Business of Tech: Daily 10-Minute IT Services Insights

The episode’s central development is the ongoing dispute between the U.S. Department of Defense and Anthropic regarding Pentagon demands for unrestricted access to Claude, Anthropic’s AI model. According to Dave Sobel, the Pentagon has threatened to sever ties or invoke the Defense Production Act if the company does not comply, seeking capabilities that Anthropic argues may be illegal—specifically mass surveillance without warrants and autonomous weapons systems without human control. This move exposes Managed Service Providers (MSPs) serving defense contractors to unpredictable legal, operational, and compliance risks embedded in their AI workflows. The analysis highlights that a commercial AI provider’s acceptable use policy now intersects directly with national security policy, and even partial vendor compliance can trigger regulatory or legal instability for dependent organizations. For MSPs, this means that building service offerings on AI infrastructures without clear fallback strategies or documented policy change clauses can lead to unmanageable risk and liability in the event of provider or legal regime shifts. Dave Sobel stresses that failing to address policy volatility as part of a managed service amounts to underwriting geopolitical risk without compensation. Other notable developments include the passage of the Small Business Artificial Intelligence Advancement Act, federal cybersecurity resource contraction as CISA operates with 38% staffing after layoffs, and heightened uncertainty around cloud infrastructure due to Microsoft’s Azure Local “air-gapped” offering not wholly mitigating U.S. CLOUD Act exposure. Vendor news covered new AI-powered compliance features from Compliance Scorecard (version 10) and Beachhead Solutions (ComplianceEZ 2.0), Apple’s accelerated retirement of Rosetta 2 translation technology, a Microsoft 365 Copilot DLP change, and continued fallout from VMware’s acquisition by Broadcom, which has led to ongoing cost and trust challenges for cloud and infrastructure partners. The episode’s clear implications for MSPs and IT providers are operational. Service catalogs and statements of work should actively address AI provider liability, dependency exit planning, and degraded federal cybersecurity support. Without scheduled and documented compatibility and risk reviews, MSPs absorb hidden exposure into their margins. Vendor stability can no longer be assumed, and proactive policy, renewal intelligence, and transparent advisory sessions are now required to avoid unplanned liability, budget crises, and damaged client trust. Four things to know today 00:00 Pentagon Threatens Anthropic Over Claude Access, Demands Autonomous Weapons Use 04:31 CISA Cuts, Azure Sovereignty Push Signal End of Federal MSP Safety Net 06:56 AI Compliance Tools Flood Market as MSPs Face Validation Gap 09:54 86% of Firms Cutting VMware Ties as Broadcom Renewal Costs Loom This is the Business of Tech. Supported by: Small Biz Thoughts Community 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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 10-Minute IT Services Insights: 💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech LinkedIn: https://www.linkedin.com/company/28908079 YouTube: https://youtube.com/mspradio Bluesky: https://bsky.app/profile/businessof.tech Instagram:...

Recent analysis from Goldman Sachs indicates that $700 billion in AI investment during 2025 resulted in no measurable U.S. GDP growth, with most AI equipment imports negating domestic benefits and 80% of surveyed firms reporting no productivity or employment improvements. This pattern suggests that AI-related spending has primarily shifted margins from enterprise IT budgets to a small number of infrastructure vendors rather than delivering distributed value. Internal concerns are rising, with 90% of IT leaders questioning AI’s return on investment, and 80% citing fragmented data as a primary challenge to measuring outcomes. Further context reveals that agentic AI initiatives face operational headwinds: Gartner expects 40% of such projects to be cancelled by 2027, and S&P Global found nearly half are abandoned before production, most often due to inadequate planning and data foundations. Margin erosion is widespread, attributed to AI implementation costs, and attempts to scale AI agents into production remain limited by inference costs and insufficient infrastructure. Despite increased adoption efforts, sustainable value delivery from AI platforms remains elusive for most organizations. Enterprise AI access is becoming increasingly concentrated. OpenAI’s partnership with consulting firms such as BCG, McKinsey, Accenture, and Capgemini consolidates control of the enterprise distribution layer, narrowing competitive opportunities for smaller providers. Meanwhile, Amazon’s 13-hour AWS outage, linked to the misconfiguration of an internal AI tool, underscores the liability ambiguity in agentic systems—where vendors may attribute autonomous actions to user error, complicating risk assignment. Additional updates from vendors such as Anthropic, Cloudflare, and New Relic address incremental technical capabilities, with a distinct focus on cost, operational governance, and policy enforcement. The prevailing themes for MSPs and IT leaders are increased scrutiny of AI value, heightened exposure to cost and accountability risk, and the emergence of managed service opportunities around data governance, cost instrumentation, and liability management. With enterprise market channels consolidating and risk shifting toward service providers, integrating robust contractual definitions for autonomy, incident attribution, and financial boundaries is essential to limit harm and clarify responsibility before incidents occur. Four things to know today 00:00 Goldman: $700B AI Spend Delivered Near-Zero U.S. GDP Growth in 2025 03:49 OpenAI Enlists BCG, McKinsey, Accenture to Distribute Enterprise AI Agents 06:44 Report: Amazon's Own Engineers Prefer Claude Over Its Mandated Internal Tools 08:56 AI Inference Costs Are Falling — But Governance Gaps Are Growing This is the Business of Tech. Supported by: CometBackup Small Biz Thoughts Community 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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 10-Minute IT Services Insights: 💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech 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...

