2024 Predictions Review & 2025 Outlook: AI, Compliance, Decentralization, and MSP Evolution

[00:00:02] I do a prediction series to close out the end of the year. It involves not only a series of predictions for the coming year, but also a look back at my predictions for this year and an accountability of what I predicted. Let's dive into my predictions for 2024 and see how I did, plus my predictions for 2025. This is the Business of Tech.

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[00:01:12] So let's start off by revisiting my 2024 predictions and seeing how I did.

[00:01:18] First prediction? Businesses, especially in healthcare and finance, will increasingly turn to MSPs for compliance with tightening data privacy regulations.

[00:01:29] While a national U.S. data privacy law is unlikely, state-level momentum will grow.

[00:01:35] Well, the outcome? I got that one.

[00:01:38] The U.S. has seen a proliferation of state-level data privacy laws, creating a complex compliance landscape for businesses.

[00:01:46] For instance, the Oregon Consumer Privacy Act was signed into law on July 18th of 2023 and went into effect on July 1st of 2024.

[00:01:56] This fragmentation has led companies, particularly in regulated industries, to seek assistance from MSPs to navigate varying requirements.

[00:02:06] Prediction. AI and machine learning will drive self-healing, predictive maintenance, and automatic scaling in IT operations, with at least one major launch expected.

[00:02:17] Outcome? Accurate.

[00:02:19] The adoption of AI for IT operations has accelerated, with platforms enhancing capabilities in root cause analysis and proactive issue resolution.

[00:02:28] For example, AI ops platforms are being fine-tuned to better identify and address the root causes of IT issues, leveraging sophisticated AI and machine learning algorithms to analyze extensive data, ensuring quicker problem resolution, and enhanced system reliability.

[00:02:45] We've even started to see elements of this in MSP tools.

[00:02:49] Prediction. New private financing options will emerge to compete with private equity, including structured debt and investments from diverse sources.

[00:03:00] Outcome? Partially accurate.

[00:03:02] While private equity remains dominant in MSP financing, there is a growing interest in alternative funding sources, such as venture capital and strategic investments from larger MSPs.

[00:03:14] However, structured debt has not seen a significant surge as a financing model in the sector.

[00:03:21] Prediction. As deepfakes become more advanced, MSPs can develop offerings like detection tools, monitoring, training, and incident response.

[00:03:30] Outcome?

[00:03:31] Nope, missed this one.

[00:03:33] The rise in deepfake-related incidents like scams and corporate impersonation has generated interest,

[00:03:39] but evidence of widespread MSP service offerings remains anecdotal.

[00:03:44] Some providers are exploring awareness training or recommending tools, but full-service packages are not widespread.

[00:03:52] Prediction. MSPs will offer virtual Chief AI Officer Services to help clients manage AI trust, risk, and security, following frameworks like Gartner's Trism.

[00:04:04] Outcome? Well, that's an emerging trend.

[00:04:07] While not yet widespread, the concept of the virtual Chief AI Officer Services is gaining traction as organizations recognize the need for strategic AI oversight.

[00:04:19] Providers and MSPs are beginning to develop offerings that align with AI trust, risk, and security management frameworks, but were not widespread.

[00:04:28] Prediction.

[00:04:29] Providers will offer ethical AI frameworks, auditing services, and policies as demand for AI transparency and fairness grows.

[00:04:38] Outcome? That one's another emerging trend.

[00:04:40] Although ethical AI considerations are gaining promise, MSPs have not yet broadly established themselves as the providers of ethical AI services as a specialization.

[00:04:52] This represents a potential area for growth as demand for responsible AI practices does continue to rise.

[00:04:59] Prediction.

[00:05:00] Apple's Vision Pro will drive use cases in constrained physical spaces like labs and manufacturing.

[00:05:05] MSPs can provide support and monitoring services.

[00:05:10] Outcome?

[00:05:10] Nope, missed this one.

[00:05:12] The launch of Apple's Vision Pro has spurred interest in augmented reality across some industries.

[00:05:17] However, it's very limited, and I don't think we can call this product launch successful.

