Why MSPs Must Embrace Agentic AI Today | Stetson Tenney

Stetson Tenney joins Rob Scott to discuss the agentic AI transformation for MSPs and the shift from Managed Service Provider to Managed Intelligence Provider (MIT).

He shares the playbook Miply uses to help MSPs deploy digital workers, monetize AI, and protect margin as seat-based billing erodes.

Key Insights:

MSPs must evolve from managing workstations and users to deploying and managing digital workers for their clients

Agentic AI is collapsing traditional MSP revenue models as per-seat and per-device billing erodes

Successful AI transformation requires business-outcome conversations with executives, not ticket-count conversations with technicians
___________________________________________________________________________

Don't Leave Gaps Unchecked - FREE MSA Review: https://hubs.la/Q0477T520

See how Monjur takes legal off your plate: https://hubs.la/Q042mCxG0

Connect with us:
LinkedIn: https://hubs.la/Q042mDZk0
X (Twitter): https://hubs.la/Q042mGRL0

Transcript

SPEAKER_00 0:03

Welcome to Talk Tech with Rob Scott.

SPEAKER_02 0:07

Hello and welcome. I'm Rob Scott, your host, and today we have an exciting episode with my friend and client Stetson Tenny. We're going to be talking about the agentic transformation for MSPs and the tools that are becoming available to assist in that journey. Stetson, welcome to the show.

SPEAKER_01 0:26

Hey Rob, thanks for having me. It's my pleasure.

SPEAKER_02 0:29

It's my pleasure. You know, you and I recently had an opportunity to spend some one-on-one time together. I was sitting at a table at an event, and you were kind enough to introduce yourself to me and sit with me, and we had an amazing conversation. What took me about your story is how you're helping MSPs with the agentic AI transformation. And your expertise and your journey in that regard is why I invited you here today because many of my clients are in the process of making decisions about where they're going to go next with respect to AI. And as the co-founder of MIPLY, I think you bring a lot of insight to the table. So thank you again for joining us.

SPEAKER_01 1:23

Yeah, absolutely. I'm glad to be here.

SPEAKER_02 1:29

Yeah, so so you're an MSP executive. Give the audience some sense of your background in managing, running, and being involved with managed services.

SPEAKER_01 1:42

So joined um Sympatico about two years ago um to lead the sales and marketing campaign. And um full disclosure, no IT background when I came in here. So uh a lot of what I've been doing has been in building materials and uh oil-filled supply. And so it was kind of a fresh take on IT and really talking about what business leaders need versus tools and um tickets, and so that's really where we dove in and um started looking at how we can use AI to give business results to business leaders versus um tech results to technicians, and that's really where that started, and um it started um really well inside of our company, but um then that's where uh Mipley kind of came in is to teach other companies how do how to do what we're doing.

SPEAKER_02 2:47

So many of you have heard me say this. No SaaS founders have ever started an MSP, but many MSPs have started SaaS companies. So tell us a little bit more about Mipley, uh specifically, what do you guys do at MIPLE and how do you do it?

SPEAKER_01 3:11

So at MIPLY, this is really what we do. Um, we help MSPs make the transition to become an MIP. And when I say MIP, I mean a managed intelligence provider. And that's a phrase that uh PAX8 coined last summer. Um Scott Chasen, the CEO over at PAX8, wrote an article called the Agentic Inflection Point. And me and my my co-founder, um Corey Ruthart, we read that and we're like, holy cow, this is exactly what we've been doing, but now it's a it's a in it's a coined phrase um from one of the industry leaders. And so we went into his office at his house, locked ourselves in there for a week, and we came out and said, This is how we're gonna do it as Patico, um, and really um tuned up what we were doing for business leaders. Um, we shared that with one of our peer groups, and um upon doing that, we found that there was a huge market for other MSPs to uh really make that journey from MSP to MIP. And so just uh um actually April 1, we we launched uh MIPLY where that's where we're make helping every one of uh uh the companies that we we were working with make that transition from MSP to MIP.

SPEAKER_02 4:42

So talk to me about the three biggest success factors that you found that are critical for an MSP to make the transition. So I my guess is that some are gonna make it and some are not gonna make it. And so if that's true, what are the things that are gonna define success in that type of transition?

