Business of Tech: Daily 10-Minute IT Services Insights

Microsoft is facing backlash from managed service providers (MSPs) for not adequately protecting them against aggressive pricing strategies employed by larger licensing solution providers. These larger entities are reportedly undercutting smaller MSPs by as much as 20%, leading to significant margin erosion and increased competition. The Cloud Solution Provider Program, which was designed to create a more equitable environment for smaller providers, has not been effectively enforced by Microsoft, leaving many MSPs feeling abandoned. Analysts warn that this trend may result in consolidation among partners, as smaller providers struggle to compete in a landscape increasingly favoring larger firms.

In the realm of cybersecurity, MSPs are grappling with severe alert fatigue, with a recent survey indicating that over 75% of providers experience this issue monthly. The report highlights that larger firms are particularly affected, with nearly half of those employing over 500 staff facing daily fatigue due to excessive tools and poor integration, which leads to a high volume of false positives. Alarmingly, one in four alerts is a false positive, and many providers are hesitant to consolidate their security tools due to concerns about migration complexity and potential feature loss. Despite the clear advantages of integrating platforms and enhancing automation, only 31% of MSPs have adopted AI or security orchestration tools to alleviate their burdens.

In product news, several companies have made significant announcements. SuperOps has launched an AI marketplace for MSPs in collaboration with Amazon Web Services, aiming to streamline the adoption of AI agents for various tasks. Kaseya introduced customer responsibility matrices to help MSPs comply with Department of Defense cybersecurity requirements, while ConnectWise expanded its remote monitoring and management platform to include third-party patching for over 7,000 applications. Synchro reported impressive operational efficiency improvements for a client, and Ignite unveiled a no-code framework for creating customized AI agents.

Lastly, the podcast discusses the ongoing challenges faced by Intel and the vulnerabilities in Enable's remote monitoring and management solution. Intel is receiving substantial investments from SoftBank and potential support from the U.S. government, indicating a lack of market confidence in the company's performance. Meanwhile, Enable is dealing with two critical vulnerabilities that are being actively exploited, with nearly 900 servers still unpatched. The urgency for MSPs to apply updates and validate their security measures is emphasized, as these vulnerabilities pose significant risks to their operations.

Four things to know today

00:00 Microsoft Faces Backlash as MSPs Accuse CSP Program of Favoring Larger Licensing Providers

04:53 From SuperOps to Egnyte, Vendors Announce AI and Security Features—Syncro Stands Out With Measurable Results

07:50 Chip Market Split: Intel Relies on Bailouts, Foxconn Rides Explosive AI Demand

10:24 Shadowserver: Nearly 900 N-able N-central Servers Remain Unpatched Against Critical Vulnerabilities

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Dave Sobel interviews Jennifer Oladipo, an award-winning business and technology journalist turned consultant, about the communication challenges faced by Managed Service Providers (MSPs) in their sales processes. Jennifer emphasizes that while MSPs are often perceived as poor at sales, they excel in consultative selling. The real issue lies in their ability to translate technical expertise into relatable messaging for their clients. She highlights the importance of understanding the client's world and addressing their specific pain points, rather than leading with technology.

Jennifer discusses the necessity for MSPs to engage deeply with their target audience, encouraging them to listen to the conversations happening around them. By understanding the everyday challenges faced by their clients, such as common frustrations like printer issues, MSPs can tailor their messaging to resonate more effectively. This approach not only demonstrates empathy but also positions the MSP as a partner who truly understands the client's needs.

The conversation also delves into the significance of competitive intelligence and market awareness. Jennifer shares practical tips for gathering insights about competitors, such as utilizing LinkedIn's ad library to analyze marketing strategies. She stresses the importance of recognizing buying signals and understanding industry trends to adapt messaging and offerings accordingly. This comprehensive understanding allows MSPs to differentiate themselves in a crowded market.