Cybercrime’s escalation has reached a projected $12.2 trillion annual impact by 2031, with a notable surge in remote monitoring and management (RMM) tool abuse—up 277% year-over-year, according to Huntress and supporting vendor reports. Attackers utilize legitimate IT tools to facilitate stealthier ransomware and phishing campaigns, amplifying structural vulnerabilities within MSP technology stacks. Key metrics from Acronis, WatchGuard, and Vectra AI indicate a shift to smaller, more evasive malware campaigns, longer times to ransomware deployment (averaging 20 hours), and widespread unaddressed security alerts, raising questions about the adequacy of current defenses and incident response practices. Vendor-supplied threat intelligence further shows that MSPs’ reliance on signature-based platforms and insufficient visibility leaves them exposed to evolving attack techniques. Data reviewed suggests phishing footholds can quickly compromise cross-client environments, and legal ramifications heavily fall on the service provider when RMM or monitoring tools act as entry points. Notably, only about 58-60% of organizations report full visibility across their systems, with a majority of alerts remaining unaddressed, underscoring gaps in operational maturity and preparedness. Adjacent coverage highlighted Microsoft Copilot’s repeated security control failures within regulated environments, specifically its inability to enforce sensitivity labels and boundaries across emails—most recently affecting the UK’s National Health Service. The lack of vendor-announced architectural changes calls into question the viability of deploying AI tools in compliance-driven contexts. Separately, political and public backlash against surveillance technologies (such as Flock cameras) demonstrates that unchecked data collection is no longer a manageable passive risk, as data becomes increasingly actionable and retains liability beyond technical considerations. The practical takeaway for MSPs and IT leaders is a need to prioritize audit, documentation, and enforcement of controls within their technology stacks, especially where vendor tools or AI-driven automation intersect with compliance and client trust. Preserving operational optionality and scrutinizing vendor terms—particularly data sharing and architectural enforcement—are essential to reduce exposure. Waiting for vendor patches, disregarding documented control failures, or underestimating public scrutiny elevate liability across legal, reputational, and client relationship domains. Four things to know today: 00:00 Vendor Threat Reports Converge on One Risk MSPs Can't Outsource: The RMM as Breach Vector 05:11 Copilot Failed Compliance Controls Twice in Eight Months — A Patch Won't Fix That 07:03 Flock Backlash Exposes the Liability Hidden in Every Vendor Data-Sharing Contract 09:42 GTDC Summit: Distributors Pitch AI On-Ramp as Hyperscalers Compress Their Margin Sponsored by: 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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 10-Minute IT Services Insights: 💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech 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:...

Recent data highlights a growing disconnect between technology spending and measurable business outcomes, with small business optimism softening and widespread skepticism about the benefits of artificial intelligence. The transcript cites an 80% rate of firms seeing no noticeable AI-driven productivity improvements, while trust in technology companies, particularly AI vendors, has declined globally according to the Edelman report. For MSPs, this presents a risk of credibility gaps, especially for those selling AI solutions without corresponding outcome data, as client trust and spending habits grow more discerning in the face of unfulfilled promises. Further context is provided by economic indicators showing a resilient U.S. economy, yet persistent challenges for small businesses. The NFIB Small Business Optimism Index has dropped slightly to 99.3, with insurance costs and labor quality as major pain points; only 16% of business owners expect higher sales. At the same time, IT professionals face salary compression—median IT salaries fell from $145,000 in 2023 to $115,000 in 2024—despite a severe shortage of skilled cloud, AI, and infrastructure talent, as less than 10% of hiring managers are confident in filling in-demand roles. Additional market pressures include rising technology budgets—three-quarters of CFOs anticipate larger tech allocations, but headcount increases are slowing and tech spending faces a widening affordability gap due to sector-specific inflation outpacing budget growth. Vendor-specific developments, such as Western Digital exhausting hard drive capacity for 2026 and Enable reporting 12.8% revenue growth alongside ongoing losses and a 65% stock decline since 2021, illustrate structural risks. Vendor rationalization and strategic uncertainty are likely outcomes for MSPs relying heavily on underperforming partners. Key takeaways for service providers and IT leaders include the need for caution in messaging and solution positioning: outcome data and defensible value propositions are essential when advocating AI or cloud services. Salary data should be weighed against demand-side evidence to avoid retention failures. Finally, dependency on vendors with deteriorating financial outlooks heightens operational risk; providers should proactively assess alternatives and align with financially sustainable partners to reduce exposure during vendor consolidation cycles or market restructures. Four things to know today 00:00 AI Productivity Gap Widens as Trust Drops — MSPs Selling Outcomes They Can't Measure Face CFO Audits 04:51 IT Median Salary Dropped 20% in 2024, But Only 7% of Hiring Managers Can Fill AI and Cloud Roles 07:26 IT Inflation Hits 6.9% as CFOs Concentrate Spend; Western Digital Fully Booked Through 2026 10:28 N-Able Beats Revenue, Misses Earnings as 2026 Growth Guidance Drops to 8–9% Sponsored by: CometBackup Small Biz Thoughts Community 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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 10-Minute IT Services Insights: 💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech 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:...