SPEAKER_01 5:07

So they have to start worrying about business outcomes and uh embracing AI to get them there, but the the ones that embrace it and and can speak business language as business business executives are gonna be relevant and um not so much um about tickets and uptime, but about ROI. And so um that's that's the biggest thing that they have to embrace. They have to embrace the fact that AI isn't just a buzzword, and um, you know what I mentioned at one of the conferences um here in Dallas with MSPs is we hear AI all the time. Every single presentation, every single tool set talks about AI, and a lot of MSPs are getting burned out about that. So um rather than um look at it as oh, we'll just catch up and uh use it when other people get it figured out, we help um we help those people that are willing to embrace it use it as a force multiplier inside their business. And then um the other piece is you gotta you gotta flip the strip and uh really help people understand that AI is going to take away the wit the way the um MSPs uh bill. So most MSPs, mature MSPs anyway, um bill by workstations or uh user. And so AI is reducing both those things, and so it's reducing revenue inside of every MSP, most MSPs anyway, and um because there's a digital worker taking those places, so that's where we aim to help MSPs embrace that and become the the one that actually presents that solution and a digital worker that's gonna take the place of those the of the human worker, and um once they embrace that, they they get a level of stickiness with their customers that they've never had before because uh they're presenting real ROI in in their tech stack and helping um businesses become more efficient, and uh then when they try to leave, if that if it were to come to that, they've got agentic solutions, digital workers that are managed by you. So that's not an easy or or a seamless handoff, um, can be done, but that's really where the magic is, is that you're giving them results and so they don't want to leave.

SPEAKER_02 7:56

So instead of managing devices and users and desktop computers, we're gonna be managing digital agents, providing security, uh testing, um, guardrails, tweaking, uh, to keep these digital workforce running efficiently and in a compliant manner. And let's assume I'm an MSP and I say, Stetson, I agree with your vision of the future. I'm open-minded, I'm prepared to embrace AI, I'm prepared to embrace outcome-based, uh, uh focused. Now I'm asking how, like, walk me through the 30, 60, 90 day vision of how an MSP makes this transition once they are committed to those principles and they've embraced them.

SPEAKER_01 8:58

Well, um, so typically, or not typically, but every time that um we engage with another MSP, um we get their their internal sales staff and their out um for their the VCIO role um on board. We also get their outside sales staff um on board and we train them on that conversation of the digital worker piece and and uh arm them with um the collateral that's gonna give help them have that conversation. And then we'll so we'll we'll do a sales enablement piece and um typically we'll start inside their own business and have them look we'll we function as as one of the big forward. Um that and I mean like a a business consultant that comes in, looks at your process, sees where um uh work breaks down, slows down or stops, and uh we give them an we give them a a process of their uh their business models. And uh let me restate that, but basically we give them their uh workflow processes, and most most companies don't have that. And so when they um engage with us, we start in um three major areas. We tell we ask them, how do you make money? Um let me back up. How do you how do you get work, do work, and get paid? And when you do those three things, um every single business has that, whether you're an MSP or a client of an MSP. And then um we're able to look at those processes inside of um each one of those areas and document them. Then we're able to show them where um who's responsible for each one of those things, and then give them uh outcome of an efficiency outcome. And then after that, um we're able to give them a statement of work of how to go and um up use AI to uh uh uh produce that digital worker that's gonna take the that's gonna help increase their efficiencies.

SPEAKER_02 11:27

Um so it sounds like you've got some digital workers that help people with sales and marketing. We've got some digital workers that help people get their work done, and we've got some digital workers that are gonna help make sure we get paid and and uh uh looking at automating some of the back of the house functions as well. Is that a fair way to describe it?

SPEAKER_01 11:52

Yes, and it's not and it's not so much like a tip like a tool or a particular digital worker. The magic really comes in of looking at the business outcome of what they want and working backwards to the processes of how they get there and created the efficiency there inside the business.

SPEAKER_02 12:16

And what is your business model? You know, that the my clients that are MSPs are like, how do I make money with it? You know, that as an MSP, you know, my client's uh North Star metric is EBITDA. And so when I think about any solution for MSPs, I need to understand how it connects to eBidDah. So explain to me how uh MIPLI helps MSPs uh create more EBITDA.