[00:05:22] So much so that I don't feel comfortable saying I got this one at all.

[00:05:27] Prediction.

[00:05:28] Apple will launch its AI product, emphasizing privacy and likely influencing MSPs towards its ecosystem.

[00:05:35] Well, accurate.

[00:05:36] Apple has introduced AI-driven features across its product lines with Apple intelligence with a strong emphasis on user privacy.

[00:05:44] The approach has caused conversations, and people are leveraging those AI capabilities.

[00:05:50] We'll see how far.

[00:05:53] Prediction.

[00:05:54] An AI system will be appointed as a board member in a major corporation contributing to strategic decision-making.

[00:06:00] Outcome?

[00:06:01] Nope, missed this one.

[00:06:03] That's inaccurate.

[00:06:04] As of now, no major corporation has appointed an AI system as a board member.

[00:06:08] Now, AI tools assist in decision-making processes, but formal board membership remains exclusively human.

[00:06:17] Prediction.

[00:06:18] AI services will specialize in carbon tracking, climate modeling, and environmental impact reduction.

[00:06:25] At least one organization focusing exclusively on this.

[00:06:29] Outcome?

[00:06:29] Yep, that one's accurate.

[00:06:31] The growing emphasis on sustainability has led to the emergence of IT service providers dedicated to climate-focused solutions, including carbon footprint analysis and environmental impact assessments.

[00:06:44] Prediction.

[00:06:45] A new model for IT services will emerge, leveraging blockchain and edge computing for secure resilience and efficiency.

[00:06:52] Outcome?

[00:06:53] That's maybe an emerging trend.

[00:06:56] Decentralized IT service models are in development and people are considering it, but utilizing blockchain and edge computing to do this is far from widespread adoption.

[00:07:08] Prediction.

[00:07:09] An international body may enforce ethics certification for AI usage impacting providers' AI deployment.

[00:07:16] Outcome?

[00:07:17] Nope, missed this one.

[00:07:18] No international body has mandated AI ethics certification to date.

[00:07:23] Now, organizations are proactively adopting ethical AI practices and seeking voluntary certification to build trust and ensure compliance with best practices.

[00:07:34] Prediction.

[00:07:35] Digital twins will revolutionize industries like urban planning and healthcare with widespread adoption anticipated.

[00:07:42] Outcome?

[00:07:43] Well, there's a lot of talk of digital twins, so I'm going to say there's accuracy here.

[00:07:48] The adoption of digital twin technology has expanded across various sectors, including urban planning and healthcare, enabling simulation and analysis to optimize operations and strategic planning.

[00:08:00] So here are my 2025 predictions.

[00:08:03] First one, generative AI will solve the reporting problem.

[00:08:07] So next year, generative AI will become the go-to solution for businesses looking to extract value from their data.

[00:08:15] It will effectively solve the longstanding reporting problem, where traditional data reporting methods have proven costly, time-consuming, or inadequate.

[00:08:23] Here's the issue. Systems collect all this massive amounts of interesting and actionable data.

[00:08:28] But customers consistently struggle to access and use it effectively.

[00:08:33] Historically, there have been two options.

[00:08:35] The first is pre-canned reports created by software developers.

[00:08:39] And these reports expose some data.

[00:08:42] They often fail to meet customers' evolving needs, leading to constant requests for customization.

[00:08:49] An expensive and slow development process.

[00:08:52] And the second option is to provide a reporting engine.

[00:08:55] But this forces customers to invest in expensive report-building skills or hire specialists, creating additional barriers to entry.

[00:09:03] Generative AI changes everything.

[00:09:06] Generative AI changes everything.

[00:09:06] Its ability to summarize and analyze data dynamically allows it to pull the answers user needs on demand, without needing predefined report templates or manual customization.

[00:09:18] Imagine asking your system,

[00:09:20] What were my top-performing products last quarter?

[00:09:23] Or, where are we losing efficiency?

[00:09:25] And receiving an instant, tailored response from your data.

[00:09:29] This capability will revolutionize how businesses interact with their data, making insights accessible to everyone.