A longitudinal analysis from the National Bureau of Economic Research highlights a sustained shift in the U.S. workforce away from evening and night work toward traditional daytime hours over the past 50 years. Research by economists Jeff Biddle and Daniel Hammermesh attributes this shift primarily to rising real incomes, which allows workers to avoid less desirable hours. For MSPs and IT service providers, this trend is consequential, as their service models frequently require 24/7 staffing and response capabilities. Detailed findings from the study indicate that the percentage of Americans working at 11 PM has declined by more than 25% since the 1970s. During this time, wage premiums for undesirable hours have only modestly increased, rising by approximately 3 percentage points. The retail sector remains an exception, with big-box expansion and 24-hour operations driving late-night and early-morning work. The COVID-19 pandemic further accelerated daytime work concentration among college-educated employees, many of whom hold the technical skills vital to MSP operations. Concurrently, current hiring environment data from Robert Half shows just 7% of hiring managers are confident in filling technical roles, indicating persistent shortages in the same skill areas on which MSPs rely. Dave Sobel notes that standard industry responses to after-hours IT work—on-call rotations and offshoring—are under pressure. On-call demands risk burning out a difficult-to-replace workforce, while offshoring depends on wage differentials that are narrowing as global labor markets evolve. Meanwhile, 80% of firms report no measurable productivity benefits from AI, suggesting automation is not yet a viable solution to the labor shortfall. The implications for MSPs and IT service providers are immediate and structural. Demand for around-the-clock technical support is rising even as workforce preferences and labor market conditions make these hours increasingly costly and difficult to staff. The discrepancy is accruing hidden costs, with risks of margin erosion and unaccounted operational stress. Providers must reassess contracts, resource allocation, and contingency plans in light of these systemic pressures, emphasizing transparency, workforce sustainability, and realistic client commitments. 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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 10-Minute IT Services Insights: 💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech 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 discussion centers on the implementation challenges and partner enablement strategies for artificial intelligence (AI) within the technology channel. According to TD Synnex’s AI Accelerator program, only a small portion of AI projects achieve active deployment and measurable ROI, with widespread difficulties cited in scaling complex AI use cases. Jessica Yeck, SVP of Vendor Solutions at TD Synnex, highlights that progress is contingent upon engaging partners at their current state of AI readiness and aligning support resources accordingly. The evidence reflects a move away from one-size-fits-all approaches toward tailored frameworks that focus on tangible business outcomes and repeatable processes. TD Synnex’s revised strategy prioritizes meeting partners “where they are,” using assessment frameworks that differentiate between partners with defined AI strategies and those seeking foundational guidance. Jessica Yeck references leveraging the broader technology ecosystem—including vendors, ISVs, and hyperscalers—to deliver solutions with multi-party input. This approach enables partners to identify actionable opportunities and develop pipelines, but demands cross-functional collaboration and technical-specialist engagement, particularly as customization—rather than rigid standardization—is required for effective deployment. The episode also addresses the evolving role of technology distribution in supporting partners beyond logistics. There is explicit recognition of the importance of financial mechanisms, marketplace access, and consultative guidance for services. Jessica Yeck underscores the interconnectedness of relationship-building, competency focus, and ecosystem utilization, noting that partners do not need exhaustive in-house technical skills if they can identify and collaborate with relevant specialists. This points to a strategic shift in what services and value partners can realistically deliver. For MSPs and IT service providers, the key implications involve re-evaluating approaches to AI enablement and partner relations. Instead of prioritizing technical uniformity or attempting to master every subsystem, providers should invest in relationship management and focused competency development while leveraging broader ecosystem resources. Adoption risk is reduced when partners clearly understand their customers’ primary objectives and are prepared to orchestrate service delivery with targeted technical and financial support from their distribution networks. The episode reiterates that risk and accountability in AI projects hinge on practical readiness, process discipline, and honest assessment of operational capabilities, rather than technology enthusiasm or over-reliance on standardized templates. 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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 10-Minute IT Services Insights: 💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech 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...

Welcome to a feed drop ofthe SMB Community Podcast, the longest-running MSP-focused podcast in the industry. Hosts James Kernan and Amy Babinchak dive deep into AI go-to-market strategies for 2026, inspired by insights from Amy Babinchak’s recent AI class for MSPs. They open with the latest news on Microsoft Copilot and Anthropic's integration, highlighting new privacy and security features for Office apps. Then, they explore how MSPs can not only adopt AI internally but also create new, innovative service offerings for their clients—like custom AI grant-writing agents for nonprofits, real-world business demonstrations, and the integration of AI readiness assessments. Pricing strategies, project sales versus monthly recurring revenue, and the importance of meaningful quarterly business reviews also come under the spotlight. Throughout the conversation, Amy Babinchak and James Kernan share practical examples, discuss industry challenges, and encourage listeners to rethink and monetize their approach to AI as we move toward 2026. Tune in for fresh ideas, actionable strategies, and a glimpse into the real-world experiences of MSPs shaping the future with AI, and find it on your favorite podcast player. Links at https://smbcommunitypodcast.com 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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 10-Minute IT Services Insights: 💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech 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.

Corsica Technologies’ reported 105% year-over-year growth in managed services bookings stands out as the primary development, indicating heightened demand for flexible service models among businesses with existing IT functions. According to Brian Harmison, CEO of Corsica, this growth is attributed to the company’s focus on operational integration, automation, and data-centric managed services that supplement, rather than replace, in-house IT capabilities. The significance for MSPs is not the expansion itself, but the operational choices that enable sustained trust and differentiated engagement in a competitive landscape. Supporting details clarify Corsica’s operational strategy: instead of automating or deploying AI indiscriminately, Harmison emphasizes that automation and AI are only effective atop an already “operationally excellent” MSP framework. Practical deployments cited include user onboarding/offboarding workflows, which demand both internal process clarity and integration with client HR systems. The company positions data integration and workflow consulting as integral to MSP-client relationships, not as add-on projects. Corsica’s contracts reportedly reduce friction and avoid asset-tracking or incremental billing, seeking to foster longer-term trust over short-term revenue optimization. The episode also addresses the implications of Corsica’s acquisition of Accountability IT. Harmison cites alignment in operating models and targeted capabilities—especially in Microsoft security and AI expertise—as central to the integration’s value, rather than generic synergies. He notes that continuity of client relationships and careful preservation of existing service structures were prioritized in the first 90 days, even at the expense of speed, to mitigate operational risk and maintain client trust. The discussion highlights the risk tradeoffs between scaling for broader capability and maintaining agility for specialized client needs. For MSPs and IT leaders, the takeaway is to focus on risk reduction through operational excellence and trusted client relationships. Embracing automation and AI is not a universal solution; process maturity and readiness in both the provider and customer are preconditions for any meaningful implementation. Acquisitions require careful cultural and operational integration, with an emphasis on continuity and incremental capability, rather than immediate consolidation or scale. The episode frames operational clarity and trust—not rapid expansion or technology adoption—as critical determinants of long-term viability and resilience in managed services. 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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 10-Minute IT Services Insights: 💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech 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.

