Business of Tech: Daily MSP News & IT Services Analysis

The episode highlights the ongoing consolidation of the MSP sector, driven by acquisition-focused entities like Evergreen Services Group. This structural mechanism centers on long-term acquisition strategies and the operational integration of MSPs, with Evergreen positioning itself as a permanent holder rather than a market aggregator intent on short-term profit. The discussion underscores how private equity-backed firms operate within multi-market IT services, spanning managed services, application support, and specialized government contracts.

Evergreen Services Group reports completing 47 acquisitions in the previous year, now owning 135 MSPs and 171 companies overall, with stated revenues of $1.5 billion and $250 million EBITDA. According to Craig Fulton, the company’s standard acquisition model typically offers 90% of enterprise value in cash at closing, with a remaining 10% tied to a one-year earnout dependent on 15% EBITDA growth. Quality of earnings assessments and customer renewal health are described as primary factors that can stall or terminate deals, particularly if financial accounts lack clarity or significant customer dissatisfaction emerges.

A recurring operational gap identified by Evergreen in acquisition targets is the absence of a dedicated growth leader within firms, which raises post-sale continuity risks. While questions were raised about the possibility of acquisitions inadvertently generating new competition in local markets—through staff departures and new businesses—no substantive evidence was cited that this has impacted consolidation effectiveness or market saturation. The dialogue also explored Evergreen’s investor structure and commitment to transparency about backend ownership and fund relationships with sellers, with claims of a high earnout payment rate and seller satisfaction.

For MSPs and IT leaders, the practical implications involve heightened scrutiny of operational maturity, especially in finance and client management roles, to realize sustained valuation and minimize deal-related risk. Vendor dependency deepens post-acquisition, as Evergreen leverages consolidated contracts to meet earnout targets. Owners not seeking to sell are advised to reassess account management practices, explore targeted AI integration for client engagement, and maintain competitive EBITDA performance, as independently managed firms continue to demonstrate strong profitability metrics.

Supported by: 
Guardz
TimeZest

About Business of Tech: The daily MSP news and analysis podcast for managed service providers and IT services leaders. Host Dave Sobel covers AI for MSPs, MSP pricing and profitability, MSP M&A and private equity, vendor partner programs, MSP cybersecurity and liability, and MSP operations — and answers the question every story raises: Why do we care? Produced by MSP Radio.

MSP Radio is supported by our partners:

ABC Solutions · CometBackup · Firetail · HaloPSA · LogMeIn · Mailprotector · Pax8 · Rythmz · ScalePad · TimeZest · Transit AI

Supporting the IT services community through insights, analysis, and transparency.

Get exclusive access to investigative reports, vendor analysis, leadership briefings, and more.

👉 https://businessof.tech/plus

Want the show on your favorite podcast app or prefer the written versions of each story?

📲 https://www.businessof.tech/subscribe

Looking for the links from today’s stories?

Every episode script — with full source links — is posted at:

🌐 https://www.businessof.tech

Pitch your story or appear on Business of Tech: Daily MSP News & IT Services Analysis

💬 https://www.podmatch.com/hostdetailpreview/businessoftech

LinkedIn: https://www.linkedin.com/company/28908079

YouTube: https://youtube.com/mspradio

Bluesky: https://bsky.app/profile/businessof.tech

Instagram: https://www.instagram.com/mspradio

TikTok: https://www.tiktok.com/@businessoftech

Facebook: https://www.facebook.com/mspradionews

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The episode reveals a structural shift toward eligibility thresholds and silent disqualification in the managed services sector, driven primarily by large vendors and regulatory buyers. Companies now establish non-negotiable numerical thresholds—such as cloud revenue minimums or cryptography certifications—as criteria that MSPs must meet to maintain channel access or bid eligibility. Key organizations shaping these dynamics include Microsoft, which has reduced its global distributor base by two-thirds, and regulatory buyers who increasingly rely on FIPS 140-3 cryptography validation as a procurement gate.