Finally, Jennifer urges MSPs to move away from clichéd messaging that focuses solely on technology or generic support. Instead, she advocates for authentic communication that reflects the unique strengths and values of the MSP. By doing so, they can create memorable connections with potential clients and stand out in a competitive landscape. The episode concludes with Jennifer inviting listeners to connect with her for further discussions on these topics.

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Jennifer Roy, CEO of Nucleus Networks, discusses her transition from COO to CEO and the broader responsibilities that come with the role. She emphasizes the shift from a narrow focus on operations to a more comprehensive involvement in various business areas, including sales, marketing, finance, and HR. Despite the turbulent market conditions, particularly in the Canadian landscape, Nucleus Networks continues to thrive, with a full sales funnel and ongoing projects. Clients are increasingly inquiring about AI and cybersecurity, reflecting a cautious yet proactive approach to technology adoption.

Roy highlights the importance of understanding clients' businesses to effectively implement AI solutions tailored to their specific needs. Her team, particularly the business transformation office, plays a crucial role in assessing readiness and executing projects. On the cybersecurity front, clients are primarily concerned about preventing breaches and ensuring they meet industry standards, such as SOC 2 Type 2 compliance. This process has revealed the significance of robust internal policies beyond just security measures, including HR practices and employee development.

The conversation also touches on the state of women in leadership within the tech industry. Despite stagnant statistics over the past five years, Roy believes that cultural shifts are paving the way for more women to assume leadership roles. She actively participates in initiatives aimed at promoting diversity and inclusion, such as mentoring young professionals and advocating for inclusive hiring practices. Her own organization reflects this commitment, with a significant representation of women in the C-suite.

As the discussion wraps up, Roy shares her key takeaways from the ChannelCon event, emphasizing the value of networking and personal interactions outside formal sessions. Looking ahead, she expresses a keen focus on employee and client retention, recognizing the competitive nature of the market. By enhancing the employee experience, she believes that client loyalty will naturally follow, ensuring the continued success of Nucleus Networks.

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Michael Fass, co-founder and CEO of Slide, discusses the company's focused approach to backup solutions for Managed Service Providers (MSPs). Unlike many companies that aim to be all-encompassing platforms, Slide is dedicated solely to being the best backup provider in the market. Fass emphasizes the importance of understanding the unique needs of MSPs, who protect data across various environments, including on-premise servers and cloud services like Azure and Google Drive. This commitment to specialization is a strategic choice to avoid the pitfalls of being a "jack of all trades, master of none."

Fass shares insights from his previous experience at Datto, where he served as Chief People Officer and General Counsel. He highlights the significance of maintaining high expectations and creating a strong partnership with MSPs. By offering direct-to-tech support and flexible month-to-month pricing, Slide aims to foster trust and empower its partners. Fass believes that these choices, while bold, are essential for building a sustainable and effective business model that prioritizes quality service over short-term profits.

The conversation also touches on the evolving landscape of the managed services industry, particularly the impact of private equity investments and the increasing complexity of technology for small to medium businesses. Fass argues that despite the advancements in technology, the need for skilled IT professionals remains critical. He asserts that MSPs play a vital role in helping businesses navigate these complexities, and as such, the demand for their services is only expected to grow.

Looking ahead, Fass expresses confidence in Slide's potential to become a global leader in backup solutions for MSPs. He acknowledges the challenges posed by industry consolidation but believes that new companies like Slide, which prioritize quality and partner relationships, will thrive. As he prepares for future discussions, Fass emphasizes the importance of measuring success by Slide's ability to lead the market in backup services, reinforcing the company's commitment to its mission.

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Ann Westerheim, founder and president of Ekaru, discusses the concept of "last mile services" in technology, emphasizing the importance of making advanced IT and cybersecurity accessible to small businesses. Drawing from her background in the semiconductor industry, she highlights the gap between cutting-edge technology and its practical application for Main Street USA businesses. Her approach focuses on empowering clients to improve their cybersecurity posture through simple, actionable steps, such as implementing strong passwords and multi-factor authentication.

