Episode 14: Hot, Warm, and Cold on AI in Managed Services

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Following up on their conversation in episode 13 about Hatz AI and the MRR opportunity in artificial intelligence, Erick and Rich revisit that topic again this week in an in-depth conversation with Hatz AI founder and CEO Jimmy Hatzell. That comes after a look at the role AI plays in future plans at ConnectWise and Nerdio, and the right way to handle the difficult task of firing an employee. And finally, one last thing: How chipmaker TSMC is having unexpected success making a new kind of chip—green cocoanut-flavored snack chips.

 

Discussed in this episode:

ConnectWise on AI and RPA: Move Fast, Get Serious, Stay Safe

Enough About AI. Nerdio’s Still Excited About the Cloud

AI MRR FTW?

TSMC finds its green chips are highly sought after… the edible ones

 

Transcript:

Rich: [00:00:00] And 3, 2, 1, Blast off! Ladies and gentlemen, welcome to another episode of the MSP Chat Podcast, your weekly visit with two talking heads, talking with you about the services, strategies, and success tips you need. To make it big and manage services. My name is Rich Freeman. I am chief content officer of Channel Master, the organization responsible for this podcast.

I am joined side by side on video with your other co host, Erick Simpson, our chief strategy officer at Channel Master, Erick, how you doing?

Erick: I’m doing well, Rich. How are you?

Rich: I’m doing great. I’m doing great. As a matter of fact it’s a sunny day in in Seattle, which doesn’t happen all that often this time of year.

Yeah, thumbs up.

Erick: Yeah, you’re getting more sun than we are here in Southern California lately. I’ll just say that. Yes. Yes. Which is, the opposite of what one would expect.

Rich: Yeah, and no gloating. No gloating from here in Seattle. And we had nothing to do with that. We didn’t trade the jet stream with you.

But hey, when we get a little burst of sun here we do like to celebrate. Erick, let’s dive into our story of the week here. And after recording this I’m just recently off of my first two road trips of this young year here. I’ve attended a couple of different conferences recently, one by ConnectWise, one by Nerdio.

Both of them touched quite a deal on artificial intelligence, but in different ways that kind of reveals some of what’s going on in the AI market. For MSPs right now. So the first of those two events I went to was ConnectWise Automation Nation. This used to be an annual event that they did for users of their RMM systems it’s now going to be a quarterly event.

ConnectWise is making very big investments. They are all in, as a matter of fact. On hyperautomation, which is a combination of artificial intelligence and robotic process automation. Late last year, you’ll recall, ConnectWise rolled out an AI companion akin to Microsoft Copilot, but specifically for ConnectWise users, it’s called ConnectWise Sidekit.

They also rolled out an RPA tool called ConnectWise RPA. So they’re now doing these quarterly Automation Nation events to help their MSP partners learn about these tools, learn how to take advantage of them. And according to Jason McGee, who I interviewed at the show those enablement efforts the development of those two tools I referenced a moment ago, everything that ConnectWise is doing around AI and RPA adds up to tens of millions of dollars worth of R& D and investment.

That was about as specific as McGee would get with me. Less than a hundred million dollars, he said, but definitely tens of millions of dollars. And they’re doing this because ConnectWise has for pretty much its entire existence been about automation and helping MSPs get more productive through automation and the next step in the automation journey.

AI and RPA. So they’ve got to be there. Basically to extend their legacy. Next week I’m in the Dominican Republic attending NerdioCon. This is an event hosted by Nerdio, also a management vendor focused really exclusively on the Microsoft stack. And yes, they did during a product roadmap presentation at that show, introduced some AI related functionality that they’re adding to their Nerdio manager for MSP platform.

But as I said in my writeup about the event in Channelholic, my blog, they didn’t talk about that a whole lot and not with a whole bunch of enthusiasm and it became clear. Why that was to me as I was interviewing their executives, basically they see a lot of promise in AI, but they don’t see it here now.

Nerdio is all about helping MSPs take advantage of, manage pretty much anything that Microsoft does that can be sold to end users or used to support end users. Hey, AI, Microsoft Copilot, that’s got to be something that Nerdio was interested in addition to Windows 365, Azure Virtual Desktop.

Not really. From Nerdio’s perspective, there really isn’t much management required with Copilot. You’re either using it or you’re not. There’s not really a value add that they can do there. They don’t really see a lot of opportunity for MSPs to make money on artificial intelligence.

Like I said, they’re building some AI automation into their tools to make MSPs more productive. Is there something AI related you can sell to your end users? Not really that they’re thinking right now. And so they, unlike ConnectWise are not making serious investments yet in artificial intelligence.

