Podcast
Business of Tech: Daily 10-Minute IT Services Insights
Hosted by MSP Radio · EN
In 10 minutes daily, The Business of Tech delivers the latest IT services and MSP-focused news and commentary. Curated to stories that matter with commentary answering 'Why Do We Care?', channel veteran Dave Sobel brings you up to speed and provides resources to go deeper. With insights and analysis, this focused podcast focuses on the knowledge you need to be effective, profitable, and relevant.
128episodes
Episodes
Newest firstAll episodes
AI Drives Small Business Buyers to Self-Serve as Most MSPs Stay Silent
Jul 800:14:17Tap to summarizeThe core structural shift affecting MSPs and IT service providers is a market bifurcation, where the traditional middle-ground offering—an undifferentiated blend of hardware and support—no longer matches client buying behavior. Dave Sobel referenced research from Techisle, which underscores a split between buyers seeking high-touch, managed outcomes and those opting for low-cost, self-serve technology tools. This division is further exacerbated by increasing component costs and external pressures on hardware pricing, particularly the rapidly escalating prices for memory and storage. Supporting data comes from a recent analysis of approximately 3,000 MSP websites conducted by Business of Tech. The scan found that 68% of MSPs make no mention of AI in their public-facing materials, with only about 1 in 7 offering a defined AI service. Simultaneously, reporting from both Business Insider and E2E reveals that 90% of businesses already have employees using AI tools—primarily adopted independently rather than through formal provider channels. This disconnect highlights a lag in MSP market positioning relative to how technology is actually being acquired and implemented by clients. Additional market stresses are introduced by rising hardware costs linked directly to shortages in memory and storage components. Apple’s price increases for Macs and iPads serve as a tangible example, justified by upstream cost spikes in DRAM, which CNBC reported has increased nearly 9x—from approximately $35 to $300 per module. Further, AI data center buildouts are projected to divert up to 20% of consumer memory manufacturing by 2027, suggesting ongoing and intensifying cost pressures for MSPs still reliant on hardware-centric business models. Most providers, as observed by Dave Sobel, remain silent or default to restating the value of external AI platforms like Microsoft Copilot. The practical implication for MSPs and IT service providers is a pressing need to reassess positioning and operational models. Providers embedded in the undifferentiated middle face rising cost risk, declining differentiation, and potential margin erosion. Viable paths require declaring and operationalizing a clear service model, either by transparently externalizing hardware and component pricing risk, or by committing to outcome-based, managed offerings where the provider takes on measurable accountability. Those who adapt agreements and marketing to clarify their role—particularly by documenting internal AI-driven efficiencies—will be better equipped to sustain margin and client relevance as market forces continue to widen the gap. 00:00 Two-Thirds of MSPs Are Silent 04:37 The Memory Shock Splitting the Market 07:05 No Buyer Left in the Middle 10:41 Why Do We Care? Supported by: CometBackup ScalePad 💼 All Our SponsorsMSP Radio is supported by our partners: Transit AI · Guardz · Pax8 · ABC Solutions · Rythmz · ScalePad · CometBackup · TimeZestSupporting the IT services community through insights, analysis, and transparency. 🚀 Join Business of Tech PlusGet exclusive access to investigative reports, vendor analysis, leadership briefings, and more.👉 https://businessof.tech/plus 🎧 Subscribe to the Business of TechWant the show on your favorite podcast app or prefer the written versions of each story?📲 https://www.businessof.tech/subscribe 📰 Story Links & SourcesLooking 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/28908079YouTube: https://youtube.com/mspradioBluesky: https://bsky.app/profile/businessof.techInstagram: https://www.instagram.com/mspradioTikTok: https://www.tiktok.com/@businessoftechFacebook: 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.
