Jay McBain on Why AI and SaaS Marketplaces Are Redefining MSP Revenue Models
Business of Tech: Daily 10-Minute IT Services InsightsSeptember 17, 2026
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00:36:2233.32 MB

Jay McBain on Why AI and SaaS Marketplaces Are Redefining MSP Revenue Models

The dominant structural shift outlined is an accelerating concentration of market power and operational control within a handful of large technology companies and platforms, exacerbated by aggressive vendor channel consolidation and a move toward marketplace-based service delivery. This concentration is evidenced by recent actions such as Broadcom’s decision to cut roughly 90% of VMware’s partners and take top-tier accounts direct, as well as the increasing tendency of hyperscalers and major vendors—including Microsoft, AWS, and Google—to funnel services and resources directly through their own marketplaces and forward-deployed engineering teams. Reports discussed, such as the Omdia Global Partner 1000, reinforce the extent to which the industry has pivoted toward highly scaled players at the expense of smaller channel partners and MSPs.

Evidence from the Omdia Global Partner 1000 report demonstrates that the top 30 service partners now generate the same amount of revenue as the bottom 970 combined, with the remaining 970 firms outperforming over a million additional smaller providers. The managed services market was noted at $608 billion—1.5 times the size of the global SaaS industry and all hyperscalers—yet smaller MSPs report decreased growth expectations and declining vendor satisfaction; for example, satisfaction in the UK and Ireland dropped from 37% to 19%. Further, partner programs for generative AI remain underdeveloped, with over 90% at only “maturity 3 of 10,” while 82% of MSPs acknowledge they are not prepared to scale as rapidly as customer demand for AI-driven outcomes will require.

Additional developments deepening this concentration include widespread launches of vendor-controlled marketplaces and the growth of token-based consumption models. Companies such as SuperOps, ManageEngine, and Pax8 are positioning their platforms as marketplaces for MSP-delivered AI and SaaS, while Microsoft and AWS continue to expand both their direct-to-customer strategy and investments in pre-sale technical resources. Analysts project that the shift toward token-based billing and variable consumption will disrupt traditional per-user pricing, limiting future margin opportunities and accelerating direct transactional relationships between vendors and end-customers.

For MSPs and service providers, these shifts increase dependency on large vendor platforms, raise the risk of abrupt contract changes, and intensify pricing and margin pressure. Traditional models relying on single-source vendor relationships and predictable per-user or per-device billing are likely to be replaced by variable, consumption-based contracts governed by token usage and direct marketplace transactions. Providers must prepare for heightened governance requirements, increased operational complexity in managing multi-vendor and multi-marketplace integrations, and potential threats to their role as strategic intermediaries in client accounts.

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[00:00:14] And its services is now a $608 billion business, one and a half times the size of the entire SaaS industry, one and a half times the size of all the hyperscalers combined, and growing at 13%, while the broader tech industry grows at 7% and the global economy grows at just over 2%. If you're running an MSP today, you are running a shop inside the fastest growing business category in enterprise technology.

[00:00:41] And in the same year this number comes out, MSP's own quarterly surveys from that same research shop showed the cohort expecting more than 10% growth dropped by 14 points. And the cohort expecting a 10% or worse decline grew by 19. Vendor satisfaction in the UK and Ireland fell from 37% to 19% year-over-year.

[00:01:05] Broadcom just cut roughly 90% of VMware's partners and took the top 2,000 accounts direct. Something is off. Both stories are true at the same time. The person who wrote the $608 billion number is the same person who's telling the audience for a year that the way the ecosystem is being reassembled around them is the biggest strategic shift in the 25-year history of the channel. He was last on this show a couple of months ago, almost to the days.

[00:01:35] And since then he's published the Omnia Global Partner 1000, the 7-17% partners forecast, 158 billion agentic AI opportunity, and a very specific warning to the small and mid-sized MSP world about the missing next wave the way they miss SaaS. In the meantime, every single vendor in the operating layer of an MSP is raced to launch a marketplace. So we're going to bring it all together and see whether the picture on top of the pyramid actually adds up with the picture in the P&L at the bottom.

