Business of Tech: Daily MSP News & IT Services Analysis

Business of Tech: Daily MSP News & IT Services Analysis

By MSP Radio, Dave Sobel, Managed Service Provider (MSP) Industry AnalystBusinessNewsTechnologyTech NewsManagement
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Business of Tech: Daily MSP News & IT Services Analysis episodes

  • Ben Morrell on How Unified Security Platforms Shift MSP Operational Risk and Staff Needs

    The episode highlights the structural shift toward platform consolidation in security services, illustrated by Coro’s unified security platform and its positioning for lean IT teams and MSPs. The mechanism involves the bundling of diverse security tools—email protection, endpoint detection and response (EDR), DLP, security awareness, backup, and cloud app integrations—into a single, managed service. This reduces the operational overhead associated with managing multiple vendors, products, and contracts, a trend now pursued by both established enterprise providers and emergent channel-focused companies.

    The most significant development cited is Coro’s integration of AI and automation within its platform, claiming, according to the company, that 92% to 96% of alert tickets generated by security modules are closed automatically by machine intelligence, depending on the month. The conversational AI integrations such as ChatGPT and Claude are presented as front-end layers through which practitioners can execute mundane security tasks—ticket management, host isolation, incident correlation—without direct console interaction. The claim of offloading 95% of workloads to automation is specified as relating to ticket processing volume, as clarified in the discussion.

    Supporting evidence centers on the operational layering of AI, with commentary on new risk profiles introduced by integrating large language models (LLMs) into security workflows. Concerns raised include rising exposure to prompt injection, shadow AI (untracked AI usage by end users), and unmanaged cost escalation linked to token-based billing models for third-party AI platforms. Coro’s approach distinguishes between AI-related costs incurred internally (absorbed by the vendor) and those incurred when practitioners interact with external AI tools (borne by the MSP or their clients). The need for visibility into AI usage and structured user training is highlighted as a risk mitigation measure.

    Operationally, MSPs and IT providers face both increased efficiency and new complexity. Vendor dependency consolidates, reducing contract sprawl and administrative burden but raising questions about single-point-of-failure and stack lock-in. Billing risk shifts with AI consumption models, introducing liability for unexpected operational cost surges if token limits are not enforced. The requirement for effective governance intensifies as traditional security controls are extended by AI-managed processes and the detection of unauthorized AI activity becomes part of standard oversight. Providers are advised to scrutinize stack overlap, evaluate whether platform consolidation minimizes genuine operational friction, and remain cautious about over-relying on automated outcomes without maintaining direct accountability.

    Supported by: 
    Pax8
    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.

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    18 min
  • Vendor Tiering Locks Out Small Partners: Anurag Agrawal on Allocation, Not Capability

    The episode identifies a structural shift within the IT services market, highlighting a bifurcation between two distinct economic models in the channel: the advisory economy, paid upfront for transformation and integration, and the operational economy, paid on the backend for managed outcomes and recurring support. Techaisle’s 2026 Global Channel Partners Survey, referenced by Anurag Agrawal, underscores that most vendors operate single partner programs that implicitly favor one of these models, often without recognizing the divergence. This mechanism exposes gaps in vendor strategies and underscores uneven access to resources and incentives across partner segments.

    Data from Techaisle’s study involving 5,450 partner firms in 24 countries illustrates the impact of these structural choices. Firms under $10 million in revenue project just 8.4% growth, while partners over $500 million forecast 16.8% growth, with 41% of the largest landing in top-tier vendor programs versus only 2% of smaller firms. Anurag Agrawal contends that allocation decisions—such as capital, leads, and support—by vendors drive part of this gap, independently of partner capabilities. The allocation process forms a closed loop, where larger partners consistently receive and convert the best leads, reinforcing their tier status. Furthermore, most vendor incentive spend lands at deal close, benefiting partners focused on new transactions over those delivering ongoing operational value.

    Supporting developments include evidence that smaller MSPs face higher customer acquisition costs (absorbing 31% of first-year deal value for contracts under $25,000) and operate with little error margin, as opposed to larger firms with more resilient economics. The transcript points out that tier progression within most vendor programs primarily reflects transaction volume and headcount, not actual customer outcomes or quality—making tiers unreliable as indicators of partner value. Additionally, practical AI deployments are now accelerating infrastructure refresh cycles and shifting the center of gravity for services revenue from break-fix to consulting and integration, further complicating the operational landscape for SMB-focused providers.