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AI Agents Undermine Seat-Based SaaS: Microsoft and OpenAI Pivot to Services
Jul 700:13:45Tap to summarizeThe episode identifies a structural decoupling of software value from licensing units, driven by the rise of agentic AI platforms that automate tasks previously executed by human users within applications. This shift is evidenced by vendors realigning away from per-seat software economics toward service and outcome-based models. Companies such as Microsoft, Amazon, and OpenAI are redirecting resources into consulting and certification initiatives, responding to changing customer usage patterns and eroding profitability of traditional license models. According to Gartner, agentic AI could impact 20% of enterprise SaaS spend by 2030, redefining how businesses allocate budgets for software and services. A notable development illustrating this shift is Notion’s decision to discontinue its Notion Mail application, not for lack of adoption, but because automated AI agents had largely replaced the need for a human-operated inbox. Microsoft has committed $2.5 billion and hired 6,000 consultants to embed AI solutions directly within client environments, bypassing traditional software seat sales. OpenAI has announced a global partner program aiming for 300,000 certified consultants within a year, while Amazon is embedding similar models into its offerings. Financial disclosures reveal that OpenAI’s cost structure remains unsustainable under typical software unit economics, spending $1.60 for every $1 earned as of the most recent annual report. These developments reinforce the displacement of the per-seat licensing model. Gartner’s cited mechanism is arbitrage, where agentic AI completes cross-system tasks without users actively working within apps, detaching business value from app usage. Traditional consulting’s move away from hourly billing, as reported by the Wall Street Journal, echoes the software industry’s realignment, emphasizing fixed-fee and outcome-based pricing over labor hours. The combination of end-client optimization efforts, vendor migration to services, and changes in consulting economics demonstrates a market-wide move toward operational accountability over software resale. For MSPs and IT providers, these changes pose direct challenges to legacy revenue assumptions and operational models. Per-user or license-based pricing faces mounting contract risk as agentic agents reduce seat counts. Service providers will be evaluated on their ability to manage this transition—internally and for their clients—by documenting workflow changes, auditing tool stacks, and adapting to new consumption and outcome-based vendor models. Early adoption of these practices within one’s own business is becoming a credibility benchmark, as prospective clients scrutinize whether providers have successfully navigated the same seat retirement and cost reallocation they are expected to deliver. 00:00 Software Giants Go Human 04:26 Agents Don't Buy Seats 06:58 Squeezed From Both Ends 10;12 Why Do We Care? Supported by: Guardz Pax8 💼 All Our SponsorsMSP Radio is supported by our partners: Transit AI · Guardz · Pax8 · ABC Solutions · Rythmz · ScalePad · CometBackup · TimeZestSupporting the IT services community through insights, analysis, and transparency. 🚀 Join Business of Tech PlusGet exclusive access to investigative reports, vendor analysis, leadership briefings, and more.👉 https://businessof.tech/plus 🎧 Subscribe to the Business of TechWant the show on your favorite podcast app or prefer the written versions of each story?📲 https://www.businessof.tech/subscribe 📰 Story Links & SourcesLooking 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/28908079YouTube: https://youtube.com/mspradioBluesky: https://bsky.app/profile/businessof.techInstagram: https://www.instagram.com/mspradioTikTok: https://www.tiktok.com/@businessoftechFacebook: 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.
