Business of Tech: Daily 10-Minute IT Services Insights

AI is revolutionizing IT service management, significantly enhancing productivity and operational efficiency. A recent report indicates that AI has reduced ticket resolution times by an impressive 76%, allowing IT teams to focus on more complex issues. However, the rapid adoption of generative AI, particularly in high-stakes areas like mergers and acquisitions, raises serious concerns about data security, with a significant percentage of businesses expressing worries over data quality and ethical considerations. The prevalence of unapproved AI tools among employees further complicates governance, as many are using these tools without oversight, highlighting the need for managed AI governance.

California has taken a pioneering step in regulating AI by passing a landmark bill that mandates safety protocols for chatbot operators. This legislation aims to protect vulnerable users, particularly children, by requiring age verification and safety measures related to suicidal thoughts. The law, which will take effect in January 2026, reflects a growing trend toward AI regulation, emphasizing the importance of safety in technology. Meanwhile, the Federal Communications Commission is considering changes that could allow internet service providers to hide fees again, which could impact transparency for consumers.

The Cybersecurity and Infrastructure Security Agency (CISA) is facing challenges as layoffs affect key divisions responsible for national security and infrastructure. These layoffs come at a time when the private sector is increasingly responsible for cybersecurity, especially amid rising AI-driven threats. The reduction in federal coordination raises concerns about the ability to effectively manage these threats, placing more pressure on managed service providers (MSPs) to ensure security and compliance for their clients.

Microsoft has announced the end of support for Windows 10, prompting a critical need for MSPs to reassess endpoint security and upgrade strategies. With a significant portion of users still on Windows 10, the lack of ongoing updates poses a risk for vulnerabilities. This transition presents an opportunity for MSPs to not only push for upgrades but also to enhance security policies and prepare clients for future technological advancements, including AI integration. The evolving landscape of technology and regulation underscores the necessity for MSPs to adapt and provide comprehensive governance and security solutions.

Four things to know today

00:00 AI Is Working — and Breaking Rules: Efficiency Soars, But Governance Falls Behind 

04:10 AI Regulation Splinters: California Targets Chatbots, FCC Eyes Fee Rollbacks, and CISA Cuts Staff

07:52 The AI Assistant Race Escalates — Copilot, Slackbot, and Salesforce All Target Your Inbox and Workflow

11:12 Windows 10 Support Ends — Microsoft’s Upgrade Glitch, Paid Extensions, and Opportunity for MSPs

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The Business of Tech Lounge features a discussion on the evolving landscape of email security, focusing on the modern threats that organizations face today. With email remaining the primary entry point for hackers, the conversation highlights how threats have shifted from simple spam to sophisticated attacks involving AI impersonation and social engineering. Experts Cody Elkley from MailProtector and Mauro Sretari from CIO Landing delve into the specifics of these threats, emphasizing the need for Managed Service Providers (MSPs) to adapt their strategies to stay ahead of potential risks.

Cody explains that the nature of email threats has changed significantly over the past five years, moving from volume-based spam to targeted attacks aimed at specific individuals within organizations. Mauro adds that AI is now being leveraged by threat actors to create highly personalized phishing attempts, which can bypass traditional security measures. The discussion underscores the importance of a multi-layered security approach, where MSPs must implement robust email security protocols to protect their clients effectively.

The experts also discuss the technical aspects of modern email security architecture, contrasting legacy systems with newer API-driven solutions. Cody highlights the advantages of using APIs, which allow for deeper analysis of email content and better detection of threats before they reach users. Mauro emphasizes the need for MSPs to evaluate vendors based on their integration capabilities and the usability of their security tools, ensuring that they can provide effective protection without overwhelming their clients.

As the conversation wraps up, both Cody and Mauro predict that the future will see an increase in AI-assisted phishing and deepfake impersonation attacks. They stress the importance of ongoing communication between vendors and MSPs to share insights and updates on emerging threats. The episode concludes with a call for MSPs to remain vigilant and proactive in their email security strategies, adapting to the rapidly changing threat landscape to safeguard their clients' information.