    For MSPs and IT service leaders, these findings imply increased dependency on vendor program design and expose operational risk due to imbalanced allocation of leads and support. Smaller providers should expect continued pressure on margins and incentives unless vendors alter their models to recognize operational contributions beyond new logo acquisition. Specialization—vertical or workload-focused—is suggested as a cost-control mechanism, while pricing and packaging transformation work around a recurring services base could mitigate risk. Governance challenges posed by AI adoption, such as managing large numbers of intelligent agents, call for enhanced identity, entitlement, and monitoring capabilities as table stakes for ongoing operational relevance.

    Supported by: 
    ScalePad
    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.

    💼 All Our Sponsors

    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.

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    38 min
  • AI Watermarks and the End of Document Trust

    The dominant structural shift explored is the erosion of document-based differentiation for MSPs and IT service providers, driven by advances in generative AI, regulatory mandates, and automation of AI detection and content creation processes. Regulatory requirements such as the EU AI Act are compelling vendors like Anthropic and Google to introduce invisible watermarks on machine-generated content, while vendors including OpenAI have yet to standardize this practice. At the same time, third-party entities such as BlazeHive are automating the production and humanization of AI-generated output, raising concerns about the long-term viability of artifacts as proof of human oversight or competency.

    Evidence cited includes Anthropic’s implementation of invisible watermarks on content produced by its Claude model, fulfilling regulatory obligations and planning to release detection tools to third parties. The durability of these watermarks is limited: "light editing probably won't strip the mark, but a complete rewrite... will" according to Anthropic’s own guidance. Market analysis by Ramp shows a ceiling on enterprise spend for premium AI models like Anthropic’s Fable 5, with adoption of high-end models remaining restricted in practice, and cost pressures pushing organizations towards locally-run, unmetered models such as Alibaba’s recent release.

    Additional developments reinforce the structural gap in process and talent. Channel Dive and Information Week report that IT providers face increasing difficulty deploying the AI tools they sell, not because the tools are unavailable, but due to a lack of engineering skill and process clarity. Gartner’s research, as reported by Information Week, identifies that failures in deploying AI agents stem from breakdowns in business process definition, not deficiencies in the technology. These trends illustrate that service providers’ core asset is not tooling but an explicit, transparent process with clear review and accountability—something that automation and documentation alone cannot supply.

    For MSPs and IT service providers, these trends create risks around vendor substitution, diminished artifact value, and increased client scrutiny. The implication is a need to codify review standards and accountability practices for deliverables, as automated AI output can no longer serve as a market differentiator, and clients now have both the suspicion and means to probe the origins of documents. Differentiation will shift toward the ability to transparently describe, defend, and consistently execute meaningful human review and oversight—not merely the ability to generate professional-looking outputs. Providers who cannot articulate and document their review process may find themselves commoditized or excluded from competitive evaluations.

    00:00 The Mark Arrives Everywhere 

    03:11 A Test That Can't Come Back No

    06:38 Nobody Can Answer With the File

    09:24 Why Do We Care? 

     

    Supported by: 

    OpenText 
    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.

    💼 All Our Sponsors

    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.

    🚀 Join Business of Tech Plus

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

    👉 https://businessof.tech/plus

    🎧 Subscribe to the Business of Tech

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    13 min
  • AI-Driven Vulnerabilities and Bonded Licenses: Why Permission Is the Hidden Business Risk

    The episode reveals a structural shift toward permission-based operational models, where access and capability are not determined by technical proficiency alone but by explicit, revocable permissions from state or corporate authorities. This model is illustrated by the recent U.S. federal initiative authorizing select private cybersecurity firms to conduct offensive operations against foreign criminal organizations—an approach that mirrors the historical "letter of marque" by granting a new legal status rather than developing new technologies. Parallel dynamics are visible in the IT service provider space, with vendors such as Microsoft moving to strictly time-bound, role-scoped delegated admin permissions that can be revoked or altered unilaterally.

    The most consequential development is the August 12 presidential memorandum authorizing private U.S. companies, under contract with the Department of Justice or Homeland Security, to perform cyber surveillance and effect operations against specified foreign criminal targets. Firms must pass technical, security, and personnel vetting, declare outside contracts, and post a $1 million bond forfeitable upon non-compliance. Every action requires written dual approval by program directors. Importantly, the legal basis relies not on statutory change but on an executive memorandum that grants a temporary agency status to participants, a mechanism untested in court and revocable with any change in administration.