Agentic AI is being deployed as production infrastructure in enterprise settings, but prevailing frameworks remain unreliable for mission-critical operations. Dave Sobel and Ron Aroussi from Muxie underscored that while AI agents are functional—especially in non-deterministic contexts like customer support—expectations of deterministic, workflow-based reliability are not met. The move from demonstration agents to production-scale tools brings heightened attention to issues of reliability, observability, and especially risk of vendor lock-in for Managed Service Providers (MSPs) and their clients. Operational deployment of AI agents currently gravitates toward roles with minimal operational risk, such as customer-facing chatbots or internal chief-of-staff assistants. Aroussi explained that while such agents can automate initial support tiers and internal daily briefings, their unpredictability and potential for error limit their use in processes demanding strict oversight and accountability. He identified two core use cases—external (customer support) and internal (personalized information management)—explicitly noting that agents are best positioned to augment rather than fully automate complex workflows at this stage. A critical risk for MSPs lies in attempting to retrofit existing software frameworks to support agents, which introduces integration complexity and increases the likelihood of operational failures. Purpose-built infrastructure for agentic AI offers better alignment between AI capabilities and production requirements, with Aroussi citing drastically reduced hallucination rates and improved oversight when using native tools. Open source is identified as a foundational element for AI development, but it incurs its own risks, particularly around third-party code quality and the long-term sustainability of community-driven projects. The practical implication for MSPs and IT service providers is clear: a cautious, incremental adoption approach focused on low-risk use cases, coupled with rigorous controls on agent permissions and robust audit trails, is essential. Decision-makers should avoid assuming agents operate with the reliability or accountability of traditional software, prioritize operational transparency, and ensure that responsibilities for agent actions are clearly defined and enforced at the implementation level. Vendor lock-in and software provenance remain significant governance concerns as agentic AI moves from experiment to infrastructure. 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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 10-Minute IT Services Insights: 💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech 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 central development addressed is the disconnect between rising overall IT spending and the declining channel share for MSPs and IT partners. Dave Sobel, in discussion with an industry analyst, highlights a reduction in indirect channel participation—from over 75% to a projected 66.7% in 2026—primarily due to the concentration of AI infrastructure investment among the largest technology firms. These hyperscalers and their associated CapEx do not translate into traditional channel opportunities, restricting partner involvement to areas outside large-scale AI data center buildouts. Supporting data point to a technological industry projected to reach $6.07 trillion in customer spend, growing at 10.2%, compared to significantly lower world GDP growth. However, almost none of the rapid AI-related CapEx from companies like Nvidia and Google flows down to channel partners, who instead rely on client-facing managed services, advisory, and security service work. The increasing complexity of customer demand—such as the shift toward managed security (15% growth) and AI services (35.3% compounded growth)—further pushes MSPs to focus on services surrounding the core product, rather than on direct product resale or thin margin opportunities. A significant operational shift within the channel also emerges: the distinction between “influence” and “execution” partners. Vendor programs increasingly recognize partner contributions outside of transactional resale, such as co-selling, advisory contributions, and services attached before or after the point of sale. This trend is reinforced as platforms move toward “point systems” and indirect revenue attribution, redefining how MSPs measure channel health and partner value in a more complex, multi-partner environment. For MSPs, IT providers, and decision-makers, the key operational implications are clear. Traditional growth through seat expansion is less reliable as hiring softens, and managed services must focus on multiplier opportunities—profitable service revenue attached to each dollar of product sold. Capturing value requires adapting to changing program structures, emphasizing trusted advisor roles, and collaborating effectively with adjacent partners. Near-term investment in understanding and building pre-sales AI and security services, and tracking evolving vendor economics, is essential for navigating the new realities of partner participation, risk allocation, and long-term business health. 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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 10-Minute IT Services Insights: 💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech 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.

