, you’re probably gonna find us there if you’re listening, but would like to check us out on [00:49:00] video, go to YouTube, book up MSP chat there.
Wherever it is you go and you search and you find us. Please subscribe, rate, review. It’s gonna help other people explore and discover and enjoy the show. Just like you do. This show is produced by the great Riley Simpson, part of the team with us here at Channel Mastered. Channel Mastered is not really about podcasts as we were hinting at before.
We work with vendors who wanna grow optimized Perfect and MSP Channel, and you can learn more about that mission at our website, www. Channel mastered.com. Channel mastered has a sister organization, MSP mastered, that is Erick working one-on-one with MSPs to help them grow and optimize their business. You can learn more about that at www.mspmastered.com.
So once again, thanks for joining us. We’ll see you in a week. Until then, folks, please remember, as we always urge you to that you can’t spell channel. Without [00:50:00] MSP.
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