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AI's increasing demand for memory and storage is leading to a significant pricing crisis in the hardware market, with projections indicating that this situation could persist for the next decade. Analysts and manufacturers are warning of impending shortages of NAND and DRAM, essential components for solid-state drives and memory. The price of NAND Flash has already surged by over 100% in just six months, and DDR4 memory products are expected to rise by up to 43% in the third quarter of 2025. This crisis is largely driven by major AI projects, such as OpenAI's Stargate initiative, which could consume a staggering 40% of global DRAM output.

Despite broader economic challenges, the tech sector is experiencing a rebound in hiring, particularly in Silicon Valley, where AI companies are driving a resurgence in the office market. Job postings for software developers, cybersecurity engineers, and AI engineers have seen notable increases, even as the private sector overall lost jobs. The demand for tech talent remains high, with international tech workers still viewing the U.S. as an attractive destination. This shift contradicts earlier predictions that AI would lead to widespread job losses, instead highlighting a transformation in workforce dynamics.

The podcast also discusses a significant shift in the perception of market development funds (MDF) among channel partners. Traditional MDF programs are becoming obsolete, with partners now prioritizing outcome-based funds and training that enhance capabilities and align with customer success. This change reflects a broader trend in vendor-partner relationships, where partners seek strategic alliances focused on measurable outcomes rather than outdated financial support for marketing activities. The evolving landscape emphasizes the need for specialization and collaboration to thrive in the current market.

Finally, the episode touches on the concept of "inshittification," particularly in relation to Amazon's declining customer-centric approach as it prioritizes profits over user experience. This trend raises concerns about the future of online commerce and the trustworthiness of platforms. Additionally, the discussion includes insights on employee satisfaction post-IPO, the evolution of AI technology at Notion, and the challenges faced by OpenAI as it navigates financial losses. These topics prompt critical reflections on vendor relationships, the impact of public offerings on innovation, and the readiness of clients for advanced AI systems.

Four things to know today

00:00 AI Boom Sparks Global Memory Shortage, Driving Decade-Long Hardware Price Surge

04:23 AI Fuels Tech Hiring Surge as U.S. Job Market Splits in Two

07:14 MDF Is Dead: Partners Demand Outcome-Based Funding and Strategic Enablement

10:10 Amazon’s Enshittification, IPO Fallout, and OpenAI’s Struggle — Strategy Lessons for IT Providers

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AI-powered cyberattacks are rapidly evolving, prompting a significant shift in cybersecurity strategies. According to a recent Gartner report, IT leaders are expected to allocate over half of their cybersecurity budgets to preemptive defense measures by 2030. This change is driven by the inadequacy of traditional detection and response tools in the face of sophisticated cyber threats, particularly those enhanced by artificial intelligence. Experts warn that while preemptive measures can mitigate risks, organizations may encounter challenges in integrating these new systems and overcoming cultural inertia.

Datadog's 2025 State of Cloud Security Report highlights a growing trend among organizations adopting data perimeters to combat credential theft, with 40% of organizations implementing this advanced security practice. Additionally, 86% of organizations are utilizing multi-account setups within AWS, which allows for better enforcement of security protocols. Meanwhile, OpenAI's report reveals that cybercriminals are increasingly leveraging AI for malicious activities, including phishing and surveillance, showcasing the urgent need for enhanced cybersecurity measures.

In response to market pressures, Synology has reversed its policy on drive restrictions for its network-attached storage models, allowing the use of non-validated third-party drives. This decision comes after user feedback indicated dissatisfaction with the previous requirement for proprietary drives, which were often more expensive. For managed service providers (MSPs), this change offers greater flexibility and cost-effectiveness, making Synology's products more appealing once again.

Pax8 has launched the Pax8 Agent Store, a platform designed to help MSPs adopt and offer AI-driven tools to small and medium-sized businesses. This marketplace aims to facilitate the integration and monetization of intelligent automation solutions, with early access set for December 2025. Additionally, SolarWinds has introduced an AI agent to enhance operational resilience for IT teams, while Barracuda Networks has launched Barracuda Research, a centralized resource for threat intelligence. Both initiatives aim to empower organizations in managing cybersecurity threats more effectively.