Now I will say, Erick, later on in this episode we are going to be joined by Jimmy Hassell, the CEO of HATS AI. This is a [00:05:00] startup that is developing tools that are designed to help MSPs create revenue generating AI services. AI is a service, they call it. There are people out there in the industry right now who think this is a customer facing opportunity and MSPs need help with taking advantage of that.

But it’s interesting that ConnectWise and Nerdio are quite a bit far apart. It is not universal out there Erick among every vendor. And presumably among every MSP that AI is a near term opportunity inside the house or outside the house.

Erick: That’s really interesting, Rich. We’re starting to see, sides being chosen on the AI conversation in terms of very specifically, is it something that can be monetized by third parties?

And, one thing that strikes me as I’m watching and leveraging Tons and tons of AI and robotic process automation and the things that we’re doing at Channel Mastered to help with things that who would have thought marketing, lead generation, sales data enrichment, all these things, and the number one job posting that I’m reading about that is launched since AI, OpenAI, ChatGPT, all these platforms.

Is for prompt engineers and prompt engineering expertise and things like that. Whenever there’s a new solution or technology, invariably monetization it doesn’t fall far behind that. So I’m in the camp that yes, there is an opportunity to become an expert, a consultant, a strategist, an engineer some person that.

Stays on top of all these changes and identifies different platforms and solutions like hats, AI, which we will be talking about in the next segment and create a service to deliver that to folks that just don’t have the time, money, expertise and help grow their businesses or overcome deficiencies or gaps in process and automate more and more of this.

Not for nothing. We’ve been hearing tons and tons about how RPA, Robotic Process Automation, was, the next frontier before AI jumped in into the scene. And I think they maybe are neck and neck or swapping places. I don’t know. But one thing I do know, Rich, is that MSPs will figure out how to monetize.

for themselves and for their clients. That’s my vote.

Rich: And I got to say, I am right there with you. And I’ll also say, I hesitate anytime I find myself in disagreement with Jay McBain, I, I said that I may be making a mistake here. And he spoke at NerdioCon. He’s in the camp, basically, that it is not time to go all in on artificial intelligence.

He said, Hey, look, we’ve all been through the IOT wave and the crypto wave and drones and the metaverse. And this is probably going to be much realer and more remunerative than any of those, but it, you don’t necessarily need to. Dive in headfirst right away, but I’m with you. I it seems to me I’m getting from vendors out there, maybe twice a week, three times a week, a research study about the security dimensions of AI in which you find out that there’s a lot of anxiety about that.

Among end users, which is good because there are a lot of risks, security related risks associated with a I that is a near term revenue opportunity for M. S. P. S. Help your customers develop security policies around a I teach that to the end user. What you pointed out, teach the end users how to use artificial intelligence to be more productive.

That’s something you can do now. Maybe it’s not an M. R. Opportunity. But it is a way to make money to monetize AI today. So I think there is a services opportunity out there right now. It might not be a recurring revenue opportunity yet, but I wouldn’t just sleep on this given all of the talk about it, how much curiosity and and need basically your customers have for

Erick: health.

Yeah, it’ll be interesting to watch rich, in the immortal words of one, Ricky Bobby. If you’re not first, you’re last.

Rich: Well done. Well done, sir. And speaking of well done, sir, it’s time for your tip of the week. What do you got for us?

Erick: Alright, Rich. This is a topic that is is an awkward and uncomfortable scenario topic.

The scenario is we have to exit an employee. And, from, no matter what your business model is, whether you’re an MSP, whether you’re a vendor, whether you’re You know, a finance company, whatever it is, it’s always the toughest decision that one needs to make. And [00:10:00] it’s, if you’re not prepared to understand how to address that in a way that does not appear to the rest of the organization from an employee morale perspective.

And a what’s next, am I next a perspective, then you should stop and think about it. And I’m working with a client right now that’s going through this scenario. I’m helping them out with planning how to address the imminent exit of someone that’s been in the organization for many years and is perceived to be.

To be delivering everything that one would expect. While in fact, behind the scenes, the opposite is true. There’s, there are definite reasons why the organization needs to make a change. And what I’m now working with them through is, okay how are we going to present this in a way to the organization?

That does not appear as if we are sliding backwards because we are releasing someone that everyone knows and likes and thinks is doing a great job when, there are other reasons that mitigating factors, whatever it is. And some of the conversation was maybe we can have someone, step back from a role.