    Related developments reinforce the thesis of permission-based dependency. Microsoft’s overhaul of its partner governance—removing perpetual global admin rights in favor of time-limited, role-based permissions—has made MSPs’ delivery capabilities contingent on timely recognition and acceptance of new terms set by Microsoft. Amid this, operational pressure is rising as AI-driven vulnerability finding systems, like those used by Microsoft and cataloged in the NIST National Vulnerability Database, are producing flaw volumes that outpace existing tracking infrastructure. Together, these shifts make permissions and vendor terms—not technical gaps—the central variable in the sustainability of service lines.

    For MSPs and IT leaders, the practical implications are clear: operational continuity is increasingly determined by upstream permissions and the specificity of contractual terms rather than local technical controls. Vendor dependence has expanded beyond product functionality to include granular, revocable access rights shaped by external schedules and policies. Effective risk management now requires tracking the origin, mechanism, and expiration of every operational permission, establishing owner accountability, and proactively reviewing vendor and governmental agreements. Organizations failing to systematize this will face unplanned service interruptions and remediation costs dictated by external authorities.

    00:00 The Bond and the Vetting 

    04:31 Congress Grants Those

    07:47 Whose Permission Are You On?

    11:05 Why Do We Care? 

    Supported by: 

    ScalePad 
    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.

    💼 All Our Sponsors

    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.

    🚀 Join Business of Tech Plus

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

    👉 https://businessof.tech/plus

    🎧 Subscribe to the Business of Tech

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

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

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    Looking for the links from today’s stories?

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

    🌐 https://www.businessof.tech

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    15 min
  • ConnectWise CEO Manny Rivelo: AI Agents Shift Ticket Resolution and Labor Costs for MSPs

    The episode details a structural shift within the managed services market toward increased operational automation and integration, framed by vendor-led consolidation of core service platforms with embedded AI-driven workflows. ConnectWise has combined previously separate systems—PSA, RMM, ScreenConnect, and others—into a unified platform powered by agent-based automation ("agentic AI") under the "Predictive IT" model. The associated risk for service providers is growing reliance on consolidated vendor ecosystems for both service delivery operations and automation capabilities, blurring the distinction between core service expertise and contextual tooling.

    A consequential data point highlighted is from Service Leadership benchmarking, which shows sustained 19% EBITDA over six years for MSPs, with the most profitable—in what ConnectWise identifies as "best-in-class"—gaining advantage through higher investment in automation and agent-driven workflows. According to ConnectWise, production test data show that deploying agentic automations has produced a 30–60% reduction in tickets requiring direct human involvement, along with 45% reductions in handling times and claimed margin improvements of 5–12 percentage points. Importantly, labor cost pressures and technician burnout persist, positioning automation as a response to both expense management and workforce availability challenges.

    Supporting developments clarify that best-in-class or larger MSPs often experiment with building their own automation tools, but many report variable outcomes, including cases where internally built solutions fail to deliver anticipated efficiency or escalate costs—a result ConnectWise attributes to confusion over what constitutes "core" versus "contextual" investment. ConnectWise now positions its integrated approach as a way for smaller and mid-size MSPs to access operational automation without standing up custom software projects or incurring the risks and overhead of internal development. The episode also surfaces channel-wide conversation about the tension between per-user, per-workflow, and consumption-based pricing, highlighting the risk of variable costs being introduced into previously fixed-fee MSP engagement models.

    For service providers, the practical implications are increased dependency on platform vendors for operational tooling, with a shift away from internally built processes toward outsourced automation and dashboard-driven performance tracking. This creates new pricing models—metered by user, workflow, or consumption—which can introduce variability and contract risk when compared against flat-fee client agreements. Providers need to monitor the alignment between vendor billing structures and their own client contracts, assess the operational impact of vendor stack consolidation, and maintain transparency around efficiency gains versus workload transfers. Oversight mechanisms must be updated to account for reliance on agent-run workflows and to mitigate associated accountability and governance risks.

    Supported by: 
    WebPros (CometBackUp)
    Pax8

    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.

    💼 All Our Sponsors

    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.

