Jay McBain on How Microsoft’s AI Billing Passes Risk and Liability to MSPs

The episode examines a structural shift in the MSP business model driven by the introduction of AI-linked consumption-based pricing layered on top of traditional per-seat fees. This emerging mechanism, typified by Microsoft’s E7 license, adds variable AI consumption charges to otherwise predictable monthly service costs. Vendors are restructuring partner payment models, with Microsoft’s move closely watched by others, signaling a wider potential for volatility in the recurring revenue foundations of MSPs, according to analysis from Jay McBain and recent channel data. The most consequential development is Microsoft’s E7 pricing, which explicitly adds an AI consumption cost to the standard per-seat license. This move introduces variability at “machine speed,” in contrast to previous examples such as cloud storage, where consumption remains predominantly human-driven and thus more predictable. Analysts note that similar micro-consumption models—charging per conversation, process, or API call—are being adopted by hundreds of companies. Market data from Omnia and referenced industry research places the global IT spend at $6 trillion in 2026, with two-thirds delivered by channel partners and a rapid shift from fixed, subscription models toward micro-consumption billed at a granular, usage-based level. Supporting evidence includes the lack of sufficient vendor-provided controls for variable consumption, leaving MSPs exposed to unplanned cost spikes. While large enterprises are introducing robust FinOps practices and loading up cloud credits, smaller MSPs serving SMB customers are not prepared with similar governance structures. There is also vendor-led encouragement for AI adoption—such as persistent in-app assistants—that drive up consumption before adequate controls or cost-passing mechanisms are established. The sustainability of current pricing models is further questioned by the fact that providers like OpenAI and Anthropic are themselves subsidizing significant portions of token usage, distorting true costs throughout the value chain. For MSPs and IT service leaders, these developments mean greater exposure to unpredictable costs, potential margin pressures, and increased contractual risk tied to AI consumption. Operators cannot rely on vendors to provide spend caps or consumption governance today; failure to build internal controls or pass-through mechanisms may result in absorbing unpaid liabilities. Accountability for AI-driven actions, remediation, and configuration changes will rest with the MSP, elevating both operational complexity and liability exposure. The current environment requires building governance, audit trails, and spend management capabilities now, ahead of broader market adoption of AI consumption models. Supported by: CometBackup  💼 All Our SponsorsMSP Radio is supported by our partners: LogMeIn · Opentext · Transit AI · Guardz · Pax8 · ABC Solutions · Rythmz · ScalePad · CometBackup · TimeZest Supporting the IT services community through insights, analysis, and transparency. 🚀 Join Business of Tech PlusGet exclusive access to investigative reports, vendor analysis, leadership briefings, and more.👉 https://businessof.tech/plus 🎧 Subscribe to the Business of TechWant the show on your favorite podcast app or prefer the written versions of each story?📲 https://www.businessof.tech/subscribe 📰 Story Links & SourcesLooking for the links from today’s stories?Every episode script — with full source links — is posted at:🌐 https://www.businessof.tech 🎙 Want to Be a Guest?Pitch your story or appear on Business of Tech: Daily 10-Minute IT Services Insights:💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech LinkedIn: https://www.linkedin.com/company/28908079YouTube: https://youtube.com/mspradioBluesky: https://bsky.app/profile/businessof.techInstagram: https://www.instagram.com/mspradioTikTok: https://www.tiktok.com/@businessoftechFacebook: https://www.facebook.com/mspradionews Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.