Global technology spending is projected to reach $5.6 trillion by 2026, with nearly two-thirds of this investment directed toward software and computer equipment, particularly servers, according to Forrester. Generative AI is cited as a primary driver of this increase, shifting the balance of power toward cloud providers such as AWS and Azure. This escalation has implications for operational margins and the position of IT service providers, as businesses increasingly migrate complex workloads to cloud infrastructure ecosystems. Supporting data shows a disconnect between tech employment trends and hiring activity. In January 2026, technology companies cut approximately 20,155 jobs, mainly in telecommunications, while job postings for tech positions rose by 13% compared to the prior month, based on CompTIA analysis. Dave Sobel interprets this as a shift away from permanent IT headcount to project-based, AI-focused engagements. This development places pressure on service providers, who must adapt to buyers reallocating spend from traditional staffing models to short-term, outcome-oriented contracts. Adjacent discussion covered two press releases: VirtuaCare launched a support offering for Windows-based MSPs needing Apple expertise, delivering an externally verifiable, Apple-certified service. In contrast, Miso announced a roadmap for an autonomous AI L1 technician but did not substantiate claims with deliverables or customer data. Dave Sobel emphasized the need for MSPs to demand piloting, outcome metrics, and auditable product maturity, warning against reliance on unproven AI solutions and highlighting the risk of outsourcing as only a temporary solution. The core implication for MSPs and IT providers is a need for tactical negotiation and operational risk management. Dave Sobel recommends using AI first to reduce internal labor costs before introducing it as a client offering, prioritizing outcome-based pricing and adjusting contracts to retain value from efficiency gains. Providers should avoid becoming displaced labor, rigorously test new technologies before adoption, and remain vigilant regarding vendor claims. The emphasis remains on capturing and defending margins through accountable operations and contract governance rather than chasing speculative innovation. Three things to know today 00:00 Tech Spending Hits $5.6T but MSPs Face Margin Squeeze Without AI Pricing Reset 05:31 VirtuaCare Ships Apple Support; Mizo Announces Roadmap—One's Testable Today 08:17 MSPs Must Capture AI Efficiency Value or Face Margin Compression This is the Business of Tech. Supported by: Small Biz Thought Community Check out Killing IT 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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 10-Minute IT Services Insights: 💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech 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.

Mid-market organizations are transitioning from pilot projects to operationalizing generative AI and agentic workflows, according to a TechEYE article and Tech Isle survey cited by Dave Sobel. This shift centers on outcome-driven automation but exposes providers to new liability concerns, mainly due to fragmented, unreliable data and shadow AI usage—employees employing unauthorized tools outside official controls. The primary risk is that MSPs may be blamed for incidents where contract boundaries and technical controls do not cover browser-based generative AI use, making forensic evidence and documented enforcement essential for defending accountability. Supporting data from Tech Isle found that over 5,000 companies are pursuing structured approaches to AI-enabled growth, but face persistent issues in data trust, governance, and user fatigue. Additionally, European investment in sovereign cloud infrastructure is projected to triple between 2025 and 2027, driven by regulatory demands and concerns about U.S. data sovereignty. MSPs managing split architectures—sovereign providers for regulated data and hyperscalers for everything else—encounter API mismatches, operational complexity, and margin pressure. The recommendation is to standardize policy enforcement, identity management, and residency mapping while prioritizing audit-ready reporting and exception handling. AI-driven cyberattacks have increased, with reports from Level Blue and Check Point Research highlighting a surge in both attack volume and sophistication. Only 53% of CISOs feel prepared for AI threats, despite 45% expecting to be impacted within a year. Browser-based generative AI use introduces visibility gaps, raising the risk of negligence claims when service providers cannot demonstrate governance or forensic readiness. Reauthorization of the Cybersecurity Information Sharing Act (CISA) underscores that voluntary data sharing is inadequate, with CIRCA now requiring mandatory 72-hour incident reporting for critical infrastructure. The key takeaways for MSPs and IT leaders are to proactively define AI coverage and governance in contracts, enforce acceptable use policies, and instrument monitoring to close visibility gaps. Providers who can deliver forensic-grade telemetry, managed compliance programs, and operational readiness for incident reporting will be better positioned to defend against penalties, retain higher-value accounts, and offer meaningful differentiation. These structural challenges—fragmented control planes, increased compliance costs, and permanent risk friction—necessitate a strategic shift toward governance-led service models. Three things to know today 00:00 Midmarket Shifts to Agentic AI as Europe Triples Sovereign Cloud Spending by 2027 06:08 Most Security Chiefs Say They're Not Ready for AI-Powered Cyberattacks Coming This Year 09:46 CISA 2015 Reauthorized Through 2026; CIRCIA Mandates Expose Voluntary Sharing Failure This is the Business of Tech. Supported by: TimeZest IT Service Provider University 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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 10-Minute IT Services Insights: 💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech LinkedIn: https://www.linkedin.com/company/28908079 YouTube: https://youtube.com/mspradio Bluesky:...

Artificial intelligence (AI) is intensifying workloads rather than alleviating them, leading to increased burnout and declining decision quality, according to findings published in the Harvard Business Review and cited by Dave Sobel. The episode underscores that AI lowers the cost of producing outputs such as drafts and summaries but raises throughput targets and introduces new verification burdens. Economic gains from AI remain concentrated where capital and skilled labor already exist, while negative impacts—like displacement and wage pressure—are felt locally. These dynamics highlight the need for robust governance, particularly for managed service providers (MSPs) who deploy AI solutions. Supporting studies referenced include the International AI Safety Report, which details heightened uncertainty around AI development and its risks, as well as research from Oxford documenting the unreliability of AI chatbots in real-world medical decision-making. Experts warn that rapid automation without corresponding improvements in control systems creates structural constraints, making traditional software governance frameworks inadequate for unpredictable AI behaviors. Without proactive measures, these gaps risk exacerbating economic inequality and liability in regulated environments. Additional developments include OpenAI’s release of upgraded agent features—such as GPT-5.2, improved context retention, managed shell containers, and a new skills standard—presented as operational enhancements but raising concerns about black-box context handling, auditability, and dependency risk. T-Mobile’s AI-powered live translation service offers greater convenience but eliminates audit trails, shifting compliance risk to customers and prohibiting independent verification. Quark Cyber’s launch of an internal cyber risk score introduces further complexity, as the scoring methodology is embedded within a financial product structure and lacks transparent validation. For MSPs and IT service leaders, the key takeaway is to treat new AI features and risk metrics as tools with significant tradeoffs. AI deployments should focus on governance layers that include workload caps, quality gates, and measurable outcomes rather than simply accelerating productivity. New features should be used for low-stakes workflows and carefully avoided in high-risk or regulated contexts unless auditable controls and deterministic checkpoints are established. Vendor-managed risk scores and warranties require independent validation before being positioned as client-facing truth standards. Four things to know today 00:00 Harvard, Oxford Studies Find AI Raises Workload, Delivers Inadequate Medical Advice 05:01 OpenAI Updates Deep Research and Adds New Agent Runtime Capabilities 07:33 T-Mobile Tests Real-Time Call Translation Built Into Its Network 09:17 Cork Cyber Rolls Out New Risk Score for Managed Service Providers This is the Business of Tech. Supported by: ScalePad Small Biz Thoughts Community 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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 10-Minute IT Services Insights: 💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech LinkedIn: https://www.linkedin.com/company/28908079 YouTube: https://youtube.com/mspradio Bluesky: https://bsky.app/profile/businessof.tech Instagram:...

