Industry executives and experts share their predictions for 2026. Read them in this 18th annual VMblog.com series exclusive.
By Christian Nagele, chief strategy officer, inforcer
2026 is set to be a consequential year for both MSPs and SMBs in terms of technology, with some significant changes set to take place. While early 2025 was dominated by talks of an �AI revolution’ set to overhaul everything we knew about the tech landscape, these predictions are already in motion, building on trends we are already seeing start to emerge.
Here are some of our key predictions for 2026:
1. MSPs will separate the �AI hype’ from the reality of AI usage
When AI tools first started to emerge, organisations everywhere (including many MSPs) thought that it would change everything overnight. In 2026, now that MSPs have had time to get to grips with how SMBs are using AI and have gained a greater understanding of the maturity of the market, we believe that they will move away from this mindset. Of course, AI is still going to be a hot topic for both MSPs and SMBs, but the industry is set to become a lot more honest about what AI can achieve for SMB customers.
MSPs are already starting to see that, at this stage, the true value of AI is not coming from huge transformation projects, it is coming from the small, practical benefits AI tooling can enable. Automating repetitive work, tidying up workflows, reducing noise, helping teams to work more efficiently: these are just a few of the benefits many businesses are already seeing.
These everyday business benefits might not seem as sexy or exciting as the grand promises of agentic AI that can replace an entire workforce. But when you can deliver twenty or thirty of these marginal gains across hundreds of users, it compounds into something very meaningful.
We predict that MSPs and vendors who stop selling a broad “AI revolution” and start talking about real, bite-sized business improvements with AI will be the ones who actually see revenue from AI in 2026.
2. Cyber security breaches will keep rising, especially where identity isn’t managed properly
Unfortunately, we’re also predicting another difficult year for SMBs in terms of cyber security. Following trends seen in 2025, cyber-attacks targeted at SMBs are set to continue to rise and breaches will continue to occur. The root cause for many will be the same: identity isn’t secure, the Microsoft tenant isn’t configured properly, and MSPs are drowning in complexity.
“Identity is the new perimeter” isn’t just a catchy line anymore, it’s the truth. But the integrated tools in the Microsoft 365 security stack (Entra, Intune, Defender, Conditional Access, and Purview, to name just a few) are a lot to manage, particularly across multiple tenants. Most MSPs are doing their best with tools that weren’t designed for multi-tenant operational delivery.
We predict that MSPs who don’t get a grip on identity, baselines, and configuration hygiene will see increased risk. Those who operationalise tenant security and policy governance will have a genuine competitive advantage.
3. Microsoft is going to double down on the SMB market, creating a massive opportunity for MSPs
Microsoft has already started paying more attention to SMBs in the last couple of years, culminating recently in their announcement of Copilot for Business at Microsoft Ignite, which unveiled a version of Copilot at an SMB-friendly price point. However, the potential for 2026 is even bigger than what we have already seen. The opportunity in the SMB segment is enormous, and Microsoft knows it.
We expect to see:
- Even more value packed into Business Premium
- A continued push on security and compliance add-ons
- Increasing incentives for MSPs to ship Copilot
- More structured programs designed specifically for MSP delivery motion
Put simply, Microsoft is betting big on the SMB market. MSPs who align themselves with the Microsoft stack, properly, operationally, and not just on paper, will grow the fastest.
4. Shadow AI will explode and MSPs will be forced to get ahead of it
Of all our 2026 predictions, this is the one we think might catch some MSPs off-guard and could potentially cause the most issues.
The excitement for AI in the SMB space has undoubtedly been one of the themes of this year. SMBs are already racing ahead with AI tools, and often they are doing so totally ungoverned, unmonitored, and completely outside their MSP’s control. Employees are pasting sensitive data into public tools like ChatGPT, automating things in ways that break internal processes, and creating a general mess of unstructured AI adoption.
This is also known as Shadow AI. It’s already happening, and we believe that it’s set to get worse in 2026 as AI adoption grows.
We predict that MSPs will start offering formal Shadow AI monitoring and governance services next year. These services only make sense when paired with structured, ongoing advisory around Microsoft Copilot, because it’s the only AI platform an MSP can genuinely manage, secure, govern, and operationalise inside the SMB’s existing tenant.
As a result, when SMBs start to realise the risks of Shadow AI and start demanding “safe AI that works with our data,” we expect Microsoft Copilot to overtake the competition and become the dominant AI platform for SMBs.
Final thoughts
2026 will be the year MSPs shift from being dazzled by AI to delivering it. It’ll be the year identity security becomes non-negotiable. It’ll be the year Microsoft pushes harder into SMB than ever before. And it’ll be the year unmanaged AI chaos forces MSPs to take the lead on governance.
It’s going to be a noisy year – but for those who can cut through that noise, it’s also going to be a very, very big one.
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