[00:02:03] Welcome to the Business of Tech Lounge. This is where we break down what's changing in the IT services market, what it means for providers and vendors, and what to actually do about it. If you're running or supporting an MSP, this is about making sense of the environment you're operating in, not just the headlines. Now to make this conversation possible, a message from our sponsor. Every tool you bolt onto Microsoft 365 is another console, another login, another thing that eats your team's time.

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[00:03:02] Learn more at proofpoint-total-protection.com. Our guest today is Jay McBain, Chief Analyst for Channels, Partnerships, and Ecosystems at Omnia, which now includes what used to be Canalus after Informatex acquisition. Jay is the author of the Omnia Global Partner 1000, the ranking of the top 1,000 channel firms in the world. He's been named Channel Influencer of the Year.

[00:03:29] And if you've read anything published this year about the shape of the partner ecosystem, you've almost certainly read something Jay put his name on. Jay, welcome back to the show. All right. Well, thank you so much for having me back. I am looking forward to this. You and I get to mix it up and it is always great fun. So let's start with the Global Partner 1000 from last October. I kind of want to start there because it feels like it's the map for everything you've built for what the ecosystem actually is right now. And everything we're going to talk about fits around that.

[00:03:57] So it was the first attempt to rank, name, and size the top 1,000 channel services firms in the world. And that would include systems integrators, VARs, MSPs, consulting firms, those professional services players, distributely, I'm sorry, deliberately excluding distributors, vendors, telcos, SaaS providers, ISVs. So to make the list at all, you had to clear $28 million in revenue.

[00:04:22] So together, the 1,000 firms you ranked generate $1.7 trillion a year, 63.3% of the entire global IT services market. The shape of it is what I was thinking a lot about that. The top 30 firms alone generate the same amount of revenue as the bottom 970 combined.

[00:04:44] The global 100 ranks 31 to 100 is $274 billion or 26% of the total. The partner 500 ranks 101 through 500 is another $280 billion. That's about 19%. And the long tail ranks from $501 to $1,000, $37 billion, 3%. Half the roster is 3% of the money.

[00:05:13] So let's start with the concentration number. Top 30 partners generating the same revenue as the bottom 970. Is that the picture of a healthy channel that finally has scale players? Or is it a picture of an ecosystem that's tipped? And the channel we've always talked about is really 30 companies plus a long garnish. It's actually just the world we live in.

[00:05:37] The longer you spend in the technology industry, you learn that the 80-20 rule really doesn't exist. And most would say there's probably a 95-5 rule. And I think what we just proved with this list, it's more of a 99.90, 0.1% rule. And so, you know, in any industry, if you want to double-click on cybersecurity, the top 20 vendors out of 6,500 do over two-thirds of the market.

[00:06:03] If you tip on distribution, you know, the top 20 distributors do over 70% of the market. So everywhere it shows up and every day in the headlines, like you mentioned, we read about Anthropic in 20 months becoming larger in revenue than IBM and HP and Cisco and Oracle and SAP and, you know, the companies we know and love.

[00:06:25] And just these big companies tend to play it out at a platform scale so much larger than others that when you combine things, it puts together. But the 1,000 was a little bit born out of a frustration of mine. And I've been standing up, and I think we've known each other a long, long time, and I've delivered, you know, thousands of speeches in Las Vegas in this industry.

[00:06:48] And every single time I stand up, I'll say, you know, there's 6.2 trillion of hardware, software, services, and telecom. 96% of it is partner-assisted, partner-surrounded. And we never had our own Fortune 500. We never could tell people exactly how it played out. And so the Fortune 500, in our case, became the Omdia global partner 1,000. We had to make it twice as good.

[00:07:13] But the surprising things, as you point out, is that the circle in the middle, it's actually right above my head, the circle in the middle, 30 companies, like you think of Accenture, which is the biggest service partner in the world, has 776,000 employees. You think of each of the GSIs with hundreds and hundreds of thousands of certified AI people. The top 30 companies do more in tech services than the next 970 on the outside.