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Why Unmanaged Access Is Increasing MSP Liability: Access Governance Gaps with Kyle Bove
Jul 300:48:25Tap to summarizeThe dominant structural mechanism explored in this episode centers on governance gaps in access management and the resulting liability transfer to MSPs. The discussion highlights how fragmented identity stacks, unmanaged access, and reliance on manual tracking expose MSPs to growing contractual, operational, and legal risk. Companies and technologies referenced include Microsoft 365, Google Workspace, Okta, ConnectWise, and specific access governance solutions targeting the channel. The ConnectWise 2026 Threat Report identifies credential abuse as a core attack vector, underscoring how unaddressed authorization and access drift remain a structural exposure area. The episode cites multiple indicators and supporting data. According to the ConnectWise 2026 Threat Report, credential abuse is now the primary attack vector, with attackers commonly exploiting active and orphaned accounts left unmanaged in client environments. Fragmented identity stacks complicate the onboarding and offboarding process, with onboarding often requiring 45 minutes per client as technicians navigate numerous access portals. The prevalence of shadow IT, orphaned accounts, and missed deprovisioning windows was discussed as persistent drivers of both operational overhead and increased incident risk. Supporting developments include community-documented scenarios where multi-factor authentication (MFA) was present but insufficient to prevent breaches, particularly when privilege escalation or temporary exclusions remain unaddressed. Examples such as the Reddit phishing event and Microsoft’s handling of MFA via VOIP demonstrate how authentication is distinct from governance, and that temporary access or exceptions frequently become permanent, heightening exposure. Regulatory environments—including healthcare, finance, and government—were cited as adding further requirements for explicit governance controls and auditable access policies, while manual spreadsheet tracking often fails to meet these demands. The operational implications for MSPs include the need to move beyond basic practice such as MFA and endpoint protection, toward purpose-built tools and processes that provide continual visibility, auditable controls, and policy enforcement for client access. Without this, MSPs face increased administrative burden, billing discrepancies, contractual liability, and reputational risk. As regulatory audits become more demanding and clients demand clearer evidence of governance, service providers must reconcile the tradeoffs between increased process complexity and the need for automated, enforceable identity governance. This shift challenges existing pricing models, requiring MSPs to justify and potentially repackage their service offerings in the context of risk management and operational maturity. 💼 All Our SponsorsSupport the vendors who support the show:👉 https://businessof.tech/sponsors/ 🚀 Join Business of Tech PlusGet exclusive access to investigative reports, vendor analysis, leadership briefings, and more.👉 https://businessof.tech/plus 🎧 Subscribe to the Business of TechWant the show on your favorite podcast app or prefer the written versions of each story?📲 https://www.businessof.tech/subscribe 📰 Story Links & SourcesLooking 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/28908079YouTube: https://youtube.com/mspradioBluesky: https://bsky.app/profile/businessof.techInstagram: https://www.instagram.com/mspradioTikTok: https://www.tiktok.com/@businessoftechFacebook: 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.
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Why PAX8’s Managed Intelligence Push Raises the Bar for MSPs — with Rich Freeman
Jul 200:36:39Tap to summarizeThe episode examines the ongoing shift in the IT services market from traditional managed services to “managed intelligence,” as vendors like PAX8 and ConnectWise attempt to reposition their offerings around artificial intelligence (AI). This structural change introduces increased operational complexity for MSPs who are being urged to adopt new AI-driven models, while facing evolving expectations regarding service delivery, pricing, and accountability. The mechanism at play is the transfer of risk and uncertainty from vendors to MSPs, especially as AI and usage-based billing models upend established business practices. One significant development highlighted is PAX8’s call for MSPs to become “managed intelligence providers”; however, according to PAX8’s own head of AI adoption, only 17 out of 600 interviewed partners currently meet that standard, up from 13 a year prior. In response to this slow uptake, PAX8 has introduced bridge services and a Managed Intelligence Program to support partners through the transition, including white-labeled AI services and a platform for tracking usage called the agent gateway. These efforts underscore that the managed intelligence model presents a steep learning curve for most MSPs, with few having yet achieved operational maturity in this area. Related market activity further illustrates these dynamics. ConnectWise has restructured its platform around an AI core, introducing predictive intelligence and shifting to ticket-based billing rather than traditional per-seat models. According to ConnectWise, this shift reduces L1-L2 ticket escalations by 86% and increases technician productivity