They used to have that role and come back in. And then do that for a while and think and move forward that way. And I said you know what, that could appear as if we are moving backwards instead of forwards. And instead I said, is there someone that we can promote up into that position? Or a couple of people that could maybe manage that position and give them more opportunity to earn that position moving forward.

So instead of thinking, okay, we’ll have someone fill in that is at a higher level, maybe in that position. which could be perceived as, Oh, we’re moving backwards to the rest of the organization. When in fact that might be the best solution, in the short term, another option might be do we have anybody on the bench that we could offer that promote that, that position to, or even create an open opportunity for folks to compete for that position, put them through some training and then move forward that way.

And this way it positions that opportunity differently. To the to the rest of the staff and sees this as a way that, Oh, we’re moving forward. We’re going to move right along with it. Now there are a lot of other strategies and tactics that one must consider when faced with a situation like this.

But the point today is, position that and strategize around that so that you’re actually in reality, moving the company forward rather than. Perhaps, having an an incorrect perception of, oh, someone is stepping back into that role and then creating more concern than is merited when the company is doing everything it should be doing.

By, trading out players, if you’re, we use this analogy on another podcast a while ago rich when I said, Hey, when you’re growing a championship team, you’ve got to make some player trades along the way to get you to the championship every year. I use that analogy for customers or clients in another podcast, but now I’m talking about the internal team itself.

Can we get to the Super Bowl with the team we have or do we need to make some trades?

Rich: Now a lot of good stuff in there and I think the biggest takeaway there for folks in the audience is The word you used, I think, at the beginning was awkward. This is an awkward topic. It’s also just an awkward thing to do.

It’s an awkward thing for the entire organization to experience. And you really do need to think about this, not just in terms of the hardest part, which is the very difficult conversation you’re going to have with that employee. It’s going to be hard for them. It’s going to be hard for you. But you really do need to think about the organizational Impact and if anything plan on over communicating in the early going after this move, this change has been made because if you do not answer all the questions that people inevitably are going to have about that, people will fill that void in with their own assumptions about why this happened.

And like you said, what it potentially means for them. So you really, you gotta be prepared. Bye. In terms of handling that interaction with the employee, which is going to be difficult, there are no two ways about it, but you also have to have a strategy and a plan for dealing with it organizationally so that this doesn’t disrupt productivity and doesn’t leave people feeling there’s something wrong at this company and it might be my turn next.

Absolutely, Rich. Said. All right. Folks, we are going to take a break right here. When we come back, as promised, we will be joined by Jimmy Hatzel of Hatz AI, a recently launched company trying to help MSPs create launch, run, customer focused AI service practices. Jimmy’s going to tell us all about why he created this company and what they’re offering right after this.[00:15:00]

So stick around

and welcome back to part two of this episode of the MSP chat podcast or spotlight interview segment We’ve just been talking about AI and what it means near term longer term for MSPs and we as I promised before have the perfect guest on the show dive into that topic with he is Jimmy Hatzel from a Very recently launched company called Hatz AI Jimmy.

Welcome to the show

Jimmy: Thanks, Rich. Super glad to be here. Appreciate you having me on.

Rich: Now we’ve known each other for a long time. I think a lot of people in the channel have known you for a long time, but what you’re doing right now is new. So before we talk a little bit about the company, just give people some background about who you are and your role in the channel through the years.

Sure.

Jimmy: Yeah. I’m a just an IT guy posing as a tech CEO, started my career in it and internal it and focus on cybersecurity as well, and eventually found myself working in the channel on a vendor side, for a company called scout cybersecurity. Scout at the time had, it was just starting there.

Journey into the MSP channel, and I came right at the beginning of that and helped them productize for MSPs ran their marketing team too I had no idea what to do with marketing, didn’t have a background in marketing, but they knew that I understood MSPs and IT people because I was one, and I am one, and I ended up Staying at Scout for a good bit and through its eventual acquisition by Barracuda networks and worked at Barracuda for a little bit, helped them integrate Scout into their XDR division.

It’s still, love the people up at Barracuda great company for the MSP channel. Been around for a long time doing good things. But eventually went back to a startup and went to CyberQP. It was one of the first, 10, 15 employees at cyber QP and really help them develop their go to market strategy in the early days and, help sign up the first thousand or so MSP partners and eventually I, I.

After a couple of years at CyberQP, I love Jim and Mateo, the founders there but I, it was time for me to do my own thing. And I saw a huge opportunity with AI and AI as a service for MSPs, spend a lot of time working in cybersecurity and mostly working on bringing. Enterprise or new security products down market for SMBs and productizing them for their MSPs and helping MSPs go and sell market Adam to manage services.

