The Hidden Industry That Controls The Tech Your Company Uses

Welcome humans to the neuron AI explained I'm Corey here with the good friend and neuron writer Grant Harvey. How are you man doing good Corey as always Today we are stepping outside the core AI research bubble And into the real world market where AI actually gets sold implemented and supported and we are joined by Victoria Durgan and Katie Bavoso from channel insider our sister publication the coverage channel sales and SPs and the ecosystem most businesses rely on Often without the public ever really realizing it exists. I'm I'm in the ladder camp. So I'm excited to chat Will we'll define what channel even is why it exists and how AI is changing who wins and who is running behind So before we get started if you haven't yet take just a minute to subscribe to the channel We really appreciate it helps us continue bringing you all the movers and shakers inside the AI space the people who are Actually building the tools, but now let's get down to business Victoria Katie. Welcome to the neuron Thank you so much for having us. Yeah, it's a long time listener first time caller. So I love it. I love it Well, we're so glad to have you here, you know kind of just to recap this this whole thing kind of came together because we were in a company leadership retreat and I watched Victoria give a very passionate explanation as to what channel is and and I remembered thinking People should be you know buying their AI this way and did doing other things there are a variety of things where this could be really beneficial And I thought neuron readers really ought to know this exists because I figured if I don't surely someone else doesn't either so While we can't do the the four-hour long late-night explanation I'd love if you could kind of explain channel Yeah, no thanks Corey and you're welcome in advance to all listeners and and readers who don't have to endure the four hours of I blocked out and delivered at that moment I'm actually gonna flip it to Katie. I think to start she's a great analogy that I think is a great starting point that I use when I'm explaining it So I'm gonna let her do it and in her own words since she's here. I love it. Sure. This is a test. All right Thank you so much Victoria Yeah, I mean first of all Corey don't be one of those people who suddenly get self-conscious about knowing not knowing what the channel is because there's also so many different words For it the IT channel is just a distribution channel like any other channel that gets product to customer to the consumer across the world We're just the only ones that call ourselves the channel and many people inside the space actually don't even call it the channel So we can have conversations with people that we literally are in the same industry as and they're not referring to it as the channel So if you if you've already if I've already lost you let me try to bring you back by using that simple Sort of comparison that Victoria was talking about the way that I learned it and the way that it helps for me to explain it is when you think about milk So think about milk as you think about actual IT products technology products computer software Those products are not necessarily direct to consumer at scale So when I want to go get milk where do I go? I had to the grocery store I had to a Haniford a shop right Uh Publix I'm really trying to get all the regions of the country here with your grocery stores Um, I don't go yeah exactly. I don't go to hood I don't go to stony field to the actual sites in which they produce these milks and actually milk the cows Uh, I go to a grocery store in order to purchase because if Hood and stony field and I really hope I could say these names because this is gonna be a lot of bleeping if I can't But if all of these particular milk distributors wanted to get milk directly to me and I had to go to them It would be a mess a logistical mess for them to be able to do that So they rely on will be used to have a distribution for milk. It was called the milkman, right? Yes, yes Grant like the milkman was maybe the AI of his time, but we can get into that at a different point Uh, so So in this case and Grant throwing the milkman's strategy and there's also gonna give me a few other comparisons But to get back to my original point Within the channel you can consider MSPs and resellers managed service and solution providers and resellers As the grocery store situation here. So we're not going as consumers directly to HPE We're not going to Dell. We're not going directly to these vendors that are providing the software and the hardware at scale for our companies We're going to the smaller shops who are able to provision us From everything from those computers that all of us need and when I say us I mean the employee base to the software and cybersecurity that is built onto them And the reason for that is because when we go to these MSPs and resellers and other solution providers They're able to work with district They're able to work with the vendors at scale where it's not just one vendor they're working with they're working with a ton of them That's why when you get a laptop that's maybe a Dell laptop has an Intel Core processor on it already Thanks to another channel relationship And you get it with maybe Bitdefender built on to it already which is a cybersecurity software These are all different pieces of technology that are built into one Computer and they're able to distribute them to your workforce of anywhere from 25 to 200 people even more So that is in a nutshell what the channel is it's a method of getting the technology to the consumer Through the channel which in this case would be resellers MSPs MSPs distributors I can name a whole bunch of them and I will lose you very quickly So I will make sure we we kind of address these as we go But that's what it is it's a distribution method to get to the consumer in the workforce Okay, I'm gonna ask a clarifying question just wait for understand this so there is no milk involved grant I'm sorry. Oh, okay, that's fine. That was just a matter of knowledge now. I've yeah Who is the almond milk in this example What is who is the alternate milks coming to play no Why why don't most Small businesses buy technology directly from hyper-skillers And I guess on top of that are you saying that it's a way for the Like IT package providers to sell their software directly through the Through the Dell computer like I that's where I'm trying to I do realize that I put in a strategic relationship compared to a customer relationship in there as well So Victoria, I'm gonna let you come in on this one because I love the question of why can't we just go to miss out? And yeah, why can't we just ask for computer? Yeah, Victoria, please Yeah, so Grant I think to answer your question. I'll actually Will flip the perspective here and I'll act as the vendor in the situation and I know we're on the neuron So maybe we'll take the AI example here too if I'm You know google cloud or anthropic or you know insert. Yeah, name that you're familiar with here um I want the millions of SMBs in the US and around the world to use my technology I don't want to service it every time it breaks Okay, right right and I don't want my direct selling teams that can go sell the million dollar deals at the enterprise level to comparatively speaking spend their time on much smaller deals And so when I'm a vendor because I mean we're talking millions of businesses that then employ millions of people right like we're talking at at wide scale here so I want a resale channel To really go and do like 90% of the work for me Wow, so then on the flip side of that right if I'm the SMB involved Let's say I'm a law firm and I've got 20 employees. I've got a bunch of lawyers and I've got some legal assistance and things of the nature I probably don't want to hire a five-person IT team Yeah, no or we're just don't want to take that head count on so My options then or I don't have IT support which in an increasingly digital world is is really no longer an option or I go find an MSP or Re-sailer and I say okay, I pay one contract And you do it for me So you're not my employee. I don't have to pay you health insurance. I don't have to put a retirement account in your name But I do get The tech I need to Katie's point the physical hardware the servers the storage etc and I get somebody who can say And also you need xyz security and you need xyz backup and you probably also need to Have somebody who