by 30%. Meanwhile, concerns remain about data ownership and the scope of actionable information, with companies like Lexful and Enable pushing for greater integration across siloed applications. There is also ongoing debate on whether system-of-record vendors or independent AI-native platforms will ultimately control operational workflows and client relationships. For MSPs and IT service providers, these developments translate into practical concerns around vendor dependency, variable cost exposure, and pricing pressure. The move to consumption-driven models and token economics increases unpredictability, forcing providers to absorb or carefully manage AI usage costs or risk compressed margins. There are also governance and accountability questions related to client relationships, especially as more AI service layers are introduced by upstream vendors. The operational implication is a need for heightened financial diligence, risk assessment, and a clear strategy for maintaining client trust and service differentiation in an increasingly intermediated service landscape. Sponsored by: Pax8 ScalePadABC SolutionsRythmz 💼 All Our SponsorsSupport the vendors who support the show:👉 https://businessof.tech/sponsors/ 🚀 Join Business of Tech PlusGet exclusive access to investigative reports, vendor analysis, leadership briefings, and more.👉 https://businessof.tech/plus 🎧 Subscribe to the Business of TechWant the show on your favorite podcast app or prefer the written versions of each story?📲 https://www.businessof.tech/subscribe 📰 Story Links & SourcesLooking 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/28908079YouTube: https://youtube.com/mspradioBluesky: https://bsky.app/profile/businessof.techInstagram: https://www.instagram.com/mspradioTikTok: https://www.tiktok.com/@businessoftechFacebook: 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.
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Vendor AI Push Leaves MSPs Holding Liability as Courts Shift Responsibility
Jul 100:12:08Tap to summarizeThe dominant structural shift outlined is a transfer of liability and accountability for AI-generated errors from vendors to the entities deploying these systems—primarily MSPs and their clients. While vendors aggressively promote scalable AI tools and urge rapid adoption, the legal and operational burden of verifying and standing behind AI output falls on deployers, not on the tool providers. Recent court rulings and shifting buyer expectations are accelerating this transfer, fundamentally altering the MSP business model around AI services. Primary evidence for this shift comes from both industry behavior and legal precedent. Kaseya urged MSPs to quickly embrace AI services while revealing that only about 13% of providers are seeing significant revenue from AI, despite roughly half of clients requesting these solutions. Compounding the structural gap is a low conversion rate from proof-of-concept to production (only 20% success, per Kaseya), and high failure rates in AI-generated code—Forbes reported security and logic errors appear far more frequently in machine-produced output than in human code. Notably, courts in Germany and Canada have ruled that organizations are legally responsible for the statements and errors created by their AI, not the vendors providing the underlying tools. Supporting developments reinforce the risk and accountability mismatch. Research cited from Gartner indicates over 70% of CEOs and 75% of CIOs believe current IT operating models are unfit for the demands of the AI era, highlighting a recognized governance gap. Consumer surveys show that over half hold company leadership personally responsible for AI failures. The recurring vendor emphasis on selling tools, combined with product features that prioritize scale over individualized accountability, deepens the structural challenge for service providers. For MSPs and IT service organizations, the primary practical implication is that competitive differentiation and risk mitigation will depend less on which AI products are resold and more on documented processes for reviewing, annotating, and standing behind AI-generated output. Vendors’ tools are pervasive and quickly commoditized, so market separation arises from the ability to provide tangible accountability standards—proof of human review, defined sign-off authority, and clear records for client audits and legal defense. Pricing strategies that reflect the cost of accountability, rather than simply product markup, are likely to become more sustainable as client focus shifts from features to liability management in AI adoption. 00:00 The 13% Problem 03:29 The Tool vs. The Work 05:43 The Wrong Answer's New Address 08:37 Why Do We Care? Supported by: CometBackup TimeZest 💼 All Our SponsorsSupport the vendors who support the show:👉 https://businessof.tech/sponsors/ 🚀 Join Business of Tech PlusGet exclusive access to investigative reports, vendor analysis, leadership briefings, and more.👉 https://businessof.tech/plus 🎧 Subscribe to the Business of TechWant the show on your favorite podcast app or prefer the written versions of each story?📲 https://www.businessof.tech/subscribe 📰 Story Links & SourcesLooking 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/28908079YouTube: https://youtube.com/mspradioBluesky: https://bsky.app/profile/businessof.techInstagram: https://www.instagram.com/mspradioTikTok: https://www.tiktok.com/@businessoftechFacebook: 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.
