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
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Michael Privat: Data Weakness, Not AI Tools, Derails Enterprise AI Investments
Jun 800:21:55Tap to summarizeA central structural mechanism highlighted in this episode is the exposure and amplification of technical and organizational weaknesses by enterprise AI initiatives, particularly as organizations pursue rapid AI adoption without adequate investment in data and process fundamentals. The episode draws on findings from an MIT Media Lab report, which found that 95% of enterprise AI pilots had no measurable impact on profit and loss, despite $30–40 billion in investment. Michael Privat, representing the healthcare technology firm Availability, discusses the consequences for organizations that apply “thin” AI overlays on top of unaddressed legacy data infrastructure and processes. The most consequential data point centers on AI’s amplifying effect. According to the MIT Media Lab report cited by Michael Privat, 74–75% of companies expect revenue growth from AI, but only 20% are realizing gains. The root cause identified is not AI itself, but foundational failures: organizations use pilots as procurement exercises rather than outcome-driven initiatives and neglect to address data consistency and process integrity. Pilot projects, in many cases, simply accelerate the visibility and scale of existing dysfunctions rather than creating new value. Further evidence is provided through discussion of operational methodologies and organizational approaches. Michael Privat details a shift from pre-AI process benchmarks, such as DORA metrics focused on predictability and velocity, toward new models that account for AI’s speed and amplification risks. He points to increasing investments in engineering capacity—in particular, tripling headcount in India—while emphasizing that efficiency gains from AI only materialize where discipline, standardization, and solid engineering “plumbing” is already in place. Both the need for audit trails and rigorous governance, especially in regulated sectors like healthcare, are flagged as structural safety requirements rather than optional layers. Operationally, the implications for MSPs and IT leaders include the risk of exposing latent deficiencies when implementing AI-driven offerings, particularly when layering automation and analytics atop fragmented or inconsistent infrastructure. Key areas of impact are the need for robust governance frameworks—especially with agentic AI, where dynamic system behaviors require ongoing accountability and auditability—and the risk that AI investments made without process and data “spring cleaning” can actually accelerate failure modes. For IT service providers, the material risks are in unexamined process debt, tool misalignment, and the temptation to prioritize velocity over resilience, ultimately increasing operational and contractual exposure. Supported by:NerdioScalePad 💼 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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Consumption-Based AI Billing Increases Financial Risk for Unprepared MSPs
Jun 500:13:46Tap to summarizeThe current structural shift centers on the transfer of accountability for AI risk from vendors and regulators to managed service providers (MSPs). Vendors such as Anthropic and Microsoft are expanding their enterprise-focused AI channel programs and services tracks, while regulators pull back from enforcement, leaving MSPs as the de facto accountable parties for AI deployments. Reports and data indicate that vendor-driven channel expansion and regulatory laxity are converging to make service providers the liable layer in AI delivery. Anthropic is broadening its CLAUDE partner network from around 100 to several thousand partners, organized in tiers with outcome-based incentives and a dedicated services track targeting MSPs and system integrators. Microsoft, responding to low Copilot adoption rates (reported at 3.3% of eligible users), is allowing full removal of Copilot from systems. An IDC/Expereo survey of 800 companies found 70% are budgeting for AI, but investment is driven more by competitive anxiety than proven results. Additionally, a concentrated group—top 5% of users—accounts for the bulk of enterprise AI-related risk, according to a separate analysis. Supporting developments include the emergence of Lemhi, an early-stage platform aimed at enabling MSPs to package and sell AI transformation as a recurring service, and warnings from lawmakers about cuts to CISA that undermine federal cyber defense capacity. The episode also highlights a consistent theme: government agencies such as the White House and NIST are shifting toward voluntary measures and measurement frameworks, declining to create enforceable accountability standards for AI in production environments. For MSPs and IT leaders, these developments translate to increased contract and operational risk. Without renegotiated agreements specifying usage ceilings, approval workflows, and liability terms, providers may inherit unpredictable financial exposure and compliance gaps. The absence of effective governance requirements from both vendors and authorities places the operational burden on MSPs to define, monitor, and enforce safe use of AI, including recurring governance services such as data boundary enforcement and audit evidence. Failure to address these issues may result in MSPs acting as uninsured support for unmanaged AI deployments they cannot fully control or price. 00:00 MSP AI Play 04:24 AI's Accountability Gap 06:50 MSP Risk Transfer 09:49 Why Do We Care? Supported by: ScalePad Moovila 💼 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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Jay McBain on How Microsoft’s AI Billing Passes Risk and Liability to MSPs