understands technology look at you and go I understand when you started in the business 20 years ago You did it this way, but right here's now a way to automate that right and that's where the AI conversation has come in of late so it's I would say a mutually beneficial sales relationship ultimately end of the day and then for the the what we consider an end user business that law firm and the example It's also a way to stay relevant and stay digital without kind of taking on the Increasingly expensive tech talent that many SMBs can't afford Wow So how would then a you know bringing the AI into it how would then an AI company or an AI purchaser Use the channel in this way like well, let's let's maybe like spell that out Yeah, no, that's that's a great question and Katie feel free to jump in whenever you'd like but I would say In some ways in that exact way right so when we're talking about specific solutions like let's say a Microsoft co-pilot or a people Gemini that's embedded in workspace already those companies already have these motions, right? And with co-pilot in particular, that's kind of the easiest example because Microsoft has a massive indirect channel worldwide for 365 as a software suite. So now that expansion is kind of a land and expand on, if your customers are already using M365, we want you to go have the conversation and add the co-pilot licenses. And then we want you to also be able to enable them to use the co-pilot so that they don't, to be really blunt about it, get mad that they're paying more now. - Right, and then it's not being used, which is kind of an issue, yeah. - Exactly, exactly. So that kind of wrap around, like don't just sell it, get people to use it. Conversation is where a lot of AI companies, I think they're starting to unlock the additional value when it comes to the channel. But frankly, with the way AI is growing, and I don't need to explain this to your audience, which is kind of nice. There's so many startups doing so many, you know, you could, we could probably talk about 100 products a day and still not cover them all. So they don't all have channel programs, necessarily, right? There's also not to over complicate the conversation of burgeoning industry that is AI-enabled products for the MSPs themselves. - Oh. - Partner businesses are also businesses that need to run in the same way that they're serving businesses that need to run. So there are plenty of companies that just make products for the MSP to use. - Targeting the MSP itself. - Right, right. - You know, automated help desk, ticketing resolution, like all of these things that you would think of, you know, if I'm hiring you as my IT, that's what your kind of business is built on. They're also in the AI game now. So you can also, like we could really expand this out and be like 10 layers deep in companies that are adding AI on companies that are AI native, who they're selling to and why they're selling to them, but at the end of the day, it's kind of this. And I know you guys have talked about this. Creating AI is great, but getting people to use it. - It's tricky. - Business setting is a lot trickier and getting them to do it securely and, you know, with compliance in mind and things like that. - And with the one you want them to use. - Yeah. - Correct. - Yeah. - And the one they're, you know, approved to - This was possibly an exact-- - Well yeah, 'cause go say it. That's a real thing. - Yeah. - Oh, go ahead. - Sorry, sorry, not to interrupt. I just, I'm just really chomping out the bed. I'm really excited. But to give kind of an example to back up what Victoria is talking about, there also is kind of a differentiator where you've got businesses that are selling or reselling AI tools themselves and then ones that are building onto those AI tools, but their own services to increase that value. So for example, I was just speaking with the CEO of Spyglass MTG yesterday. We have a great article on our website right now by Jordan Smith, if you want to go to channelincedeter.com and check that out about their brand new AI navigator. So this is a great example of how to add value onto an existing product. So Spyglass is a Microsoft exclusive partner, meaning that that is only what they deal in is Microsoft products. Microsoft is a great example of showing how AI can be built into a suite and then distributed at scale at nauseam, honestly, because anybody that is on the suite for Microsoft similar to how Gemini is on Google's suite. You've got the power for it. You might not know, and the worst thing that you could do is a business is being paying, be paying for all these tools that are built into a software suite and then have no idea that they're at your disposal or how to use them. So what Spyglass has done is that they've actually built an AI navigator. So another LLM, I hesitate to use the word chatbop but think of it like that into their system when they offer Microsoft, the suite of Microsoft, you're able to go in and chat with the system to be like, how can I use co-pilot for these use cases? And they've actually already created prompts that are pre-made that you can select from in order to talk to the system to learn how you as the business can use co-pilot. This saves so much time and it also really extends the value of that provider who is not just managing these tools and not just doing break fix, which is, that's a term now that you cannot just do going in and fixing things and patching things. It has to be so much more in order to get ahead in the market because as Victoria said, it's such a crowded space. You have to do so much more, which we'll be getting into some examples later on. But that was a great example in my opinion of showing how maybe they're not offering an AI tool that they came up with, but they are offering their own AI tool to be able to be built into the system as an accelerator, not a product that is standalone. So that's an example of one managed service provider that is able to kind of build onto a great tool that is already coming with the system. There's some other ones, including Thrive, which is based in Massachusetts, where I am, Victoria and I, we love talking to them because they're so jazzed about how their AI services are being built, where they're literally trying to help their customers understand the use cases that they can use AI for, select the correct AI LLM for them to use, the correct model for them to use, I should say, and then how do we also use our MSSP services manage, we love our, we love to talk in letters in the chat. - We let you define these. - Yeah, yeah. You said manage service provider, right? - Yeah, manage security service provider. How do we build on those security services to then lock down what tools that you're using and be able to monitor this and learn from it and gather data? So you can see it's kind of a compounding of services that get piled onto each other. It's like a really great layer cake or lasagna, like not to sound like Donkey from Shrek, but like everybody loves layers. We got layers. - Well, they do make the world go round. - That's right. - This reminds me of something that we're seeing in the AI space as well, where we're seeing people who are kind of, excuse me, companies that are sort of cornerstones of their specific niche of industry. Like maybe it's in Adobe, for example, I use them quite often, taken on that AI responsibility in their space and implemented in ways that are both like palatable and make a lot of sense for users. And to me, this makes a lot of sense because they're the companies that already have all of these subscribers. You know, like it's essentially the same thing Microsoft and Google are trying to do because they already have all of these people. But I assume that's happening in every industry. Does some level or should be by now, if it's not? - Yeah, and I think, Corey, to your point too, you know, from our perspective in the channel, right? There are MSPs and resellers who have kind of verticalized to themselves to rightly to go to my example on the law firm earlier. Some MSPs just specialize in supporting law firms and they don't really take on other clients. The same is true of healthcare, it's true of retail, it's true banking and financial services. - It makes sense. - And so to your point in that perspective, right? If I can be the strategic advisor that goes to my law firm owners and says, "Hey, here's how you can use AI. Here's what you can use." And here's how I can ensure that you're not breaking compliance so that