The managed service provider model is well suited to guiding small and midsized business through AI transformation projects. The typical MSP, however, is not. Lemhi wants to bridge that gap.
The SaaS company emerged from stealth on Tuesday, touting investments led by venture capital firm Top Down Ventures. Lookout Ventures and Start Something Ventures are also backing Lemhi. The company plans to launch its managed AI software at the Pax8 Beyond Conference next month and is looking to recruit MSPs as design partners.
Lemhi’s strategy is built on the proposition that MSPs lack the capacity and consulting skillset needed to build AI roadmaps for the majority of their clients. Its research shows that the average MSP builds custom AI workflows for only 10% of its customer base, often relying on one or two employees who are well-versed in AI. Lemhi is betting that it can use software to turn other workers — especially salespeople — into AI consultants.
“Most MSPs are struggling to have the AI conversation with customers,” Lemhi Co-founder John Harden told Channel Dive. “We're giving them a way to have a nice, repeatable motion that anybody in their company can have.”
A former MSP technician and a former director of AI enablement, Harden has subject matter expertise. He led the AI transformation at Auvik, a company that acquired his firm Saaslio, heading an intensive project that took 10 months and inspired Harden to find a more democratized process for MSPs.
“Let's take the best practices from AI transformation and make it as color-by-numbers as possible so that MSPs can transform as many of their clients as possible,” Harden said.
In Lemhi’s business model, an account manager would implement Lemhi’s white-labeled software and playbook when a customer asks for help on an AI roadmap. The MSP would send out a survey to the client’s employees and use the software to create a baseline of the company’s current AI posture. Then, the team would build a plan for the business.
Harden envisions Lemhi filling an analogous role to Cynomi or Scalepad, which are the foundation for MSPs’ virtual CISOs and CIO practices.
IT service providers and channel partners are pitching AI consulting, especially the large global system integrators. The message is simple: businesses are struggling to extract value from AI and need third-parties to help them source, build and manage LLMs and agents.
However, SMB is an entirely different beast. One of the biggest differences is that the SMB typically doesn’t have an AI expert to navigate a consultant-sourced AI roadmap.
“Take a 20-person or even 100-person accounting firm,” Harden said.“They're not hiring an AI specialist at their company, just like they didn't hire a cyber specialist, and just like they didn't hire an IT director, because they outsourced it. It's not primary to their business in the way that they operate. Which is why the MSP is positioned to have this conversation, because they're already in the door with all these businesses.”
The ongoing nature of the MSP model is also better-suited to SMB, Harden said. GSIs thrive in 90-day sprints, but Harden said small businesses need a partner to guide them in the long-term. It’s the notion of full AI “absorption” that Microsoft is currently preaching.
“Accenture wants to build and go buy and do their next billing project, and an MSP is with a client for two, three, four, five, six, seven years,” Harden said. “Good AI transformations are iterative, momentum-driven things, whereas bad AI projects are these moonshots.”