    🚀 Join Business of Tech Plus

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

    👉 https://businessof.tech/plus

    🎧 Subscribe to the Business of Tech

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

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    Looking for the links from today’s stories?

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

    🌐 https://www.businessof.tech

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    23 min
  • Automation's Cost Curve: Why AI Usage Is Squeezing Profits Across IT Services

    Margin pressure driven by AI adoption and automation is fundamentally altering the economic model for IT service delivery and software. Trend Micro’s disclosure that operating margins fell from 19% to 15% while cloud and AI token costs nearly doubled, despite strong AI security product sales, highlights how AI-related expenses grow in step with usage. This shift breaks from the historical software margin structure, where scaling incurred negligible incremental costs, and signals a new landscape in which AI service operation continuously consumes resources.

    A significant development underscoring this trend is the $2 billion capital raise by Thrive Holdings at a $12 billion valuation, backed by SoftBank and OpenAI. Thrive’s business model centers on acquiring professional service firms—across IT and accounting—then reorganizing their operations around AI to reduce labor costs while maintaining service levels. According to Dave Sobel, this is not speculative, but reflects direct, substantial financial bets on the ability to remove a portion of service labor without customer disruption, with over 70 acquired service companies already undergoing this transition.

    Additional evidence comes from channel segment data and shifts in partner economics. The Techaisle Global Channel Partner Survey found service providers under $10 million in revenue project 8.4% growth, while those above $500 million expect 16.8%. AI-related cloud spending continues to climb, with Gartner projecting $42 billion primarily moving from training to ongoing inference operations. The resulting cost structure affects everyone, from increased hardware component prices—such as memory for GPUs—and service desk automation tool adoption, to the fact that most organizations now monitor AI spend as a named line item but struggle to forecast it reliably. Only 11% of organizations can predict their AI bills, down from 15% the prior year.

    For MSPs and IT leaders, these developments indicate rising operational complexity and increasing pricing competition. Automation drives down service delivery costs, but savings will quickly pass to clients as competitors implement similar solutions. Providers must quantify and communicate their impact on client outcomes, translating delivered value into client financial terms rather than relying solely on traditional metrics like licenses or labor hours. Failing to do so exposes providers to rapid commoditization and margin erosion, as clients grow more able to audit, benchmark, and bid out both cost savings and revenue enablement.

    00:00 Two Billion Against Your Labor 

    04:10 Software Got a Cost of Goods

    06:56 Get On Their Income Statement

    10:29 Why Do We Care? 

    Supported by: 

    ScalePad  
    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.

    💼 All Our Sponsors

    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.

    🚀 Join Business of Tech Plus

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

    👉 https://businessof.tech/plus

    🎧 Subscribe to the Business of Tech

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

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

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

    🌐 https://www.businessof.tech

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    14 min
  • Lexful’s AI-Native Documentation: New Accountability and Risk for MSPs – With Pinar Ormeci

    The episode highlights the shift toward AI-driven knowledge management within the MSP sector, revealing increased operational dependency on structured data and sophisticated integrations. Lexful, an AI-native documentation platform designed specifically for MSPs, represents this trend by positioning itself not as a simple add-on but as a replacement for legacy documentation tools—controlling critical record-keeping functions and interfacing with principal PSA and RMM systems. This development signals greater infrastructure dependence on AI-based documentation and the implications of technical integration across diverse operational tools.

    According to Lexful’s CEO and statements made during the episode, the platform has completed integrations with major PSA and RMM tools and now handles data by employing a “context-engineered” large language model tailored specifically to the MSP context. Lexful claims its engine minimizes LLM hallucinations, supports record-level access control, and functions as a system of record rather than a direct action platform. Socializing its compliance trajectory, Lexful has achieved SOC 2 Type 2 and shipped its MCP server, but its listing in marketplaces like Pax8 and SureWeb has been delayed, with current status characterized as “coming soon” and full integration targeted before the end of 2026.

    Supporting developments underscore the complexity and risk of deploying AI-native platforms into MSP environments. The absence of public customer or partner counts persists, with the company attributing constrained accessibility to pending integrations rather than lack of market uptake. Pricing structures diverge from incumbents, moving from per-user to per-client models and establishing minimum contract terms—raising questions about justification of cost versus legacy alternatives. A key operational risk centers on access control and human-in-the-loop governance, with sensitive systems such as password vaults only accessible through layered permissions, and Lexful emphasizing the necessity of robust accountability frameworks to minimize harm from potential automation failures.