OpenAI’s twin initiatives to monetize ChatGPT’s free tier through ads and launch the Frontier enterprise agent platform represent a shift in the AI provider’s business model, with substantial implications for compliance and operational governance. Free and low-cost ChatGPT users will now see sponsored links unless they opt to reduce daily usage; only customers paying $20 or more per month retain an ad-free experience. OpenAI is concurrently marketing Frontier to enterprise clients such as HP, Intuit, and Uber, offering AI agent orchestration and deploying a team of consultants to support custom AI applications. The company projects enterprise revenue will constitute 50% of its income by year-end, up from 40% the prior month. Operating in both the consumer funnel and the enterprise layer, OpenAI combines top-of-funnel data monetization with vertical integration of services. The ad-supported free tier raises compliance concerns, as user interactions become subject to additional data collection and monetization. For organizations, this means enforcement decisions around whether and how employees may use free AI tools in regulated or sensitive environments. The more consequential development, however, is the introduction of enterprise agent orchestration through Frontier, where questions persist regarding liability, governance, production stability, and how organizations are protected from errors committed by autonomous agents. Related market movements include Anthropic’s release of Claude Opus 4.6—which enables multi-agent collaboration with context windows up to 1 million tokens—and Microsoft’s planned shift for Windows to a signed-by-default trust model. Anthropic’s enhancements to agent functionality remain constrained by key gaps, such as conflict arbitration mechanisms, rollback procedures, and documented cost models, and the expanded context remains limited to beta testers. Microsoft’s strategy to enforce signed apps by default mirrors iOS’s approach to application trust, but its operational viability depends on how override mechanisms are managed by both users and IT administrators. Additional developments in backup, asset management, and AI governance (as seen with NinjaOne, JumpCloud, and Zoom) reflect a general trend towards increased integration and platform consolidation, though with ongoing gaps in security and compliance as AI adoption accelerates. The practical takeaway for MSPs and IT service leaders is the need to re-evaluate policies around free AI tool usage, invest in governance and auditability for enterprise AI, and prepare operational systems for stricter software trust and exception management requirements. Structural changes in software security and AI orchestration are transferring costs and risks from incident response to ongoing policy enforcement and exception handling. Those offering AI services should prioritize model-agnostic governance and avoid reliance on a single vendor’s automation layer, as vertical integration by platform providers is reducing the defensibility of narrow service offerings. Four things to know today: 00:00 OpenAI Adds Ads to Free ChatGPT; Launches Frontier Platform for Enterprise Agents 04:07 Anthropic Ships Opus 4.6 Agent Teams; Model Found 500 Zero-Days in Testing 06:43 Microsoft Announces Signed-App-Only Mode for Windows 11; Phased Rollout Planned 10:19 NinjaOne Adds Asset Management; Zoom Launches AI Workspace Tool; JumpCloud Opens VC Arm This is the Business of Tech. Supported by: CometBackup IT Service Provider University 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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? 📲...

IT spending continues to expand, with North America projected to lead a 12.6% increase to $2.6 trillion, primarily due to hyperscaler investments in AI infrastructure. However, the proportion of technology spending funneled through channel partners is declining, now at 61% compared to over 70% four years ago, according to a survey by Omnia. This shift signals that while the market is growing, traditional margin and resale opportunities for MSPs are narrowing as vendors redirect a larger share of revenue direct while still relying on partners for implementation, support, and customer operations. Data from Salesforce underscores a near-universal trend toward partner involvement in sales, with 94% of surveyed global salespeople leveraging partners to close deals and 90% using tools to manage relationships. Despite this, Dave Sobel clarifies the distinction between involvement and compensation, highlighting that partner influence on deals does not guarantee economic participation at previous levels. These dynamics reinforce that MSPs must adapt to a reality where their role in the value chain is being separated into influence and execution, with the middle tier facing increasing pressure. Additional analysis draws attention to labor market changes and technology commoditization. U.S. job openings have fallen to their lowest point in over five years, undermining MSP growth strategies dependent on seat expansion. Simultaneously, the AI market is fragmenting at the application layer—with Google's Gemini app, Grok, and OpenAI's ChatGPT shifting market shares rapidly—while hyperscalers like Alphabet (Google) commit unprecedented capital expenditures, fueling an infrastructure arms race even as front-end AI tools become more interchangeable. The practical implication for MSPs and IT service providers is increased pressure to re-evaluate business models, operationalize AI offerings, and focus on defensible, productized services. Reliance on a single vendor or seat-based growth forecasts presents heightened risk. Successful adaptation will require a shift toward managed services around AI operations, governance, and productivity—emphasizing accountability, optionality, and measurable ROI—rather than assuming historic revenue models will persist. Three things to know today: 00:00 Partners Essential to Sales but Losing Economic Share, Survey Shows 05:44 US Job Market Shows Low Hiring, Low Firing Despite Falling Openings 08:00 Alphabet Plans $180B AI Capex as Gemini Hits 750M Users This is the Business of Tech. Supported by: Small Biz Thoughts Community 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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 10-Minute IT Services Insights: 💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech 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.

