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MSPs Are Adopting AI, but Few Are Seeing Measurable Gains, Nerdio Finds

• By Sean Parker
• October 22, 2026

Managed service providers (MSPs) are increasingly adopting artificial intelligence, but few have translated that investment into measurable productivity gains or new revenue, according to new research from Nerdio.

The company's 2026 State of the MSP Business Report found that 32% of MSPs have adopted AI tools for internal operations, while another 46% are piloting or planning to adopt the technology within the next 12 months.

However, just 12% reported measurable productivity improvements, and only 14% currently operate a revenue-generating AI service line.

The findings are based on a survey of 153 MSP decision-makers responsible for managing Microsoft 365 and Azure environments, conducted between June 22 and July 7, 2026.

Nerdio's research found that how MSPs manage their existing operations is closely associated with their ability to scale services and generate measurable results from AI.

The report identified operating model as the strongest predictor of most outcomes measured, ahead of company size, headcount and the number of tools used.

For example, 52% of MSPs using commercial multi-tenant management platforms can onboard a new user using three or fewer portals, consoles or tools, compared with 22% of providers relying primarily on native Microsoft tools and manual processes.

The differences extend to security and compliance.

According to the report, 77% of commercial-platform MSPs can produce an audit-ready Microsoft 365 assessment within the same day, compared with 53% of native-tool MSPs.

Across all respondents, only 20% consistently enforce a single documented security and configuration standard across every customer tenant, while 71% identify configuration drift as at least an occasional issue.

AI governance also remains limited. Just 14% of MSPs consistently apply a documented AI governance framework across every customer using Microsoft Copilot or other AI tools.

The researchers also found that 17% of MSPs are receiving customer inquiries about Copilot or other AI technologies but are not yet prepared to respond.

Nerdio's research also highlighted the operational challenges facing MSPs as they manage increasingly complex Microsoft environments.

The findings showed that 60% of MSPs believe Microsoft management complexity is increasing faster than their ability to scale operations.

Meanwhile, 29% expanded their customer base during the previous 12 months without a proportional increase in engineering staff.

The growing workload is also affecting employee retention.

Nearly three in 10 MSPs reported losing technicians to workload-related burnout during the past year.

The research found differences between operating models, with 37% of native-tool MSPs reporting burnout-related technician losses, compared with 20% of commercial-platform MSPs and 29% of providers using community or open-source tools.

Concern about technician burnout also increased among providers managing larger workloads. Among MSPs supporting fewer than 200 users per engineer, 34% identified burnout as a risk, compared with 54% of those supporting more than 200 users per engineer.

Nerdio said standardized operations and automation can help MSPs manage growing workloads while allowing existing teams to spend more time developing and delivering AI capabilities.

"AI didn't create the divide in the MSP industry. It's making the one that was already there easier to see," said Will Ominsky, vice president and general manager of MSP Business at Nerdio.

"The difference isn't whether an MSP has access to AI tools. It's whether the business has the operational foundation to put them to work consistently for customers across increasingly complex environments. MSPs that build a more consistent, repeatable way to deliver service will be best positioned to turn AI from an experiment into a measurable business advantage."