Westerheim introduces her CyberFit 21-day program, designed to demystify cybersecurity for non-technical users. She aims to replace the overwhelming jargon of the tech industry with relatable concepts that resonate with small business owners. By simplifying complex topics, she helps clients understand the risks they face and the straightforward measures they can take to mitigate them. This approach not only educates but also empowers clients to take control of their cybersecurity.

The conversation shifts to the impact of artificial intelligence (AI) on cybersecurity, particularly in phishing attacks. Westerheim notes that AI is being used to create highly sophisticated phishing emails that are indistinguishable from legitimate communications. She emphasizes the need for businesses to establish acceptable use policies regarding AI and to educate employees about the potential security risks associated with its use. This proactive approach is crucial as many employees may be using AI tools without understanding the implications.

As the discussion wraps up, Westerheim reflects on the current mood among small business clients, who are feeling overwhelmed by rapid technological changes and external economic pressures. She stresses the importance of taking small, manageable steps to adapt to these changes rather than succumbing to paralysis by analysis. By fostering open dialogues about technology and security, she aims to guide her clients through this period of uncertainty, helping them to embrace the opportunities that come with technological advancements.

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Agentic AI is transitioning from demonstration to real-world application, particularly through the Model Context Protocol (MCP), which transforms traditional RMM and PSA systems into more interactive and efficient tools. This shift is expected to significantly impact ticket management, service level agreements (SLAs), and profit margins for managed service providers (MSPs). The discussion also delves into the competitive landscape, with companies like PAX 8 positioning themselves as orchestration layers in this evolving market, raising questions about whether this represents a genuine transformation or merely a rebranding effort.

Rich Freeman, a prominent voice in the SMB channel, shares insights on how MSPs are adapting to these changes. He highlights that many organizations are already deploying AI solutions, which are automating tasks traditionally performed by humans, such as service dispatch and help desk operations. This evolution is not just about reducing workforce size but rather reshaping the roles within MSPs, allowing employees to focus on higher-level tasks that drive customer value and differentiation.

The conversation also touches on the implications of MCP, which allows AI agents to interact with various backend systems seamlessly. This capability could lead to a future where technicians no longer need to navigate complex interfaces, as they can simply communicate with AI to manage their systems. The rapid advancements in AI technology are prompting MSPs to rethink their operational strategies and prepare for a future where automation plays a central role in service delivery.

Finally, the discussion explores the concept of managed intelligence providers, emphasizing the need for MSPs to evolve from merely providing tools to delivering comprehensive solutions that leverage AI for better outcomes. As the industry shifts towards this model, the role of marketplaces and distributors will also change, requiring them to support MSPs in integrating and managing these advanced technologies. The conversation concludes with a recognition of the urgency for MSPs to adapt to these changes or risk falling behind in a competitive landscape.

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Dave Sobel interviews Robert Buda, founder and president of Buda Consulting, about the critical role of data management in the age of AI. Buda emphasizes that while the principles of data management remain unchanged, the speed at which organizations must adapt to new technologies has increased dramatically. He argues that ensuring data quality is more crucial than ever, especially as organizations begin to rely on AI models for decision-making. Buda expresses concern that some in the AI community believe that simply feeding more data into models will lead to accurate outcomes, a notion he finds misleading.

The conversation delves into the tension between speed and scale in data management. Buda explains that the rapid influx of new applications requires data professionals to react quickly, making speed a more pressing issue than the sheer volume of data. He acknowledges that while big data was heavily discussed, much of it went unused, contrasting this with the current AI landscape, which he believes will have a more significant impact on how data is utilized.

Buda also challenges the perception that organizations overestimate the value of their data. He argues that many companies underestimate the criticality of their operational data, which is essential for their functioning. He highlights the risks associated with data loss, such as ransomware attacks, and stresses that all data, not just sensitive information, is vital for business continuity.