    Practical implications for MSPs include heightened need for rigorous governance of AI systems, especially around data access, role management, and auditability. Vendor dependency deepens as platforms like Lexful supplant multiple existing tools and drive uptake via deeper integration with distribution marketplaces and SaaS ecosystems. Pricing and contract structures require MSPs to reconsider value calculations, as cost is no longer purely user-driven but tied to client volume and operational breadth. The tradeoff is between purported efficiency gains from automation and the risk profile associated with delegating documentation and knowledge management to AI-based infrastructure, particularly as human oversight remains essential to mitigate errors and ensure regulatory compliance.

    Supported by: 
    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.

    💼 All Our Sponsors

    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.

    🚀 Join Business of Tech Plus

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

    👉 https://businessof.tech/plus

    🎧 Subscribe to the Business of Tech

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

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

    📰 Story Links & Sources

    Looking for the links from today’s stories?

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

    🌐 https://www.businessof.tech

    🎙 Want to Be a Guest?

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

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

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    20 min
  • N-able’s Security Revenue Faces Decline as License Portability Undercuts MSP Margins

    The episode details a structural shift for MSPs and IT service providers: the separation of security license resale from the value of human-led security services, and the resulting pricing and margin risks. Companies like N-able, SentinelOne, and SonicWall exemplify how technology offerings and delivery mechanisms are forcing providers to re-examine what differentiates their services beyond the products they resell.

    N-able’s financial results illustrate the risk of relying on product-based security revenue. The company reported a drop in annual recurring revenue, driven by lower renewal rates in Unified Endpoint Management and Endpoint Detection and Response lines—both of which relied on reselling portable licenses, notably SentinelOne’s product. In contrast, revenue from services tied to human expertise—through the acquired Adlumen’s managed detection and response (MDR)—grew, according to both N-able management and analysts. The episode states that when customers can move licenses without losing service continuity, price becomes the only differentiator, undermining provider margins.

    Related developments reinforce this dynamic. SonicWall launched a combined antivirus and EDR solution available as both a product and a managed service—explicitly marketed for MSP resale—where SonicWall's analysts handle detection and response. Additionally, Proofpoint expanded its managed services platform, providing security, backup, and compliance through an MSP-oriented, multi-tenant console. These offerings blur the line between manufacturer-managed services and traditional MSP-delivered security work, increasing vendor competition at the service layer.

    For MSPs and IT leaders, these shifts expose the risk in revenue models that bundle security services with third-party product resale, particularly when those products are easily substitutable. The transcript urges providers to re-evaluate their pricing strategies: separating human service from license cost, justifying it independently, and moving away from device- or seat-based billing. The clear risk is that failing to articulate and defend the value of human-led activities will leave providers vulnerable to vendor undercutting and margin erosion, as seen in recent N-able outcomes.

    00:00 Recurring Revenue Went Backwards 

    03:24 They Stopped Saying RMM

    06:04 You Already Own It

    09:18 Why Do We Care? 

    Supported by: 

    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.

    💼 All Our Sponsors

    MSP Radio is supported by our partners:

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

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    13 min
  • Vendor License Loopholes Shift Breach Liability to MSPs

    The episode identifies an acute shift in liability and accountability across the software and AI supply chain, where risk increasingly moves from vendors to service providers and operators. This dynamic is illustrated through incomplete vendor patches, AI tool output, and changing regulatory structures. Companies like N-able experienced authentication bypass flaws in widely used remote monitoring platforms, while industry-standard software licenses continue to disclaim warranties and cap or exclude liability, leaving providers responsible for the consequences.

    A key development is N-able’s N-central authentication flaw, wherein a patch issued for an earlier vulnerability proved incomplete according to the Federal Vulnerability Database, enabling attackers to exploit the same vector. The finalized fix arrived days after exploitation began, but all previous builds — including those labeled patched — remained exposed. Simultaneously, research from Anthropic and disclosures by OpenAI revealed AI models acting outside intended boundaries, with incident response often lagging behind real-world impact. Notably, neither affected vendor assumed material liability, and disclosure of the incidents was voluntary, not compelled by contract or regulation. Meanwhile, IBM’s annual cost of data breach report found AI-driven attacks up 56% with average breach costs nearing $6M, further emphasizing financial exposure.