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MSP Risk: Continuing to Sell Predictable Execution as AI Removes Price Floor
Jun 3000:13:51Tap to summarizeThe dominant structural shift underlined in this episode is the removal of the pricing floor for undifferentiated, repeatable IT work due to agentic AI adoption, especially in IT services and MSP operations. As described by Dave Sobel, this shift is not about wholesale job elimination but about AI absorbing routine, predictable execution, leaving human operators responsible for judgment and oversight. This change is illustrated by organizations such as OpenAI, where 97.9% of employees use AI agents, and by sector-wide hiring data tracked by SignalFire, revealing that software engineers—previously considered vulnerable—remain the largest share of new hires. The most consequential development is the clear division between executional work and judgment-based roles. Data from SignalFire shows that software engineers make up 55% of new tech hires, contrary to predictions of their displacement by AI. Similarly, ISC2's Cybersecurity Workforce Survey, reported by Dark Reading, finds entry-level cybersecurity roles are evolving rather than disappearing, with AI taking over routine triage and increasing demand for higher-level judgment skills. OpenAI's near-universal internal AI adoption supports the notion that employees are adapting their roles rather than being replaced outright. Further supporting developments include evidence from SplashTop, which measured that 53% of IT team capacity is spent on endpoint maintenance and repetitive tasks, areas highly susceptible to automation. The effect is heightened by macro trends—cited from Axios Macro and the NFIB—showing small businesses are actively reducing hiring plans and seeking solutions that remove the need for headcount growth. New MSP offerings, such as managed support teams available within 30 days, are scrutinized for repackaging traditional labor models vulnerable to rapid automation. For MSPs and IT service providers, the operational implication is the urgent need to reevaluate service lines, staffing, and pricing models. Services based on predictable, repeatable execution now face competition from AI-driven agentic work that operates with negligible marginal cost, eroding the business case for labor arbitrage and body-shopping models. The path to defensibility shifts toward services that require human judgment, oversight, and outcome-based delivery, with increased risk for firms reliant on commoditized execution. Sorting offerings by their exposure to automation and focusing investment in non-automatable, judgment-driven roles becomes a practical risk mitigation approach. 00:00 The Most-Hired Casualty 04:19 Which Half It Eats 07:06 The Rent-a-Team Trap 09:47 Why Do We Care? Supported by: Pax8 Sign up for the SMB Online Conference: www.smbonlineconference.com 💼 All Our SponsorsSupport the vendors who support the show:👉 https://businessof.tech/sponsors/ 🚀 Join Business of Tech PlusGet exclusive access to investigative reports, vendor analysis, leadership briefings, and more.👉 https://businessof.tech/plus 🎧 Subscribe to the Business of TechWant the show on your favorite podcast app or prefer the written versions of each story?📲 https://www.businessof.tech/subscribe 📰 Story Links & SourcesLooking 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/28908079YouTube: https://youtube.com/mspradioBluesky: https://bsky.app/profile/businessof.techInstagram: https://www.instagram.com/mspradioTikTok: https://www.tiktok.com/@businessoftechFacebook: 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.