And I saw an opportunity to do that with AI thus begins had say I. We are recently formed, recently funded and recently launched, and we are here to bring, we are here to put MSPs in the AI service business, basically.

Rich: And talk a little bit about how you do that what you’re doing. And let’s just start with what you’re doing now, because later on I think we’ll talk a little bit about the roadmap, but right out of the gate what was it, right at the beginning of this year, late last year, you had a few solutions already, so talk a little bit about what you’re doing today for MSPs and AI.

Sure,

Jimmy: so we have a platform today where an MSP can go and build AI powered applications in a low code, no code app builder. Very quickly for their end customers. And what this does is puts an MSP in the position where they can actually. Go in and in a consultative approach and actually bring someone through their own AI readiness audit or a process audit and build tailored applications or tailored use cases for small business.

So for example, if I was an MSP and I went into one of my customers and wanted to sell them AI as a service, my first step to doing that would be to look for areas where AI could be impactful for the organization. And through conversations with. A one of their end customers, they might uncover that customer service answers are varying and there might be business processes that, it’s the same 50 percent of texts for most of the time.

And then the other 50 percent changes based on the situation and it’s taking. Days or weeks or months to prepare reports or data in a specific format, and I could be used to do that very quickly. And then also a I data readiness. What? What? If you just turn on a I without any data readiness, you could Accidentally give access to data is not supposed to.

So there’s a whole security component and it’s really an area. MSPs are qualified to speak on as well and be thought leaders in.[00:20:00] And then with our platform, the MSP could turn around build applications specific for that end customer. Give them organizationally managed chat. That’s all managed on a like a multi tenant basis where you can easily publish apps across tenants. For example, marketing use case, it’s synonymous, most small businesses. So an MSP could publish apps related to marketing to most businesses. And yeah, it’s a start. Like we’re the software component and we’re also helping MSPs productize and figure out their own services.

And it’s going to be a couple months, I think, before people really get it down. And but I don’t think we’re that far off from. MSPs as they sign up new customers or do renewals on their other customers or existing customers to start adding an AI component or an AI package versus line iteming AI related tools like, our software, like a co pilot or something like that, where it’s just added to the bill.

It’s early, but I think things are going to move fast.

Erick: So Jimmy, as a recovering MSP myself, I’m very interested in anything that adds MRR to, channel partners to MSPs out there. Top line revenue, bottom line profitability. So I’ve got a two pronged question for you, right?

So I’m very interested in, in, in what you guys are up to. You’re promoting this concept first question, kind of two part question. First part is you’re promoting this concept of AI as a service, which is pretty catchy. It’s interesting. You’re riding the wave of AI. You’re positioning your timing.

Couldn’t be better. So how would you define what’s included in AI as a service for our MSP channel partners that are listening? And the second part of that question is we know that typically when we sell Some sort of a managed service or something as a service, we typically start that relationship with some sort of a project, right?

Then we build trust and confidence with our client, and then they’re more willing to accept, the, as a service component, or we may sell it all at once. Walk us through the journey as you see it, as I’ve expressed it, it’s what is, what’s inclusive, what’s what’s hot right now.

And then what are the project opportunities for MSPs that want to engage and take advantage of this opportunity with you? Yeah,

Jimmy: I think the journey that you bring someone. Along is, has to come from a place of thought leadership in the beginning. And if you look at the past two MSP megatrends or IT megatrends you have the movement to cloud, which was the start of a lot of MRR focused or recurring focus or OpEx spending versus CapEx spending which set the standard for the the past two decades and then cyber security as well.

And the formula has been the same for all of them. Where you go in and you do some assessment, you show them where they’re at now and where it could be, and then you pitch a project which turns into ongoing management. And I’ll go back to your first question in a second here.

But let’s say, you go into an organization. You say, Hey, listen we’ve we’ve gone through this checklist. We’ve identified 15 areas of your business where AI could be impactful. In order to do that, we’ve conducted interviews with people. We’ve identified areas where, 30 to 50%, 30 percent or more of the text in a given business process is the same every time, or the business process is repeatable.

And I could do it and we’re going to build, applications and use cases and train your users over the next six months. If you look up market if an enterprise company one to hire someone to do this and all the enterprise companies are doing this, by the way, they’re paying 2, 000 plus.

A day for a consultant for AI services. So that’s the going rate right now in the enterprise and it’s going to come down market to it. Yes, the use cases will be a bit simpler and will be lagging a couple years where right now they’re working on vector database implementations and custom LLM implementations.