you can remain certified to practice. Here's how you're not using proprietary data, secure data to train those tools, right? And I can promise that and you're probably going to believe me when I promise you because you've worked with me for 20 years. - Yeah. - And so me saying that to you is a lot different than a kind of nameless faceless AI startup saying it and they might be just as true and correct in saying that, right? But at the end of the day, a lot of this comes down to relationships and the channel is basically one big relationship and you trust people that you like and you trust people who have proven themselves to you over time, which is also why I think from a business standpoint, the bigger names, like the Microsofts and the Googles, do you have a bit of a leg up over some of the new cores because if I'm a business owner, not a technical expert and I'm going, well, I've bought Microsoft for 20 years. So-- - Yeah. And when you just on nearly all of the computers-- (laughing) - Or the classic line was, you know, no one ever got fired for buying IBM, right? Like, "Correct." - I wanted to-- - So it's like if it's tried and true, it's like, it's not like you're jeopardizing your-- Well, let's stick with the legal example for a second. So imagine you're, are either of you familiar with the AI startup Harvey? That's a legal, like basically like a lawyer tool. - I think a little bit. Yeah. - We'll just imagine you are-- - That's the one that makes you a lawyer, like gives you like a guy that comes in and he's like, "I'm your lawyer now as an AI bot." I don't think it is, I'm just kidding. - No, no, I might be-- - Go on, where's one of you? - It's an AI tool for lawyers, is my understanding. I've never used it. Thankfully, I've never had any of it. But imagine you're a tool like Harvey, and no relation, by the way. And you're trying to buy, like sell to those companies that you just mentioned who do have the relationship with the law firms. How would you be able to use the channel in order to do that? - Great question. - So there's a few ways I'll let Katie jump into, but what I will say is in order to get into the channel, you have to get the channel to like you a little bit, right? And what I mean by that is not, you know, in the kind of ubiquitous sense. But usually companies, tech companies who operate within the channel have kind of program addict structures in place by which MSPs do something called deal registration. So you would go to said company and say, hey, I have this law firm and they want to buy Harvey in this example If I do that on their behalf can you promise me that you're not actually just gonna cut me out of the deal at the last second I as an MSP Get my margin on the resell US Harvey get your percentage of profit because it's your products ultimately applying and then I as an MSP Handle the provisioning usually also any integration work that needs to be done in the ecosystem of other products that the owner the client has And I will handle maintenance and service opportunities Harvey do you like this if so let's draw the contract and Then Harvey would say great now for smaller startups that can be kind of a one-to-one Forms situation a little more rib eyes in crystal. Yeah, yeah, yeah, but when you will just start scaling up the chain Right, and you're on the bigger names. You're not doing that on one-to-one basis ever Yeah, is that's insane so you'll have more of a a wholesale program in place where you either kind of bring partners in and approve them So that's when you get into the kind of authorized partner Label that you'll see many peace carry for things like the Microsoft the Google the AWS's etc You basically go through an approval process and then company says you can legally resell my products wrap around your services and those agreements are in place Nice In the car example, I don't know specifically what they do if they do it, but that's kind of the Like the margin structure that goes into things like this and then you would get kind of nuanced from there on when you would escalate like a service ticket if something goes wrong What the MSP is responsible and liable for what Harvey in this case is responsible and liable for right if there's a breach If there's an extended outage like you very quickly get into these kind of like existential questions on whose responsible when Insert exploitive here hits the fan, but Well, at core that's kind of how the the channel works so to speak Yeah, it makes sense and there definitely has to be reason to be able to build a channel around a product If it's super super specialized that's going to be a bit of an issue If it's super specialized in a vertical, that's one thing is we're using law offices for example here And I just wanted to add verticalization is something that we're seeing in to 2026 be so important so as Victoria was saying you're going to see MSPs and other solution providers really continue to drill down into one specific area maybe a few Some of them will even get almost sub verticalized where they're not just getting into healthcare They're specifically getting into nursing homes That has X number of beds We're are on this very specific system With with like a healthcare provider so it's verticalization is going to be so important in 2026 because it's how people are differentiating and Defectory is point offering something like Harvey and not to not to I don't know anything about Harvey as far as you know Not to give them a shine that they don't deserve But if that is something that they realize they can offer at scale to Law offices then that is something that I can absolutely see Become a differentiator for an MSP and they go oh we want to be a part of that We since we are very law firm specific we can see this as being an offering Let's work something out. That's why you're seeing a lot of ISVs now create their own channel programs And for those who again letters Independent software An independent software vendor a lot of them are creating their own Channel programs to be able to connect with other MSPs ISV is sort of this I would argue to say newer Name in the channel as far as the MSPs the bars go those are old hat But ISVs have kind of come in as AI has really ramped up because they offer software Usually SaaS products that are built on top of a hyperscaler AWS is very big on this because AWS is one of the first ones to market with this And they have the marketplace where a lot of these ISVs can go and put their software their offerings in and then people can go and buy from it So it's really easy to do so a lot of ones that I speak to are you know hyper verticalized or they Really get into your CRM or they really get into your system in a very specialized way to make things easier on you with these big Very AI workload intensive AI intensive workloads, but they're built on top of AWS So they basically say we built a thing Using your engine Text deck workflow you see all of these different nodes that are all different tools that it's running because it's gonna run through here It's gonna run through Kong and then it's gonna go over here and it's gonna run through this it's gonna run through that and That's those companies all over AWS that are yes, yeah, in their marketplace too. It's a bunch There's still startups right now. This is this is like and I'm sure you're gonna. It's only see more this year same I agree That's I mean actually I think the the AWS marketplace examples a really great example to of how AI is changing the channel a little bit And maybe changing is too strong of a word, but you know in that marketplace example Corey You as an end customer right actually much easier than ever before could go by it direct. Yeah That's good point That's the example actually grant to your earlier question like why not just do that in some ways that's gotten easier over the past five years and so Partners and now this is where we get complicated right because AWS doesn't want to lose its partner network because AWS can't just sell It's core cloud on the marketplace in the same way because that's a much more technical deployment integration process Right is so AWS has built marketplace to also support MSP offerings So in the way that you can go into the marketplace and buy code from an ISV to kind of keep it broad Some MSPs that we speak to also offer their services through the marketplace so their customer goes into AWS marketplace to provision Security services the MSP gets a cut AWS gets a cut whatever ISV is involved in the middle