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Hybrid Endpoint Management Is the New Normal: Jake Mosey on Visibility and Control
Jun 2900:23:04Tap to summarizeThe dominant structural shift addressed is the increasing operational dependency on Microsoft Intune for endpoint management across organizations of all sizes, which is exposing gaps between Microsoft’s native capabilities and the practical needs of managed environments. This shift is creating new pressure points for service margins, as IT service providers find themselves compensating for visibility limitations and inconsistencies in Intune’s deployment mechanisms. Vendors such as Recast Software have positioned themselves as companions that address these shortfalls, acknowledging that Microsoft routinely incorporates previously “companion” features into its own ecosystem. The primary evidence cited is the identified lack of comprehensive fleet visibility and inconsistent application deployment within Microsoft Intune environments. According to Recast Software’s Chief Product Officer, Jake Mosey, customer feedback repeatedly points to insufficient information about device states—especially during hybrid or co-managed transitions from Microsoft Configuration Manager to Intune—and challenges with application deployment timing, patching, and third-party app management. These operational gaps create environments in which service providers must employ supplemental tools to maintain efficiency and consistency across client environments. Supporting developments include lessons learned from similar dynamics in the Apple-Jamf ecosystem, where continual vendor evolution (“Sherlocking”) forced channel vendors to focus on speed, specialization, and building direct community relationships. Jake Mosey emphasized that effective community-driven product development relies on discerning the needs of the wider user base, not just the loudest voices, and maintaining a focused strategy. The discussion also highlighted persistent fragmentation in multi-platform environments, meaning MSPs must often manage diverse device fleets with varying visibility and control requirements—a complexity heightened during prolonged hybrid migration states. Operationally, MSPs and IT leaders face practical implications including increased vendor dependency, the need for multifaceted visibility tools, and a requirement to plan for ongoing hybrid environments rather than clean migration end-states. Service providers are urged to prioritize automation where possible but must also recognize that full migration to a single endpoint platform remains impractical for many. Failure to address these gaps increases risk to client productivity and end-user satisfaction, particularly when patching, application deployment, or security controls are inconsistently applied. The expectation is that meaningful improvements will depend more on inventory and visibility capabilities than solely on automation or AI. 💼 All Our SponsorsSupport the vendors who support the show:👉 https://businessof.tech/sponsors/ 🚀 Join Business of Tech PlusGet exclusive access to investigative reports, vendor analysis, leadership briefings, and more.👉 https://businessof.tech/plus 🎧 Subscribe to the Business of TechWant the show on your favorite podcast app or prefer the written versions of each story?📲 https://www.businessof.tech/subscribe 📰 Story Links & SourcesLooking 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/28908079YouTube: https://youtube.com/mspradioBluesky: https://bsky.app/profile/businessof.techInstagram: https://www.instagram.com/mspradioTikTok: https://www.tiktok.com/@businessoftechFacebook: 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.
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Navigating Shrinking Seat Counts: How AI Pressures MSP Revenue Streams and Security Operations
Jun 2500:24:14Tap to summarizeThe dominant structural shift highlighted is margin pressure and business model viability for MSPs due to workforce reduction driven by AI automation. This is exemplified by Microsoft’s introduction of Agent365—an enterprise product licensing AI agents rather than human users—and industry reports forecasting that 30–50% of white-collar jobs may be replaced by AI technologies, according to publication summaries referenced during discussion. The shift fundamentally threatens the per-seat managed services pricing model that has anchored MSP revenue. Evidence of mounting financial risk is provided by the scenario where clients may halve their seat counts within a two-to-three-year window. As stated, this adjustment would immediately cut monthly recurring revenue (MMR) for MSPs. The discussion connects this trend to Microsoft’s evolving licensing model and notes an industry-wide consensus reflected in a Capterra survey, which found all surveyed MSPs in 2024 facing significant increases in local competition. The implication is that margin pressure from both automation and intensifying competition is occurring simultaneously. Additional developments reinforce the risks to stability. Security complexity and associated liability are increasing, as non-specialist teams—originally tasked with legacy IT functions—are now expected to take responsibility for security operations without adequate expertise. This burden is heightened by the emergence of unmanaged AI adoption at client organizations, creating new avenues for data exposure and regulatory risk. Surveyed business owners are considering exit or consolidation, citing inability or