And we believe MSPs are going to be in that business in a couple years and we’re going to help them get there. But I think because people don’t know about it yet and everything’s so new there’s it seems like an area that’s impossible to get to, but I think it’s going to happen very quickly and maybe it’s not, 2, 000 a day, maybe it’s, 200 an hour or something, or, a good rate though.

But right now the going rate for expertise for AI. Is more than cyber security and more than incident response which is not something to be ignored. And then from an M. R. perspective, like from our software, we’re trying to build in where. Our good our loyal partners and we have, we’re building out [00:25:00] tiered pricing and all that, of course as well, but where our loyal partners can make at least 50 percent margin in everything that they sell from a software perspective.

Which requires some creativity on our end because AI is very expensive to run and a lot of companies, a lot of startups are even running at a loss and we’re through this era of startups, just burning through cash. But there are creative ways that, that we could do that and ensure that, our good loyal partners are able to make that amount of money which is a huge revenue opportunity, think of the going rate for most AI services is like for software alone, it’s 30 a month in, in top line in just per user per month, right? Microsoft copilots that notion AI is that like big may they’re all like 30 a month is pretty much what it gets to GPT like personals. Whatever, 20, but that’s a personal, so business, 30 a month across an entire client base is a lot of top line.

And then if you can get margin off of that too, that’s meaningful revenue for your business products that you can make that kind of money along on don’t come around every day. No there’s like insecurity, right? You have to bundle six or seven or eight products to get to that. Maybe not that many but you’re bundling, right?

Endpoint protection whatever MFA and maybe a so service or something like that to get up to those numbers. Where ai, I think the price is higher. So the result for the MSP compounds faster than on top of that is the management of it. So there’s going to be dollars spent on AI.

Nobody denies that. There’s every, there’s one thing that analysts will agree on, they’ll disagree on how fast AI is a service or how fast MSPs or blah, blah, blah, blah. But nobody disagrees that businesses are going to spend money on AI. And I just think it should be through their MSP and MSP should be making the margin off all the AI spend and then manage services on top of it to manage all of that.

Rich: Jimmy, I I have a bigger question I want to ask, but I want to do a quick product related question that I probably should have asked before, because I’ve written about HATS AI. A few weeks back in my blog, Channelholic, and shortly after that post went out, I got a message from a reader who said, Hey, Microsoft has this thing called Microsoft Copilot Studio, sounds a lot like what Jimmy is doing, what’s the difference there?

In case she’s listening now, what is the distinction between that component of your platform and Copilot Studio?

Jimmy: Yeah, Copilot Studio it’s like more the intuitiveness of how to use it and being able to easily publish it across multiple tenants. I’ve taken a look at it, and honestly, when I went to use it, it was even hard for me to figure out how to use.

I’m not trying to Compete with Microsoft by any means. And I think that there’s going to be a wide variety of products in this area. But would see that more as like a Zapier type competitor versus what we’re trying to do. And addition is the ease of multi tenant management, ease of editing, that kind of thing as well.

Rich: So Erick and I were talking about this earlier in the episode, and you and I have actually spoken about this there are some people out there who are a little bit skeptical. About A. I. As a near term, what particularly as a near term M. R. Opportunity, but even maybe as a near term kind of project services revenue opportunity generally and one of one of those persons is J.

McBain from canalis. I had an opportunity to hear him speak just last week, actually, as we’re recording this, and he said on stage what he said to me before and in an interview for my blog, which is just there will be Good money for MSPs to make an AI, but it’s going to be a little bit down the road. So you don’t have to address your comments to Jay, but he’s not the only one who’s thinking it’s going to be a while before this opportunity materializes.

What do you say to those kind of skeptics who are thinking you’re maybe a little bit ahead of the curve?

Jimmy: Maybe I am ahead of the curve and maybe I only work with the top 10 percent or the 10 percent earliest adopters with MSPs. I don’t know. I think it’s going to happen faster than anyone thinks.

I think if you compare this mega trend to cybersecurity or the movement to cloud, it’s like comparing apples to oranges. I’ve been in client meetings selling cybersecurity. Over and over and over again. And it is hard. It is very difficult to convince someone that they need to increase their monthly spend on it by 50 percent for cybersecurity, something that’s intangible, something that they can’t see, and they’ve [00:30:00] never been hacked before.

Because they didn’t know it, right? And then you do all these discovery questions, all these reports, all this stuff where AI is show, don’t tell. And it hits OpEx savings at a time where, we’re in a potentially in a recession, certainly some sort of economic tightening, if we don’t want to put a label on it.