Four things to know today

00:00 Gartner, OpenAI, Datadog, and DHS Paint a Stark Cyber Future: AI Attacks Surge, Budgets Shift, and Defenses Fracture

06:01 New Pax8 Platform Targets Repeatable AI Services, Sets Early Access for December

08:03 Synology Reverses Course on Pricey Drives — Because You Stopped Buying

09:53 SolarWinds and Barracuda Push AI to Ease IT Burdens—But Can They Deliver Real Value?

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Kaseya made headlines at DattoCon by announcing its shift to becoming an “AI-first” company, highlighted by its acquisition of INKY, a generative AI email security provider. Alongside this, the company unveiled new Datto products and teased its upcoming Cyber Resiliency Platform for 2026. While Kaseya’s vision of unified, intelligent automation sounds ambitious, many managed service providers (MSPs) remain skeptical, wanting to see real product integration rather than marketing promises.

AI’s impact on the workforce also dominated discussion, with reports showing that one in seven U.S. jobs faces automation risk. However, experts emphasize that AI isn’t eliminating jobs—it’s transforming them. The real challenge for businesses lies in broken workflows and poor operational readiness, not the technology itself. For MSPs, this creates a new opportunity to help organizations document processes, integrate AI effectively, and deliver measurable ROI.

Meanwhile, OpenAI’s trillion-dollar compute deals with major tech firms reveal the escalating financial pressure behind the AI race. Despite massive commitments with Nvidia, AMD, and Oracle, analysts question the sustainability of such spending as compute costs surge. This “AI bubble” highlights that power and price, not innovation, may soon be the industry’s greatest constraints, pushing businesses toward efficiency and smarter workloads.

Finally, companies like Snowflake, IBM, Otter.ai, and Google are leading the next evolution of AI—turning it into infrastructure. From data management and cost-efficient models to meeting automation and browser-based AI agents, these developments mark the shift from experimentation to real-world integration. The emerging “intelligence layer” means that AI will soon underpin how services, systems, and workflows connect, defining the next frontier for MSPs and tech providers alike.

Four things to know today

00:00 At DattoCon, Kaseya Sells an AI Future — But MSPs Want Proof, Not Promises

04:19 AI Isn’t Taking Jobs — It’s Exposing Broken Workflows and Creating a New Service Market

06:41 AI’s Real Risk: Not Job Loss, But Business Disorganization and Soaring Compute Costs

08:42 The Intelligence Layer Emerges: Snowflake, IBM, Otter, and Google Show How AI Becomes Infrastructure

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OpenAI has made significant strides in the AI landscape with a series of announcements that position it as a leading platform in the industry. The introduction of new models, including the GPT-5 Pro and Sora 2, alongside app integrations like Slack and a new Apps SDK, marks a pivotal moment for the company. These developments aim to enhance user interaction and streamline workflows, allowing users to perform tasks directly within the ChatGPT interface. The partnership with Advanced Micro Devices (AMD) for a multi-billion dollar chip deal further solidifies OpenAI's commitment to expanding its computing capabilities, crucial for the advancement of its AI technologies.

In a contrasting scenario, Deloitte has faced scrutiny after delivering a flawed report to the Australian government, which included errors attributed to the use of AI. Despite this setback, Deloitte is moving forward with a significant partnership with Anthropic to deploy their AI chatbot, Claude, across its workforce. This juxtaposition highlights the challenges and risks associated with AI integration in business operations, emphasizing the need for careful governance and oversight. The incident serves as a cautionary tale about the potential pitfalls of relying too heavily on AI without proper verification.

The podcast also discusses the broader implications of AI adoption in enterprises, revealing that a majority of AI projects are failing due to governance gaps and a lack of trust in the technology. A survey by Gartner indicates that many IT leaders are concerned about regulatory compliance, with only a small percentage feeling confident in their organizations' ability to manage AI tools effectively. This situation underscores the importance of establishing robust governance frameworks to ensure that AI implementations are both effective and trustworthy.

As the AI landscape continues to evolve, the podcast suggests that service providers should pivot towards building governance frameworks and risk management strategies rather than simply promoting AI hype. The focus should shift to creating value through responsible AI use, ensuring that clients can trust the technology they are implementing. This new approach positions governance as a critical service line, essential for navigating the complexities of AI adoption and maintaining client trust in an increasingly automated world.

