AI Spending Impact, Channel Share Decline, and MSP Growth Strategies With Jay McBain

In this episode of The Business of Tech, host Dave Sobel sits down with Jay McBain, a prominent industry analyst from Canalys, for an in-depth discussion on the current state and future outlook of the IT channel.

They focus on how the explosive growth of AI is reshaping opportunities (and challenges) for Managed Service Providers (MSPs) and technology partners.

The conversation explores the surprising disconnect between record-breaking overall IT spending and the shrinking slice of that pie flowing through traditional channel partners, offering strategic insights for MSPs navigating this new landscape.

Key Points from the Conversation:

• Disconnect between overall IT spending growth and channel/MSP share: Global IT/customer tech spending is projected to hit $6.07 trillion, growing at 10.2% (well above world GDP growth). However, the indirect channel’s share (resale/partner-involved) is declining—from over 75% historically to a projected ~66.7% by 2026. This is largely because massive AI infrastructure CapEx (data centers, GPUs, etc.) is concentrated among hyperscalers like Nvidia, Google, Microsoft, and Amazon, with little to no flow-down to traditional channel partners.
• AI spending is not helping most MSPs/resellers in the traditional way: The AI boom drives huge vendor investments but bypasses the partner ecosystem for core infrastructure buildouts. MSPs and partners are mostly limited to client-facing opportunities outside these massive projects.
• Shift in MSP focus and growth opportunities: MSPs should pivot away from thin-margin product resale toward higher-value services. Notable growth areas include:
  • Managed security services (~15% growth).
  • AI-related services (projected 35.3% compounded annual growth).
  • Advisory, pre- and post-sales services, and “multiplier” services attached to product spend.
• Evolving partner roles and vendor programs: There’s a growing distinction between “influence” partners (advisory, co-selling, consulting) and “execution” partners (transactional resale). Vendors are moving toward point-based systems, indirect revenue attribution, and recognizing non-resale contributions. This reflects more complex, multi-partner ecosystems.
• Hiring and operational challenges: A softening hiring market makes traditional “seat expansion” growth less reliable. MSPs need to emphasize profitable service attach rates, specialization, trusted advisor roles, collaboration with other partners, and adaptation to changing vendor economics and risk allocation.

Overall theme: While the tech industry is booming due to AI, the benefits aren’t evenly distributed to the channel. MSPs must evolve their business models toward services, influence, and specialization rather than relying on traditional resale or volume growth to thrive. The discussion provides strategic advice for MSPs on navigating these shifts.

Overall IT and AI-Driven Spending Growth

Canalys projects robust global IT spending growth fueled by AI:

• Worldwide IT spending is expected to reach around $5.44 trillion in 2025 (roughly 8% growth) and climb to $6.07 trillion in 2026 (10.2% growth), significantly outpacing global GDP.
• This acceleration marks AI as the “fourth great era” of IT spending, with heavy investment in AI-powered software, cybersecurity, AI-capable devices, and especially data center infrastructure (servers, storage, networking).

Cloud infrastructure services, a key AI enabler, show particularly strong growth: Q2 2025 spending hit $95.3 billion (up 22% YoY), with hyperscalers (AWS, Azure, Google Cloud) ramping up CapEx—e.g., AWS >$100B, Google $85B, Microsoft ~$80B for 2025 infrastructure.

AI Infrastructure vs. Channel Impact

A core theme in Canalys’ outlook (echoed in the video discussion) is the disconnect: Massive AI infrastructure investments by hyperscalers largely bypass the traditional indirect channel.

• The share of IT spending flowing through partners has declined from over 75% historically to around 70% recently, projected to drop to ~66.7% by 2026.
• AI buildouts concentrate among a few big players, limiting resale opportunities for most MSPs and partners, who instead capture value in client-facing services.

AI-Capable PCs and Devices

Canalys tracks the rapid rise of on-device AI hardware:

• 2024: ~19% of PCs shipped were AI-capable (~48 million units).
• 2025: Expected to reach 40% of global PC shipments (surpassing 100 million units).
• 2027: Projected at 60% of PC shipments, with commercial/business adoption accelerating fastest (60% of AI PCs going to enterprises by then).
• Longer term (by 2028): Up to 205 million units, implying a ~44% CAGR from 2024.

This creates refresh cycle opportunities and demand for attached services, though channel partners need education and incentives to drive adoption.

Services and MSP Opportunities

Canalys sees strong tailwinds for services, where partners have better leverage:

• Managed services overall: ~13% growth in 2025 to ~$595 billion globally.
• AI-related services: Significant growth potential (often cited in the 30-35%+ CAGR range in partner contexts), including advisory, design, implementation, maintenance, and managed AI offerings.
• Cybersecurity: A standout area, with the overall market growing ~11% in 2025 to ~$282 billion (products + services). Managed security services (including MDR/SOC) are a high-growth segment for MSPs/MSSPs, with partners adding substantial services revenue on top of product sales.

Jay McBain emphasizes shifting to “influence” and high-value services (pre/post-sales, consulting, multipliers) rather than pure resale, plus specialization and ecosystem collaboration.

Broader Channel Ecosystem Trends

• Channel software/automation tools market: Growing from $7.46B in 2024 to $13.48B by 2028.
• Vendors are evolving programs toward point-based recognition, indirect attribution, and rewarding non-transactional contributions.
• Challenges include supply constraints (e.g., DRAM/memory shortages into 2026 due to AI demand), hiring softening, and the need for MSPs to adapt to platform ecosystems.

Conclusion

Canalys forecasts paint an optimistic picture for the broader tech market—AI is supercharging growth across infrastructure, devices, cloud, and services—but it requires adaptation for channel players. The infrastructure boom benefits hyperscalers most directly, while MSPs and partners thrive by focusing on services, security, AI enablement for clients, and becoming trusted advisors in multi-vendor ecosystems.