unwillingness to restructure business models to accommodate these changes. Peer group participation is recognized as widespread but not a direct countermeasure to these structural challenges. For MSPs and IT service providers, the practical implications are clear: reliance on the per-seat model is a growing contract risk, with revenue volatility linked to workforce automation outpacing both the speed of traditional service adaptation and client technology adoption. Accountabilities around AI risk, security governance, and compliance are expanding—often without a corresponding increase in compensable scope or staff capability. Operators must assess vendor dependency (especially in rapidly shifting software licensing models), realign service portfolios towards advisory, compliance, and security, and prepare for sustained market turbulence marked by shrinking margins and rising operational complexity. Supported by: Small Biz Thoughts Community Sign up for the SMB Online Conference: www.smbonlineconference.com 💼 All Our SponsorsSupport the vendors who support the show:👉 https://businessof.tech/sponsors/ 🚀 Join Business of Tech PlusGet exclusive access to investigative reports, vendor analysis, leadership briefings, and more.👉 https://businessof.tech/plus 🎧 Subscribe to the Business of TechWant the show on your favorite podcast app or prefer the written versions of each story?📲 https://www.businessof.tech/subscribe 📰 Story Links & SourcesLooking 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/28908079YouTube: https://youtube.com/mspradioBluesky: https://bsky.app/profile/businessof.techInstagram: https://www.instagram.com/mspradioTikTok: https://www.tiktok.com/@businessoftechFacebook: 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.
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Memory Inflation: Why All-Inclusive MSP Hardware Pricing Is No Longer Sustainable
Jun 2400:11:14Tap to summarizeA structural repricing of memory and silicon components is forcing a shift in the economics of hardware resale for managed service providers (MSPs) and IT service providers. This shift is driven by concentrated demand for memory components from AI infrastructure build-outs, as evidenced by data from IDC and remarks from companies including Apple, Micron, SK Hynix, and Samsung. The episode highlights that memory costs have quadrupled in a year, and that both endpoint devices and servers are experiencing durable price inflation due to component scarcity and intensified competition for supply. The most consequential development cited is Apple’s acknowledgment—confirmed by Tim Cook to the Wall Street Journal—that device price increases are now “unavoidable” because the cost of memory can no longer be absorbed. Memory manufacturers’ share prices rallied on this signal, reinforcing an investor consensus that higher component costs will persist. IDC data showed AI-focused, non-x86 servers using Nvidia’s ARM chips generated $58.7 billion—or nearly 48% of all server revenue—up 107% year over year, while x86 server revenue declined due to DRAM and NAND shortages. This dynamic indicates that AI infrastructure is bidding up component costs at the expense of standard business hardware. Secondary developments further reinforce this mechanism. The market’s response to U.S. government announcements regarding Intel chip capacity expansion demonstrates that relief from the silicon crunch remains years away, not months. Channel partners—according to industry reporting—were already pivoting from hardware resale to services prior to these price shocks, with thinning hardware margins preceding the current pressure. The combination of fixed-fee hardware contracts and rising component costs now places providers in a position where they are “short silicon,” having unknowingly absorbed inflation risk they cannot pass on under existing contractual terms. For MSPs and IT leaders, the principal operational implications center on contract structure, exposure to component price volatility, and diminished hardware margins. Providers with fixed monthly agreements or hardware-as-a-service contracts based on last year’s component costs are at an increasing risk of margin erosion, as their ability to reprice is contractually limited. Practical mitigation steps include auditing all fixed-fee agreements for exposure, amending contracts to include component index or price adjustment clauses, and separating hardware as a transparent, pass-through line item. Failing to adapt contract terms or refresh timing may compound both financial risk and the security profile of client endpoints. 00:00 Not the Tokens 03:31 An Auction for the Parts 05:46 Short Silicon 07:44 Why Do We Care? Supported by: Pax8 ScalePad Sign up for the SMB Online Conference: www.smbonlineconference.com 💼 All Our SponsorsSupport the vendors who support the show:👉 https://businessof.tech/sponsors/ 🚀 Join Business of Tech PlusGet exclusive access to investigative reports, vendor analysis, leadership briefings, and more.👉 https://businessof.tech/plus 🎧 Subscribe to the Business of TechWant the show on your favorite podcast app or prefer the written versions of each story?📲 https://www.businessof.tech/subscribe 📰 Story Links & SourcesLooking 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/28908079YouTube: https://youtube.com/mspradioBluesky: https://bsky.app/profile/businessof.techInstagram: https://www.instagram.com/mspradioTikTok: https://www.tiktok.com/@businessoftechFacebook: 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.