SPEAKER_01 12:49

So rather than um having uh rather than having uh your biggest line item increase in your PL, which is labor for almost every single company out there, um, as you scale, we're able to use the digital workers to let you grow without adding headcount. And it's usually about a third of the cost of a full-time employee. So that's really where we um can stack um percentage points on your Ebidol.

SPEAKER_02 13:24

So each agent costs $15,000 to $20,000 a year. Is that roughly the math?

SPEAKER_01 13:32

Yes. Um, and depending on on the skill set or or the complexity, it could be higher, it could be lower. It just really depends on what outcome you're trying to seek and uh how how bought-in you are to go in uh to build these autonomous systems that the agent can manage versus a human?

SPEAKER_02 13:55

Let's say I'm an MSP and I think what you're saying sounds good, but I don't have the staff currently or my own confidence in my own expertise to offer a digital worker solution to my end user customers. How does Mipley help with that?

SPEAKER_01 14:18

So that's really no problem. What we do at Mipley is that we'll take we'll take that on for you, and you can actually white label projects for um your customers. So while we're giving you the tools and the the sales enablement, um we can help you sell that at first, bring us on it as part of your um um consulting piece, if you will. And uh then while we're doing the capability transfer and building your staff, um, to be able to deliver these projects, we'll white label them. And the goal is to uh help the companies level up and be able to deliver the projects only so or deliver the projects by themselves. If if a company that doesn't have that kind of uh doesn't want to take on that overhead or want to do that, we can do that indefinitely. There's no problem with that, but uh it really depends on the vision of the MSP and where they're headed, and then we can help help them grow um either if they want the capability transfer, we'll do that. If not, then we'll be the ones that um can deliver those projects for you, white labeled, and usually you can deliver it at about 20 to 30 percent um with a 20 to 30 percent markup on it on our cost.

SPEAKER_02 15:43

Interesting. And with respect to um uh the agents that you've built that an MSP could uh take and plug into their environments, talk me through like the num the the types of agents that are running uh that MIPLI is running at Sympatico, for example, or other MSPs. Give me a rundown if someone was to implement the full MIPLI suite of what's available in production today, what agents could they deploy in their MSP?

SPEAKER_01 16:21

So there we're really technology agnostic when it comes to um agents. If there's something commercial off the shelf that we can help find, uh we'll track it down. Um we have several partners that do that. I don't know if it's appropriate to share it here, but we have a partnership with Pats AI, and they really focus on uh increasing efficiency and inside MSPs themselves. And um that's where they can tie multiple tool sets and give you results out of that. Um that's one of the commercial off the cell that we we use, we put in with every single MSP that we start with to give the execs visibility into into their data. But um that that's just one specific tool, but really the process of understanding the the result. Um we have a web app that that can walk you through that from start to finish. It's a five-phase process where you start with um what is the your business process and sales, marketing, operations, finance, um, kind of going back to those three things, telling me how you um get work, do work, get paid. And then after that, um we're able to uh we walk down um those processes, who's responsible those for those processes, um, the outcome or how where the opportunity is for efficiency gain, then um we'll build out a plan of which is high priority inside your business and uh what which ones you want to do now, which ones you want to do later, or which ones um you want to do it in down the road, and we'll give a 12 to 24 month roadmap of what that is. Then the fifth phase is where um the agent that we built for this particular process of understanding business process, that's where um the agent will spit out a statement of work of how you go about accomplishing each one of these goals, and it's got an ROI calculator bit built into it. So when you spend the time um documenting all these processes, it'll tell you how much does it cost um to implement, how much how much does it cost to maintain it on a monthly basis, and then um when your break-even uh is gonna happen. And then the statement of work usually goes to what most people call a design desk or a pre-sales engineer, and they can go approve it. Then that's where we we um plug in with Hats AI, and they can actually go build that inside your environment and um do it um pretty fast. So um this thing used to take about when we first started this um about three, four years ago, it'd take us a couple months to really go and uh go and have these interviews and go build a statement of work. And um before we could ever like say, all right, here's your your real roadmap. Now we're doing it within a couple working sessions. And so it's usually um a couple hours where we'll have a lunch and learn um on site with our clients, with the people that are um running their business and um take a break, feed them lunch, and then come back and and um knock that out on a couple departments, um, then come back the next week, uh do that again. And then uh at the end of it, in about two or three working sessions, they can have a roadmap of uh what they want to do inside their business over the next 12 to 24 months and use digital workers to gain those efficiencies.