[00:07:42] But it doesn't stop there. The 970 do more tech services than the next million companies combined. It is very much concentrated at the top. And when you think of the AI era and you think of major vendors and how they look at their partnerships, this is why you see them working so top-down in many cases and forgetting about the grassroots, forgetting about SMB, forgetting about the broader base of managed service providers.

[00:08:11] And we're trying to stand up and change that. Communities that I know, Dave, you run and others that show how big this market really is looking beyond just a few logos. But don't I have to, I kind of feel like I have to push back a little bit and say like, aren't there structural implications for these small companies that know they're never going to be in the top 30? I mean, what does findable in the ecosystem mean for a company like that?

[00:08:39] Well, there is structural challenges. And I mean, we can go into income distribution and we can go into all other topics outside of the tech industry. And there's ramifications everywhere for this. But it does mean a lot. You know, a few of your recent shows have been on M&A. You think about private equity and venture capital rolling up 94 companies to be larger, global, you know, or national in scale.

[00:09:05] Well, this is based on the premise and the thesis that in platforms, you think of the AI platforms that kind of rule the world right now. Now, the bigger the company is, the more capabilities, the higher capacity tend to win. They tend to grow the fastest. They tend to, you know, get the right attention and visibility. And so, yeah, there's this race to become large, you know, to be recognized in this broader, you know, AI opportunity over the next 20 years.

[00:09:34] And there are implications for the small MSP. There's 338,000 companies, for example, that today have at least one managed contract. And they have an average of eight people. This is a study in small business, not unlike flower shops or daycare centers or tanning salons. There's 1,012 industries of small businesses. And this is a study of one that says, how do I stand out from the pack?

[00:10:02] And how do I find myself in the room of the customer? And the good news, there's two things to that. One is that the average customer today has 6.3 partners in the room. This is not a single throat to choke or a trusted advisor, non-plural world. The modern buyer, and now 51% of our buyers are born after 1982. They're millennials. They love a team sport. They want somebody in the room that understands them as a buyer.

[00:10:34] They want somebody in the room that understands their industry. One of those 1,012 industries and has walked in their shoes and maybe spent decades in their industry before. They want somebody who understands the locality. You know, your state, your province, your country, the compliance, regulatory, governance, sovereignty outside the United States. They want somebody who understands the segment. I may have 50 people, 500 people, 5,000 people, 50,000. The capabilities, capacity changes.

[00:11:04] I need somebody who understands what kind of resources I can bring to bear. I want somebody who understands technology. This is where most MSPs play. If I just pick on SaaS, there's 2,262 categories of SaaS today on G2 Crowd. No one walks in with expertise across that, but SaaS only makes up 10% of my customer's budget. I need people in the room that understand the technology and how to integrate it together. And finally, I need proper services.

[00:11:34] What makes a great consultant may not make a great implementation partner. What makes a great designer or architect may not make a great managed service provider. So those are six reasons to have six different people in the room. And MSPs, large, medium, or small, need to figure out a way to get in that room. So let's talk a little bit then about, you've been making two kind of specific arguments. And I kind of want to talk about what I perceive as the tension between them.

[00:12:02] The first, and we've talked a little bit about it now, is managed services is the biggest, fastest growing engine in the tech stack. And Wall Street still doesn't give it the credit it's due. And that's kind of why you did the research here. The second argument you've been making is that agentic AI is the largest partner opportunity in the history of the industry. And that the small and mid-sized MSP world is on track to miss it. Both of those, I think you're nodding. So I think I'm kind of summarizing your words a little bit. You've made the point around the managed services market, right?

[00:12:31] Particularly its size, how big it is compared with the hyperscaler market. We talked a little bit about that. You're also making some highlights around the agentic AI market. A 59.3% compound growth rate through 2028. 44% of partners already build or deploy agents today. And Omnia expects that figure at 64% within the next 18 months.

[00:12:57] Now the other thing that I thought was really interesting here is like the shape of the deployment is different by segment. We got all the coverage on enterprise and public sector, right? That's the ecosystems, hyperscalers, NVIDIA and infrastructure at the edge, cybersecurity. In the SMB world, it's something else entirely, right? The larger SMB and mid-market customers are expecting to get their agentic AI through their line of business SaaS. So that's Salesforce, ServiceNow, Workday, HubSpot.