The most consequential development discussed is Microsoft’s reduction of its distributor partners from approximately 180 to roughly 60, based on a $30 million annual cloud solution provider revenue threshold per region, or $1 million for direct bill partners, according to Scott Frew of iAsset. Concurrently, regulated buyers are disqualifying MSPs whose tools lack FIPS 140-3 validated cryptography, a certification that requires third-party verification and is referenced by procurement officials as a hard requirement. The Managed Services Journal and vendor press releases provide evidence that this filtering mechanism now operates prior to any sales engagement, largely outside the control or even awareness of affected MSPs.

Supporting developments reinforce this threshold-driven landscape. CompareIT in the UK has launched an AI-driven platform to assess over 8,000 MSPs on up to 197 criteria, allowing buyers to shortlist providers before direct interactions. Vendors are responding by integrating compliance features (such as Datto RMM adding FIPS 140-3 support) without extra cost, turning compliance into a baseline rather than a differentiator. Third-party products and partnerships are emerging—like RYTHMz’ SCOUTz or the Senteon and SPECTRA alliance—to supply objective evidence of eligibility, making attestation a commodity and part of a burgeoning industry.

For MSPs and IT leaders, the operational implication is a shift from sales-driven competition to eligibility-driven access. Risks arise from losing channel relationships, not keeping up with compliance requirements, or being silently excluded from consideration in regulated deals. Ensuring a clear owner for validation data, maintaining up-to-date records of distributor status, and proactively verifying the business’s public profile now represent concrete governance requirements. Eligibility is becoming a precondition for market participation—those who manage it systematically maintain market access while others are removed without notification.

00:00 Three Thresholds, Three Weeks 

03:42 Cheaper Than A Conversation

06:06 You'll Never Get The No

09:12 Why Do We Care?

Supported by:

WebPros(CometBackup)

HaloPSA 

About Business of Tech: The daily MSP news and analysis podcast for managed service providers and IT services leaders. Host Dave Sobel covers AI for MSPs, MSP pricing and profitability, MSP M&A and private equity, vendor partner programs, MSP cybersecurity and liability, and MSP operations — and answers the question every story raises: Why do we care? Produced by MSP Radio.

MSP Radio is supported by our partners:

ABC Solutions · CometBackup · Firetail · HaloPSA · LogMeIn · Mailprotector · Pax8 · Rythmz · ScalePad · TimeZest · Transit AI

Supporting the IT services community through insights, analysis, and transparency.

Get exclusive access to investigative reports, vendor analysis, leadership briefings, and more.

👉 https://businessof.tech/plus

Want the show on your favorite podcast app or prefer the written versions of each story?

📲 https://www.businessof.tech/subscribe

Looking for the links from today’s stories?

Every episode script — with full source links — is posted at:

🌐 https://www.businessof.tech

Pitch your story or appear on Business of Tech: Daily MSP News & IT Services Analysis

💬 https://www.podmatch.com/hostdetailpreview/businessoftech

LinkedIn: https://www.linkedin.com/company/28908079

YouTube: https://youtube.com/mspradio

Bluesky: https://bsky.app/profile/businessof.tech

Instagram: https://www.instagram.com/mspradio

TikTok: https://www.tiktok.com/@businessoftech

Facebook: https://www.facebook.com/mspradionews

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The episode highlights a pronounced governance gap in how small and mid-sized businesses (SMBs) are adopting artificial intelligence (AI) tools and services. New research from GTIA, discussed by Sharon Florentine, identifies that while AI use has become nearly universal among SMB end customers of IT service providers, most lack formal policies, leadership, and budgeting structure around their deployment of AI. This reflects a foundational misalignment between AI adoption rates and organizational preparedness.

According to the GTIA study, 97–98% of surveyed SMBs are already using AI to some extent, yet only 20–25% do so strategically. Strategic usage is defined by having AI under a leadership role, with established policies and procedures. In addition, only around one-quarter of respondents reported having a dedicated AI budget. This suggests that despite broad AI integration, most spending is ad hoc or drawn from unrelated IT priorities. The research surveyed 520 SMBs across 11 verticals, reinforcing the generalizability of the findings.

Supporting discussions emphasized that this misalignment is both an opportunity and a risk for MSPs and ITSPs. Unaddressed gaps in governance, budgeting, and cybersecurity may undermine value delivery and create liability issues. Practical challenges—such as unclear funding sources, lack of proactive customer engagement, and potential cybersecurity risks tied to unmanaged AI use—were described as persistent pain points. It was also noted that shifting to a proactive approach is essential for building trust and effective client partnerships.

