EChannelNews Podcast

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Julian Lee and Paolo Del Nibletto talk about the 50 Best Managed IT Companies assessment and the value of this survey (a free 200+ question assessment). Paolo describes it as visiting a “business psychiatrist” once a year, forcing MSP leaders to pause, ask tough questions about valuation and operations, evaluate their business health, and benchmark performance across their leadership teams.

Winning the top-50 award gives MSPs a trustworthy badge of excellence that boosts their credibility with potential clients. Using a decade of survey data with strict privacy rules, AI tools can map this data by location to reveal market sentiment, partner coverage gaps, and how individual sales reps affect brand perception.

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Adam Markowitz, CEO and co-founder of Drata discussed the growing security, compliance, and governance challenges created by autonomous AI agents. While AI adoption in enterprise environments is surging, governance and visibility are severely lagging behind. Drata’s platform data shows that 30% of vendor security questionnaire inquiries now center around AI agent governance (up from nearly zero a year prior), yet 87% to 89% of security leaders cannot substantively identify or prove what AI agents are operating inside their environments. Because autonomous agents act at machine speed and execute tasks across production environments, point-in-time reviews and human oversight can no longer keep up. To combat machine-speed risks, enterprises require machine-speed, agentic governance solutions.

For the IT channel, Adam emphasized that AI agent governance represents a major recurring service opportunity. Because SMBs and enterprise clients are deploying agents faster than they can manage them, they will inevitably look to MSPs to deliver AI governance as a managed service. Supported by the Drata Academy and Drata’s established channel partner network, MSPs can leverage automated, continuous assurance tools to help their clients navigate evolving regulatory frameworks and win procurement trust.

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Adam Slutskin, Co-Founder and Co-Owner of CyberFox, detailed his company’s evolution from an executive team of ConnectWise alumni to a security powerhouse serving roughly 4,000 MSPs. Following previous foundational integrations of Password Boss and AutoElevate, CyberFox closed the acquisition of Timus, a strategic move that introduces Secure Access Service Edge (SASE) and secure-access capabilities to its product lineup. CyberFox’s overarching product framework centers on building an interoperable, layered security “onion” composed of complementary, set-and-forget defenses designed to deliver immediate ROI and absolute price stability.

Adam also analyzed the changing economics of the core global MSP population, currently estimated at 80,000 to 100,000 firms. As the market matures, MSPs are shifting from single-vendor suites to multi-vendor environments while navigating structural milestones. To maintain healthy profitability and satisfy insurance or compliance demands, providers must target an average revenue generation of approximately $300 per end-user by layering on MSSP-grade capabilities and formal compliance attestations. Looking ahead, this economic pressure is further compounded by AI, which represents both an escalating threat vector and an essential defensive weapon. While widespread uncertainty remains regarding how to best monetize AI services within the channel, CyberFox is positioning its unified stack to defend against machine-speed attackers while shielding MSPs from the engineering complexities of building in-house AI infrastructure.

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Presenters: Julian Lee, Publisher, Community Builder, Speaker, Channel Ecosystem Developer with a focus on cybersecurity, AI and Digital Transformation
Paolo Del Nibletto, Editor, eChannelNews
Evgeniy Kharam, Publisher, Community Builder, Speaker, Channel Ecosystem Developer with a focus on cybersecurity, AI and Digital Transformation Cybersecurity Architect | Evangelist | Consultant | Advisor | Podcaster | Visionary | Speaker |
Adam Bennett, Co-Founder & CEO at SureStack CEO at Crosshair Cyber
Eric Weast, Owner, ECW Computers
Randal Wark, Owner, MTech Cyber (MSP & Cybersecurity) ★ Conference Host ★ Mastermind Facilitator ★ Podcast Host ★ Journalist

The Cybersecurity Defense Ecosystem aims to assist Managed Service Providers (MSPs) in becoming more cybersecurity-oriented amidst industry disruptions caused by AI and regulatory changes.