As the discussion wraps up, Buda emphasizes the importance of maintaining rigorous data accuracy and proper metadata management. He warns against complacency as organizations adopt AI technologies, advocating for a proactive approach to ensure that data is well-structured and labeled. This diligence will be essential as businesses increasingly rely on AI-driven insights for operational decisions, making the quality of data more important than ever.

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Tariffs imposed during the Trump administration are now impacting businesses, leading to layoffs and price increases as companies adapt to rising costs. Outdoor brand KAVU has implemented cost-saving measures, including freezing marketing spending and limiting employee travel, while preparing to raise prices due to escalating tariffs on imports from countries like India and Vietnam. Public companies such as QVC Group and Allbirds are also planning price increases to mitigate the effects of tariffs, which could contribute to higher inflation and reduced consumer spending. As the stability of tariff rates becomes clearer, businesses may become more decisive about hiring and layoffs.

The adoption of artificial intelligence (AI) is surging, with nearly 80% of companies reportedly using generative AI. However, many firms are experiencing little to no significant impact on their bottom line, reminiscent of the productivity paradox seen during the personal computer boom. A survey indicates that CFOs are increasingly prioritizing AI for productivity and long-term revenue growth, with a notable shift in budget allocation towards agentic AI. Despite the optimism surrounding AI investments, the anticipated benefits have yet to materialize, raising concerns about skill degradation among professionals who rely heavily on AI tools.

Recent executive orders signed by President Trump may have significant implications for cybersecurity, potentially reversing progress made under previous administrations. While some directives aim to enhance preparedness for cyberattacks at the state and local level, others remove critical software security requirements for government vendors. This shift could undermine existing protections and create vulnerabilities, benefiting hackers and fraudsters. Additionally, Disney's decision to cancel plans for a deepfake version of Dwayne Johnson highlights the growing concerns over copyright and AI-generated content, as studios grapple with the implications of intellectual property rights in the age of AI.

As AI adoption accelerates, companies are rethinking their pricing strategies, moving from flat fees to consumption-based models to maintain profitability amid rising operational costs. This shift raises questions about forecasting costs and protecting margins, as unexpected spikes in per-task billing could impact clients. Furthermore, the limitations of AI systems in self-assessing their capabilities pose challenges for trust and validation in AI outputs. With significant vulnerabilities identified in AI systems during stress tests, service providers must ensure their AI offerings are built on robust, verified systems to deliver reliable value to clients.

Four things to know today

00:00 With Tariffs Solidifying, Businesses Tighten Spending and Raise Prices, Forcing IT Providers to Prove Value

03:56 Generative AI Adoption Hits 80%, Yet ROI Elusive as Healthcare Skill Loss and Data Risks Emerge

07:56 Mixed Cybersecurity Signals from White House; AI Copyright Uncertainty Halts Disney’s Moana Project

10:50 AI Managed Services Evolve as Consumption Pricing Rises, Chatbots Mislead, and Red Teams Find 139 Flaws

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The Cybersecurity and Infrastructure Security Agency (CISA) is facing significant criticism from state and local officials who feel abandoned due to diminishing federal support for critical cybersecurity programs. Many officials are concerned about their increasing reliance on self-driven initiatives, especially after cuts to the Multi-State Information Sharing and Analysis Center, which has been a crucial source of cybersecurity intelligence for over two decades. A recent survey revealed that a substantial portion of state and local governments lack adequate funding for cybersecurity, with 22% allocating no funds and 42% operating with annual budgets of less than $100,000. This situation raises alarms about the potential for increased vulnerability to cyberattacks, particularly from nation-state actors.

In response to the evolving landscape of artificial intelligence, the National Institute of Standards and Technology (NIST) is developing new security guidance aimed at addressing the associated risks. This initiative will clarify how AI interacts with cybersecurity, focusing on securing AI systems, the adversarial use of AI, and leveraging AI to enhance cybersecurity measures. Additionally, a bipartisan bill known as the Validation and Evaluation for Trustworthy Artificial Intelligence Act has been reintroduced in the Senate, aiming to establish guidelines for the responsible development and testing of AI systems. House appropriators are also proposing a significant funding increase for NIST, reflecting a commitment to bolster cybersecurity and innovation.

