AI and Profitability: The Hard Business Case for MSP Leaders

The conversation around AI in the channel often circles back to one simple question: does it really move the needle on profitability? For MSP leaders balancing rising delivery costs, tool sprawl, and technician burnout, the answer has to be more than buzzwords. It has to be measurable, and it has to be about money.

The good news is that the data is starting to tell a clear story.

How does AI Really Show Up in Profitability?

In Datto’s most recent State of the MSP report, top-performing providers were far more likely to say their automation and AI tools were directly improving operational efficiency and margins. Nearly half of those MSPs reported measurable margin lift from automation, while average performers admitted they were still under-utilizing the technology. The spread is telling: leaders are already pulling ahead, and AI is the wedge.

Other industry research points to the same financial upside. Lansweeper found that almost 90% of MSPs expect AI to boost profitability within two years—43% predict the gains will be significant, while another 45% foresee moderate but steady improvement. That’s not theoretical. It’s MSP leaders looking at their own P&Ls and forecasting better gross margins because machines are finally doing the drudge work humans shouldn’t.

And the gains aren’t limited to margin defense. AI allows MSPs to expand their customer base and service capacity without adding the same level of headcount. Providers who successfully roll out assistive automation are already seeing the ability to support more clients, deliver faster resolutions, and position AI-driven services as premium offerings. In other words, AI doesn’t just protect the bottom line—it opens the door to new, higher-value revenue streams.

What Efficiencies Should We Expect?

Profitability is one side of the story. Efficiency is the other. Every hour reclaimed from repetitive, low-value work is an hour that can be redeployed to billable projects, escalations, or growth initiatives.

Industry research shows the payoff is already real. Datto’s most recent benchmark survey found that nearly a third of MSPs are using AI to remove tedious manual tasks altogether. Another fifth say it’s giving their teams more time for strategic work. That may sound modest on paper, but for a 25-person service desk, even small improvements in triage or summarization can free the equivalent of several full-time employees.

At Thread, we believe the most powerful efficiencies come from assistive AI, automation that supports technicians rather than replaces them. Auto-triaging tickets by category and priority, generating clear summaries for faster handoffs, and suggesting next steps in real time are all high-impact, low-risk workflows. These are the kinds of changes that immediately reduce the noise of the service desk.

There’s also the human side. Burnout remains one of the biggest threats to MSP profitability, driven by tool sprawl and repetitive work. It’s no surprise that most leaders plan to increase budgets for automation and AI in the coming year. Efficiency isn’t just about shaving minutes off tickets, it’s about making the work more sustainable, reducing turnover, and freeing technicians to focus on higher-value service delivery.

Zoom out, and the pattern is clear. Assistive AI creates space. That space reduces burnout. Stronger, more engaged teams follow and efficiency becomes a flywheel that feeds directly into profitability.

The Thread POV

At Thread, we believe the smartest path forward is to start with assistive AI, the kind that supports your team in ways that are high-impact but low-risk. Think about auto-triaging tickets by category and priority, auto-summarizing notes for faster handoffs, or nudging technicians with suggested next steps. These are efficiency wins you can measure in hours saved per week and customers served per technician.

Once those foundations are in place, profitability naturally follows. More capacity with the same headcount, more clients onboarded without adding dispatchers, more premium services offered because your team finally has the bandwidth. That’s the hard business case: AI isn’t just hype, it’s an operational lever MSP leaders can pull today to make more money tomorrow.