For MSPs and IT leaders, the operational implications center on the need to address governance and budget planning for AI while maintaining a focus on established IT infrastructure. Relying solely on existing processes may introduce unmanaged risk, particularly as customers expand AI use without adequate oversight. Providers are advised to prepare by developing frameworks for AI budgeting, security controls, and policy development, rather than diverting focus from foundational IT services. Neglecting core infrastructure and data practices in pursuit of unstructured AI integration was identified as a critical operational miscalculation.

Supported by: 

About Business of Tech: The daily MSP news and analysis podcast for managed service providers and IT services leaders. Host Dave Sobel covers AI for MSPs, MSP pricing and profitability, MSP M&A and private equity, vendor partner programs, MSP cybersecurity and liability, and MSP operations — and answers the question every story raises: Why do we care? Produced by MSP Radio.

MSP Radio is supported by our partners:

ABC Solutions · CometBackup · Firetail · HaloPSA · LogMeIn · Mailprotector · Pax8 · Rythmz · ScalePad · TimeZest · Transit AI

Supporting the IT services community through insights, analysis, and transparency.

Get exclusive access to investigative reports, vendor analysis, leadership briefings, and more.

👉 https://businessof.tech/plus

Want the show on your favorite podcast app or prefer the written versions of each story?

📲 https://www.businessof.tech/subscribe

Looking for the links from today’s stories?

Every episode script — with full source links — is posted at:

🌐 https://www.businessof.tech

Pitch your story or appear on Business of Tech: Daily MSP News & IT Services Analysis

💬 https://www.podmatch.com/hostdetailpreview/businessoftech

LinkedIn: https://www.linkedin.com/company/28908079

YouTube: https://youtube.com/mspradio

Bluesky: https://bsky.app/profile/businessof.tech

Instagram: https://www.instagram.com/mspradio

TikTok: https://www.tiktok.com/@businessoftech

Facebook: https://www.facebook.com/mspradionews

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

A central structural shift discussed is the acceleration of security risk and remediation cycles driven by AI-powered tooling available to both attackers and defenders. The episode highlights that the difference between offensive and defensive capabilities now depends less on underlying technology and more on access controls and permission settings, as demonstrated by offerings and incidents involving Anthropic, OpenAI, Cloudflare, and tool vulnerabilities in products from Connectwise and Enable.

Primary evidence of this shift includes the use of advanced AI models and agent frameworks, which have enabled attackers to compress the timeline for successful ransomware intrusions to under 10 hours, according to Unit 42 and The Register. On the defense side, Cloudflare and OpenAI announced an early access service leveraging Daybreak models (including GPT 5.6 Cyber) for vulnerability detection and suggested patching, subject to human review. Meanwhile, Microsoft implemented a policy throttling unpatched Exchange servers until remediation occurs, rather than relying on voluntary patching, marking a move towards enforced maintenance in vendor ecosystems.

Supporting developments underline the blurred line between offense and defense: Anthropic’s simultaneous release of two AI models (Claude Fable 5.1 and Claude Mythos 5.1) with identical capabilities but different access restrictions based on user vetting, and OpenAI’s promotion of its GPT-6 Astra model’s security testing performance, while applying safeguard layers to limit exploit generation. Reports from Hack the Box and Red Sift, citing increased enterprise adoption of AI for both security assessment and attack surface discovery, reinforce that automation now exposes vulnerabilities faster than traditional remediation processes can keep pace.

The operational implication for MSPs and IT service providers is that speed of decision-making—particularly client approval for emergency remediation—has become a critical risk control point. The analysis underscores that technical controls and cyber insurance arrangements are frequently untrusted or unused, leaving actual exposure governed by change management logistics. Providers are advised to formalize rapid approval clauses and escalation contacts in contracts, shifting from hypothetical scenarios to incorporating real vendor disclosures as triggers. This adjustment is positioned as a necessary response to a landscape in which exploits and mitigations move at comparable velocity, and traditional maintenance rhythms no longer align with risk movement.

