The rise of artificial intelligence (AI) is set to accelerate demand for managed networking services as bandwidth consumption becomes more unpredictable than ever.
AI is changing network traffic patterns
According to a new report from Dell’Oro Group, managed local area network (LAN) revenue is already growing at a double-digit rate this year. That growth will likely accelerate as more AI agents access massive amounts of data. Unlike humans or applications running at the network edge, AI agents access data at machine speed. As a result, they create traffic patterns that are far less predictable.
Rising infrastructure costs create new challenges
Most IT organizations cannot afford to deploy additional networking equipment just to handle peak demand. The challenge grows when that equipment sits idle for long periods.
At the same time, networking costs continue to climb as memory and semiconductor manufacturers raise prices. Those increases drive up the cost of routers, switches, and other infrastructure. As a result, fewer organizations can afford high-end networking equipment.
MSPs face many of the same cost pressures. However, they are often better positioned to finance these investments when needed. They can also spread costs across multiple clients that share the same infrastructure resources.
Automation will become essential
Organizations now need to find ways to use AI to manage networks at scale while reducing reliance on specialized expertise. AI will not replace experienced network engineers anytime soon. However, it is automating many tasks that once required teams of networking and security specialists.
A growing opportunity for MSPs
Organizations will adopt these new networking economics at different rates. However, many MSPs have already started these conversations with clients. Some organizations are deploying hundreds of AI agents today.
Soon, the average mid-sized company could run thousands of AI agents. Those agents will periodically access data across multiple cloud platforms. MSPs will need to help secure those environments. Security will become even more important as organizations deploy more agentic AI. A compromised AI agent could provide attackers with a simple path to sensitive data.
In short, AI agents could create significant opportunities for MSPs, especially if the cost of delivering networking services continues to decline. Telecommunications providers will likely increase competition by expanding managed networking offerings. That pressure may eventually lower prices. For now, however, the outlook remains positive. MSPs that find the right pricing balance can encourage adoption at scale while protecting profit margins.
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