Stepping off the Sidelines: How MSPs Can Regain Relevance in the Age of AI and App Sprawl

Over the past decade, MSPs have stepped in to play a bigger role in IT security. As cybersecurity threats grew more complex, MSPs evolved. Building security practices, running audits, and, in many cases, operating as MSSPs. It’s been the main way they’ve retained strategic influence as technology evolved.

But here’s the irony: while MSPs are in the business of managing technology, most have fallen behind when it comes to innovation. In a world charging ahead with AI, automation, and ongoing SaaS expansion, many MSPs are still focused on backing up systems, reporting on phishing attempts and resetting passwords.

The tech world is not static. That statement should be self-evident, and we should have already learned this lesson that if MSPs don’t adapt, they risk looking more like custodians than strategic partners.

The rise of SaaS and cloud apps have already shifted control of software decisions away from IT. Most people remember very well what happened in the enterprise when cloud business applications showed up. IT leaders screamed about ‘corporate standards’, ‘security’, and ‘data loss in the cloud’, and the world just passed them by. A similar story played out for MSPs that clung to physical infrastructure for five to ten years after their customers (and the opportunity) moved on.

Whether it was internal IT or the MSP that replaced them, both ended up sidelined.

Business units brought in their own tools, often without involvement from internal IT or MSPs. And while MSPs continued to manage infrastructure and endpoints, they were largely cut out of conversations about software spend, tool adoption, or employee digital experience.

Now, another transformation is underway with AI. And without a shift in how they position themselves, MSPs could once again find themselves watching from the sidelines.

Out of the shadows - rethinking the ‘shadow’ part of IT

The term "shadow IT" has always implied something risky or out of bounds. But the truth is, it’s often just a reflection of where innovation is happening fastest.

What if you could show how fast AI is being adopted by your clients' employees?

For MSPs, how you think about (and communicate) that concept says a lot about the kind of partner you want to be. If your first instinct is to shut it down, you’re reinforcing the very dynamics that pushed internal IT departments to the margins 15 years ago. But if you view it as a signal, an indicator of unmet needs or emerging preferences, you have an opportunity to help clients navigate it intelligently.

Teams adopt tools for a reason. Usually to help them work better. When you bring visibility to what’s actually being used and help evaluate it on merit, you stop being the roadblock and start being the guide.

AI Is already inside the building

From ChatGPT to Microsoft CoPilot, AI tools are becoming part of the daily workflow often without a formal rollout plan or clear measurement of effectiveness. They’re being licensed, trialed, and adopted on a department-by-department basis. Most clients don’t know what’s being used, where it’s helping, or what it’s costing.

This is a major strategic blind spot. And if MSPs don’t help their clients close it, someone else will.

Executives are already asking questions. Questions MSPs should be prepared to answer:

• Are we spending on tools that no one’s using?
• Are the AI platforms we’ve deployed actually improving productivity?
• Do we know what tools employees are adopting without approval?

The answers require data, and that’s where MSPs can step in with a new kind of solution.

Application visibility as a strategic lever

This is where Produce8 makes a difference. It gives MSPs the ability to bring real data into these conversations. With detailed insights into application usage across SaaS and desktop tools, you can help clients see:

• Which tools are gaining traction—and which aren’t
• Where licenses are underused or could be reclaimed
• How teams are adopting tools outside IT’s visibility
• Trends across departments that reveal broader opportunities

This is more than just reporting. You should be thinking about it as the path to re-engagement of the MSP. Strategic relevance. When you can quantify usage, surface inefficiencies, and highlight emerging trends, you shift the conversation from reactive support to proactive planning. You become the partner your clients need.

A practical path to higher-value services

So here is the self-serving, shameless vendor plug - and our simple playbook for MSPs:

1. Deploy Produce8 to give your clients visibility into the entirety of the digital workplace (not just the stuff you manage).
2. Use those insights to guide QBRs and executive conversations. One topic at a time.
3. Recommend changes, license adjustments, tool rationalization, and training support
4. Support change initiatives using Produce8 to measure the impact
5. Build on early wins to expand your role over time

The MSP space is no stranger to reinvention. As security demands grew, MSPs stepped up. The next reinvention is already underway, and it centers on how work is getting done, what tools are enabling it, and whether those investments are delivering value.

With AI adoption accelerating and app ecosystems growing more fragmented, your clients need clarity. They need partners who can help them understand what’s working and what’s not.

Not every MSP will make this shift (just like the last time)

There will be a clear divide between those who continue to focus solely on tickets and endpoints and those who evolve to help their clients lead through change. One path leads to greater relevance, new revenue streams, and more strategic relationships. The other leads to being quietly replaced.

The opportunity is real for increased wallet share, stronger client retention, and net-new business from companies looking for forward-thinking partners.

We’re both excited and a little terrified about what’s coming next with AI. Your clients probably are too. But we’re here to help you do more than just hang on. We want to help you lead. We can partner on this one. We’ll bring you the data and insights. You deliver the strategy.

You can be an innovator again. You can get excited about “new” again. And isn’t that why you got into tech in the first place?