Unlocking AI potential: the governance challenge for managed service providers

MSPs are encountering governance challenges as they expand AI services, with a growing focus on standardised approaches to data protection frameworks.

AvePoint has shared insights from Omdia’s recent study highlighting challenges managed service providers (MSPs) face in progressing towards AI readiness. While adoption of AI tools continues to grow, gaps remain in end-customer AI readiness, with governance and compliance identified as the primary barriers.

Omdia forecasts a $276 billion partner opportunity in AI services by 2030, although governance issues may affect MSPs’ ability to fully capitalise on this growth. The study finds governance and compliance are the main obstacles to AI implementation for MSP customers, ahead of concerns such as technical infrastructure and skills.

Over half of providers cite governance challenges as the leading barrier to AI adoption, underlining the need for structured data protection and governance frameworks.

The research also highlights a shift away from point solutions, with MSPs increasingly seeking integrated platforms that address customer requirements more holistically. Around 49% of MSPs report a preference for a fully integrated platform alongside core tools, reflecting this trend as AI adoption increases. While nearly all MSPs recognise the importance of automation in AI readiness, a significant gap remains between intent and execution, with many unable to scale AI-ready environments effectively.

For MSPs that have not yet fully automated data protection and compliance services, operational complexity across customer environments is the main barrier to achieving scalable automation. Each customer tenant introduces different configurations, which makes consistent workflow standardisation more difficult. However, demand for governance and data protection services remains strong, with Omdia forecasting 21% growth in compliance services by 2026.

Key operational priorities identified for MSPs include establishing repeatable governance frameworks, enabling centralised multi-tenant visibility, and implementing unified data protection controls. These approaches are increasingly important as shadow AI increases risk, driving demand for integrated solutions that support policy enforcement and ongoing compliance.

Overall, the research highlights the growing importance of streamlined governance processes in enabling AI adoption. As MSPs address these operational challenges, there is an opportunity to improve service delivery and participate in the expanding AI services market.

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