there and making the product to get a cut Everybody kind of wins Yeah, wow I tried to relate this When we talk about marketplaces we also see Marketplaces cloud marketplaces like Paxate marketplaces that are out there that Don't want to call themselves distributors and are also competing with distributors at the same time It can get a little hairy so I think this is a part two But I say this because UC MSPs is needing to be they want to make sure that they're showing up as that expert In whatever technology and field that they are focused on which is why we got so into the vertical conversation So that is where they're trying to continue to differentiate themselves by saying I know you could technically go do this With one of these marketplaces, but here's why you should stick with having somebody else Be a part of your team in a third party sense because we know what we're doing You can concentrate on your business and we'll take care of the IT and everything involved in that I was trying to relate this back to what I know on my domain here, which is the the like cloud service providers for Let's say you want to run an AI model over the cloud There are a lot of what they're called like neo clouds or Like I guess services that sort of run on top of an AWS or Microsoft Azure or something like that at Somebody who's buying space on top of AWS and That's also have a channel program What about are you familiar with like fireworks or base 10 or any of these companies that are like selling the like tokens like directly basically and and are they part of the channel or I'm trying to figure out how this works with what they do and differentiate it. Yeah, that's a good question Great. I I would have to check specific companies. So I don't want to speak to you know specific organizations. I think What I would say is you might be able to find specific avenues of Tech and I think a eyes a good example of this where businesses don't necessarily need an MSP in the middle And so there isn't necessarily a channel like one to one connection. Yeah in those cases But if you are a company that's heavily invested in the AWS ecosystem just to stick with one example. Yeah Odds are you do have an MSP who's handling at least part of your environment So they might be responsible for your cloud compute. They might have built Your environment and your storage capacity and so you might be kind of piecemealing some things on the side or working with other Businesses and startups on things but like your core operations that all of that kind of has to integrate into at some point is probably a channel relationship Right, I mean, speaking of a verse cell, verse L would be another one right when in this instance where verse L basically is like handles all of the the AWS stuff and and then there like uh, yeah, they handle your AWS they handle your Uh, excuse me like your super base they handle your read us they handle a variety of other little tools where When you go and you know say you're five coding in v zero and you need a database. It's like hey we got you bam done Right, it's all in this one ecosystem. It's tied together and you're just doing it through them which is really quick easy and painless and Uh large I don't know if that's directly the same thing we're talking about, but it certainly feels like we're in the real related. This is where AI has been like making this into such a rock spider, right? This is where AI has come in the last few years who created these businesses or or led to the creation of these businesses that are also trying to get a foothold in the market. So they have to go to some of the bigger dogs or they have to form a channel program because then if you're without a network, who are you selling to? So that is that I mean to the point of where we're kind of going, okay, you know, like Charlie Day in front of the wall trying to like connect all the dots here. This is this is that because that is what AI has done to this space. So the acceleration, the confusion, the questioning that is all directed back to what AI and ultimately like what open AI a few years back when they introduced such UBT for the first time and has kind of like accelerated all of this, what that has done to the channel. No, there's a good question. So go ahead. Are there pathways through the channel where you can buy open AI? I mean, or well, they're tied to Microsoft as well. And I've wondered like, you know, obviously Microsoft's going to have to cope pilot, but are things from their partners generally available or is it often a here's a specific offering that's available? I was just curious kind of how that works. Do you get the whole catalog or? I mean, open AI is is actively forming their channel program or trying to build it out right now, which some of the, you know, so if you're a channel, if that wants to even work for four weeks and make more money than you ever have, I suggest going over and trying to apply for those roles that are opening up over there, but Victoria, I'll pass it over to you in a more literal sense of what we're seeing and how you can procure that technology. Yeah, I would say anything really at the broadest level, any product solution that has kind of an enterprise license component is probably fair game for a channel partner to be reselling in some capacity. That is typically because again, MSPs and channel relationships are a beat of be venture, right? So when we talk consumers, we're talking employees and businesses. So there need to be kind of a business focus tooling here, but to Katie's point, anthropic has announced and opened quite a few partnership facing roles. So those VP titles are joining some of the bigger AI platforms. And when they hire for partner roles to, you know, really blow everybody's minds and confuse everybody some more because that's what channel. Those partnerships are also like integration agreements still like open AI and Microsoft. Well, that's a bad example because of the money involved, but like, also proper problem. I was like, I don't know, profit and things like that. Announce you can use us and X tool together. Right. Well, yeah, Microsoft and drop it because how to deal like that, right? Right. So those agreements and relationships and mutual outcomes are also indirect channel partnerships. Gotcha. They are all housed within the same system, right? So when Microsoft talks about its ecosystem of partnerships, we're talking the open AI's and the anthropics and the all the security tools that they integrate with, et cetera. And you're talking indirect resellers and you're talking cloud providers. And everything available in Azure. I assume which is essentially their AWA is a WS. Wow. Different flavor. Microsoft WS. I'm sure they'd love that. Yeah. I love this whole conversation. No, to your kind of question, you can likely procure chat, GPT specifically from an MSP, but to the kind of earlier conversations we've had, I think many of those partners are being heavily influenced by the big three hyper scalers. Yeah. Simmers in house reported quite extensively, again, to plug channel insider on how Microsoft is doing that through its partner network. There's a whole slew of rebates and incentives and structured deals that more appealing to an MSP if you're getting your customers on a co-pilot. Yeah. Because of course they would. Correct. Yeah. I mean, the channel is, I always say, as much if not more a business conversation as it is a tech conversation. So yes, it's important to MSPs that their customers are using good technology and doing so securely, efficiently, et cetera. But I'm also as an MSP concerned about whether my vendor relationships are happy because where my margin is. Well, I mean, open AI and a dropback have both made it very clear that this year is the year that they're competing on enterprise. I think last year they were also competing on coding. I mean, coding is part of enterprise, but I think this year open AI is like, we're here to play when it comes to enterprise. Yeah. So what in your mind does that change for everybody else in the ecosystem if anything? I would also add to that real quick that, you know, that goes far beyond API usage as well. You know, I think in the AI space, there's a tendency to refer to enterprise as API referred to API use as like the extent of enterprise. But I mean, there's also the, you know, there's that element as well as the element of what do we want to provide to our 2000 employees, I think. And right. Sorry. I just wanted to tack that on there before