Jun 400:39:04Tap to summarizeThe episode examines a structural shift in the MSP business model driven by the introduction of AI-linked consumption-based pricing layered on top of traditional per-seat fees. This emerging mechanism, typified by Microsoft’s E7 license, adds variable AI consumption charges to otherwise predictable monthly service costs. Vendors are restructuring partner payment models, with Microsoft’s move closely watched by others, signaling a wider potential for volatility in the recurring revenue foundations of MSPs, according to analysis from Jay McBain and recent channel data. The most consequential development is Microsoft’s E7 pricing, which explicitly adds an AI consumption cost to the standard per-seat license. This move introduces variability at “machine speed,” in contrast to previous examples such as cloud storage, where consumption remains predominantly human-driven and thus more predictable. Analysts note that similar micro-consumption models—charging per conversation, process, or API call—are being adopted by hundreds of companies. Market data from Omnia and referenced industry research places the global IT spend at $6 trillion in 2026, with two-thirds delivered by channel partners and a rapid shift from fixed, subscription models toward micro-consumption billed at a granular, usage-based level. Supporting evidence includes the lack of sufficient vendor-provided controls for variable consumption, leaving MSPs exposed to unplanned cost spikes. While large enterprises are introducing robust FinOps practices and loading up cloud credits, smaller MSPs serving SMB customers are not prepared with similar governance structures. There is also vendor-led encouragement for AI adoption—such as persistent in-app assistants—that drive up consumption before adequate controls or cost-passing mechanisms are established. The sustainability of current pricing models is further questioned by the fact that providers like OpenAI and Anthropic are themselves subsidizing significant portions of token usage, distorting true costs throughout the value chain. For MSPs and IT service leaders, these developments mean greater exposure to unpredictable costs, potential margin pressures, and increased contractual risk tied to AI consumption. Operators cannot rely on vendors to provide spend caps or consumption governance today; failure to build internal controls or pass-through mechanisms may result in absorbing unpaid liabilities. Accountability for AI-driven actions, remediation, and configuration changes will rest with the MSP, elevating both operational complexity and liability exposure. The current environment requires building governance, audit trails, and spend management capabilities now, ahead of broader market adoption of AI consumption models. Supported by: CometBackup 💼 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 Outcomes, Warranties, and the Shift from Risk Manager to Delivery Arm for MSPs
Jun 300:13:03Tap to summarizeOutcome-based managed security and attached vendor warranties are driving a new form of coverage-based vendor lock-in for MSPs and IT service providers. Vendors such as Intezer and SPECTRA are introducing performance guarantees, SLAs, and cyber resilience warranties that require MSPs to fully standardize on their architectures. This evolving model shifts accountability for enforcement and risk management from the individual MSP to the vendor’s operating model, thereby altering the independent role of the MSP within client environments. A notable example is Intezer’s Amplify Partner program, which asserts that its platform can process 100% of security alerts while escalating fewer than 2% for human review—claims the company frames as outcomes rather than product specifications. SPECTRA’s use of certification-linked warranties, distributed via Ingram Micro, establishes channel-distributable assurance products with explicit conditions attached at every level. According to a Check Point report, while 77% of organizations report having adopted AI for cloud security, only 26% feel capable of enforcing those strategies, revealing a gap between security intent and operational ability. This structural shift is further illustrated by Merlin Cyber’s FedRAMP managed service offering, Lumen’s MDR enhancements targeting mid-market MSPs, and Trustlogix’s addition of intent-based authorization controls. The FBI’s announcement regarding Microsoft 365 OAuth token hijacking and recent vulnerabilities in widely used platforms like ConnectWise Automate underscore the real-world risks of automation platforms being targeted. These developments collectively point to growing operational complexity, rising compliance burdens, and the need for MSPs to separate their commitments from upstream vendor claims. For operators, the trend demands increased scrutiny of warranty terms, claim denial conditions, and SLA language before making any client-facing assurances. MSPs risk absorbing liability if they repeat vendor marketing claims without contractual clarity or operational control. Effective governance now requires independently produced, audit-ready evidence that documents compliance and enforcement separate from vendor portals. As assurance sales proliferate, the operational gap between acting as an underwriter versus a reseller will drive market differentiation, affecting both pricing structures and eligibility for vendor-backed coverage. 00:00 Channel-Ready Security 03:41 Policy vs. Reality 05:59 MFA Isn't Enough 09:12 Why Do We Care? Supported by: ScalePad Moovila 💼 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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AI as Production Workload Makes Spend Limits and Logging Mandatory for MSPs