[00:13:25] And smaller SMBs get it through vertical SaaS. Like a restaurant sees it through Toast or Clover or Square. And our MSPs are literally the example themselves, right? So that average eight-employee customer get it through their PSA and RMM. ConnectWise, Kaseya, Ninja, Enable, Ellia. They're all running right there, right? And you made this kind of challenge. 76% of SaaS is still sold direct today. 78% sold to line of business buyers.

[00:13:54] And these are the buyers that the channel sort of doesn't know. And this is where I get to my question. The line that really kind of stopped me was that partners need to engage these SaaS partner programs quickly, or they risk missing the agentic phase the same way they missed SaaS in the beginning. Okay. The MSPs that missed SaaS 20 years ago are still here. They built managed services around it, and they are fine, right?

[00:14:21] So what is the still fine version of an MSP that misses the SaaS agentic wave? Like, or is there even one? Or is the story going to be different this time? I kind of want to get your take here. Yeah, so I mean, the bigger conclusion to what you just said is nothing really ever goes away in our industry. I mean, we're still selling typewriters. They're still typewriter ink business that Office Depot is doing. Like, you can go back. Nothing ever goes.

[00:14:49] So the client server era, you know, kind of from August 12th, 1981 to that moment in 1999 when Mark Benioff, you know, created Salesforce in San Francisco, that 20 years never went away. We're not selling less PCs. We're not selling less servers, less storage. We're selling way more because, you know, more of AI is happening at the edge. So client server is absolutely there. And it's so mature at this point that most customers believe, 82% of them believe, that someone else can manage it better than they can.

[00:15:19] Bigger, better, faster, cheaper than they can. And so they outsource. It just makes sense. But one thing happened in 1999. Salesforce got started direct. And so did, you know, the other Service Nows and Workdays and Marketo, NetSuite, HubSpots. You know, 250,000 companies in SaaS started direct because that's how you have to start a company. You know, no channel partner is going to sign on until you've got product fit and a sales and marketing engine that can be extended. But they stayed direct.

[00:15:47] Salesforce got into the Dow 30 and got to $40 billion in revenue pretty much 100% direct. And the problem was in client server, you ended up serving the stuff you sold. So it was kind of a hybrid VAR and MSP business. And in the early days of SaaS, we didn't really sell it. And even worse, we didn't really know the buyer. Because, you know, the head of sales or marketing, the head of operations or finance or the head of HR.

[00:16:14] I mean, these line of business buyers were not exactly the people that we called on. We called on IT. We called on security. We called on technology folks. And those are kind of in medium and mid-market size customers that we would have. Down in small business, you know, when that owner is buying the product, they're not buying Salesforce for CRM. And their version of a PSA for a flower shop, for example, has CRM built in.

[00:16:40] Again, those 1,012 categories all have somewhere between 7 and 10 leading PSAs to kind of run their industry. And they've all built kind of a crappy version of CRM built in. As well as marketing, as well as operations and billing and service tickets and things like that. So everybody kind of has. That's why there's so many SaaS companies. So there's this motion in SaaS. The winning market, which was kind of the medium, mid-market up into enterprise. The channel really never got involved in.

[00:17:08] We never figured out, to this day, really, the managed services around it. We can secure it. We can govern it. We can drive compliance. We can drive backup. And we can drive, you know, a number of things. But we really never got into the business outcomes. And this is the challenge I'm having today. And, you know, yesterday listening to the Salesforce Dreamforce keynote from Mark Benioff. And last week, I spent time with ServiceNow up in New York.

[00:17:30] And I spent a lot of time kind of inside these partner ecosystems, you know, figuring out where the multiplier effects are, figuring out where the managed services are, and figuring out how this plays out in AI. And we just published a report last week that quantified this. And, I mean, the news isn't great. I mean, the AI era, the 32.5% compounded growth and these big numbers that we're publishing, 80% of that's in enterprise.

