Jessica Davis on AI-Driven Pricing: How Microsoft and Kaseya Are Pressuring MSP Margins

The dominant structural shift addressed is the move of platform vendors away from competing on feature sets toward controlling the governance and billing layer that underpins managed services. This is evident in moves by Microsoft, AWS, and Kaseya, specifically with Microsoft's new licensing tier combining per-seat fees with consumption-based AI add-ons, AWS redefining managed services around agents, and Kaseya introducing action-based pricing for IT management. Analysts noted that these developments collectively place a consumption meter on previously flat-rate services, reconfiguring how MSPs and IT providers will be billed and held accountable. Primary evidence for this shift includes data from Omdia’s channel media report and tracked M&A activity within the MSP sector. The report counted 169 MSP acquisitions in 2025, mirroring prior years’ activity, yet identified that one acquirer—Evergreen Services Group—accounted for 47 deals, illustrating a concentration in acquisition strategies. Notably, 69% of publicly announced deals involved private equity, with the remainder pursued by independent operators. The North American channel media landscape saw significant contraction, with titles dropping from 29 to 18, despite stability in the global outlet count—attributed to both industry consolidation and AI-driven changes in content discovery. Supporting developments include growing use of AI in content production, leading to declining traffic for B2B publications as audiences increasingly access information through automated tools rather than direct visits. The rise of engagement-focused business models and shifts in acquisition criteria—such as Evergreen targeting founder-led MSPs—underscore evolving buyer strategies. Additionally, platform vendors are restructuring their product and pricing models around agent-driven and action-based billing, while shifting their external positioning to emphasize AI, intelligence, and cyber resilience. Operationally, MSPs and IT leaders face increased pricing and margin variability driven by emerging consumption-based licensing and AI service models. The historical per-user, per-month bundle is at risk as vendors experiment with new billing constructs, exposing providers to cost unpredictability and complicating client contracts. Providers lacking internal engineering or acquisition frameworks may be especially exposed, while consolidation and vendor dependency raise governance and accountability stakes. MSPs pursuing higher margin services, such as compliance or cyber resilience offerings, must prepare for new cost structures and intensifying pressure from both customers and vendors regarding efficiency, pricing, and service outcomes.Supported by:  Zero Networks Moovila   Upcoming event:  The Pivotal Point of IT: Building Services for the AI-First Era Date: May 13 at 1p.m. EDT Register: https://go.acronis.com/davesobelaiera  💼 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.