With exclusive insights from Channel Program CEO Kevin Lancaster and Canalys Chief Analyst Jay McBain, the 2025 IT Management Report reveals how AI is reshaping the entire MSP value proposition from tools to staff, and even vendor strategies.
The State of the MSP Stack
Channel Program’s 2025 IT Management Software Report offers a rare and expansive view into the real-world tech stacks of over 2,600 MSPs. Powered by its NaviStack platform, the report captures usage across nearly 2,000 tools from over 1,300 vendors, creating what CEO Kevin Lancaster calls the “first true agnostic snapshot” of MSP product adoption.
What it shows is a rapidly consolidating ecosystem. Categories once siloed, like PSA, RMM, documentation, and workflow automation, are now converging into adaptive, AI-enhanced platforms. “Every major IT management category is shifting from static tools to dynamic platforms that respond in real-time,” says Lancaster.
AI Isn’t Optional Anymore
Lancaster’s blunt message is that tool sprawl, outdated UIs, and manual workflows won’t cut it in an AI-driven world. Vendors that fail to deeply embed AI risk irrelevance as MSPs gravitate toward platforms that automate resolution, optimize workflows, and enable predictive service delivery.
According to Canalys Chief Analyst Jay McBain, AI isn’t just a boost to operations but is the new foundation. “AI is becoming an integral part of how technology is planned, delivered, and governed,” he notes, projecting that Agentic AI, a category of autonomous, decision-making systems, will reach $158 billion in IT services revenue by 2028.
Platforms Rule, Features Follow
From 13 product categories in the report, Lancaster anticipates the number will shrink to 7 as vendors “platformize.” This includes major players like ConnectWise, Kaseya, and NinjaOne integrating formerly distinct tools like asset lifecycle, documentation, and automation into unified experiences. The upshot for MSPs is fewer vendors, more interoperability, and adding pressure on niche providers to adapt or disappear.
Margin Highs — Then Margin Hell?
AI-powered automation offers immediate gains, like reduced ticket volume, leaner support teams, and faster resolution. “Some MSPs are already cutting 20–30% of their Tier 1/Tier 2 workforce,” says Lancaster. However, long term, these gains could backfire as pricing compresses and market entry becomes easier.
“What used to cost $75 per user per month now costs $5.” Between private equity roll-ups, aggressive bundling, and SaaS disintermediation, MSPs must evolve — fast.
New Roles, New Realities
In this AI-first future, the traditional MSP is being squeezed. “It’s not enough to say you’ll keep email flowing or backups working,” says Lancaster. “You’ve got to talk ROI, business optimization, and customer outcomes.”
McBain sees a future where AI-driven analytics will enable MSPs to model scenarios, assess risks, and make data-backed decisions with far greater precision and scale. This evolution will elevate the MSP role, making it more aligned with enterprise growth, innovation, and competitiveness.
The Human Factor: Enablement Is Everything
Among the most surprising findings? Vendors with high customer satisfaction aren’t always the most feature-rich—they’re the most supportive. MSPs consistently favor vendors who offer strong enablement: pre-sales tools, training, marketing support, and transparent leadership. “If you can’t help your MSPs understand, leverage, and sell your tool, there’s no point being in this space,” Lancaster warns.
Final Word: Don’t Wait
The landscape is moving rapidly. “No one knows exactly how this will play out,” says Lancaster. “But we do know the themes: consolidation, AI disruption, platforms, short-term margin bounce, and long-term margin pain.”
McBain frames it simply: “MSPs must evolve from troubleshooters to strategic advisors.”
Takeaways from Channel Program’s 2025 IT Management Software Report
For MSPs:
- Reevaluate your stack: Can your tools do more together and with fewer people?
- Shift your pitch: Speak in ROI, business outcomes, and optimization, not just uptime.
- Learn AI deeply: It’s not just about prompts. It’s about platforms, workflows, and customer data.
For Vendors:
- AI isn’t a buzzword: It’s the backbone of your next product roadmap.
- Build enablement-first: Help your partners understand, sell, and succeed.
- Train your partners: They need to be trusted advisors in their own client conversations.
Image: Channel Program