Jun 200:13:02Tap to summarizeA fundamental structural shift underway is the movement of AI from isolated features to operationalized, production-level workloads in MSP tooling and client environments. This transition is not primarily about the capabilities of individual AI models but about their integration into existing operational platforms and workflows. Companies such as PDQ, Senteon, Domotz, and Zoom are incorporating AI agents directly into management layers, endpoint automation, and workflow orchestration, thereby increasing both the scope and complexity of AI impact. The locus of value is shifting from features to workflow control and integration, creating new demands for governance, consumption monitoring, and exit strategies. The most consequential development referenced is the transition in AI billing and operational models from static user or seat licenses to variable, usage-based consumption. He cites TechCrunch’s coverage of GitHub Copilot's move to token-based billing and Semafor's reporting of Uber's rapid exhaustion of its 2026 AI budget in four months due to unbounded consumption by generative tools. F5’s State of Application Strategy report is referenced to confirm that multi-cloud and parallel model operations are now common, with significant instances of AI-related security incidents already reported. Secondary developments reinforce this structural realignment of risk and accountability. PDQ, for instance, is expanding multi-tenant management and integration capabilities, while Senteon enables endpoint hardening and drift control directly in Rewst’s platform. Domotz’s MCP server allows AI agents to operate across 40,000 networks globally, and Zoom is packaging AI context protocol features for workflow automation. Each of these changes is designed to increase operational efficiency, but also expand the surface area for unintended consequences, elevated operational complexity, and potential budget overruns. For MSPs and IT leaders, the operational implications center on governance, spend control, and clear accountability over AI-driven tools and workflows. The risk is that without adequate monitoring, policy setting, and contractual clarity—especially around data portability and exit costs—MSPs may face liability for unplanned consumption, misconfigured automation, or governance gaps. The evidence indicates the need to proactively audit AI integrations, set usage thresholds, instrument logging and budgeting controls, and renegotiate vendor contracts to ensure service boundaries and oversight mechanisms are in place before workflows become too deeply embedded. 00:00 MSP Stack Resets 04:09 AI Needs Governance 06:45 Govern AI or Pay 09:22 Why Do We Care? Supported by: Nerdio Zero Networks 💼 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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Forced Arbitration in Tech Contracts: Brendan Ballou on Vendor Accountability Risks
Jun 100:23:49Tap to summarizeForced arbitration clauses have become embedded as a dominant mechanism in technology vendor contracts, shifting legal risk and accountability away from large vendors and reducing recourse options for managed service providers (MSPs) and IT service firms. This structural change, present in agreements with RMM and PSA vendors as well as hyperscalers such as Microsoft, Amazon, and Google, establishes a private dispute resolution system that operates beyond the traditional court system and is typically non-negotiable for smaller partners. The shift is evidenced by data and case studies outlined by Brendan Ballou. According to supplied figures, while consumers win in 89% of small claims court cases, their success rate drops to between 20% and 30% in arbitration, and even less—sometimes as low as 0.2%—for certain arbitration providers. Arbitration clauses are enforced even in extreme cases, as illustrated by a notable instance involving Disney, in which a forced arbitration clause was applied following a consumer’s prior account registration. Legal precedent as far back as the 2011 Supreme Court decision referenced by Brendan Ballou has broadened the Federal Arbitration Act well beyond its 1925 origins, further entrenching this system. Additional developments reference increased litigation in the 1980s, often cited as justification for expanding arbitration, though he attributes much of the legal caseload surge to government actions rather than consumer or employee lawsuits. The technology industry’s broad adoption of arbitration, especially in contracts where MSPs have little or no room to negotiate, further cements these power imbalances. Alternatives such as mediation are discussed as potentially less risky, but their adoption remains limited. The operational implications for MSPs, IT service providers, and IT leaders include heightened contract risk and reduced leverage in vendor disputes. Arbitration clauses limit access to open legal processes, restrict discovery rights, and are prone to bias in favor of vendors with repeat arbitrator relationships. For MSPs reliant on large platforms and suppliers, this creates ongoing exposure and complicates risk management. Mitigating measures—such as leveraging peer coordination for "mass arbitration" or negotiating for post-dispute mediation rather than pre-dispute forced arbitration—require proactive planning but may remain unavailable in standard vendor agreements. Supported by:MoovilaHaloPSA 💼 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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Governance, Not Enablement: Why Agentic AI Demands New MSP Service Models