The Federal Risk Management and Authorization Program (FedRAMP) has made strides in streamlining the approval process for government cloud services, achieving a significant reduction in wait times from over a year to approximately five weeks. This shift is part of a broader trend toward more efficient cloud authorization processes, with FedRAMP already approving more than twice as many services in fiscal year 2025 compared to the previous year. This development presents an opportunity for businesses to leverage FedRAMP-authorized stacks for government-related buyers and to build migration strategies accordingly.

OpenAI has recently updated its ChatGPT platform, introducing new models and third-party tool connectors while facing scrutiny over the performance and security of its latest model, GPT-5. Despite the introduction of various user-focused options, security assessments have revealed significant vulnerabilities in GPT-5, prompting concerns about its safety and reliability. As companies like ConnectWise implement new credit card surcharges and adjust their workforce in response to market demands, the overarching theme emphasizes the need for operational discipline and strategic planning in navigating the evolving technology landscape.

Four things to know today

00:00 Shrinking Cyber Budgets, Emerging AI Rules, and Streamlined FedRAMP Signal Shifts for IT Providers

06:43 From Security to SaaS Management, Vendors Roll Out Agentic Features for IT Service Providers

10:25 OpenAI Expands GPT-5 Options, Adds Connectors, but Faces Early Security Backlash

13:41 ConnectWise Adds Credit Card Surcharges, Trims Staff in Strategic Realignment

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Amazon Web Services, Microsoft Azure, and Google Cloud dominate the infrastructure-as-a-service market, controlling 71% of the market share. This concentration is driven by the rapid growth of artificial intelligence, with global cloud spending projected to exceed $700 billion in 2025. The economic impact of AI is significant, as evidenced by Microsoft reaching a $4 trillion valuation, largely due to investments in AI infrastructure. However, this boom has created challenges for recent computer science graduates, who are struggling to find jobs in a tech industry that is increasingly adopting AI tools while simultaneously laying off employees.

The job market for young tech workers is deteriorating, with unemployment rates for those aged 20 to 30 rising sharply. Economists warn of a potential "jobless recovery" for white-collar roles, as AI continues to replace routine jobs. The share of tech jobs peaked in late 2022 but has since declined, leaving graduates questioning the reliability of traditional pathways into tech careers. This shift highlights the need for companies to reassess their hiring practices and adapt to the changing landscape influenced by AI.

In a concerning development, researchers have identified vulnerabilities in Google's Gemini AI Assistant that could allow attackers to hijack smart devices through manipulated calendar invites. These vulnerabilities pose significant risks as AI becomes more integrated into everyday applications. Although Google has addressed these issues, the potential for exploitation raises alarms about the security of AI systems and the importance of implementing strict controls and user training to mitigate risks.

The recent launch of GPT-5 by OpenAI has sparked disappointment among users, leading to a petition for a return to the previous model. Many users feel that GPT-5 does not offer substantial improvements over its predecessor, resulting in a significant drop in OpenAI's perceived leadership in AI. This disconnect between advanced AI tools available at home and outdated technology in the workplace is causing dissatisfaction among employees, prompting organizations to evaluate their AI policies and capabilities to retain talent and enhance productivity.

Four things to know today

00:00 AI Boom Fuels Cloud Giants’ Growth While Squeezing Entry-Level Tech Jobs

06:33 Researchers Expose Gemini AI Flaw Allowing Smart Device Hijacking via Calendar Invites

08:04 GPT-5 Backlash Highlights AI Leadership Slip and Workplace Adoption Crisis

11:06 Intel CEO Goes from “Conflict Risk” to “Success” in Trump’s Eyes

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