we got an answer. Yeah. No, I that's, I mean, that's a great point. I think grant to your question. The answer is yet to be determined. Fair. In the channel conversation, specifically, I would say there are still many players already in that I find it, I will find it very interesting. I'll say this to watch how an open AI and then, Thropic, et cetera, kind of enter enterprise now for a lot of the whole term right now. That's not to say companies don't switch tools. They do. Like all means, right? So we could absolutely see a world where everybody goes and Thropic's a lot better. And we're going to switch. But the odds are enterprises already have some form of AI that they're experimenting with. If nothing else, right. And on in the enterprise level, the channel conversation is also, you know, I have probably 50 tools in my tech stack already. Yeah. I'm already overwhelmed with all the legacy burden of tech I have. Right. I put something new in. It has to integrate with everything I'm already using because from a data perspective, and the Corey's point from an API perspective, if I bring something in and it doesn't play with everything else, then I can't use it. Right. I mean, the AI is data first and foremost. If all my data over here, right. I need a partner to come in and say, okay, your CRM and all of your, you know, CSM platforms and your help desk that has all your ticketing information when things go wrong. Like all of those are going to have to integrate with whatever you bring in. And I think increasingly, enterprise leaders who are hearing from the board that they need AI at all costs, but who are hearing from their CIOs and security teams that AI at all costs is breaking things. Uh-huh. Not want to then go, all right, let's move everything over to something else. Yeah, right. Let's take another six months to deploy this in the way that everybody's comfortable with. Right. So that by July, when inevitably, the next new thing has arrived because there will always be a next new thing. Yeah. What are we going to do? Move it again. Like it, I think you're going to be catching your competitors. That's what you're going to be doing. Right. And so I do think 2026 might be the year that we, at least from a channel conversation, start to see some camps emerge of like, I'm a partner of XYZ, right? Microsoft, AWS and Theroppet, whoever it is, you want to be my client and you want to buy AI from me. I'm using these guys because I know them. I can call them when I have questions and I understand the product. And if you want something else, Mr. customer, please don't get it. You're on you. You're going to have to go figure that out then because I'm not 50 different ecosystems because 50 different people want 50 different versions of an all right. Something that could be problematic there is that one of the things we're really seeing in the AI space is that what works best for one department doesn't for another. Like, you know, what software engineers are using versus what a writer's using versus what a finance team is using. Or a corporation steam. It's a really big deal. And I think it points to that drive for like Microsoft's added a bunch of flexibility into co-pilot. Like now you can use open AI models, you can use Microsoft models, you can use anthropic models. Google even all of those right there in one tool at one price. I can see the attraction to that for a company where you have that flexibility among your teams to be able to take. You know, the approach that works for you and the truth is we don't know what those are yet. It might be that tomorrow what's right for software engineering is different. What's right for writing might be different and and it may just continually flip forever. I don't know. I don't know how it's going to go. I know it's right now. It's with the the velocity of a top fuel dragster and Grant and I regularly feel like we're the umbrella on the back. I can hold it up. It's taking a face full of this AI air. Yeah. I know that that's like I think to the point of where we're also seeing the the partners come into the conversation. And like you said, Victoria, splitting up into potential camps, like going into who they're going to side with and focus on that selling. Training is a big part of the offerings that that managed service providers have in their portfolio. And if they can show that they can not only it's not a one and done conversation training is an ongoing thing. so if they can show that they can have success training. And when I say training, I should be specific for your audience and saying, training the users, not training the models in this case. So you're going to want to have managed service providers who say we are accredited and we are licensed in being able to train on the Anthropic model or to train on chat GPT for your company, especially because you're going to have a lot more companies who are going to lock down what LLM they can be using. So even if your teams are using different different brands, essentially AI brands across the board, I don't see that as being something that's going to continue. Cory, then maybe that's me being pessimistic, but only because from a top-down business conversation, nobody has time to apply compliance and governance of all different forms to several different LLMs across the board. So if somebody comes in and says, not only are we going to lock down the compliance and the governance for you, we're also going to continuously train your employees on how to use these programs as new models come out or as new generations of those models come out every month or every quarter, whatever we're going to see. And that's why you should go with us. And that's going to definitely be a selling point for why they are going to continue with one of one of the many at this point and the growing AI providers. So I definitely see as far as that goes, you're going to see a lot more people have to get again, really granular with what they're offering with that training and who they pick because nobody has time to go through all the ones. So there will be a little bit of infighting amongst the AI brands. So all of this makes me wonder, and I'd love to get both of your thoughts on this. How does the concept of people like creating their own software and bringing their own software to work change this equation? A little background, you know, a lot of people have been using cloud code as not just a coding agent, but a general purpose agent because it can manipulate files on your computer. There's this new one that's even more extreme than that called cloud bot that basically has access to your entire computer. Very scary. Security people are absolutely going to go like crawling a hole and give up on one. Yeah. But then now cloud andthropic just released a new version called cloud code work that makes it even easier for you to create files even if you're a non-engineer. You're not familiar with the terminal. So what are you guys? What are your both of your thoughts on that? Like how, how is that going to impact the channel and how we've selling software? I mean, to give a few examples of what I heard you can do with that particular platform, I haven't tried it yet myself. But in this context, I've heard people being able to spin up a website super fast. And that totally eliminates their needs for website hosting platforms like Wix that require them to then pay for every month. And they're like, why would I do that when I could just make my own? And it's worked out pretty well for them. So I consider in the channel, there's there's a couple of ways that you can pay for for certain things, whether it be pay as you go or pay for what you use. I can imagine that's something like that really disrupts what they're paying for on a monthly basis. If they discover there's an aspect of it that they can just make themselves. So I imagine that this could really disrupt the way that software companies are more specifically how how we provide different software or SAS tools. I think SAS tools in general could be in trouble in my opinion. And a lot of what the channel sells are SAS applications or are ISVs who provide SAS applications. That's some of my two cents. But I do think that we are kind of on the cusp of just learning about this now. So I don't want to create an economic panic for anybody in the audience. I'm just one girl. So that's that's my opinion. But Victoria, I'd love to hear your thoughts on that. I think Grant, maybe without meaning to you've kind of hit like one of the existential