00:00 The Intruder Left A Report 

04:17 Same Model, Different Door

06:44 Configured, Never Turned On

09:47 Why Do We Care?

Supported by: 

Proofpoint 
Guardz 

About Business of Tech: The daily MSP news and analysis podcast for managed service providers and IT services leaders. Host Dave Sobel covers AI for MSPs, MSP pricing and profitability, MSP M&A and private equity, vendor partner programs, MSP cybersecurity and liability, and MSP operations — and answers the question every story raises: Why do we care? Produced by MSP Radio.

MSP Radio is supported by our partners:

ABC Solutions · CometBackup · Firetail · HaloPSA · LogMeIn · Mailprotector · Pax8 · Rythmz · ScalePad · TimeZest · Transit AI

Supporting the IT services community through insights, analysis, and transparency.

Get exclusive access to investigative reports, vendor analysis, leadership briefings, and more.

👉 https://businessof.tech/plus

Want the show on your favorite podcast app or prefer the written versions of each story?

📲 https://www.businessof.tech/subscribe

Looking for the links from today’s stories?

Every episode script — with full source links — is posted at:

🌐 https://www.businessof.tech

Pitch your story or appear on Business of Tech: Daily MSP News & IT Services Analysis

💬 https://www.podmatch.com/hostdetailpreview/businessoftech

LinkedIn: https://www.linkedin.com/company/28908079

YouTube: https://youtube.com/mspradio

Bluesky: https://bsky.app/profile/businessof.tech

Instagram: https://www.instagram.com/mspradio

TikTok: https://www.tiktok.com/@businessoftech

Facebook: https://www.facebook.com/mspradionews

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

A central structural shift discussed is the growing pressure on margins and operational risk, driven by the competing models of vendor platform integration versus modular, best-in-breed solutions for managed service providers. Slide, a backup and disaster recovery vendor with roughly 1,000 partners, serves as an example of a company resisting long-term, bundled contracts and instead favoring a highly flexible, monthly engagement model. This approach reflects a broader industry debate over contract structure, integration depth, and the risk of vendor dependency.

Slide argues that month-to-month agreements offer MSPs operational agility, while conceding these contracts heighten vendor-side financial unpredictability and require more proactive account management. The company acknowledges consistent partner requests for longer-term deals, mainly to secure better pricing or manage risk, but maintains that flexibility takes precedence. The result is a dynamic in which vendors bear greater short-term churn risk in exchange for heightened accountability.

Secondary discussion critiques the “single pane of glass” approach found in many vendor stacks. Slide claims current market consolidations mostly deliver superficial integration—such as unified login—while failing to address the operational inefficiencies of managing backup across multiple platforms. True interoperability remains limited, and MSPs often pay a process penalty, with searches and recoveries split across separate product silos. Attempts to automate recovery and search using AI offer partial relief but can introduce new risks if processes are not robust.

For MSP organizations, these developments reinforce the importance of scrutinizing vendor contracts for embedded risk, especially as flexibility increases exposure to abrupt churn. The tradeoff between interoperability and platform lock-in demands attention to operational readiness, governance, and resource planning. Smaller providers, in particular, should weigh the support and integration limits of their partners against the risks of fragmented tooling and short-term agreements.

Supported by:

TimeZest
ScalePad

About Business of Tech: The daily MSP news and analysis podcast for managed service providers and IT services leaders. Host Dave Sobel covers AI for MSPs, MSP pricing and profitability, MSP M&A and private equity, vendor partner programs, MSP cybersecurity and liability, and MSP operations — and answers the question every story raises: Why do we care? Produced by MSP Radio.

MSP Radio is supported by our partners:

ABC Solutions · CometBackup · Firetail · HaloPSA · LogMeIn · Mailprotector · Pax8 · Rythmz · ScalePad · TimeZest · Transit AI

Supporting the IT services community through insights, analysis, and transparency.

Get exclusive access to investigative reports, vendor analysis, leadership briefings, and more.

👉 https://businessof.tech/plus

Want the show on your favorite podcast app or prefer the written versions of each story?

📲 https://www.businessof.tech/subscribe

Looking for the links from today’s stories?