A deep dive into frontline cybersecurity incidents highlights a sobering reality: massive security budgets are useless against basic human error and poor deployment hygiene. A notable case study involving a researcher breaching FIFA’s networks via overly permissive Microsoft Entra defaults demonstrates that high-profile compromises consistently stem from weak SaaS and VPN configurations. This widespread risk is forcing a major market migration from legacy SSL VPNs to zero-trust architectures, while simultaneously shifting procurement dynamics where vendors risk losing massive enterprise contracts if they fail to meet modern security compliance. Furthermore, emerging regulatory regimes, such as Canada’s Bill C-36, the U.S. CMMC framework, and strict government audits, are acting as harsh market filters, forcing smaller vendors and MSPs to obtain formal security certifications or face total exclusion from competitive public and private bidding pools.

At the same time, the explosive growth of rapid AI workflows is fragmenting corporate client behaviors and creating severe liability challenges for MSPs. While a disciplined segment of end-users demands heavily sandboxed, private endpoints with rigid data governance, an adversarial faction pushes for rapid deployments with zero built-in controls, offloading immense operational risk onto their providers. This tension is exacerbated by advanced, auto-switching models which utilize aggressive safety layers to redirect unsafe prompts to weaker models, yet face persistent open-source jailbreaks circulating by the millions. Because end-to-end encryption, browser edge gaps, and prompt injections continue to blind traditional network visibility, tracking this unvetted shadow AI remains technically difficult. Consequently, modern MSPs are stepping into a vital gatekeeper role: navigating unresolved legal debates over AI liability waivers, combating adversaries who weaponize the exact same fast automation tools as defenders, and implementing mandatory human-in-the-loop verification to manage unpredictable, autonomous agent behavior.

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Speakers: Paolo Del Nibletto, eChannelNEWS and Michael Contento, Founder at Simple Mystery

This podcast episode introduced the “Three Legs” framework (balancing business, finance, and personal stability) to guide entrepreneurs through exit planning, scaling, and organizational maturity. Michael illustrated these concepts using his track record of scaling My Blue Umbrella past $10M and a subsequent platform beyond $100M, while Paulo highlighted his transition from journalism to channel storytelling.

The core discussion centered on valuation and sellability, emphasizing that sophisticated buyers prioritize operational maturity and transferability over superficial EBITDA or ARR metrics. Real success is measured across four forms of capital: human, customer, structural, and social. Owner-dependent human capital creates severe single-point-of-failure risks that actively destroy exit value. To combat this, Michael and Paolo contrasted basic revenue MSPs (which are owner-dependent and limited in scale) with sophisticated platform MSPs. These high-maturity platforms grow reliably, often balanced 50/50 between organic expansion and acquisitions, because they possess the infrastructure required to absorb and integrate other companies.

While the current MSP M&A market remains highly active, premium valuation multiples could begin to decline within the next 18 to 24 months.

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Jim Piazza, Chief AI Officer at Ensono, talked about how legacy mainframe systems fit into the modern AI era and explored the practical strategies large enterprises must adopt to modernize their core infrastructure. A significant number of Fortune 500 companies continue to run their most critical workloads, such as credit card transaction processing, on IBM Z and Power platforms. He categorized the path forward into two distinct buckets: operational modernization, which leverages AI to predict system faults and prevent costly outages, and business modernization, which utilizes AI services to accelerate transactions and enable real-time fraud detection. Organizations looking to modernize can choose between migrating workloads completely to the cloud, translating legacy COBOL applications into modern languages like Python, or implementing hybrid approaches that integrate existing mainframes with distributed cloud environments.

Achieving success with predictive analytics and machine learning on these platforms requires a foundation of robust data engineering. Beyond software and talent constraints, Jim also highlighted the physical and economic realities of modern infrastructure. Skyrocketing power consumption from AI workloads has become the primary near-term constraint for data centers, forcing hyperscalers to invest heavily in renewable energy and advanced cooling technologies. Additionally, the lifecycle for GPU and AI hardware is shortening rapidly, driving hyperscalers toward shorter depreciation cycles. While future innovations like silicon photonics promise to materially lower cooling and energy costs, substantial CapEx savings can be realized today by optimizing software to train large models on previous-generation hardware, or by utilizing ensembles of smaller, targeted models.