SPEAKER_02 20:18

So we're leading with a strategic plan for AI transformation, and it results in a uh managed um agent uh model on a recurring revenue basis that's tied to managing the agent versus some sort of a cybersecurity or you know cloud-based approach. Is that a fair way to describe it?

SPEAKER_01 20:50

Yeah, yeah, that is. And maybe I could give you an example. I think I shared this example with you um uh at when we first um met, but uh really this is a case study that we did with uh one of our clients out on the east coast, and uh it's a pretty big, pretty big client. They have uh um six accountants on staff, and uh in that when we came to them, they're like, hey, we have a bunch of errors. Um we think we're pretty good, but you know, we've got a lot of things that slow down. Um, and so we're like, all right, let's let's we run them through the process, and um we're we're able to take that um reduce their overhead by about 70 percent. We took it from six people down to three. Now that's really about 83 percent when it comes to efficiency, but um in that market we charge um $200 um per user um a month. So that cut out about a thousand dollars of our uh of our monthly recurring revenue in our MSP. And um that hurts, you know, and and that's that's what we're asking MSPs to embrace the fact that if they're not having that conversation, somebody else will. But the digital worker that we put in to uh um replace them was about $2,300 a month for us to maintain, and so a net gain of uh $1,300 of monthly recurring revenue is um is good for us, and then it's the client's more efficient than ever. And then on top of it, uh the the digital workers uh really don't make as many mistakes, um, they don't call in sick, they don't click bad links, and um it and it makes it to where that cover that customer has uh really uh 70% efficiency gain. Um that so what we took that, um what we did with that is their operating cost before us for that department, for all six of the full-time employees, their the total um benefits and payroll burden, um management of overhead, um software licensing, and the air and rework cost was about um right at just under half a million dollars a year, 493,000. After we went through that process, we took it down to one full-time employee. It has um an uh AR supervisor that's there. Um we took the payroll and um the benefit and payroll burden down each one of those things that we just talked about, added in the digital workers, which is about $2,300 a month. We took that from $493,000 a year to $125,000 a year. That's even off. That's what puts money to the bottom line.

SPEAKER_02 23:59

That's interesting. And and what was the time for that project to unfold? Like from the time you initially engaged to the time you built the plan to the time that they realized the ROI, what was the timeline of that particular engagement?

SPEAKER_01 24:15

So that that engagement took about two months from the time we be we began to the time we implemented the solution. Now, as you're fine-tuning the the solution, we we um took those efficiencies where um it was taking them 13 days on there to get paid down to 7.2 days. And as we as we worked in those efficiencies, it took about a month to fine-tune that. So two to three months where um we were able to take the uh take the concept, deliver it in two months, and then fine-tune it over the next month with the guidance from uh the full-time employee uh letting us know feedback of hey, this is something that it missed. And so we come back and tune it up because as much as you want to detail a process, um things break in the real world, and so that's where we stick around and help them fine-tune that agent.

SPEAKER_02 25:16

That's what makes it recurring, yes, absolutely.

SPEAKER_01 25:20

Yeah.

SPEAKER_02 25:21

So if someone embraces these concepts and is willing to uh learn the tooling or white label the solution, what is the potential impact on growth? Like, what have you seen in terms of growth since you've been using the system? And what is an MSP partner likely to experience in terms of new logo acquisition or expansion revenue growth at their MSP?