Every episode script — with full source links — is posted at:

🌐 https://www.businessof.tech

Pitch your story or appear on Business of Tech: Daily MSP News & IT Services Analysis

💬 https://www.podmatch.com/hostdetailpreview/businessoftech

LinkedIn: https://www.linkedin.com/company/28908079

YouTube: https://youtube.com/mspradio

Bluesky: https://bsky.app/profile/businessof.tech

Instagram: https://www.instagram.com/mspradio

TikTok: https://www.tiktok.com/@businessoftech

Facebook: https://www.facebook.com/mspradionews

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The episode details a structural shift toward increased automation and integration of AI layers within managed services platforms, raising questions of risk management, transparency, and economic models. Syncro’s integration with Anthropic’s AI, positioned as a native connector in the Anthropic ecosystem, exemplifies how platform providers are embedding AI to automate routine technical work and streamline technician workflows.

Syncro’s leadership claims their platform is targeting up to 30% autonomous handling of Level 1 and Level 2 technical tasks by the end of the year and 50% by 2027, according to internal projections. Current reported outcomes show between 15% and 25% of tickets resolved autonomously via guided ticket resolution, with ticket summarization reportedly improving time to action and resolution speeds by up to 50% for some ticket types. The company indicates that economic models are in flux, as large language models are being run at a loss and cost recovery is being managed via credit-based usage tied to task volume.

Supporting developments include the persistent gap in adoption: only 5-10% of Syncro partners—primarily larger, more mature MSPs—are actively leveraging these AI-driven features, according to company estimates. There is also ongoing debate about the continued necessity of tickets as a unit of work, with Syncro’s product team emphasizing the importance of visibility, measurement, and audit traceability amidst increasing automation.

For MSPs and IT leaders, these shifts signal increased vendor dependency and exposure to evolving cost structures related to AI model consumption. There are governance considerations regarding transparency and audit trails for AI-driven operational decisions, and practical questions around adoption readiness, as the efficiency gains are not automatic and depend on proactive enablement. Operators should monitor changing license and consumption models, scrutinize audit and accountability processes, and reassess how automation may alter labor and cost dynamics.

Supported by:
GoTo(LogMeIn)
Proofpoint

About Business of Tech: The daily MSP news and analysis podcast for managed service providers and IT services leaders. Host Dave Sobel covers AI for MSPs, MSP pricing and profitability, MSP M&A and private equity, vendor partner programs, MSP cybersecurity and liability, and MSP operations — and answers the question every story raises: Why do we care? Produced by MSP Radio.

MSP Radio is supported by our partners:

ABC Solutions · CometBackup · Firetail · HaloPSA · LogMeIn · Mailprotector · Pax8 · Rythmz · ScalePad · TimeZest · Transit AI

Supporting the IT services community through insights, analysis, and transparency.

Get exclusive access to investigative reports, vendor analysis, leadership briefings, and more.

👉 https://businessof.tech/plus

Want the show on your favorite podcast app or prefer the written versions of each story?

📲 https://www.businessof.tech/subscribe

Looking for the links from today’s stories?

Every episode script — with full source links — is posted at:

🌐 https://www.businessof.tech

Pitch your story or appear on Business of Tech: Daily MSP News & IT Services Analysis

💬 https://www.podmatch.com/hostdetailpreview/businessoftech

LinkedIn: https://www.linkedin.com/company/28908079

YouTube: https://youtube.com/mspradio

Bluesky: https://bsky.app/profile/businessof.tech

Instagram: https://www.instagram.com/mspradio

TikTok: https://www.tiktok.com/@businessoftech

Facebook: https://www.facebook.com/mspradionews

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

A structural shift in regulatory accountability now places incident notification and liability directly on the operators or deployers of AI-powered and software tools, rather than on technology vendors or model developers. This mechanism is made explicit by the requirements of the EU’s Cyber Resilience Act (CRA), Digital Services Act (DSA), and the upcoming Machinery Regulation. Incidents such as the Cursor AI coding agent breach at a Belgian chemical company underline that compliance timelines and regulatory scrutiny target the entity deploying the technology.