So with those factors I just think people are going to adopt it faster than people are ready for. People think, ChatGBT has only been really been used for a year. I think about how fast that’s happened where now, almost everyone’s used it now and many people use this part of their daily workflow.

I, I. I maybe I’ll end up in a it’s happened before where I’ve gotten in a impromptu webinar debate with Jay McBain. This was over partner portals a couple years ago. Maybe that’ll happen again, but I just think it’s going to be happening fast. The thing that happened a week ago or whenever the time released three weeks ago Open AI showed their capabilities to generate video.

People didn’t think that was going to happen for 10 years.

Rich: You know this well from your background in in security, that there are MSPs who understand the appeal of having some kind of specialized security practice, but they worry about positioning themselves. to clients as somebody who knows security well enough to follow through on those promises.

I, I’ve got to imagine it’s a similar kind of thing with AI. There will be people listening who are thinking, I like the sound of that revenue opportunity, but I need to know something about this before I can go to my clients and say, here’s something I can do for you. How much training, how much preparation, what do you got to do to get yourself ready to launch an AI as a service practice?

Jimmy: So let me give some context. I get on with Google cloud, right? Because I’m testing their, their new models. They just came out with Gemini and I’m on with them and we’re testing it and they’re going, okay, so this is in beta preview, early access and this one’s in beta preview.

And I haven’t tested this one yet. And then I get on with AWS and they’re like, all right, so this is in beta preview, early access, this is brand new. And then you go to use an open AI API documentation and it’s in, beta preview, whatever like it, everything is so new that the playing field is almost level because all of the new products to implement where if you had a great background and understanding.

I, you had a huge advantage maybe up until two years ago, where now you still do, but you do at the LLM level, where now there’s a new level, which is similar to having a background in AWS or Azure or Intune or something like that, where it’s more interacting with APIs or cloud services. So I, I think that, that it’s not as hard for someone to catch up or be ready to implement these services as people think, especially for M. S. P. S. who are used to learning on the fly and, have lived on Google their whole life. So that’s that’s 1 piece of it, which is different than security, right?

Because you need to know a lot of. A lot of things in security. The second is I was in the security business for a long time and like It is difficult. It is difficult because someone gets hacked. It’s on you. There’s so much risk so much liability Yes, there’s risk and a liability in ai but it’s a lot less than security.

So I think that there is a hypersensitivity to it around that, just with recency bias with security. And then the third thing is, we’re all learning together. This is a new area and there’s a shortage of talent, right? There’s the same way there’s a shortage of talent in cybersecurity.

Talk about the cybersecurity talent gap, right? Whatever 3 million unfilled jobs or whatever the commonly quoted thing is there’s nobody has a degree in chat GPT, right? There’s it’s a, it’s all new. So I think MSPs are what we’ve got. And I’m trying to build some certification programs where MSPs can get certified and prompt engineering and LLM security and LLM basics and gen AI basics.

Just to get that foundational knowledge, but like it’s a new area that has just flown up faster than anything I’ve ever seen before. And I would encourage people to get involved and to not shy away from it.

Erick: Jimmy it’s obvious that. You’re taking advantage of, something that is emerging technology, right?

It’s improving every day. It’s adoption rate is increasing. I think I read somewhere recently where, prompt engineer is like the number one position that, enterprise organizations and mid market organizations are hiring for. Do you see HATS AI? [00:35:00] Expanding beyond an MSP focused deliverable will do, have you thought further into growth and seeing how this expansion might be utilized by someone that is employed inside of an organization as a prompt engineer or something like that?

Jimmy: Yeah. Potentially I’m really focused on MSPs right now, and I think, MSPs in the shorter term are going to be in the prompt engineering business. And for example, like in our AI app builder it’s prompt engineering. So I’m even talking to our launch partners right now and they’re.

Like looking at creating managed service services package where you get access to a prompt engineer or you get, a certain amount of per month of prompt engineered apps or edits you can get as part of the managed package. And I think MSPs are going to be in that business. I did meet with, some direct customers to, to stress test and get early like direct feedback on the product and use cases. And one thing that I realized very quickly is at the rate that AI adoptions happening. It would be very difficult for me to scale support for business outside of scaling support for MSPs versus end users.

So it’s it’s not like most software businesses go and try to partner with MSPs because of the sell through distribution power, right? You’d go partner with MSP and they sell it to, you All their customers, either all at once or over a period of time. And that, that’s certainly appealing to me, but there’s so much demand for AI, like that’s only half of it.