questions of the channel right now, which I kind of find fascinating because to your point, you know, end user customers, right, the kind of people and employees within businesses who are going, oh, I, I watched the neuron and they told me I can go use cloud code for XYZ. And so I'm playing around with it. Now I've created these things there. I think much more inclined now than ever before to go and rethink their entire approach to tech, right? Like I think this the last 18 months to two years, maybe let's just put it in context there has really been this kind of like consumer driven culture around technology because chat GPT went consumer before it went business, right? We'll talk a little bit later about how this kind of relates to other shifts in technology over the years and cloud and security and things. People use these tools outside of work and within work, whether they're IT teams are telling them to or not, right? So I think what that creates is this culture, then, from a leadership standpoint of I've paid for this for 10 years for you to do it for me on a monthly basis. Do I still need you? And MSPs need to figure out what the answer to that question is going to be because I, I would argue that they are still needed because for all the shadow AI risks that we can talk about, yeah, for all of the kind of wrap around ongoing support things you do still need somebody. And I mean, we could also talk about the efficacy of, you know, 15 different employees doing 15 different things and not tearing those outcomes and not kind of solidifying what a business does holistically. But if MSPs can't sit in a business review meeting and articulate their value in a new way, then I do think actually some of them are going to, to face some issues if for no reason other than business leaders and employees feel a lot more comfortable with this tech than they have, I think with previous kind of, I don't understand IT. So I'll just do what they tell me to do. Like I don't, I find it fundamentally different approach now because people do feel empowered to go build their own things to go use these products. And frankly, you have CEOs in the tech space telling them to, right? Like it's not all employees find these things on their own. They're reading the news. They're watching, you know, some of the biggest names in the business go, I did this in an hour and it used to take me, you know, four years in an advanced degree. Like isn't that great? If you're listening to the rich man tell you that you're probably doing it too. So I think AI is as fueled much different conversations. And I think the next step of that process now is like whether things tangibly start working. Yes. Right. I think it really applies, especially to solopreneurs and really small businesses. If you make your money, you know, if you're a SaaS tool focusing on companies with less than 20 people or something, especially, I think, I think that area that's already cash strapped that has only so much budget, they're looking to do what they can't. They don't want most of the features in what Bob lost CRM anyway. For the most part, what they want is something that'll keep track of X and to add a few features that are specific to them. And you know, if I'm coding on locks, a lot of that to normal people like, I can't stress enough that Grant and I have built software. And yeah. And and our back. Not anywhere near the level, not anywhere near the level that I am capable of creating. Oh, yeah, I had a my space page too. I know how to code. Yeah. That's right. No, totally get it. Views for the win. Yeah. Oh, my gosh, to Victoria's point actually about the consumer driven rise of AI tools that I think is kind of a new frontier for the channel to be facing because as I've mentioned before, channel partners are coming to their customers as that trusted advisor. You hear those those words a lot trusted advisor is the title that they want to be for customers because it's the what differentiates them from just a regular break, fix shop or a help desk. So they're able to walk them through what was really startling for a lot of them is that a lot of the customers and their their businesses in general with their employees came to them saying like, we've tried this new tool before they could even bring it up. Like the customers know a lot more about AI than they did during the last sort of evolution in the channel involving cloud. So there was a lot of confusion around cloud or hybrid cloud or even multi cloud. So this is really kind of strange element where we see the channel providers needing to almost catch up a little bit and that brings it back to why they're focusing so much on verticalization, why they're focusing so much on niche application uses and being the trusted advisor for something very specific because you can't go broad in this. Like there's too many tools and there's too many use cases and at the same time, everybody wants more and more and more. So you have to protect yourself. That's been an interesting thing to watch from our viewpoint between Victoria and I and the rest of the channel insider team is to see people go people as in partners go, okay, why do my customers seem to have more questions than I have answers about AI because they've been using it a little too much outside of the guardrails. So there definitely is kind of a walking it back sort of focus right now. Yeah, and it's tough for your customers to come to you and talk to you about something where they understand it and you don't have an answer. Yeah, we're bad luck. I would posit. Think that they know. Yeah. They understand because that's fair. And they thought to say there are absolutely leaders in SMB and in all thumbs of business who are very kind of tech enthusiastic and are probably playing around and have probably found use cases and things before their partners did absolutely. Yeah. I think What's much more common is that many business leaders are reading headlines, feeling very behind and feeling like they need to do whatever to catch up. And so they enter a business meeting with their trusted advisor, MSP, and going, "Well, I heard so and so down the street say that they're using XYZ for all these things. And if you as a partner, either A, generally haven't understood AI yet, or you from maybe a security and a compliance mindset go, "Right, okay, they shouldn't be doing that though." Right? I don't care. They think that they're doing better now financially than we are. That scares me as a business owner. Great, MSP then has to be the bad guy. That's like, "Right, but if they get hacked, they're screwed. You don't want to be them." Right? But then that goes back to the security conversations that are always very like, if something happens. And AI is going tangible short-term. I use the thing, I create the thing. That's much more appealing to a business owner than the well, on the off chance that something occurs to you three years down the line, you'll be grateful that we stopped you now. And that's like the fundamental business question for most SMBs is, "I don't know if I have three years." That's a good call. You're right. I'm getting disrupted right now. I don't want to worry about cyber security, right? Right. And then in Sikorri's point, when we hopped on here, like security professionals are sticking their heads in the stands and going, "Oh my god, we still don't listen," right? Because now it's just the next evolution of the conversation of nobody's taking the security seriously. And if you do, you're left in the dust is the other thing. You know, the truth is, if you're willing to worry a little less about security, there are some serious, serious advantages you can unlock right now. So I'm just going to send that in a town hall. He was like, "Yeah, I was really worried that I was never going to install this thing on my computer and give it full access, and I lasted two hours." And then he did it because the trade-off is just so it's working out. It's just too high. Yeah, like there's this stuff I run that I should not run, but you know, it just unlocks things that are working. Sorry to Omar and our IT team that's listening to this right now. Sorry Omar. I love you man. Uh-uh, yeah. Now run my work computer. I promise. There you go. Yeah, that's good to say. Oh, well from there, I have another question. So does the channel kind of protect small businesses from that hype or does it amplify it? I think it could be a little bit of both. In my opinion from what I've seen when done right, because