CrowdStrike and Okta both reported that increased enterprise security spending is being driven by heightened AI-generated attacks, according to their quarterly results. Gartner forecasts AI security spending will reach $4.8 billion by 2027, up 68.7% from this year, with usage control as the most dynamic segment. A public letter signed by over 100 vendors—including OpenAI, Anthropic, AWS, and Microsoft—warns of urgent defensive needs but does not shift responsibility to software suppliers.

Recent breaches and vulnerabilities illustrate how accountability remains with the service provider or end-user implementer. The Cursor breach assigned notification duties to AnySphere (the product vendor) and the breached organization, not to upstream model providers. Likewise, after N-able's Passportal bug, MSPs were accountable for client-facing remediation. In each case, the “accountability line” lands on the party deploying the tool.

For MSPs and IT service providers, these trends require updating agreements, operations, and client communications. Service structures must prioritize regulatory response timelines, documentation, and clear reporting obligations. Providers serving EU clients, or those linked to global supply chains, will encounter business risk if they do not proactively address these regulatory demands before mandated deadlines.

00:00 Prevention Got A New Price 

03:25 The Half That Doesn't Move

05:50 Where The Call Lands

09:27 Why Do We Care?

Supported by:

Proofpoint 

GoTo(LogMeIn) 

About Business of Tech: The daily MSP news and analysis podcast for managed service providers and IT services leaders. Host Dave Sobel covers AI for MSPs, MSP pricing and profitability, MSP M&A and private equity, vendor partner programs, MSP cybersecurity and liability, and MSP operations — and answers the question every story raises: Why do we care? Produced by MSP Radio.

MSP Radio is supported by our partners:

ABC Solutions · CometBackup · Firetail · HaloPSA · LogMeIn · Mailprotector · Pax8 · Rythmz · ScalePad · TimeZest · Transit AI

Supporting the IT services community through insights, analysis, and transparency.

Get exclusive access to investigative reports, vendor analysis, leadership briefings, and more.

👉 https://businessof.tech/plus

Want the show on your favorite podcast app or prefer the written versions of each story?

📲 https://www.businessof.tech/subscribe

Looking for the links from today’s stories?

Every episode script — with full source links — is posted at:

🌐 https://www.businessof.tech

Pitch your story or appear on Business of Tech: Daily MSP News & IT Services Analysis

💬 https://www.podmatch.com/hostdetailpreview/businessoftech

LinkedIn: https://www.linkedin.com/company/28908079

YouTube: https://youtube.com/mspradio

Bluesky: https://bsky.app/profile/businessof.tech

Instagram: https://www.instagram.com/mspradio

TikTok: https://www.tiktok.com/@businessoftech

Facebook: https://www.facebook.com/mspradionews

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The episode highlights a structural shift in the MSP sector characterized by consolidation at the top and fragmentation at the low end, driven by a rise in niche MSPs entering the market and ongoing acquisitions by larger providers. This shift is outlined in discussion of industry data sourced from the Kaseya State of the MSP report, as well as Greg Jones’ observations regarding both market entry trends and the increased prevalence of hyperscale consolidation activity.

According to the Kaseya report, there has been a reduction in the proportion of clients spending $25,000 a year or more with MSPs—from three quarters of the market to four in ten within a year—indicating a trend towards smaller client engagements. In parallel, 48% of surveyed MSPs identified AI as their clients' top need, but only 13% reported being able to charge for AI, pointing to a significant value capture gap. These figures were referenced during a discussion on monetization challenges and the changing expectations around AI service delivery.

Further supporting this structural change, the episode details Kaseya’s shift towards more transparent contract terms and new commercial offerings such as FLEXSpend and catastrophic loss prevention. These policy changes are described by company leadership as attempts to address longstanding provider grievances and increase flexibility, but the discussion also reinforces the persistence of operational risks related to contract renewals and alignment between vendor strategy and MSP needs.

For operators, the implications center on growing exposure to contract risk, complexity in billing and service models, and the challenge of capturing new sources of value such as AI services. The evolving mix of small and consolidated players in the MSP landscape puts further pressure on vendor selection, contract diligence, and process accountability, especially where new technologies are marketed ahead of proven monetization strategies.