May 2900:15:22Tap to summarizeThe structural shift highlighted in this episode is a move from simple AI enablement to a managed service model centered on agent governance, enforcement, and workflow automation within IT environments. The episode identifies unmanaged AI agents as a source of escalating risk, citing vendors like Scalepad shifting from remote monitoring to SaaS and AI usage discovery, and referencing research and audits from SNCC and Verizon that identify tangible security flaws and unapproved AI activity within organizations. Managed service providers are increasingly positioned as the operational layer that defines and enforces governance over automation systems, rather than simply deploying AI tools. The primary evidence for this shift is found in audit findings and market reports. SNCC's audit of 4,000 AI agent skills showed over a third had at least one security flaw, while Verizon’s data cited by The Register noted a fourfold increase in employees using unauthorized generative AI, with 28% of data loss prevention violations involving code or proprietary data submitted to AI platforms. Gartner, as reported by The Register, predicts 40% of organizations will demote or remove AI agents due to failed governance efforts—attributing the problem to all-or-nothing approaches that lead to operational and compliance failures. Secondary developments reinforce the move toward operationalized governance. Scalepad and Watchguard are bringing AI and SaaS governance capabilities to the MSP channel, with product releases focused on real-time discovery, policy enforcement, and automation control. Incidents like Anthropic’s leak of its full source code for Claude Code, exposing permission and sandboxing details, illustrate how transparency in AI agent operations can also create attack vectors—emphasizing the need for robust operational controls and ongoing auditability. The market is shifting to sell "coherence"—packaging identity, permissions, and workflow automation—rather than just technological capability. Operationally, the consequences for MSPs include increased responsibility for defining and enforcing permission boundaries, approval rules, and evidence collection. Failure to address agent governance will expose providers to operational ambiguity, unpriced liability, and recurring support burdens. The guidance is to move beyond AI enablement projects and toward agent operation retainers that include clear workflows, permission maps, execution logs, and contractual clarity on responsibility and incident management. MSPs that cannot prove and control agent behavior risk inheriting the complexity and fallout from system failures or misuse. 00:00 Shadow AI Surge 05:01 Context Is Infrastructure 07:46 Agent Control Plane 11:16 Why Do We Care? Supported by: JumpCloud 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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AI Liability and Data Risk Shifts: Veeam’s Platform Pivot and Rich Freeman on MSP Readiness
May 2800:39:36Tap to summarizeThe episode reveals a growing governance gap as the central structural shift in the IT services sector, driven by accelerated AI adoption and increasing automation. Companies such as OpenAI, Anthropic, Veeam, and Auvik are reframing their market positions around the operational risks and requirements introduced by AI agents, data automation, and new service delivery models. This evolution is underscored by the rising number of AI agents—projected by IDC to reach 2.3 billion by 2030—operating largely outside of current oversight and frequently with excessive or inappropriate permissions. The principal development discussed is Veeam’s announcement of its Data AI Command Platform. According to Dave Sobel and Rich Freeman, this platform is intended to address data-centric failures beyond traditional ransomware or accidental deletion. Veeam’s platform is designed to handle issues such as AI-generated data hallucinations, inappropriate data exposure, and policy enforcement failures. The platform’s architecture builds on the acquisition of Security AI, combining data security posture management with backup, compliance, and governance capabilities, although, as of now, key remediation features are only available for Microsoft 365, with further expansion expected over the coming months. Supporting developments include Auvik’s expansion of automated network management based on a large historical dataset and the simultaneous entrance of OpenAI and Anthropic into direct services for mid-market clients, backed by billions in private capital from entities such as Goldman Sachs and Blackstone. Both companies now embed applied AI engineers at client sites, bypassing traditional channel partners. Channel operator feedback, reflected in research by Techisle and discussions at vendor conferences, indicates a lack of MSP readiness and a slow response to developing governance and compliance services, despite evidence from end-user data pointing to significant unmet demand and risk exposure. Operationally, MSPs face a growing liability trap where the speed and delegation of decisions to AI systems increase the potential for unnoticed errors or breaches. There is a disconnect between customer demand for governance, compliance, and data controls, and the preparedness of MSPs to deliver those services. This exposes providers to heightened contractual, operational, and reputational risk, particularly as vendors and large AI companies move directly into the mid-market service delivery space. Practical safeguards, clear accountability frameworks, and objective benchmarks for automation and governance effectiveness will be required to mitigate exposure and support safe, durable service offerings. Supported by: CometBackup HaloPSA Moovila 💼 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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Structured Vendor Programs Increase Operational Load for MSPs