we have to recognize that there are still MSPs out there that are probably not doing some things the correct way. Whether that be because of staffing, whether that be because of talent, or whether that be because of the pressure to keep up. That does happen. In every industry, you have somebody that would rather be first than correct. I think the ones who do it well, and I have a lot of friends out there in the channel that I really, really respect, because they run their businesses the right way, because that's how they know they're going to get more clients through word of mouth. So the reason I say all this and temper myself is to say in my personal opinion, I think that it protects small businesses from the hype, because especially in a world where cyber, the cyber attacks are not targeting large businesses anymore. It's it is open season schools, hospitals, children's hospitals. It is, it doesn't matter. They're going for everybody. The doors open. They're coming in exactly exactly. We're seeing a blurring of the lines between nation state and you know rogue gangs like scattered spider. So I think that it's important to the safe option is to go with an MSP, especially for the small business, the small-demand-sized business, which could be anywhere from 25 people, even up to 500 people, quite a bit more than you would assume still counts as a small-demand-sized business. I think going with an MSP, going with a provider and solution to service provider is the smart thing to do. I think it's going to protect them. And I think it's also going to introduce things that perhaps they would not have thought to introduce, because you have everybody using the Kleenex of the AI system right now, open AI's chat GPT. They might not even know anything about Claude and it's could be you know 10 times better further use case than they realize. So I think that it's important to consider at some point, you got to have people in there that aren't just going to say yes to everything. You really need to ask the tough questions here. But I also think it matters that you interview properly. It's very much like dating. Like interview these MSPs that you could partner with. Like really figure out are they the ones that are going to just sell you something or are they going to be a true guide through the journey? That is actually I forget who it is. Maybe you can help me out. Somebody has like a Sherpa as their sort of mascot to lead through. I have a plushie somewhere. Oh my gosh. I love that. I do. I agree with Katie's point. I think that on the whole having just even another person at your C-suite level meeting once a quarter to be like, well, did you think through XYZ before you solidified that plan? Right. Like I think that's a level of protection that otherwise you as an SMB owner, tech leader, etc are probably doing what the rest of us are doing, which is either asking Google or asking chat GPT what should I buy for my business or to go back to my earlier point, you're trusting Brian down the street who may or may not be somebody you should listen to. I think from that perspective, it's a layer of protection. But I will say MSPs are not some kind of group of geniuses who don't also fall for hype cycles. And they're being sold probably harder actually than SMBs are being sold on some of this time. Because a lot of the big companies in particular have really frankly, but a lot of their businesses on whether these tools get adopted. Right. And they know that their channel partners are who's going to get them across the line. Microsoft has invested interest at this point in co-pilot working. Yeah. Right. Right. How can you get co-pilot to work unless its partners go do that on their behalf? And so Microsoft is coming down pretty hard on their partners. And then if you're an MSP, maybe you do kind of just go, well, co-pilot must be great. That's a good call. And that's not the thing that I'm not making a judgment call on that. But there it's a very interesting moment in time for all of the businesses involved in the chain that is the chance. And so within that, there's a lot of opportunity. And I think within that, there's also a lot of, I don't know what's going on. And everybody tells me if I don't adapt, I'm going to be out of business in a year. Yes. So we're just going to do it. And we're just going to do it and let the chips fall as they may. Right. Because what's the alternative? You listen to people and go, all right, I'm out of business. Like, yeah, that's not appealing to anybody for opt- no, no, of course. Yeah. Why do you think AI is stressing the system differently than cloud or SaaS or, you know, previous cybersecurity waves? Is there anything fundamental about it? Other than what we touched on, I guess? I will say I think the only thing other than the kind of the way the conversation has shifted is there are elements of AI as a technology that feel very fundamentally different from like a use case perspective. So like cloud and the infrastructure conversation, right? Because when we say cloud, what we really mean is the shift from on-prem to cloud and what that entailed was not like the sexy thing that anybody actually wanted to think about, like, you need your infrastructure in place, but nobody's like drooling over an on-prem conversation, right? Like, those are not the things. Other than investors on CNBC, I remember this is called the neuron and AI podcast and not the neuron, a cloud podcast. Yeah. Yeah. You know, it was one of those out of sight out of mind things. Security, like we've touched on, is the same way you need it. Like going to the doctor once a year, you know you're supposed to. Nobody wants to. Right? But AI people want and AI kind of provides itself, I think, in ways that the others don't. Like to your point, there's open source now that didn't exist before for some of the other technologies. And you do feel like with the onslaught of agent to agent protocols that are starting to be promised, the kind of shopping experiences of will this all be integrated? Can I go tell my chatbot to go buy something on my behalf? Like, that stresses an MSP out, because if my customer thinks that they can just program something to go provision, that's like 90% of what they think I do for them. Yeah. And that wasn't a concern with security and that wasn't a concern with on-prem to cloud. Like, there's, I do think there's something fundamental about AI that is potentially encouraging people to rethink the very like nature of business relationships right now. And that feels very scary. That's the that that existential element that that tends to hang around AI no matter what field you're in. You know, I mean, we've felt it as as journalists. So for engineers, Bill, it, you know, there are people saying that even executives aren't going to be safe at some point from what this can do. That the truth is it's going to be better than the average executive you would go higher. Probably you would stare today. And it may be there today. That's the other thing. Average executive, average executive. But politicians, but sorry. And but you know, I think I think that's a very real concern, a very real fear that that I feel like overlooking and just pretending isn't the case is probably the wrong answer. You know, I mean, as a rule, denial is not not a good strategy. You know, it's the first stage of grief and transformation. The first stage of grief, which is going through it as quickly as possible to move on. Yeah. Yeah. Yeah. And I think that's really important. What's what's one signal that will tell us whether AI is strengthening or weakening MSPs? Victoria, I'd like for you to kick us off with this one. Okay. So I want to make sure we don't say the same thing. I got a cup. I think I'm going to take a real boring business answer here for to some degree evaluation. The kind of other aspect that we haven't necessarily talked much about in this conversation is that the channel is is undergoing a real wave of mergers and acquisitions activity. A lot of it be private equity and by venture capital. Those organizations are looking for AI to be everywhere. Yeah. Whether they know what that means tangibly or not, frankly, they they want to see it if they're going to invest. And there are plenty of groups that are very active within the channel right now, buying up MSPs, rolling them up into kind of these larger platform organizations. There's a lot of consolidation in the industry. And I think I think MSP owners are at a real kind of crosshair at the moment