Three things to know today

00:00 OpenAI Builds the Windows of AI: New Models, App Store, SDKs, and a Chip Deal Signal Platform Takeover

06:50 Deloitte’s AI Paradox — A Costly Error in Australia, Followed by Its Biggest AI Expansion Yet

09:38 AI’s Next Frontier Isn’t Innovation — It’s Accountability, and That’s Where MSPs Win

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Enterprises are significantly increasing their investments in AI governance as the risks associated with artificial intelligence become more apparent. A recent report indicates that 98% of organizations plan to boost their governance budgets in the coming financial year, with an average expected increase of 24%. This shift highlights the realization that managing AI is not a plug-and-play solution; organizations must establish multiple lines of defense to handle risks effectively. As AI technologies evolve, refining governance will be an ongoing process, especially as companies face incidents that could lead to substantial financial losses.

Public cloud spending is projected to increase dramatically, primarily driven by generative AI workloads. A survey reveals that nearly half of IT leaders expect more than 30% of their cloud budgets to be allocated to generative AI in the coming years. This rapid adoption of generative AI applications necessitates improved cloud cost management strategies, as enterprises brace for higher infrastructure costs. Analysts warn that the financial models supporting this AI boom, particularly for companies like Oracle, which may need to borrow significantly to meet obligations, raise concerns about sustainability.

Despite fears of job losses due to AI, a study from Yale University indicates that generative AI has not yet significantly disrupted the job market. The research shows only a slight change in the occupational mix since the launch of ChatGPT, with hiring in the tech sector remaining steady. A significant portion of tech employers plan to hire, particularly for roles related to AI, indicating that the demand for skills like Python and project management is driving this trend. The study suggests that while generative AI has transformative potential, it is too early to assess its long-term effects on employment.

In a notable industry development, Huntress has partnered with SureWeb to expand its cybersecurity solutions, marking its first distribution deal. This collaboration allows Huntress's products to be available in the SureWeb marketplace, enhancing security offerings for managed service providers across various regions. The partnership emphasizes the importance of relationships over transactions, contrasting with larger marketplaces. This move reflects a growing trend where vendors prioritize community-focused partnerships, providing opportunities for service providers to access quality cybersecurity solutions while navigating the evolving landscape of AI and technology.

Four things to know today

00:00 AI’s Hidden Cost: Governance Budgets Up, Cloud Bills Soar, and Debt Piles High Behind the Boom

05:25 Government Shutdown and Policy Turmoil, Not AI, Emerging as Real Threats to U.S. Employment

10:17 Pax8’s “Managed Intelligence” Push Highlights Growing Tension Between AI Hype and MSP Readiness

13:28 Huntress and Sherweb Redefine Channel Strategy with Relationship-First Distribution Model

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Full transcript and links to extended interviews is at https://businessof.tech/podcast/datto-sues-slide-2025/

What happens when a founder returns to disrupt the company he built, and that company sues him for stealing its secrets? This is the central conflict in the case of Datto v. Slide, a legal battle unfolding in Delaware. Datto, now owned by Kaseya, accuses Slide, founded by former Datto CEO Austin McCord, of misappropriating proprietary technology related to its Hardware Independent Restore (HIR) system. Slide, on the other hand, asserts that it developed its technology independently and that Datto's lawsuit is merely a distraction from the reality that better products will prevail in the market.

The lawsuit includes multiple allegations, such as trade secret misappropriation and unfair competition. Datto claims that Slide's technology closely resembles its own HIR, which allows for near-instant recovery of systems across different virtual environments. The complaint details how Datto's HIR operates and the proprietary elements it encompasses, arguing that Slide's founders had access to these trade secrets and used them to expedite their competing platform. Slide counters these claims by emphasizing that its product was built from the ground up, utilizing modern tools and practices that do not infringe on Datto's intellectual property.

To provide further context, the podcast features interviews with Slide's founders, who discuss the safeguards they implemented during development to ensure compliance with legal obligations and to avoid using any confidential information from Datto. They assert that their technology is fundamentally different and that their marketing strategies, including a dramatic demonstration involving the destruction of Datto hardware, were intended as light-hearted competition rather than disparagement. The conversation highlights the importance of transparency and trust for Managed Service Providers (MSPs) considering which platform to support.