[00:09:36] Not just those with technical skills.

[00:09:38] So in next year, expect generative AI-powered reporting to become a critical feature in software solutions, removing friction and empowering businesses to act on their data more effectively.

[00:09:51] Prediction. Autonomous IT systems will achieve maturity and widespread SMB adoption.

[00:09:57] Autonomous IT systems, driven by advancements in AI and machine learning, will reach a point of maturity in 2025.

[00:10:04] This progress will make them more accessible to small businesses through easier integrations and lower costs, encouraging broader adoption.

[00:10:13] For years, enterprises have enjoyed the benefits of autonomous systems capable of self-healing, predictive maintenance, and automated scaling.

[00:10:21] Particularly when we think about data centers.

[00:10:23] Now, the technology is advanced enough to trickle down to small businesses.

[00:10:28] MSPs will play a critical role in bringing these solutions to smaller organizations, offering managed services that include proactive system optimization.

[00:10:36] By automating infrastructure management, MSPs can free up resources to focus on delivering strategic outcomes, further positioning themselves as indispensable partners.

[00:10:48] Prediction. Legal AI services will become a valuable offering for small businesses.

[00:10:54] AI-driven legal services will emerge as a practical solution for small businesses to manage regulatory filings, contract reviews, and compliance checks.

[00:11:04] MSPs will seize the opportunity by packaging these services into accessible, scalable solutions.

[00:11:11] Regulatory complexities continue to grow, and SMBs often lack the resources or expertise to navigate them effectively.

[00:11:19] AI tools can handle repetitive legal tasks with remarkable efficiency, reducing costs and improving accuracy.

[00:11:27] Providers that integrate AI legal advisors into their offerings will provide clients with tools from everything from document drafting to real-time compliance monitoring.

[00:11:37] The trend aligns perfectly with the broader movement toward AI-powered solutions, allowing providers to deliver high-value services without expanding their headcount.

[00:11:48] Prediction. Decentralized MSP models will enter the mainstream.

[00:11:53] Next year, possibly, but I'm going to make the prediction, decentralized MSP models leveraging blockchain and peer-to-peer computing will emerge as a viable alternative to traditional centralized services.

[00:12:04] The models will allow providers to deliver hyper-resilient secure services that are particularly appealing in industries like healthcare and ones requiring heightened data security and compliance.

[00:12:15] Imagine a future where authentication is managed through blockchain, ensuring tamper-proof records and reducing reliance on centralized servers.

[00:12:23] Peer-to-peer computing could enable MSPs to offer distributed backups, disaster recovery, and even compute power sharing.

[00:12:31] All while minimizing costs and enhancing resilience.

[00:12:35] This decentralized approach not only provides superior security, but also aligns with demands that are growing for data sovereignty and redundancy.

[00:12:43] This is still an early emerging concept, but early adopters will set the stage for broader industry adoption.

[00:12:51] Here's a big bold prediction.

[00:12:53] AI co-governance frameworks will shape MSP services.

[00:12:57] Governments and industry bodies will adopt AI co-governance frameworks to ensure ethical AI use, and providers will respond by developing services that help businesses align with these new regulations.

[00:13:08] The proliferation of AI has brought significant benefits, but also concerns about trust, risk, and fairness.

[00:13:15] Co-governance frameworks will address these challenges, focusing on transparency, accountability, and ethical standards for AI deployment.

[00:13:22] For providers, it creates an opportunity to deliver AI compliance services, including audits, risk assessments, and governance policy through development, by guiding businesses through the complexity of AI ethics.

[00:13:34] MSPs will strengthen their role as trusted advisors and help clients maintain compliance with those evolving regulations.

[00:13:43] Prediction.

[00:13:44] Enhanced AI adoption services will take off.

[00:13:47] MSPs will begin offering AI readiness assessments and adoption strategies to guide customers through the process of integrating AI into their operations.

[00:13:56] These services will focus on aligning AI capabilities with specific business goals, identifying opportunities for automation, and providing training to ensure smooth implementation.

[00:14:08] AI is no longer a tool exclusive to large enterprises.