One huge appeal for working with MSPs for myself is because I know how to build support or even a, partner success or customer support or. For an MSP organization. And I don’t like, I can do it for an end customer, but it’s a lot more difficult when you’re dealing with an MSP and they’re trying to find a bug in an application or trying to get new software or do some integration or, like we’re doing an AI phone assistant, there’s all sorts of stuff with.

Sip trunking and avoid stuff that like MSPs just know how to do that. And like you get on with it’s much easier to support an MSP and then they support the customers than it is to try to offer direct support to an end customer or for us to bring on a direct a direct sales organization or something like that.

So it’s not something that super, super pursuing right now also sensitive to channel relationships and, I never want to be. The guy who’s, selling around a partner or something like that, I get that there’s if you go up market and you sell up market, you don’t really get a channel conflict and you can always, in many organizations, especially more recently, we’ll have, have come out of MSP and ended up, having a mid market or a channel work Like ThreatLocker, Huntress, right?

Really all in MSP companies which previously it’s like a death sentence as a vendor to go and, have your direct business and then compete, but I think it’s if you do it right and you’re smart about it, as long as you put your partners first, it’s okay. But I guess what I’m trying to say is I’m not ruling it out, but I’m really just focused on MSPs for the short term.

There’s just so much opportunity there.

Erick: Yeah. And we know and appreciate Jimmy that’s where your heart is and your experience really lies in this channel. So you mentioned, the opportunity for MSPs to sell so many hours or so much time for a prompt engineer. So are you?

Looking at it as the virtual CTO, virtual CISO, virtual PEO, prompt engineering

Jimmy: officer. I don’t know. We’ll see how it plays out, but definitely like being able to integrate AI into a small business and streamline their workflows with AI is going to be a huge differentiator for MSPs.

And. If I’m a small business, take any law firm, any architecture firm, any whatever, any small business, right? There’s optimizations probably that can be done with AI. If they want to help and they want to call someone to figure out how to do in their business. There’s no one to call. And so MSPs have to be they logically are going to be the ones getting that business.

So I’m sure the branding will come out and the rules and responsibilities, and we’ll all be at, it nation at the end of the year, like in some workshop, like how to. Set up your chief AI officer your virtual chief AI officer, services practice, right? Like that. I think it’s all going to come in whether it’s in six months or two years.

I don’t know. There’s seems to be some uncertainty there, but it’s gotta happen.

Rich: Really interesting stuff, Jimmy. And just Kudos to you basically for being first to market essentially with something so MSP [00:40:00] specific around AI. That was what got my attention certainly about the company and other people as well.

And that’s why. Erick and I both will be keeping an eye on how this goes, paying attention to where it goes from here. It should be a very interesting year for your very young company. For folks in the audience right now who want to learn more about you, get in touch with you, learn more about the company, get in touch with the company, where should they go?

Jimmy: Sure. You can go to hats.ai. You can connect with me, Jimmy Hazel on LinkedIn. In the month of March, we are slowly rolling out access to the partners on the wait list, and we hope to be fully active for all partners. We’re on the wait list. We’re newly interested in signing up by the month of April.

So excited to interact with all your listeners.

Erick: And I just wanna clarify the the URL there. Jimmy is HA tz.ai, is that correct?

Jimmy: Yes. HA tz.ai. Maybe eventually I can buy that. HA ts dot h ai. I want everyone’s that

Erick: Stetson, I think. But anyway,

Rich: Yeah.

Erick: So I wanna see you with the shirt on.

I’m from the future when we meet at the next event, Jimmy.

Jimmy: Okay. Sounds great. All right.

Rich: Thank you again very much for joining us. Really interesting conversation. And folks, we’re going to take a break now. When Erick and I are back on the other side. We’re going to chat a little bit about this conversation we just enjoyed with Jimmy.

Maybe have a little bit of fun, wrap up the show. So stick around. We are going to be right back.

Okay. Very interesting conversation. We started the show. Erick, with a conversation about how ConnectWise and how Nerdio are looking at AI and made it clear that There is a range of opinions about what is near term and longer term. Is there MRR available? Is there not? Jimmy if ConnectWise is all in on automating the work that technicians do, Jimmy is all in he’s betting his career basically, at least for now on the prospect that MSPs can make money with their clients today.

Around artificial intelligence and look, are you going to make, are the people in our audience likely to make 2, 000 a day like the enterprise AI pros do? Probably not. But Jimmy’s talking about maybe 200 an hour. That sounds realistic. You could be making that money relatively soon.