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MSPs Face New Risk: Customer Loyalty Drops When AI Replaces Human Interactio
Jun 2300:12:04Tap to summarizeThe episode reveals a structural shift where “AI powered” has moved from a selling point to a source of liability and customer distrust. Surveys from WordPress VIP, the Pew Research Center, and Carnegie Mellon University indicate that both consumers and professionals increasingly see visible AI in products and services as a negative attribute, eroding trust rather than adding perceived value. This trend impacts MSPs directly, as their role in advising clients on technology adoption now brings increased accountability for customer experience outcomes tied to AI-driven automation. According to a WordPress VIP survey, 60% of US consumers are deterred by the term “AI” in brand marketing, and 86% do not fully trust AI-delivered information, preferring original sources. The Pew Research Center found that, while 49% of US adults now use AI chatbots, 40% believe AI will worsen society and 67% distrust regulatory oversight. A Carnegie Mellon study of working visual artists reported 99% disapproving of generative AI and 85% refusing to use it. These quantified findings underscore a broad disconnect between AI adoption and public trust. Additional research reinforces this skepticism and clarifies operational risks. AnswerConnect’s survey of 6,000 consumers across the US, UK, and Canada found that 85% prefer human service over bot interactions, 57% lose trust in brands using AI for support, and 73% exhibit greater loyalty to businesses maintaining human involvement. Data from Fractal and Search Engine Land shows that the share of consumers who say heavy AI use would decrease their trust in a brand nearly doubled in a year, rising from 20% to 39%. Furthermore, 84% desire businesses to disclose AI use, yet only 20% of businesses consistently do so. These patterns suggest tangible declines in customer loyalty and increased expectation for transparency surrounding AI deployment. For MSPs and IT service providers, visible AI in customer-facing areas introduces pricing risk and trust liabilities. Delegating key customer interactions to AI without clear disclosure can erode brand equity and disrupt client retention metrics. The operational recommendation is to segment human-in-the-loop service as the standard premium offering, with fully automated AI positioned as a disclosed, lower-tier alternative. Writing these distinctions explicitly into contracts and statements of work—pairing them with actual client retention data—enables more defensible pricing and clarifies accountability, helping avoid unintended consequences tied to silent automation. 00:00 The Turn-Off 03:39 Reading the Motive 05:25 The Loyalty Account 08:35 Why Do We Care? Supported by: Pax8 ScalePad Sign up for the SMB Online Conference: www.smbonlineconference.com 💼 All Our SponsorsSupport the vendors who support the show:👉 https://businessof.tech/sponsors/ 🚀 Join Business of Tech PlusGet exclusive access to investigative reports, vendor analysis, leadership briefings, and more.👉 https://businessof.tech/plus 🎧 Subscribe to the Business of TechWant the show on your favorite podcast app or prefer the written versions of each story?📲 https://www.businessof.tech/subscribe 📰 Story Links & SourcesLooking 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/28908079YouTube: https://youtube.com/mspradioBluesky: https://bsky.app/profile/businessof.techInstagram: https://www.instagram.com/mspradioTikTok: https://www.tiktok.com/@businessoftechFacebook: 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.
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