May 2700:15:23Tap to summarizeThe dominant structural shift highlighted is the increasing systematization and formalization of vendor-to-MSP growth channels, where vendors now dictate partner engagement through structured programs, marketplaces, and packaged offers. According to Dave Sobel, this trend is driven by vendors such as Microsoft, NinjaOne, GoTo (LogMeIn), and Forcepoint, each advancing formal partner networks and explicit funding paths. The episode contends that these programs operate less as genuine strategies for MSPs and more as distribution mechanisms, shifting operational and support burdens downstream to service providers. Primary supporting evidence comes from the 2026 Microsoft Partner Global Benchmark and Success Index from Maven Collective Marketing, which analyzed over 185,000 data points. The report found that 87% of partners exist on at least one Microsoft Marketplace, with 60% having transactable offers and 58% receiving leads sourced by Microsoft. Moreover, partners with dedicated Microsoft management support are three times more likely to secure funding from Microsoft. This data illustrates how tightly partner success is coupled to marketplace discoverability, direct purchasing offers, and vendor-provided leads and funding. Secondary developments reinforce this mechanism. Other vendors—such as NinjaOne, GoTo, and Forcepoint—have instituted similar programs, with explicitly defined partner journeys for integration, service delivery, and mutual success. Additionally, economic factors such as historically low consumer sentiment, supported by University of Michigan data, and persistent IT resourcing gaps, as identified by the Linux Foundation survey and reported by SmarterMSP, are further sharpening buyer demands for packaged, defensible IT outcomes. In parallel, reports like the 2026 Kaseya State of the MSP emphasize misaligned demand and revenue in AI/automation, and research from RCR Wireless highlights operational burdens that can fall back onto MSPs in vendor weak-support scenarios. For MSPs and IT service providers, the operational implications center on risk absorption, margin erosion, and increased dependency on vendor-defined models. Without internal discipline to clearly define, price, and standardize offers—especially for complex new demands like AI and automation—MSPs risk turning complexity into unpaid labor and operational drag. The key accountability remains with the provider to package and govern vendor-aligned services in a manner that remains robust regardless of shifting vendor incentives or support. Failure to do so leads to “MSP-owned friction,” where ticket volumes, support expectations, and inconsistent delivery increase without corresponding profit. 00:00 Partner Programs Formalized 04:31 Packaged or Passed 08:14 Priced or Absorbed 11:58 Why Do We Care? 💼 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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AI Governance Hurdles in Defense: Jason Tierney Examines CMMC Barriers for MSPs
May 2600:26:33Tap to summarizeThe episode details a tightening regulatory environment driven by new enforcement timelines for Cybersecurity Maturity Model Certification (CMMC), altering how MSPs and IT service providers are expected to deliver both compliance and operational services for U.S. defense contractors. Structural pressure stems from the Department of Defense making CMMC Level 2 compliance a contractual mandate for approximately 300,000 defense contractors, shifting risk and accountability towards providers who manage compliance workflows, technical environments, and client behaviors. C3 Integrated Solutions and their dual CMMC Level 2 certifications exemplify this transition, with clear implications for co-ownership of compliance outcomes and increased scrutiny on provider practices. The most consequential development is the substantial gap between compliance requirements and the current readiness of the defense contractor base. As of early 2026, only around 8% of contractors have obtained CMMC Level 2 certification, despite enforcement being implemented in contracts starting in November of the same year, according to Dave and Jason. Challenges arise from cost, organizational bandwidth, and complexity, with MSPs serving as pivotal partners to small subcontractors lacking in-house resources for process documentation and change management. Assessment scheduling bottlenecks and insufficient documentation are delaying certifications, increasing risk that many contractors and their service partners will miss the rapidly approaching deadlines. Related developments reinforce the central issue of operational risk and governance complexity. Jason Tierney illustrates the difference between technical compliance and true assessment readiness, citing real-world examples where insufficient evidence and poor understanding of process details lead to significant assessment delays. The rise of compliance-as-a-service offerings, enclave computing environments, and specialized governance tooling are attempts to address those gaps, but also introduce new layers of pricing, platform selection, and accountability concerns, especially when third-party tools fail to meet strict requirements such as FedRAMP moderate for handling sensitive data. For MSPs and IT leaders, the shift imposes higher barriers to entry, increased legal and contractual exposure, more rigorous documentation and process controls, and the need for customized delivery models that support both technical defenses and organizational behavior change. Providers must navigate conflicting requirements between specialized regulatory environments and multi-tenant tooling, manage escalating costs for both themselves and clients, and clarify responsibility boundaries in shared compliance scenarios. The requirement for human oversight—particularly in automated or AI-assisted compliance tooling—remains non-negotiable, reflecting the ongoing gap between technical implementation and credible assessment outcomes. Supported by:CometBackupMoovilaHaloPSA 💼 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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