How AI will transform the SMB landscape

Pax8 has released the results of a new global survey conducted by Channelnomics on the buying trends of Small and Midsize Business (SMB) buyers in the Artificial Intelligence (AI) market. The report found that 88% of SMBs have successfully implemented at least one AI system but that insufficient infrastructure, data hygiene, and security hinder the realization of complete value when it comes to integrating AI.

“The AI implementation trends among SMBs signal a positive outlook for the backbone of the global economy to be able to adapt and succeed in the digital future,” said Ryan Walsh, Chief Strategy Officer at Pax8. “However, the lack of sufficient infrastructure, data hygiene, and security to fully harness AI’s potential underscores the vital role of Managed Service Providers. As AI continues to reshape business operations, MSPs emerge as essential partners in providing the expertise and solutions SMBs need to effectively navigate the complexities of AI integration into their tech stack.”

AI as a Business Imperative

The imperative for businesses to adopt AI has never been more pressing. With the emergence and rapid expansion of AI in the IT market, organizations have been focused on the potential of the technology, particularly following the release of tools like ChatGPT and Microsoft’s Copilot.

According to the report, more than 80 percent of global SMBs surveyed acknowledge that neglecting AI adoption could jeopardise their competitive standing, while nearly half (49%) admitted that failing to keep pace with AI adoption will place them at a competitive disadvantage. At the same time, the perceived long-term benefits of investing in AI (87%) and the ability for AI investments to enhance meeting business objectives (74%), including improvements in operational efficiency, data analysis, customer engagement, and the optimization of business processes demonstrate the understanding on the part of SMBs of the transformative impact AI will have on the business landscape.

SMBs Leading AI Adoption

SMBs increasingly view AI as critical for their future growth and competitiveness, with 96 percent acknowledging they are ready to purchase more AI systems and tools within the next 12 months and 64 percent expressing they are planning to expand their AI implementation within the next 24 months. This surge in adoption is being propelled by several desired outcomes, including faster adaptation to market shifts (53%), reducing operational costs (51%), and breaking into new markets (41%), reflecting a strategic focus on using AI to achieve greater agility, efficiency, and expansion.

Facing the Complexities of Integration

As SMBs look to harness the potential of AI, several hurdles emerge that underline the complexities of AI integration. These challenges span a variety of operational and strategic issues, with global respondents pointing to insufficient infrastructure (42%) as the leading roadblock, followed closely by concerns over data privacy and security (40%). In North America, integration with existing systems is the next leading concern (38%), with a lack of in-house skills and expertise (33%) not far behind.

These obstacles highlight the multifaceted nature of AI integration, spanning infrastructure readiness, security vigilance, skill enhancement, and system compatibility.

Role of MSPs in the AI Journey

As the AI landscape continues to evolve rapidly, MSPs are becoming pivotal allies for SMBs looking to maximize the full potential of AI and have a unique role to play, as 58 percent are working with a solution provider to implement AI systems independently. Further, the complexities involved in successfully implementing AI are driving SMBs to look for external expertise, with 68 percent of North American businesses citing technical integration as the primary reason for working with a service provider, closely followed by support services (64%), and training (53%).

“The 2024 AI Buying Trends for SMBs report underscores the vital role MSPs hold in facilitating AI adoption among SMBs as they not only bridge the gap in technical expertise but also serve as strategic advisors,” said Larry Walsh, Chief Executive Officer and Chief Analyst at Channelnomics. “As trusted advisors, MSPs deliver tailored AI solutions and comprehensive support, enabling SMBs to navigate the complexities of AI adoption and transform their business operations for a digital-first future.”