Exploring IT Service Models: Toolsmiths, Citizen AI, and the Future of MSPs with Howard Cohen

Business of Tech: Daily 10-Minute IT Services Insights

Host Dave Sobel engages in a thought-provoking discussion with Howard Cohen, a seasoned expert in the IT industry. They explore the evolving landscape of IT service providers, focusing on the emergence of the "toolsmith" model. This model emphasizes the importance of software developers and hardware manufacturers providing tools that enable partners to create and deliver profitable services, rather than merely reselling products. Howard highlights the shift from product sales to service-oriented models, which allows providers to enhance profitability and foster collaborative partnerships with software vendors.

The conversation delves into the challenges faced by managed service providers (MSPs) in today's market, particularly the tension between reliance on vendor tools and the risks associated with vendor dependency. Howard draws an analogy between MSPs and carpenters, suggesting that while tools are essential for their work, the true value lies in how they utilize those tools to provide services. He argues that MSPs can leverage vendor tools to offer proactive services that improve customer relationships, rather than simply reacting to issues as they arise.

As the discussion progresses, Howard introduces the concept of a post-verticalization era for technology service providers. He envisions a future where MSPs evolve into business technologists, emphasizing the need for specialization and collaboration among professionals. This shift would elevate the professionalism of IT service providers, akin to established fields like medicine and law. Howard advocates for a framework that establishes professional standards and ethics within the IT industry, ensuring that customers can differentiate between credible providers and those lacking the necessary qualifications.

Finally, the episode touches on the implications of citizen AI and its potential to disrupt traditional IT roles. Howard discusses how citizen developers, empowered by low-code and no-code platforms, may reduce reliance on traditional information systems teams. While this democratization of technology presents opportunities, it also raises concerns about shadow IT and the need for IT professionals to adapt to a more dynamic landscape. The conversation concludes with a reflection on the future of AI in the industry, emphasizing the importance of practical applications and the need for IT professionals to remain vigilant in managing the evolving technological environment.

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