[00:17:57] And when you get into SMB and mid-market, kind of the target of the average MSP, you know, it's not really happening at the same level or the same scale. These are customers that don't buy services, especially before the sale, consulting, advisory, design, at the same level. And what we're learning now in this version of agentic AI, it's coming through SaaS. You're not buying Anthropic directly. You're not inviting NVIDIA into the room.

[00:18:27] You're looking at the tech stack that you built over the last 20 years to run each of your departments. And agentically, you're having those systems work better together and then having those systems jump out and talk to other departmental systems. So that control plane that the battle is on now is at a line of business buyer that, again, the average MSP hasn't done a phenomenal job of working in those business outcomes.

[00:18:54] And getting into the middle of those conversations and selling services to design and architect how AI is going to look for them and what outcomes look like. So there's just a bit of nervousness now that, you know, the MSP market, which is going to grow fine in double digits, may just not hit that 30 percent level in compounding growth. It may be other system integrators, some other obviously ISVs and some other players that are focused will be able to hit.

[00:19:24] So let's dwell there a little bit on what the choke point is, right? Because if I dug into the Omnia data around this, it says where 90 percent of vendor partner programs are still what you're calling maturity three out of ten for what generative AI requires, right? Makes sense. And here we are. We're talking about MSPs moving faster. And I'm kind of wondering here, so who's the choke point? Is it the vendor program? Is it the MSP in their business model? Is it customer readiness?

[00:19:50] Like each of those answers would lead us to very different ways of addressing it. Yeah. Well, let's think about the customer journey. So this is where the report we just published. We look at, you know, last year, exactly today, last year, the newspaper headline was that MIT report 95 percent failure rate proof of concept to production in AI. And that was, you know, receiving all the buzz. They only talked to 58 people. I'm sure MIT wanted that one back.

[00:20:19] But it was the following week that Accenture came and said, no, no, our failure rate's 90 percent. So the good news is earlier this summer, we approached 70 percent. And by the end of this year, we're going to knock that number below 50. So we're in the phase now. We've moved past consumer AI, generative AI, and consumer-based AI. And now we're truly in the business growth model of what we were thinking about in the hype cycle for the last couple of years.

[00:20:44] But when we're thinking about this business cycle of driving these outcomes, most of the work is in that before-the-sale services. When you think about proof of concept, the advisory, the consulting, the design, architecture, and then moving into these factories and other things, it's all happening before the sale. Obviously, to prove it, to get it to production.

[00:21:09] Once it's in production, we can obviously start to implement, integrate, manage, secure, govern, all the things we know how to do. But most of the opportunity in 2026, 2027, early parts of 2028 are before the cycle even starts. So again, by 2031, we're talking about significant growth in managed services, obviously cybersecurity, governance, and other things that we're experts in. But that's post-sale.

[00:21:38] And we're not at a point yet that we have enough success. And I will say there's an insane amount of money now going into driving this success faster. Now, the three hyperscalers alone have already committed to a trillion and a half in infrastructure, buying NVIDIA chips and buying ahead of demand.

[00:21:59] And they're trying to convert that quicker because 82% of the broader MSP channel that we surveyed said that they're not fully ready to grow at this level. We don't have the skills. We don't have the practices built. We don't have the M&A set up. Like, we're not ready to grow at the scale that customers are demanding. And so they're spending a lot of money. Google spent $750 million. Anthropic spent $100 million. ChatGPT, OpenAI, $150 million. SAP, $100 million euros.

[00:22:29] Salesforce dropped $50 million. So all these companies are lining up. Even Dell, Michael Dell himself, moved billions from the point of sale back into these consulting moments to win factories. So all this money is coming in. It's billions of dollars in enablement to help partners become better advisors and consultants. And I don't see enough MSPs standing up and taking that money and going and jumping in before the sale, before the proof of concept, at the level that they need to.

[00:22:59] And then the second thing, the hedge, which is making me nervous, is the forward deployed engineers. So Microsoft committed $2.5 billion. AWS committed $1 billion. We have Google up that $750 and just doubled it with forward deployed engineers. So if they don't get the 82% of partners comfortable and ready to go and drive outcomes and really get in front of the customer, well, they're going to do it themselves.

