AI for MSPs: Managed AI’s Control Point Moves Upstream

Dave Sobel (0:02)

On October 15th, one credential signed in to 173 Microsoft 365 tenants in a little over two hours, moving through them in sorted order, seconds apart. It didn't belong to an employee or a client, it belonged to a backup vendor. This is the Business of Tech. I'm Dave Sobel.

Before the first fact, the disclosure. Many of the companies in this episode sponsored this show or have in the past. I own Small Biz Thoughts and IT Service Provider University, which compete with GTIA for MSP's community and education. I do better when MSPs rely on independent sources instead of vendor-led ones, and this episode leans that way. I also know Rob Ray, who chairs the alliance you're about to hear about, and GTIA CEO Dan Wensley personally, so I'm reporting on a market I competed. Discount my conclusion if you like. The facts are sourced and linked. As always, our sponsors and my financial disclosures are at businessof.tech.

The pieces of managed AI are being assembled, and most of them sit upstream of the MSP. Start with Pax8. At its Beyond and MIA conference in Copenhagen, the distributor launched 8OS, which it describes as an operating system for IT providers to govern the AI agents running inside their customers' businesses. It's built on the marketplace more than 47,000 IT providers already use to sell to around 800,000 small businesses. Partner and client identities carry over from that marketplace. Agents and models from different vendors are managed together as one workforce, and the partner sets the rules client by client. Usage and spending are metered per user and per customer with hard caps that cut consumption off. The partner sets the price, and billing runs through the Pax8 account it already has. Alongside it comes 8bot, a managed AI co-worker that partners deploy and supervise through 8OS. Limited early access is open, with general availability planned for early 2027 Now look at who is writing the rules for that kind of service. GTIA, the Channel Trade Association, launched the Managed Intelligence Alliance to build standards, open specifications, and accreditation for managed AI. Pax8 is its charter member. GTIA's CEO, Dan Wensley, told CRN the idea came from Pax8. In his words, Pax8 brought it to us, and we stood it up. It's chaired by Rob Ray, Pax8's corporate vice president of community and ecosystems, who also sits on GTIA's board. It isn't only distributors. GoTo added an open beta model context protocol connector to LogMeIn Resolve, its remote support platform for MSPs. It lets a technician query Resolve and take supported actions through Anthropix Claude without opening the console. GoTo says existing account permissions stay in force, activity is logged, and changes can require confirmation. In plain terms, the identity, the rules, the meter, and the bill for Client AI are all being built into platforms the MSP subscribes to. The standard that will define what good looks like is being chaired from inside one of them. That's where the control point is going. The question is what it's made of.

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Kaseya's own survey of more than 1100 MSPs and IT professionals found that 68% rank human error as the biggest threat to their organizations. The incident at the center of this episode didn't need anyone in an MSP or a client to make a mistake. It needed one credential. ConnectWise Cloud Backup, formerly SkyKick, backs up clients' Microsoft 365 data for MSPs. To do that job, it's consented into every tenant where it's installed with broad access to mailboxes, OneDrive, SharePoint, Teams, and the directory. The credential behind that consent lives with ConnectWise, not with the MSP or the client. It's a master key to every client's office, kept at the locksmith's shop. Huntress found that the credential used to sign in to 173 tenants in a little over two hours, moving through them in sordid order, seconds apart. That's a script working from a list. Microsoft called it an active supply chain attack on a trusted app. That's the first property of upstream control. Consent is given once and the access stands. It also sits outside the control's MSP's watch. Total found that revoking user sessions didn't end it, and Huntress noted that some directory reads leave no audit trail. The second property is that one key can make others. In at least one partner tenant, Huntress found a second ConnectWise app gave itself global administrator. It then added new secrets to an MSP management app and to Huntress' own security app. MSP management apps are often consented into the MSP's client tenants too, so access to the MSP's tenant is a path to the rest. Guards, which sponsors this show and sells identity threat detection, counts 7 privileged ConnectWise apps in Microsoft 365, so the exposure isn't limited to the credential that leaked. It also warns that intra-log retention can be as short as 7 days.