SPEAKER_01 25:55

So we saw um when we implemented this inside our own MSP, um, we really kicked this off and launched it um last September and at the beginning of the fourth quarter. And um that's where we really got traction, and we were able to take um our MRR um with just our existing clientele up by $30,000 in the fourth quarter. So uh there's real growth with existing um clientele, and we we targeted our top 60 um accounts, and we went in there and had this conversation with them. So it was on average about 500 bucks a month on the solution that we presented to them. Um that was just to uh have them sign up for um for us to go through their KPIs, document them, and put them on a dashboard so that they could keep score with us and and know that all right, here's the baseline of where we are today. So in we just wrapped up um the first quarter, and um what that did is add about eighty-four thousand dollars of MRR projects that um the the net of eighty-four thousand dollars because there's a lot of uh workstations that went down and users that went down. Um that we netted about $84,000 in the first quarter of MRR. So that's the kind of efficiencies you can expect to see. Now, I'll be transparent. Our MSP is uh we've got about 70 full-time employees and um several hundred customers and uh about 10,000 um endpoints that we manage. So um we're a little bit larger than um quite a few MSPs out there. We're not the largest, but that's what you can expect um when you go through this. And we're seeing the same thing at Mippley with a couple of our clients that um we're engaged with out of across the country, and um they're starting to see real ROI in the first 30 days, or they're having conversations um with executives rather than tech um contacts inside their company and having um real conversations of efficiency gains and guiding their clients through uh AI as a solution and as a service versus um just tools.

SPEAKER_02 28:32

Very interesting, very interesting. And if if an MSP is interested in Mippley, uh what are the options for them to engage?

SPEAKER_01 28:42

So we have a couple options. Um one, uh real simple, they can um look at our efficiency tool that we built, it's a web app, we can license that to them. Um the other is if they just want us to do a um if they just want sales enablement and they want us to deliver the projects white label, um, that's another option. And then the third thing is they can have all three um uh the tools, the sales enablement and the capability transfer. So those are the three levels that um we engage with um other MSPs.

SPEAKER_02 29:28

And if someone is interested in the capability transfer, uh what have you seen is sort of the time period from which they can transition from the white label program to an independent, you know, offering?

SPEAKER_01 29:45

So all of our contracts are one year, and um the reason why we do one year is so that they can level up that um the capability transfer, and um that's the that's where we intend to get them fully um up and running so that they can deliver it themselves. And that is when after the first year, we don't just um wave goodbye. If they want to be a part of it, because what comes part of that capability transfer is bi-weekly peer groups of where we're working on working through these processes and training um their um training their engineers to be able to deliver this. If they still want to be a part of that peer group, that's fine too. We'll reduce the um price after that so that they can still be part of the peer and they should be making uh be able to deliver these projects, but um as technology evolves, it gives you access to a group of people that are willing to share and teach you how to grow um and keep building upon that knowledge and capability transfer so that um you can continue to be innovative and and have those kinds of conversations with your customers.

SPEAKER_02 31:06

How do you price the services? Uh, if I'm an MSP and I'm thinking about whether or not I might be a good fit for your company, how do you define your ICP?

SPEAKER_01 31:21

So our ICP is really an the clientele that that is a little bit more mature, um their top line recurring is like their annual recurring revenue is usually about uh a million dollars. And then we we're engaged with clientele that uh they're up through 50, 60 million dollars um a year, and so um that it's kind of a wide gamut, but um and that's how we price just on like the the sales enablement piece where we're delivering white label projects, that's uh 3,000 a month, and for the capability transfer, um including um delivery while you're building that um and the peer groups is um is 5,000 a month. If you want to license the tool, um that's uh um right at 250 a month right now.

SPEAKER_02 32:20

So that's so is it just to be clear, is the 5,000 inclusive of the three or in addition to the three for a total of eight?

SPEAKER_01 32:31

It's um it's inclusive. So that's where the really the 3,000 is just sales enablement and um a peer group on sales. The the 5,000 is sales enablement and peer group with sales, as well as capability transfer with a capability transfer peer group. So that's where that comes in at 5,000. So you get both at the 5,000, not just sales enablement, but capability transfer as well. Every single one of those packages come with the tool.

SPEAKER_02 33:07

And um if I'm a million-dollar MSP and I've met a lot of them in my day, uh $3,000 is a month is a very big number. Uh my guess is that $3,000 a month, very few million-dollar MSPs are gonna jump in. But I want you to make the case for why that $3,000 a month, even for a small MSP with a million, for whom I assure you the perception is $3,000 a month is a lot of money, because when I talk to them about $299 or $315 a month, they um give me feedback that that's a significant sum to them. So 10 times that amount, so 10x a monger subscription uh is gonna feel like a lot of money to that MSP. Tell me how you overcome the price objection for the smaller MSPs.