AI pilot programs are consistently failing to deliver measurable business value, with a primary cause identified as a lack of clearly defined problem statements guiding these initiatives. Ashwin Mehta, an AI strategist with experience leading enterprise transformations, emphasized that many organizations initiate AI pilots without specific objectives, resulting in projects that struggle to demonstrate impact or justify further investment. This lack of focus often leads to stalled initiatives, rather than progress into scalable production environments. The discussion outlined how mid-market and small businesses typically implement AI by acquiring SaaS tools with embedded AI features, rather than building bespoke solutions. Ashwin Mehta observed that while “build versus buy” considerations have shifted as orchestration and database platforms become more accessible, custom development still brings additional risk, skill requirements, and long-term maintenance burden. Even as technical barriers decrease, organizations are cautioned to weigh lifecycle costs and operational support needs before pursuing custom builds. Data management was highlighted as a recurrent challenge, both from an organizational readiness perspective and regarding regulatory risk. Ashwin Mehta underscored the importance of establishing a single source of truth for business-critical data and classifying information by its regulatory sensitivity. Without such data discipline, adoption of AI tools—especially in regulated sectors—becomes a source of uncertainty, with organizations defaulting to restrictive or prohibitive AI policies due to inadequate risk visibility. For MSPs and technology leaders, the operational implications are clear: pilots without rigorous scoping and problem definition are unlikely to progress, and sustainable AI adoption requires purposeful data governance and clear frameworks for project prioritization. With the complexity of AI implementations extending beyond technical issues to include cost volatility, compliance, change management, and skills gaps, providers must approach each initiative with a structured, risk-aware mindset and ensure ongoing oversight as both technology and regulatory landscapes evolve. Sponsored by: ScalePad 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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 10-Minute IT Services Insights: 💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech 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.

OpenAI’s direct investment and technical involvement with Thrive Holdings, specifically through its partnership with SHIELD Technology Partners, presents a new precedent for AI’s integration into the managed service provider (MSP) space. Unlike prior private equity roll-ups or traditional organic growth, this move involves embedding OpenAI's models and engineers directly within SHIELD’s platform, an entity that has rapidly acquired and integrated nine MSPs and executed two $100 million funding rounds. The arrangement is characterized by efforts to optimize MSP operations through proprietary AI automation, raising immediate questions around operational dependency and the shifting locus of software control. According to Seth Robinson, this approach signals OpenAI’s attempt to navigate both consumer and enterprise technology markets—a dynamic seen previously in mobility—and reflects the broader tension between individual AI use cases and deeply integrated stack solutions. The initiative may accelerate operational scale, but it also introduces new operational risks by centralizing key components of service delivery and support within a single AI-driven platform, potentially affecting vendor lock-in, data governance, and continuity of MSP business models. Parallel developments highlight new vendor integration strategies among MSP-focused software providers. One example is Lexfold’s AI documentation system, which, rather than integrating directly with core PSA and RMM tools, utilizes intermediary platforms such as Scalepad and Liongard for data access. Seth Robinson emphasizes that these alternative integration points may alter an MSP’s center of operational gravity and complexity management, underscoring the need to assess not just functional outcomes but also system dependencies and brittleness introduced by new integration paths. For MSPs and IT leaders, these trends underscore the necessity of rigorous due diligence in vendor relationships, clarity on operational dependencies, and attention to the long-term implications of AI-enabled automation. Management—not elimination—of complexity remains central, with the risk of oversimplification leading to commoditization and loss of differentiation. Moreover, advances in AI should prompt greater scrutiny about talent pipelines, upskilling strategies, and the potential risks of eroding early-career roles, which may impact long-term service quality and resilience. Careful evaluation of integration points, data integrity, and operational control is recommended to mitigate the practical and organizational risks emerging from these developments. 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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 10-Minute IT Services Insights: 💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech 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 PwC survey of over 4,400 CEOs across 105 countries found that 56% report artificial intelligence has not delivered meaningful revenue growth or cost savings in the past year. Only one in eight organizations saw both benefits. The core issue, as highlighted by Dave Sobel, lies in poor integration—largely due to data quality challenges and legacy systems—leaving many businesses stuck in what PwC terms “experimentation purgatory.” Despite significant investment, AI infrastructure is often failing to produce measurable returns. This lack of operational discipline is mirrored by the rising incident of AI bots, which now account for 1 out of every 50 website visits, a sixfold increase from earlier reports. AI is successfully extracting value from enterprise infrastructure through sophisticated scraping, as companies pay for tools that return little and simultaneously fund infrastructure serving AI bots. The operational cost and exposure from bot traffic and ineffective AI tool adoption highlight the disconnect between hype and practical benefit. Adjacent stories expand on the governance gap and evolving expectations around risk. The U.S. and China declined to sign a non-binding declaration on military AI, underlining global regulatory fragmentation. In contrast, the Cybersecurity and Infrastructure Security Agency (CISA) issued a binding directive for federal civilian agencies to remove unsupported devices within a year, signaling substantial operational risk from end-of-life technology. These regulatory movements are expected to drive similar risk accountability into the private sector, primarily through insurance requirements. For MSPs and IT service providers, the takeaway is not to chase AI-powered offerings but to prioritize readiness, control, and cost accountability. Vendor partner programs (Cisco and 1Password) reward lifecycle management and customer retention, not AI sales. The practical competitive advantage is operational honesty—delivering realistic assessments, proactive client interactions, and transparent guidance. Automation should fund genuine client relationship activities, not replace them. The focus should remain on safeguarding operational integrity, controlling technology risk, and building customer success capability. Four things to know today: 00:00 PwC Survey Finds Most Business Leaders Still Waiting for AI Payoff 05:00 Federal Agencies Ordered to Eliminate End-of-Life Devices Over Cyber Threats 08:06 Cisco and 1Password Launch Partner Programs Focused on Customer Success 10:52 Harvard Business Review Says Human Touch Remains Critical Advantage Over AI This is the Business of Tech. Supported by: Small Biz Thought Community 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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 10-Minute IT Services Insights: 💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech 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 primary development centers on the shift toward smaller, task-specific AI models within enterprises and how this shift is primarily about transferring liability from AI vendors to operators. Dave Sobel notes that while narrower AI models are being marketed as safer and easier to govern, the reality is that they shift the burden of control, oversight, and risk directly onto the organizations deploying them. Hidden costs—particularly those related to data infrastructure, compliance, and ongoing governance—are substantial, often eclipsing the initial AI investment. Supporting data includes findings from a Salesforce survey indicating that CIOs allocate a median of 20% of their budgets to data and infrastructure management versus 5% to AI itself. Dave Sobel stresses that the real cost of an AI project can be significantly higher than client expectations, pointing out a 4:1 spending ratio between supporting infrastructure and the AI technology. This underscores the risk for MSPs who may fail to price in the operational and governance requirements appropriately, exposing themselves to financial and compliance liabilities. Adjacent stories address OpenAI’s strategic expansion into advertising and direct consulting, marking a move from pure technology platform to direct competitor for services revenue. OpenAI is creating an Ads Integrity Team to manage advertiser verification and reduce scam risk but acknowledges the challenges of maintaining effective controls at scale. In parallel, OpenAI is embedding engineers within client operations—mirroring other internal AI initiatives such as those at Shield and Entegris—and reinforcing a market divide. MSPs who build such capabilities internally capture margin, while others face lasting margin compression as purchasers of external solutions. The implications for MSPs and IT leaders are direct. Success depends less on which AI model is selected and more on the provider’s ability to establish rigorous governance, liability management, and ongoing operational control. The market is bifurcating: service providers who can build in-house AI platforms or attract strategic investment will retain efficiency as margin, while those relegated to purchasing third-party tools risk further erosion of profitability and competitive position. The decision to build or buy is becoming a business model risk, not just a procurement choice, and the opportunity to address it is narrowing. Three things to know today: 00:00 Firms Shift to Task-Specific AI Models Amid Governance, Liability Concerns 04:35 OpenAI Launches Ads Integrity Team, Hires Hundreds as Services Push Begins 08:34 MSP Market Splits as Integris, Shield Build Internal AI, Others Buy Tools This is the Business of Tech. Supported by: IT Service Provider University 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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 10-Minute IT Services Insights: 💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech 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...