Positioning itself at the center of these shifting dynamics, Ensono operates as an AI-first managed services provider dedicated to modernizing large enterprise customers across both mainframe and distributed environments.

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Jim Piazza, Chief AI Officer at Ensono, talked about how legacy mainframe systems fit into the modern AI era and explored the practical strategies large enterprises must adopt to modernize their core infrastructure. A significant number of Fortune 500 companies continue to run their most critical workloads, such as credit card transaction processing, on IBM Z and Power platforms. He categorized the path forward into two distinct buckets: operational modernization, which leverages AI to predict system faults and prevent costly outages, and business modernization, which utilizes AI services to accelerate transactions and enable real-time fraud detection. Organizations looking to modernize can choose between migrating workloads completely to the cloud, translating legacy COBOL applications into modern languages like Python, or implementing hybrid approaches that integrate existing mainframes with distributed cloud environments.

Achieving success with predictive analytics and machine learning on these platforms requires a foundation of robust data engineering. Beyond software and talent constraints, Jim also highlighted the physical and economic realities of modern infrastructure. Skyrocketing power consumption from AI workloads has become the primary near-term constraint for data centers, forcing hyperscalers to invest heavily in renewable energy and advanced cooling technologies. Additionally, the lifecycle for GPU and AI hardware is shortening rapidly, driving hyperscalers toward shorter depreciation cycles. While future innovations like silicon photonics promise to materially lower cooling and energy costs, substantial CapEx savings can be realized today by optimizing software to train large models on previous-generation hardware, or by utilizing ensembles of smaller, targeted models.

Positioning itself at the center of these shifting dynamics, Ensono operates as an AI-first managed services provider dedicated to modernizing large enterprise customers across both mainframe and distributed environments.

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As artificial intelligence reshapes the managed services landscape, MSPs are facing a defining moment. According to the MSP Poverty Line framework, developed by EChannelNews, organizations that fail to evolve risk falling behind, while those that embrace change can position themselves for long-term growth and profitability.

The good news is that crossing the MSP Poverty Line is achievable. Based on industry research and insights from leading MSPs, eight key action plans have been developed that can help any size MSP consistently separate themselves from a struggling to adapt organization into a high-performing one. 

THE EIGHT STEPS

The first step is embracing visionary leadership. Successful MSP leaders approach AI strategically, balancing innovation with strong cybersecurity governance. Rather than viewing AI as a trend, they see it as a core business capability.

Second, MSPs must strengthen their own brand identity. Organizations that define themselves primarily by the vendors they represent risk becoming interchangeable. The most successful MSPs focus on the outcomes they deliver rather than the products they sell.

Third, businesses should integrate autonomous agentic AI across their operations. From service delivery to internal workflows, AI is becoming the foundation of modern MSP operations and enabling greater efficiency and scalability.

Fourth, AI must be incorporated into sales and marketing strategies. Forward-thinking MSPs are leveraging automation, analytics, and AI-powered tools to improve customer engagement, generate leads, and accelerate growth.

The fifth step is developing a deeper understanding of clients’ business goals. Rather than focusing solely on technology, successful MSPs align their services with measurable business outcomes and competitive advantages.

Sixth, MSPs need to stay ahead of industry trends. By acting as trusted advisors and maintaining a seat at clients’ decision-making tables, they become indispensable strategic partners rather than service providers.

The seventh step focuses on building a strong organizational culture. As automation becomes more prevalent, maintaining human connection, collaboration, and employee well-being becomes increasingly important. Organizations with healthy cultures are often more resilient and adaptable.

Finally, MSPs must commit to continuous modernization. The pace of change in the channel is accelerating, and standing still is no longer an option. Businesses that continually evaluate their processes, service offerings, and market positioning are better equipped to respond to new opportunities and challenges.

The MSP Poverty Line is not simply a measure of revenue or profitability. It represents a business’s ability to adapt, innovate, and thrive in a rapidly evolving technology landscape. By focusing on these eight areas, MSPs can strengthen their foundations, create greater value for clients, and position themselves for sustained success in the AI-driven future.

