“We’ve been using AI tools as first-line replacements”
Phil Callow, Partner Manager, Redsquid
How will the onset of AI tools that in theory make MSPs more efficient impact their pricing to customers?
It’s a difficult balance, especially at the moment with the economy being the way it is and the perception among our customers that they have less money to spend with us.
We’ve been using a lot of AI tools as first-line equivalent replacements.
When we’ve had a first-line person leave, or where we’ve felt we needed a bit of extra help but we didn’t really want to hire someone, we’ve used an agent. That’s been really effective as a way of giving us far more capability without the cost. The cost equivalent is probably two-thirds that of employing a member of staff – but the AI works 24 hours a day, and doesn’t need a pension or holiday pay.
As much as I’ve always been a massive advocate for hiring people, the efficiencies it has brought have been significant, especially being an educational provider where we get a massive peak of activity when all the schools come back: it was the difference between needing extra staff and not needing extra staff for that period of time.
There’s always the gamble that it becomes a race to the bottom rather than a race to generate value. I think as long as tools are being used to increase the capability, and reduce the SLAs, generally the end customer will see them as something that’s being utilised to better serve their needs, rather than a way of us reducing the cost to them.
Are you worried we might see the emergence of born-in-the-AI era MSPs who undercut everyone?
It’s a risk in every industry. Marketing is the prime example where everyone was using an AI tool to do their marketing, and then realised it was doing an absolutely terrible job. If you’re truly bringing value to your customers, there’ll always be a place for the MSP.
In the last five years, we’ve tried really hard to increase the value in what we do. If you pay a solicitor £150 an hour, but you pay an IT person less than you pay a plumber, something’s wrong with that. So hopefully the AI tools won’t have that negative effect on reducing the cost down to nothing.
Why are you here?
The main reason I’m here is community. This community has probably had one of the most significant impacts on my professional life since I got involved, and I’ve only been involved for about four years. It’s elevated me personally to a different level and enabled me to have conversations with people I wouldn’t otherwise have had the opportunity to if I’d have just been going to the odd trade show here and there.
Clients “won’t particularly care” if MSPs make the most of AI, according to the MSP MD quoted on the following page…