The episode focuses on current security risks and limitations in industry intelligence, highlighting that CISA’s Known Exploited Vulnerabilities (KEV) catalog often lags by years in tagging vulnerabilities exploited by ransomware. One cited vulnerability sat in the catalog for 1,353 days before being flagged as ransomware-exploited, illustrating a significant delay in actionable intelligence. This gap raises concerns for MSPs whose patching priorities rely on outdated catalogs, potentially leading to a misalignment between compliance activities and actual threat vectors. Supporting this, Dave Sobel underscores how evolving threat models frequently bypass traditional vulnerability management. The recent compromise of OpenClaw’s skills marketplace, with a 12% malicious rate in submitted skills and basic post-facto reporting mechanisms, demonstrates that credential theft and malicious automation now present risks outside standard patch management. The core operational challenge for MSPs is not just software vulnerability but the governance of AI-enabled tools and uncontrolled marketplaces that can expose clients to breaches. Further contextualizing risk and automation, vendor launches include Lexful’s AI-native documentation for MSPs and Cavelo Flash’s agentless assessment tool. These offerings promise streamlined documentation and rapid risk assessment, but Dave Sobel notes their reliance on beta features, integration dependencies, and non-definitive compliance positions. Additionally, DocuSign’s release of AI-generated contract summaries raises questions about liability, as inaccurate summaries can mislead signers, and responsibility defaults to the end user rather than the vendor. The primary implication for MSPs and technology leaders is the need to inventory all AI-powered tools with access to client environments, actively govern marketplace adoption, and critically evaluate automation claims. Compliance-focused patching is no longer sufficient; operational oversight must prioritize credential management and identity governance over checklist-based approaches. Caution is advised before rapid migration to beta solutions or locking into long-term contracts, as both reduce flexibility and increase exposure to emerging, non-traditional attack surfaces. Three things to know today 00:00 CISA's Ransomware Tags Arrive Years Late While AI Tools Steal Credentials Now 05:53 IT Glue Founder Launches AI Documentation Platform Lexful for MSPs at Right of Boom 09:52 Cavelo and DocuSign Launch AI Tools That Automate Assessments and Contract Reviews This is the Business of Tech. Supported by: Small Biz Thoughts Community 💼 All Our Sponsors Support the vendors who support the show: 👉 https://businessof.tech/sponsors/ 🚀 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 10-Minute IT Services Insights: 💬 https://www.podmatch.com/hostdetailpreview/businessoftech 🔗 Follow Business of Tech 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.