The episode also delves into the broader implications of the case, particularly how litigation can serve as a competitive strategy in a consolidating market. With Kaseya reportedly carrying significant debt, the lawsuit may reflect a defensive posture rather than a commitment to innovation. For MSPs, the ongoing legal battle raises questions about vendor reliability and the potential distractions that litigation can create. Ultimately, the podcast suggests that while the case may settle, the reputational costs for Kaseya could be substantial, impacting its image as a channel-friendly company.

00:00 Intro: Founder vs Incumbent

01:45 Case Summary: Datto v. Slide Explained

02:22 Inside HIR: The Alleged Trade Secret

04:47 Slide’s Defense

06:05 Timeline and Next Steps

08:36 Interview: Slide Founders Respond

14:04 Expert Analysis: Bob Zeidman

20:10 Expert Analysis: Prof. Camilla Hrdy

24:10 Market Context: Kaseya’s Debt & Strategy

26:24 Lessons for MSPs

28:33 Closing Take: What This Means for the Channel

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Mal Vivek, founder and CEO of Zeb, discusses the rapid growth of her firm, which has become a leader in digital and AI transformation. Zeb has established itself as one of the fastest-growing AWS Premier Tier and Databricks partners, primarily by addressing the challenges small and medium businesses face in implementing AI solutions. Vivek emphasizes the importance of understanding each client's unique business model and tailoring AI solutions to meet their specific needs, rather than offering a one-size-fits-all approach.

Vivek highlights the significant shift in lead generation strategies among their clients, who are increasingly utilizing AI to create more targeted and high-quality leads. This change reflects a broader trend where businesses are moving away from traditional lead lists and instead developing custom AI systems that align with their ideal customer profiles. Additionally, she notes the importance of training and upskilling employees through AI, enabling them to access vast amounts of knowledge quickly and efficiently.

The conversation also touches on the concept of an "AI-first strategy," which varies in definition across different organizations. For Zeb, this strategy involves identifying repetitive tasks that can be enhanced through AI while ensuring that the human touch remains integral to the customer experience. Vivek stresses the need for restraint in digital transformation, arguing that not every process should be automated, especially when personal interaction is a key component of a business's success.

Finally, Vivek discusses the evolving business models driven by AI, including a shift towards value-based pricing. She explains how Zeb structures its pricing around measurable outcomes and mutual agreements on success metrics, ensuring that both the firm and its clients benefit from the results achieved. This approach not only fosters accountability but also aligns the interests of Zeb with those of its customers, ultimately driving better business outcomes.

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Diving into the evolving landscape of the partner ecosystem, the discussion centers around three major forces shaping the industry by 2030. First, cloud marketplaces are projected to reach $163 billion in transactions, with nearly 60% of that being partner-led. This shift signifies a redefinition of partner value in the marketplace era, moving beyond traditional procurement methods. Second, the rise of AI services is highlighted, with a projected $267 billion opportunity by 2030, growing at an impressive 35% CAGR. This transition emphasizes the importance of packaging, governance, and delivering measurable outcomes rather than merely developing AI technologies.

The conversation also delves into the critical role of cybersecurity as a services multiplier, with a study indicating that for every dollar spent on the CrowdStrike Falcon platform, partners can generate over $7 in services revenue. This statistic underscores the potential for partners to leverage cybersecurity solutions to enhance their service offerings. Jay McBain, Chief Analyst at Omdia, provides insights into how these trends impact channel partners, vendors, and the future of IT services, emphasizing the need for partners to adapt to these changes. 

As the discussion progresses, the challenges and opportunities for partners in the AI landscape are examined. The conversation points out that while AI is becoming a feature rather than a standalone product, partners must engage with business leaders across various departments to capitalize on the growing demand for AI-driven solutions. The importance of understanding customer needs and aligning services accordingly is stressed, as partners risk being sidelined by larger system integrators and management consultants if they do not adapt.

Finally, the dialogue touches on the changing economics of partnering, particularly in light of recent shifts by major vendors like Microsoft and Cisco, which are cutting back on their partner networks. This consolidation raises questions about how partners can continue to thrive in a landscape where margins are shrinking. The emphasis is placed on the necessity for partners to rethink their business models, focusing on delivering high-value services and leveraging the opportunities presented by AI and cybersecurity to ensure sustainable growth in the future.

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