Supported by:
Proofpoint
GoTo (LogMeIn)

About Business of Tech: The daily MSP news and analysis podcast for managed service providers and IT services leaders. Host Dave Sobel covers AI for MSPs, MSP pricing and profitability, MSP M&A and private equity, vendor partner programs, MSP cybersecurity and liability, and MSP operations — and answers the question every story raises: Why do we care? Produced by MSP Radio.

MSP Radio is supported by our partners:

ABC Solutions · CometBackup · Firetail · HaloPSA · LogMeIn · Mailprotector · Pax8 · Rythmz · ScalePad · TimeZest · Transit AI

Supporting the IT services community through insights, analysis, and transparency.

Get exclusive access to investigative reports, vendor analysis, leadership briefings, and more.

👉 https://businessof.tech/plus

Want the show on your favorite podcast app or prefer the written versions of each story?

📲 https://www.businessof.tech/subscribe

Looking for the links from today’s stories?

Every episode script — with full source links — is posted at:

🌐 https://www.businessof.tech

Pitch your story or appear on Business of Tech: Daily MSP News & IT Services Analysis

💬 https://www.podmatch.com/hostdetailpreview/businessoftech

LinkedIn: https://www.linkedin.com/company/28908079

YouTube: https://youtube.com/mspradio

Bluesky: https://bsky.app/profile/businessof.tech

Instagram: https://www.instagram.com/mspradio

TikTok: https://www.tiktok.com/@businessoftech

Facebook: https://www.facebook.com/mspradionews

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

A disconnect between technical capability and end-user adoption is driving current decision-making in AI and infrastructure among managed service providers and IT leaders. While companies like Broadcom, Perplexity, Apple, and NVIDIA are introducing hardware and platforms for on-premises and local AI processing, the primary lever for value remains organizational adoption rather than available technology. Costs and infrastructure investments are being shaped by how—and whether—users engage with these tools.

The most significant evidence is from Voya Financial, where a five-hour AI training for 11,000 employees led to 98% adoption and frequent use, despite no change in underlying technology. Industry data cited shows that while generative AI now reaches 80% of occupations, only 2.8% of tasks have more than 50% usage, and none reach 70%. This indicates broad awareness but little real transfer of work to AI, making current spending primarily reflective of shallow adoption rather than deep operational change.

Additional developments include a clear industry shift toward privately owned AI infrastructure, as shown by recent product launches and by NVIDIA’s ongoing focus on cloud-rented compute. Gartner projects that consumption-based and inference-specific storage will expand rapidly by 2029, but these estimates are based on limited current adoption, underlining a mismatch between infrastructure readiness and immediate need.

For MSPs and IT providers, the risk is overcommitting to AI infrastructure before clients are ready. Real opportunity lies in structured adoption programs for existing AI tools—identifying staff with teaching skills, piloting training internally, and focusing on increasing client usage. Deferring on-premises AI infrastructure projects until client adoption and economic signals align is positioned as a safer, more pragmatic approach.

04:20 Nobody Turned It On

07:53 The Window Opens In 2029

10:46 Why Do We Care? 

Supported by:  
Proofpoint 
GoTo(LogMeIn) 

About Business of Tech: The daily MSP news and analysis podcast for managed service providers and IT services leaders. Host Dave Sobel covers AI for MSPs, MSP pricing and profitability, MSP M&A and private equity, vendor partner programs, MSP cybersecurity and liability, and MSP operations — and answers the question every story raises: Why do we care? Produced by MSP Radio.

MSP Radio is supported by our partners:

ABC Solutions · CometBackup · Firetail · HaloPSA · LogMeIn · Mailprotector · Pax8 · Rythmz · ScalePad · TimeZest · Transit AI

Supporting the IT services community through insights, analysis, and transparency.

Get exclusive access to investigative reports, vendor analysis, leadership briefings, and more.

👉 https://businessof.tech/plus

Want the show on your favorite podcast app or prefer the written versions of each story?

📲 https://www.businessof.tech/subscribe

Looking for the links from today’s stories?