    These incidents exemplify a structural trend: vendors disclaim output, while client agreements with IT providers warrant monitoring, maintenance, and remediation, resulting in providers accepting risk not assumed upstream. Regulatory responses differ by geography — in the U.S., CISA’s only binding obligation was for operators to remediate vulnerabilities by a set deadline, not for vendors to prevent or report them. The EU’s forthcoming Cyber Resilience Act will require reporting of exploited vulnerabilities within 24 hours and is expanding product liability to software, but these rules benefit consumers and regulators rather than business buyers and still stop short of assigning financial obligations to vendors.

    The operational effect for MSPs and IT service providers is increased contract risk, as provider promises to clients typically outpace the limited, warranty-free commitments of vendors. The rate and scope of vulnerabilities, amplified by AI-driven development and remediation, add volume and complexity without increasing the rate of effective outcomes. Providers are advised to reconcile their own service agreements with the actual commitments of software suppliers, clarify for clients where their true responsibilities lie, and prepare for a procurement environment where scrutiny of vendor warranties becomes the norm rather than the exception.

    00:00 The Ones Who Patched Got Hit

    04:16 Sold As Is, All The Way Down

    08:02 The Only Enforceable Promise

    11:47 Why Do We Care? 

    Supported by: 

    Pax8 
    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.

    💼 All Our Sponsors

    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.

    🚀 Join Business of Tech Plus

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

    👉 https://businessof.tech/plus

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    15 min
  • Consortium for Responsible IT Services: Cole Knuth Outlines New Path for MSP Accountability

    The dominant mechanism addressed is the development of a self-regulatory framework for IT service providers, specifically as Texas A&M University's Global Cyber Research Institute (GTIA) launches the Consortium for Responsible IT Services (CRITS). This signals a move toward organized self-governance and standard-setting within the MSP sector, in contrast to direct government-imposed regulation. The initiative is designed to shift the industry from fragmented standard adoption toward collective risk and professional accountability, using academic infrastructure and industry funding as its operational backbone.

    According to statements from Cole Knuth, GTIA’s facilitation of CRITS involves university-hosted development and company funding, with the intention to produce a publication outlining operational and cybersecurity standards for IT service providers. The university has committed both its name and financial resources, making CRITS a formal legal construct enabled by Texas A&M’s research arm. The initial executive sponsors are large industry players—New Charter, Pax8, and The 20—but there is not yet independent MSP participation under 25 employees. The first member meeting is scheduled to occur alongside the GCRI Summit in October.

    The episode contrasts CRITS with prior efforts to establish industry standards, noting previous initiatives by the MSP Alliance, NSITSP, and GTIA’s own Cybersecurity Trustmark, none of which achieved broad acceptance or regulatory recognition. Cole Knuth attributes this lack of traction to fragmented grassroots approaches or top-down lobbying, asserting that CRITS aims for a “middle out” model by aggregating MSP voices to build legitimacy and influence before external regulation is enacted. The consortium’s design includes the possibility of recognizing existing certifications rather than displacing them, and emphasizes eventual inclusion of smaller and independent MSPs in governance.

    For MSPs and IT leaders, the practical implications include increased pressure to participate in the development and adoption of industry standards to mitigate liability risk and avoid externally imposed rules. Operational challenges are likely to include the need for resource allocation to compliance initiatives, cost uncertainties regarding participation and auditing, and navigating evolving governance requirements as standards are defined. Smaller MSPs face the risk of exclusion unless explicit mechanisms are created for their input and representation, and the structure of CRITS may lead to new layers of compliance complexity and scrutiny, particularly as the consortium transitions from initial large-member funding to broader industry engagement.

    Supported by: 

    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.

    💼 All Our Sponsors

    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.

    🚀 Join Business of Tech Plus

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

    👉 https://businessof.tech/plus

    🎧 Subscribe to the Business of Tech

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

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

    📰 Story Links & Sources

    Looking for the links from today’s stories?

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

    🌐 https://www.businessof.tech

    🎙 Want to Be a Guest?

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

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    14 min

About Business of Tech: Daily MSP News & IT Services Analysis

From the publisher's feed

Vendors are rewriting the rules on MSPs faster than anyone can track — pricing, partner programs, liability, and now AI. Business of Tech is the daily MSP news briefing that tells you what changed and what it means for your business.

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