[00:14:12] It's rapidly becoming a growth driver for small and mid-sized businesses.

[00:14:16] Yet many SMBs lack the expertise to navigate the transformation.

[00:14:20] By positioning themselves as trusted advisors, providers can help clients take that critical first step into AI adoption, securing both competitive advantage for their clients and long-term loyalty to their services.

[00:14:33] Prediction.

[00:14:34] MSPs will start evolving towards strategic outcome providers.

[00:14:38] The traditional MSP model of managing infrastructure is reaching its limits.

[00:14:43] Next year, MSPs will take the first steps towards becoming strategic outcome providers, focusing on delivering measurable business outcomes for their clients.

[00:14:53] This evolution will be powered by AI and automation, which will increasingly handle back-end processes like infrastructure monitoring and maintenance.

[00:15:01] Meanwhile, human expertise will shift toward data-driven consulting, helping clients optimize operations, increase revenue, and reduce costs.

[00:15:10] This transition positions providers to differentiate themselves in a competitive market and build stronger partnerships by aligning with their clients' strategic goals.

[00:15:20] Prediction.

[00:15:22] Outcome-based pricing models will emerge.

[00:15:25] Some forward-thinking MSPs will experiment with pricing tied directly to client success.

[00:15:30] These outcome-based models will use tools like blockchain-enabled smart contracts to ensure transparency and automate key elements of service delivery.

[00:15:40] This approach aligns the MSP's revenue with the measurable success of their clients, whether that's increased productivity, lower operational costs, or higher customer satisfaction.

[00:15:51] By sharing in the risks and rewards, providers deepen client relationships and reinforce the value of their services.

[00:15:58] Expect these models to gain traction among innovative investor-backed MSPs in particular.

[00:16:05] Prediction.

[00:16:06] Fraud prevention will become a standard offering for MSPs.

[00:16:10] In 2025, fraud prevention services will become a standard component of cybersecurity offerings.

[00:16:17] While some providers already include fraud prevention, we'll see broader adoption across the industry, particularly targeting SMB clients.

[00:16:25] It's not just a luxury anymore, it's a necessity.

[00:16:28] Phishing attacks, account takeovers, and transactional fraud are growing threats, particularly for those small clients.

[00:16:35] These businesses lack the resources to monitor and prevent fraud effectively, leaving them vulnerable to financial and reputational harm.

[00:16:42] Providers will respond by integrating fraud detection and prevention into their existing security packages.

[00:16:49] It might include monitoring for suspicious activity, implementing multi-factor authentication, or providing tools to safeguard financial transactions.

[00:16:57] For clients in industries like e-commerce and finance, where fraud costs are climbing rapidly, these services will be a game changer.

[00:17:04] So next year, we'll mark the point where fraud prevention transitions from an emerging offering to a standard expectation for providers, reinforcing their value as essential partners in cybersecurity.

[00:17:17] Now, why do we care?

[00:17:19] I make these predictions less to be right, although I really do enjoy the accountability, and more to stimulate your thinking as you think about your 2025 plan.

[00:17:30] You'll note I steered away from ones related to vendors or specific tool categories.

[00:17:35] Now, I'm happy to make those predictions too.

[00:17:37] But I wanted this conversation to be a sense of big strategic ideas, and the ones our customers might care about.

[00:17:45] Here's to 2025.

[00:17:47] This is my last news style show in 2024.

[00:17:51] You'll get a lot of interviews on a wide range of topics to take you into the new year.

[00:17:56] And I'll be back again in January with the news.

[00:17:59] Talk to you again next year.

[00:18:03] The Business of Tech is written and produced by me, Dave Sobel, under ethics guidelines posted at businessof.tech.

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[00:18:40] Once again, thanks for listening to me.

[00:18:43] I'll talk to you again on our next episode of the Business of Tech.

[00:18:50] Part of the MSP radio network.

[00:18:52] Well, it is still a blog.

[00:18:52] Thanks for listening to me.

[00:18:53] I'll talk to you again next time.

[00:18:53] Bye.