What is the reality in terms of partner AI services and revenue right now?

So if there's ever a sentence written by AI, that sounds like one, doesn't it? No, I mean, the answer to the question goes back to what we just said.

Where is this $85 billion happening? And for the first time in our industry, again, going back 56 years, AI is more of a segment story than it is an industry story, a geography story, a buyer story.

And what I mean by that is depending on how large your client is, It depends on their vision of AI.

For example, no one in SMB up to 499 employees is ever going to meet, you know, Sam Altman or Dario or Jensen from Nvidia.

They're never going to be in the room.

It's all white labeled.

Before we talk about that deal itself, can you talk a little bit about why community is such a growth engine in the channel and not just kind of a feel-good get-together of partners every once in a while?

I mean, we're

still selling typewriters.

There's still typewriter ink business that Office Depot is doing.

You can go back.

Nothing ever goes.

So the client-server era, kind of from August 12, 1981 to that moment in 1999 when Mark Benioff created Salesforce in San Francisco, that 20 years never went away.

We're not selling less PCs.

I kind of want to know from your seat, is there room for more than one or two of these to become the operating layer for an MSP? Or does this end the way it always ends with two or three consolidators owning the take rate and everyone else becoming channels into those marketplaces?

So how do they adapt, especially with millennials now making up the dominant technology market?

Yeah, so the good news is we know way more about this buying than we ever did.

And it's not theory, it's not a flywheel, it's not a force multiplier.

I mean, it's not some fancy PowerPoint slides.

It's literally the average buyer in a considered purchase, which this would be a considered purchase, is not unlike buying a car.

There are 28 moments, measurable moments on average in a considered purchase.

Now, if you start to think about the moments, if you buy a car, for example, 94% of people now are using ChatGPT or Gemini or Anthropic or something, Grok or something to start the search.

So what does that motion look like today? And how do you see it going, you know, evolving into the near future?

So to go back to that story about the fifty-three percent of companies who are gonna fail, one of us is gonna be asked to write the book, but chapter one is always you blame the CEO.

Jay, welcome.

Thank you, sir.

31 days ago, we landed Artemis II, the furthest humans have ever been away from the planet Earth.

57 years ago, we landed on the Moon.

In the 56 years between those two moments, the tech industry has been the fastest-growing industry in the world every single year.

We moved from the Space Race to the technology race, and we're just getting started.

If you're old enough, you'll recognize the mainframe and mini era for 20 years.

Are you expecting similar pacing? Is it gonna move faster? Like, give me a sense of your thinking about the way the timeframe will go, particularly as we're trying to look at these historical analogies.

Yeah.

The interesting thing that is coming out of all the research now is one of the surprising things in the AI era, it has so much to do with segment, your customer size in terms of employees.

Not so much industry, not so much geography other than some sovereign, you know, type of conversations.

You know, not so much on the product stack and the service stack.

But the segment drives everything.

I think one of my most popular posts this year on LinkedIn was breaking down the segments.

So from, from your vantage point, you're looking at the channel, like, is that assessment right or am I completely overcorrecting here?

Where are you seeing partner value highest right now in AI? Is it around model and vendor selection? Is it integration? Is it data readiness, raw security, ongoing operations? Like where are the partners getting the most value out of something attaching to AI right now?

Yeah, most of what you just said, but keep in mind, you know, 95% of the opportunity, that 35% growth that I talked about is happening before the point of sale.

You may have remembered MIT writing the report that 95% of proof of concepts are not turning into production.

We kind of criticized that and said, hey, you only talk to 52 people.

That doesn't seem scientific.

Well, then the next week, Accenture came and said, being the biggest tech services company in the world with 779,000 people, came and said, no, our failure rate's 90%.

So when you start to think about that, no one has AI at this point in a managed service.

I'd like to get a little sense, as somebody who spends a lot of time looking at the channel, the interaction with the vendors and the partners, how do you look at labor indicators? Which ones do you look at and what signals do they tell you?

like this would be one of the largest and fastest growing opportunities in the channel far exceeding cyber security which everyone knows that i'm kind of down on the you know the the idea here is is to look for those new you know moving from transitional experimental transitional generative ai pilots into actual agent-driven business processes talk to me a little bit about what you're thinking about that transition means again over a five-year period like some of the specific outcomes that providers are thinking about or leaning into.

Yeah, if you start with customer first, I'm gonna play out what your bubble is.

And if anybody's an investor, here's the secret, is that if you look at unicorns, companies becoming worth a billion dollars, it's all on paper, it's all in terms of how the money flows from private equity and venture capital.

But half of this year's unicorns, the 100 new companies that become unicorns this year are AI companies.

Those are at high risk.

And even the VCs and PE firms behind them know that their hit rate is going to be maybe one out of 10.

Sure.

Talk to me a little bit about how you think about that uplift on services revenue in something like a CrowdStrike program versus the new trends of how these vendors are moving the way they engage their partners.

okay guys tell me a little bit then about where your thinking is around some of the disruption that we might see particularly if we're putting on our hat of that new startup player like what is the potential competition that to the space that you're thinking about jay i'm sure you've got an idea here

Yeah, I just, to cap off on the last one, though, remember, you can't easily just segment the market by good, better, best.

You know, the best are going to get it, the good are not going to get it.

Guess what? If you're only $100,000 or $200,000 away from jumping out of that bottom 30% and now you're profitable and you can reset yourself, by the way, agentic AI can do that.

You can go into your tool set with ConnectWise, Kaseya, Enable, Ninja, Halo, Synchro, Atira, through 25 different tools that are going to be introducing these models to make your people more efficient, to make you more efficient and effective in your sales, marketing, invoicing, billing, service tickets.

That might be the leap to get out of that struggle and start leaning into the future.

Now, here's the answer to your question.

Anybody wanna dive in there particularly, Jay, you're smiling.