[00:23:29] They're going to keep dropping in expensive resources. We're talking $500,000 a year people into the customer directly to become that 7.3rd partner in the room to get to that outcome so that they can start telling investors to calm down and that the trillion and a half they're spending on NVIDIA is going to play itself out. That's what's happening right now in kind of mid-September in this industry. And we've been covering a ton of it, both on the show, both on the news show and the live show.

[00:23:58] Every time Rich Freeman comes on and he and I are talking about another one. I'm going to take a quick break here from today's sponsors. And if you've got a question, throw it into the chat. We'll be right back after this. The MSPs getting ahead in security aren't adding more tools. They're getting the work off their plate.

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[00:25:36] So I got to talk a little bit then about both the marketplace and the shift in the models, right? So first off, tons of announcement, right? SuperOps and AWS launching an agentic AI marketplace for MSPs. Manage Engine does theirs. Pax 8 integrates into the Microsoft marketplace. Microsoft launches a whole bunch of different things around there. Kaseya announces an all-digital AI platform. Like, literally, I could do another news show to rattle all that stuff off.

[00:26:04] And then on the demand side, GTIA's state of the channel 2026 showed vendor satisfaction for the UK and Ireland at 19%, half of last year. But what I thought was most interesting was Carolyn coming out and saying out loud what a lot of people have been whispering. The per-user, per-device model about to be blown up. You mentioned the MIT study. There's fewer than a quarter of enterprises successfully scaling AI from some Gartner data, right?

[00:26:31] So it seems like every RMM, PSA, distributor, hyperscaler, they're all racing to be the marketplace layer for the MSP, right? And you've got that. We've got Kaseya, ConnectWise, Pax 8, the list, and now Microsoft and AWS directly. I kind of want to know, from your seat, is there room for more than one or two of these to become the operating layer for an MSP?

[00:26:54] Or does this end the way it always ends, with two or three consolidators owning the take rate and everyone else becoming channels into those marketplaces? Yeah, I mean, the whole story, by the way, we've been predicting this for five years because it's simple demographics. Right. So when I said that 51% of our buyers are now millennials, these are folks that have grown up with Spotify and Netflix. They love subscriptions. They love marketplaces.

[00:27:20] But 75% of them, if given the choice, would not work with a human. They would love the 28 moments before the sale to be all digital. And there's no point after 28 digital moments you're going to send a fax or an email or something to place an order. So this whole marketplace thing is more about demographics than anything else. And now the average deal, when I joined IBM 30 plus years ago, 33 years ago, you know, it was a single throat to choke. It was you couldn't get fired for buying IBM. Today's buyer is completely separate.

[00:27:50] I'm going to evaluate all seven layers of the stack and I'm going to buy the best data solution, the best security solution, the best model for AI. I'm going to get the best backup. I'm going to build a seven layer stack and then I'm going to integrate it together. So best of breed. So when I'm buying seven things and I'm managing licensing and I'm managing the renewals and things like that, this whole idea of a single bill really works. And that answers your second question. No, there's not going to be 50 marketplaces.

[00:28:21] Marketplaces work on scale. And the reason Amazon beat Walmart was it became the everything store. And two of them are the biggest companies in the world today by revenue. And there's even news this morning about Amazon opening up 1000 warehouses, hyper local to go after Walmart same day shipping. So this is the world. It's level of scale.

[00:28:47] If I go and buy my seven things and you only have five of them and then I have to work, you know, two other different systems differently and I don't have a single bill. I'm not coming back to your marketplace. I need, you know, the biggest and it has to be reverse gravity. I can't build a marketplace and call a bunch of people to sign up. It's got to be a place like if I'm selling a product today, I pretty much have to be on Amazon. There's no way around that route to market.

[00:29:14] And so the same thing, when you talk about AWS, Microsoft or Google, Google's actually second to Microsoft's third. When you look at that, we had them growing at 82% compounded over the last five years. And we nailed it almost to the decimal point. We've now taken that out for the next five years. We're starting to, you know, debate how much agentic AI tokens are going to be in that. And when is Amazon finally going to bring in hardware in on top of software?