in do I spend the capital to invest so that I'm more appealing to three years from now for an exit? Do I spend the capital now because I want to be able to compete against the larger players that are being built because everybody else is exiting? Do I want to just sell as is and get what I can get and get out of town? Because this is all very stressful to me. And I'm, you know, this industry kind of started really at a pivotal moment about 20 to 30 years ago and many of those people were 20 to 30 years old at the time. And so retirement's looking really good right now. Yeah. Right. So like there was kind of like layered process of cash infusion. And I think over the next eight to 12 months into 2027, where those numbers start to lie is going to be the real sign of of what this means from a business perspective for MSPs. So how highly or not highly they're valued a year from every 18 months from now? Yeah. Katie, what's your take? I definitely agree with the valuation. I think the rate of acquisitions and consolidation that we see kind of uptick in the channel will definitely be an indicator. I think how long that goes on for is going to be a more important indicator because every year we do see kind of this ramp up of consolidation. And we go, oh, like what's driving this? So I do think you'll see at least for the first half of the year a lot of businesses, including MSPs, buying up smaller shops that are more focused on certain niches, certain AI verticals, certain use cases. I definitely think though for what's going to indicate success for me that it's helping the channel is you're going to see more line items added to portfolios that have to do with very specific use cases. Not long ago on channel insider partner POV, which you can listen to on YouTube as well as all your major podcast platforms and channel insider.com. Well, thanks. Yeah. Do it. I had a great conversation with the founder and CEO of data 41, Hans Maes. He sort of stumbled into realizing that he can apply AI tools in a very unique way to tissue banks that are looking to be able to speed up their processes of going through healthcare records, going through health records, going through all the data in which donors come in and to be very clear when I say donors, I mean bodies that come in and they are trying to figure out what their lives looked like so that they can essentially get the organs harvested and over to the people that need them much faster, which is honestly one of the very few use cases that I've heard out there of AI making our lives better, like literally making human lives better. He went to a conference after this. And then it was just like, he's like, this is all we do now. This is the life sciences boat that we have raised our flag on because it's gone so well. So I think you're when you see more of that when you see more line items and use cases added to their portfolios, and you can say like, this is exactly where this is going to go and how it's going to help you. I think that's going to be a big strength, a strength in our less ambiguity about like, yeah, we can work with your AI and do services towards your AI, like less about that and much more saying, here's what we can do here are the use cases that you can expect from us and how we're going to build on that over time with our with our business. So that's what I think is going to be an indicator. We don't see enough of that in the first six months. I'll panic a little bit, but I think that if it's going to be successful, we're going to see that. Just to make sure I understand so it would basically be like niche use cases as opposed to just AI for AI sake. I just think more use cases in general. I think a lot of people are still struggling with how to get ROI from their AI investments. A lot of people are like, look how much time it saved me on this task that I totally was like looking for it to save me time on. I think now people are looking for how do I integrate this into my business process to just make this make sense and get something out of it, whether that be time to value or literal money. So that's just want to see more use cases that have nothing to do with kind of the it proof red. It wrote me an email. It finished my sentence like a little bit more. It thought for me. Yes. It took it over my body. Yeah, it got me a heart faster. That's literally that's what I want to see is more intensity. Well, any advice for SMBs trying to decide how to buy AI in 2026? Find an MSP. I would say, I mean, yes, the data suggests if you're an MSB, especially MSB, if you're an SMB, see too many. Too many works. Too many. The data suggests if you're an SMB, especially in North America, you were probably already working with an MSP to some degree or a seller. Most SMBs in the country work with with at least one outsourcing partner at this point. If you are not already talking to them or they are not coming to you and talking to you about AI and what it means for you, you might, you might be in the market for a new partner. Great. I think now is now is the time to get serious about thinking about what you want to get out of this technology. I mean, it's been a lot of time talking to partner executives to SMBs themselves to vendors who are I think all coming around to this idea that 2025 was a lot of AI for AI is sake to Katie's point to Grant's point and that's not going to be sustainable. Avoiding it entirely is probably not sustainable either, right? So like maybe once in our lives, we'll get to something called nuance, which I think we've all forgotten. That would be that would be my advice. If you are at this point, anybody on the earth, please, let's just, I know it feels impossible. It feels impossible for us covering it. Take a breath. Thank the little and then let's move forward, right? Let's say, yeah, this is working. So I'm going to invest more heavily in it. We tried this and my employees actually revolted because they felt like they were given no instructions other than use this thing or you're not valuable here. Find the middle ground and and build a path forward that makes you confident in what you're doing because ultimately the goal for everybody involved in a channel is that that end business stays in business and grows and that then up the stream, everybody grows along with them. So that would be that would be my soapbox for the day. Can we please then we will all be fruitful and multiply and yeah, but you know, offensively with yes. Well, Victoria Katie, thank you so much for joining us today. This has been an absolute blast. I knew this would be a long conversation. Do you want to do what Grant? Okay, I learned it's on no, I've learned it's on now. Same, same lots to take away and better understand and kind of look at, you know, how things are framed. But thank you. Where can people go to follow channel insiders coverage? Yeah, Victoria, you kick us off. Yeah. So first of all, we are at channel insider.com. That's channel how you would normally spell at C H a and N E L. Yes, that's how you spell channel. It's like a dot com follows on LinkedIn and all of the social platforms as well for all of our written coverage. But if you would like to see channel insider partner POV, which is our maybe less exciting, but I think just a cool version of the neuron, you can head over to where Katie. You can head on over to channel insider dot com to find where you can watch it. You can also head to youtube.com. We're at channel insider underscore news and trends. And you can listen to us on all the major podcast platforms where literally on all of them Apple podcast, Spotify, the list goes on and you can always come follow us on LinkedIn as well as X. Those are two major social platforms and you can follow me too at Katie. of OSO pretty much in all the places that I just said. So please come on over. We put out new episodes every other week. So we'd love to have you. You can also subscribe to our weekly newsletter. We send once a week on Wednesdays. So if you head to channelinsider.com you'll find the link right at the top of our page, weekly news, friends, insights, analysis, you name it, we've got it, or at least we try to write to your inbox. Excellent. And the same stands for the neuron. If you haven't yet, please take a minute till I can subscribe today. Also, pop by the neuron.ai and sign up for the newsletter that started all of this for us here. We'd love to have you as a reader and have you be a part of our community. But for today, that's it. Farewell for now, humans. [BLANK_AUDIO]