And for Jimmy, you don’t necessarily have to be. An AI expert to start doing that, the technology is so new and it changes so rapidly that you’ve got more leeway than you typically would in an area like security, for example. Just a very interesting strategic take on the revenue opportunity around AI.

Erick: Yes, Rich. And what, one thing that I really like about introducing this opportunity. To the MSP channel is it creates a unique and distinct service slash solution definitely is seen as much more strategic and potentially valuable to the right clients. So it’s not, keeping the infrastructure running and.

And making sure that, the environment is secure and all this can make real positive change and difference inside an organization when structured correctly and packaged and delivered properly. It’s a much different type of a service. And I would argue it would certainly increase the perception.

Of the MSP delivering these types of services to a much higher and more strategic perception than they may be enjoying currently with those clients.

Rich: And that I really agree with. As a matter of fact, the thing I was doing before we started recording this episode was working on a column for Channel Holic in which that is a small part of the larger point I make, which is, the, according to Canalys.

In a research study, they collaborated on with Enable this year. Something like 340, 000 channel partners worldwide will collect over half a trillion dollars with a T of money on managed services, which is great. But if you’re competing with 340, 000 other organizations, there better be something about you that is a little bit more than the commoditized network monitoring, endpoint management, et cetera.

And AI, to your point. Could be that thing right now. And if it’s not, if you make the decision, you’re just not going to go there, then keep in mind, you’re going to be competing with people who can have that conversation with your customers.

Erick: Yep. Yep. Definitely a risk and an opportunity, a risk.

If we don’t move in that direction and take advantage, risking first mover advantage and the opportunity to really carve your niche and perfect that solution. Or a bundle of services or whatnot. [00:45:00] And we even talked with Jimmy and I threw up the the idea, Rich of a, virtual prompt engineer kind of a thing.

Of course, I, it can be whatever you want it to be the title of it, but really that’s what it’s all about. And it could add even a distinction from your virtual CTO services or virtual CISO services. And again, just another way to go deeper and wider. into a client relationship, adding more strategic value and commanding, the commensurate rate.

Rich: All right. Folks, that leaves us with time for just one last thing and it comes to us from Taiwan. Home of TSMC, one of the world’s biggest manufacturers of chips. Now they recently announced their Q4 earnings, which were essentially flat. It’s actually a tough time to be making processors for PCs in particular, but just in general endpoint sales are not thriving right now, but TSMC has found a chip market that’s working pretty well for them.

It just happens to be. The snack chip market. TSMC has recently released a limited edition of a coconut flavored corn puff chip that they’ve made with in coordination with a local manufacturer there. And by golly Erick, these things have been just leaping off the shelves. The processors, not so much.

The snack chips, absolutely. Now, I don’t know the size of these bags. I’m guessing it’s like the lunchbox, the little lunchbox size, because the the chip, yeah, chip maker. The the snack maker working with ts T-M-T-S-M-C on this sells chips without that branding in the same kind of bag for 80 cents US typically.

But once this limited edition set of TSMC snack chips got out there. They started trading online because they’re collectors items and people are spending 16 a bag for these 80 cent bags of chips. So you know what, at a time when they really need it, Erick, TSMC has found themselves a hit product.

Erick: Wow, way to trade on the chip name in a different way. And, creating buzz, which I think is awesome, right? Creativity, marketing, we’re always trying to figure out new ways to generate interest and curiosity. Let’s just see how many of these bags of chips they need to sell to equal, or to close the gap on their revenue for this year.

Rich: And hey, opportunity for you to Intel if you’re listening. Intel snack chips. I think they would be a winner. All right, folks. That is all the time we’ve got for you this week on the MSP Chat Podcast. Thank you so much for joining us. We’re going to be back in a week with another episode for you. If you are listening to the audio version of this podcast but you’re curious to check out the video version, we do have a video version available for you on YouTube.

If you’re watching us on YouTube, But you’re also into audio podcasts. Wherever it is you get your audio podcasts, Spotify, Apple, Google, beyond. You’re probably going to find us there too. And wherever you find us, please subscribe, rate, review. It’s going to help other people find the show and they can enjoy it just as much as you do.

This show is produced by the great Russ Johns. He can produce a show for you too. You can learn more about him and the services he provides. At russjohns. com. All one word. And of course, the show is brought to you by Channel Mastered. The organization Herrick and I both work with. If you want to learn more about Channel Mastered, go to channelmastered.

com. So once again, we’re going to see you again in a week with another brand new episode of NSP Chat. Still, until then folks, please remember you can’t spell channel without N S P.