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Presenters: Julian Lee, Publisher, Community Builder, Speaker, Channel Ecosystem Developer with a focus on cybersecurity, AI and Digital Transformation
Paolo Del Nibletto, Editor, eChannelNews
Nim Nadarajah, C.CISO, Cyber Security, Compliance & Transformation Expert | Executive Board Member | Keynote Speaker
Adam Bennett, Co-Founder & CEO at SureStack CEO at Crosshair Cyber
Randal Wark, Owner, MTech Cyber (MSP & Cybersecurity) ★ Conference Host ★ Mastermind Facilitator ★ Podcast Host ★ Journalist

The Cybersecurity Defense Ecosystem aims to assist Managed Service Providers (MSPs) in becoming more cybersecurity-oriented amidst industry disruptions caused by AI and regulatory changes.

The meeting examined how advanced AI models and automated offensive tooling are radically accelerating zero-day vulnerability discovery, forcing a massive paradigm shift in corporate incident response. The panel highlighted Anthropic’s Project Glasswing and its core security-focused model, Claude Mythos, as clear signals of this new reality. Able to autonomously uncover and chain complex, decades-old vulnerabilities in minutes, these tools are rendering traditional point-in-time scanning and monthly “Patch Tuesday” cycles obsolete. To adapt, the panel emphasized moving toward agent-based, continuous risk prioritization based on exploitability and CVE severity, while utilizing automated testing and seamless rollback capabilities to mitigate the operational threat of system breakage from rapid patching.

The urgency of this shift was framed by alarming defensive metrics, with CrowdStrike’s recent threat data citing a record-setting e-crime breakout time of just 27 seconds and an average corporate compromise under six minutes. The discussion referenced the high-profile ShinyHunters breach of Instructure’s Canvas platform between April 30 and May 7, which disrupted final examinations across thousands of educational institutions. Despite the platform going offline and a ransom reportedly being paid in exchange for decryption keys and certificates of destruction, the panel warned that such outcomes heavily expose organizations to double extortion and severe legal liabilities.

Transitioning to defensive economics, the panel analyzed the broader workforce and infrastructure impact of the AI arms race. The consensus was clear: AI will not replace security practitioners, but practitioners who adopt AI will replace those who do not. Organizations are urged to retool internal roles and consider variable, token-based pricing models for AI compute to shift operational budgets away from legacy per-user SaaS structures. They should also secure baseline infrastructure by enforcing core email security protocols like DMARC, SPF, and DKIM to prevent supply-chain vendor spoofing.

Click here to watch previous episodes on Cybersecurity Defense Ecosystem

To learn more on Cybersecurity Defense Ecosystem, visit: https://cybersecuritydefenseecosystem.com/

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Danielle Morrison, National Practice Manager – Healthcare IT Services at All Covered, analyzed the healthcare threat landscape and explored how the industry’s lag in IT modernization has created severe security gaps. With an expanding attack surface of medical devices and legacy systems, under-supported small and mid-size providers frequently suffer from incomplete tooling, misconfigured software, and a critical shortage of internal security expertise.

To illustrate these risks, she talked about a ransomware breach where attackers weaponized dark-web credentials to exploit a legacy server that lacked multi-factor authentication (MFA). With an attacker dwell time of up to two years, the fallout caused widespread downtime, forcing ambulance diversions and disrupting patient care. The panel noted that the intense operational pressure often drives healthcare executives to pay ransoms, yet doing so failed to prevent a secondary attack by a different cybercriminal group.

Drawing on her dual background in nursing and healthcare informatics, Danielle emphasized that solving this crisis requires ongoing, expert human management rather than simple tool purchases. She outlined key defensive priorities:

• Continuous Monitoring: Deploying Managed Detection and Response (MDR) and active threat hunting.
• Proactive Controls: Enforcing mandatory MFA and increasing vulnerability scanning.
• Unified Operations: Leveraging specialized providers like All Covered (Konica Minolta’s IT division) to integrate secure infrastructure with compliant communication tools.