Every episode script — with full source links — is posted at:

🌐 https://www.businessof.tech

Pitch your story or appear on Business of Tech: Daily MSP News & IT Services Analysis

💬 https://www.podmatch.com/hostdetailpreview/businessoftech

LinkedIn: https://www.linkedin.com/company/28908079

YouTube: https://youtube.com/mspradio

Bluesky: https://bsky.app/profile/businessof.tech

Instagram: https://www.instagram.com/mspradio

TikTok: https://www.tiktok.com/@businessoftech

Facebook: https://www.facebook.com/mspradionews

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

A structural transfer of liability and risk is reshaping industry engagement models, with outcome-based contracting increasing across service agreements. This shift is being driven by buyer demands for accountability in technology solutions, notably in artificial intelligence deployments, and is illustrated by recent unpublished but credible reports that OpenAI is quietly allowing select large enterprise customers to pay only when AI tasks are successfully completed. Supporting research from Gartner and CIO Dive highlights a growing disparity: while 19% of service buyers seek outcome-based payment models, only 13% of agreements from sellers currently accommodate them.

The core development spotlighted is the disconnect between expectations for measurable AI-driven business outcomes and the lack of empirical evidence that such technologies are delivering on those promises at the organizational level. A large-scale survey by the National Bureau of Economic Research, encompassing nearly 6,000 senior executives across four countries, found that over 89% reported no observable improvement in employment or labor productivity from AI investments during the past three years, despite substantial organizational changes and budget reallocations. Additionally, research by Thomson Reuters found that 91% of 1,800 professionals reported their organizations were not realizing expected AI value, identifying a gap in demonstrable returns even while the technology is being deployed.

Supporting data from Techaisle reveals partner capability thins dramatically as customers progress into advanced AI adoption stages. Most channel providers retain capacity only for basic "estate" work, with capability dropping to near zero for the most advanced client needs. Forrester has also identified persistent barriers to reliable measurement, such as fragmented and inconsistent data baselines, as well as dependencies on customer-side decisions. These factors magnify contract risk and reinforce the liability shift toward providers, who become responsible for defining, measuring, and underwriting outcomes without always possessing necessary levers or data.

The operational implication for MSPs and IT service providers is heightened exposure to contractual and financial risk when agreeing to outcome-based terms, especially without mechanisms to price or control every relevant input. Providers are often unable to flow contract risk upstream to vendors or technology manufacturers, as their own agreements typically exclude outcomes. The episode concludes that early engagement and proactive definition of acceptable, controllable outcomes is essential, as outcome-based demands are likely to appear pre-baked in future client agreements, shifting bargaining power away from providers unprepared to quantify their exposure. Using data from their own worst-performing months, documenting client dependencies as contract conditions, and piloting outcome-based lines in otherwise standard agreements are outlined as practical tactics to mitigate downside risk before broader market adoption.

00:00 Four Numbers, One Cause 

03:45 What You Ask For When You Can't Tell

06:45 Nobody Underneath You

10:20 Why Do We Care? 

Supported by:  
Guardz 
ScalePad 

About Business of Tech: The daily MSP news and analysis podcast for managed service providers and IT services leaders. Host Dave Sobel covers AI for MSPs, MSP pricing and profitability, MSP M&A and private equity, vendor partner programs, MSP cybersecurity and liability, and MSP operations — and answers the question every story raises: Why do we care? Produced by MSP Radio.

MSP Radio is supported by our partners:

ABC Solutions · CometBackup · Firetail · HaloPSA · LogMeIn · Mailprotector · Pax8 · Rythmz · ScalePad · TimeZest · Transit AI

Supporting the IT services community through insights, analysis, and transparency.

Get exclusive access to investigative reports, vendor analysis, leadership briefings, and more.

👉 https://businessof.tech/plus

Want the show on your favorite podcast app or prefer the written versions of each story?

📲 https://www.businessof.tech/subscribe

Looking for the links from today’s stories?

Every episode script — with full source links — is posted at:

🌐 https://www.businessof.tech

Pitch your story or appear on Business of Tech: Daily MSP News & IT Services Analysis

💬 https://www.podmatch.com/hostdetailpreview/businessoftech

LinkedIn: https://www.linkedin.com/company/28908079

YouTube: https://youtube.com/mspradio

Bluesky: https://bsky.app/profile/businessof.tech

Instagram: https://www.instagram.com/mspradio

TikTok: https://www.tiktok.com/@businessoftech

Facebook: https://www.facebook.com/mspradionews

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.