SPEAKER_01 34:16

So, really, it what we look at is that this is um roughly about half the price of what you'd be doing um for a VCIO that um that you're gonna be paying to go in to have these conversations with your customers. And so we're and and the next piece of that is that over the past three, four years that we've been doing this inside of our own, we've learned a lot of mistakes. We we've learned from a lot of our mistakes, and then um that we're helping them stand up and um go deliver this um on day one. When they have these conversations, they can actually um bring us a use case, bring us a customer, we'll sit down and show them how to do this with their customer, and on average, these digital workers are um 1,500 to uh two grand. So you go do one or two of these jobs and you're breaking even. And usually the implementation costs um will help you break even within the first 30 to 60 days, and that's really where we pitch it to the small ones um that are that where $3,000 is a lot of is a lot of money for them. And so uh that's that's where we try to help them understand that just one or two of these projects will will uh help you break even. And this is without the cost of a full-time employee and the full burden of their salary, but and and you're getting some expertise along with that.

SPEAKER_02 36:04

Understood. So so the idea is there's a partnership here that uh quickly could pay for itself with one or two deals. Your experience is you've got a high conversion rate when you do the assessment, correct? If the client goes through the the planning exercise, a high percentage of them buy, correct?

SPEAKER_01 36:28

Oh yeah, absolutely. Once they see, once you start talking ROI and they see that they can break even within 30 to 60 days and actually see the success, then um that's where they're um more apt to be able to um afford it. Um but it's really not for everyone. If they don't, if they don't have that vision and if they want to keep doing it the same way, um by all means keep doing it and keep betting on yourself. But the the thing that is most troubling um with some of the um smaller organizations is that AI is going to come in and replace what a lot of what you're doing. And we see it all the time. I mean, you go to a lot of conferences, I see you there, um, and there are so many tools out there that are showing efficiency gains and um taking away a lot a lot of what managed service providers are are doing. And so if you want to stay relevant, then you need to have this kind of conversation. I'm not saying this is the only conversation, but um in our space, um monetizing AI is ideal to staying at um at the forefront of your of your clientele's um mind, and this is where you get to generate revenue for your clientele as an MSP versus versus be a cost center. And that's the real magic of when you realize that when you can give um clients the ability to let their data make choices for them versus just pay you every month to keep the lights on, that that's the real differentiator. That's the kind of conversation execs want to have with you versus um, yeah, you know, we had uh 700 tickets last month, and um, you know, we had this much uptime, and uh, you know, yeah, we need to replace a server at the end of the year. We know that's going out of warranty. Those things all suck money from the from EBITDA, like you're talking about. But when you create efficiency gains and you bring solutions to your customers, you're having a totally different conversation.

SPEAKER_02 38:50

There you have it, ladies and gentlemen. Stetson Tenny. Stetson, if someone wanted to get in touch with Mipli to start this conversation and work with you on this journey, uh, how can they get in touch?

SPEAKER_01 39:05

Well, um, first they could go to Mipli.com. Um, they can check out um our our website, look at um some of our case studies. Um, you know, we were posting one today, the one I talked about. We've got a couple other coming with law firms, and um they can engage there, check that out. Um, you could also look me up, Stets and Tenny on LinkedIn, uh, engage there. And uh we've got some socials coming up here soon, so um be on the lookout for that.

SPEAKER_02 39:39

Fantastic, ladies and gentlemen, Stets and Tenny from Mipply, thank you for being on the show.

SPEAKER_01 39:45

Thanks, Rob. Glad to be here.

SPEAKER_00 39:47

You've been listening to Talk Tech with Rob Scott, brought to you by Monger. Monger is the first mover in providing contracts as a service solutions specifically designed for IT managed service providers. Their SaaS-enabled legal solution is based on industry-leading templates customized for each client and periodically updated to ensure that MSPs always have the latest protections and are legally compliant. For more information, visit Monger.com. That's M-L-N-J-U-R.com. You've been listening to Talk Tech with Rob Scott, brought to you by Monger. Monger is the first mover in providing contracts as a service solutions specifically designed for IT managed service providers. Their staff enabled legal solution is based on industry leading templates customized for each client and periodically updated to ensure that MSPs always have the latest protections and are legally compliant. For more information, visit monger.com. That's M L N J U R dot com.