[00:29:40] So it's very hard when you look out five years to kind of pull out that. But you start to think, what about SMB and what about mid-market? You know, the market that most MSPs serve. Where is their marketplace? Because they don't have a relationship with AWS or Microsoft or Google Azure or Google Cloud. Because the software that they run, we've been talking about SaaS. Those companies are white-labeled behind the software.

[00:30:06] And they, in most cases, don't know where the compute and storage and other stuff is happening. Nor do they need to know. And the same thing is happening now with Anthropic and OpenAI and other things. They're becoming component level. You don't know behind the scenes what your SaaS is using as a model. And you don't care as long as it drives your outcome. So the same thing is on the marketplace side is I need to make sure that I can get everything I want in terms of my outcome.

[00:30:34] And it serves me in the digital renewal and the enrichment and all the things that go around it. So, yes, marketplaces are going to continue to grow well above the industry growth rates. And there's going to be a point in time, and Microsoft has pretty much told most of its partners this, 10 years from now, Microsoft's going to look more like a utility company, kind of like your electric or your water. And it's going to be based on tokens. It's not going to be based on a subscription.

[00:31:03] And when that happens, there's no margin on tokens. Those tokens will mostly come back to Microsoft direct through the marketplace, just like you don't have a reseller for your electric bill. So it's just token-based, and you pay the monthly bill, whatever it happens to be. So this is the market that we're kind of going towards.

[00:31:23] And the more microconsumption that happens that replaces today's consumption in hyperscalers and today's SaaS models, that's the SaaSpocalypse that has been so well reported on. This whole model change of paying for usage, paying for actual outcomes at the microconsumption level is what Carolyn was pointed to in terms of our model.

[00:31:46] This $113 per month, per person or per device and things, and shoving 20 different help desks and services and remote management and patching and all that into it, that's going to change as well as everything becomes token-based. And we think about the fixed and variable models within our cost structure and how many of those things can be charged out to the customer. So we're in the middle of all that right now, and that's going to play out for the next five years.

[00:32:13] Well, which leads us almost to the last question. The piece that I need to know about that is if we're thinking about this, all of the models now are going to start changing. We're moving to token and that, but you not make money off of that. What do you think the MSP customer contract looks like? I want to say 2028, maybe 2030. What are we billing on? Is it outcomes? Is it consumption? Is it something else we haven't even named yet? Where direction do you think we're going?

[00:32:41] Yeah, in the short term, it's going to look like the new Microsoft E7 offering. It's going to be $99 a month plus. So there's going to be a variable charge. So if you want to stay up late at night and start hammering Claude on my bill, I'm going to have a pass-through for that. And hopefully I have the governance, and hopefully I can come in before you hit go on that 2 million line spreadsheet to hammer every line of it.

[00:33:10] I can tell you it's going to cost $7 to do that. But right now, the tokenomics, token maxing, and all these stories that are happening in enterprise are going to happen in SMB. And before our customer presses that magic button that costs them $7, we want to be the FinOps experts. We want to be the people protecting them because that's what we've always done. This is why managed services has such a long-term play because that never goes away.

[00:33:36] The customer needs to be protected from all these major platforms, multi-trillion dollar players, and these leaky bills that could put people out of business if they got big enough. This is the value of what we do, but we're going to have to be variable as well. So yeah, for $99, you get these 15 things.

[00:33:56] But if you want to press that button and you know you're pressing the button, the bill could be $500 for that particular seat or that particular person on a monthly basis if they are a power user. And you get to decide whether that's good for your business or not. Well, Jay, you have literally just described what the embedded services provider of the future looks like right there. So that is exactly the perfect place to end. If people are interested in continuing the conversation, finding you and your work, what's the best way to do that?

[00:34:23] Yeah, I mean, on LinkedIn, I respond to everything that comes in. Send me an email, get to me on Facebook. I mean, pretty much anywhere. I don't go to bed with any open emails or any open comments. So I'll see it before I go to bed. And he is true to his word on that. He's always good at responding. And Jay, always great fun to have you on. Really appreciate you joining me today. All right. Thank you so much. And I want to thank our sponsors today. Four sponsors that help us make this possible.

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