AI Crawlers Threaten Open Source, Microsoft Recall Launch, and IT Budget Cuts Amid Tariff Uncertainty

[00:00:02] It's Friday, April 11th, 2025, and I'm Dave Sobel for Things to Know Today. Web bots are taking your data and now Recall wants to watch too. IDC slashes IT growth forecast over tariffs while MSPs grapple with the federal market contraction. Security is getting easier to buy but harder to sell as strategy. And AI innovation and Wi-Fi stability, the twin pillars of modern IT strategy. This is the Business of Tech.

[00:00:32] AI crawlers are increasingly harming Wikimedia and other open source sites by overwhelming their infrastructure with excessive data requests. Since January 2024, Wikimedia has seen a 50% increase in bandwidth used for downloading multimedia content, primarily driven by automated bots rather than human users. These bots account for 65% of resource-consuming traffic, while overall page views from bots are around the world.

[00:01:02] 35% of resource-consuming traffic, which is a lot of the most important. This surge in scraping activity not only strains resources but also poses a threat to the sustainability of open source projects. As developers express frustration over these invasive practices, experts warn that if left unchecked, these AI crawlers could jeopardize the open web and access to knowledge, limiting opportunities for academic researchers and journalists.

[00:01:25] And Microsoft is gradually rolling out a preview of its new feature called Recall, which captures screenshots of user activity on Copilot Plus PCs. The rollout is currently available to Windows Insiders. Originally intended for launch last June alongside Copilot Plus PCs, the feature faced delays due to security concerns raised by experts. After postponements, including one planned for October, Microsoft aims to provide a secure user experience before a wider release.

[00:01:55] A previous preview was made available to specific Copilot Plus PC users. According to a recent blog post, users must opt in to save snapshots with Recall and can pause this feature at any time. Why do we care? There's an important conversation to be had with customers about data ownership. The genie is likely out of the bottle for a lot of already published information, and most small companies will not be able to fight back against their data being scraped.

[00:02:24] But there are two angles. First, how do your customers react to being scraped? And second, how do they react to using scraped data? Because Recall is essentially the individual version of that. Recall is opt-in, yet organizations should determine what their policy is for opting in as an organization. And this data conversation is an important one to have with your customers.

[00:02:50] This episode is supported by Synchro. Synchro, the integrated remote monitoring and management and professional services automation platform, is designed for mid-sized and growing managed service providers. Its latest innovations include an AI-powered smart ticket management system with automatic ticket classifications, guided resolution steps using pre-approved scripts, and a natural language smart search function.

[00:03:14] These tools streamline ticket handling and improve response times. Discover more at SynchroMSP.com. And so, while not tariffs, I want to do a bit about the impact which has significantly disrupted enterprise IT budget planning.

[00:03:31] According to Stephen Minton, a program vice president at International Data Corporation, or IDC, many companies are reporting that their budgets are uncertain, with a notable increase in organizations unable to finalize spending plans for the second half of the year. Minton noted that the uncertainty surrounding tariffs is already leading to spending cutbacks.

[00:03:52] The uncertainty has prompted IDC to lower its projected growth in global information technology spending for 2025 to as low as 5%, down from 10% earlier this year. As businesses prepare for various potential tariff scenarios, including retaliatory tariffs that could escalate costs, experts emphasize the importance of flexibility and IT planning.

[00:04:16] In particular, technology prices for devices are expected to be the most effective if the tariffs take effect as scheduled in July. CIOs are advised to plan for the worst while hoping for the best, as they navigate these uncertain economic times. And how about this coverage in Channel E to E?

[00:04:36] Due to significant layoffs and cuts initiated by the Trump administration and the Department of Government Efficiency, U.S.-based managed service providers, or MSPs, are facing challenging times. These cuts are eliminating tens of thousands of federal jobs, leaving remaining staff in a state of uncertainty. Analysts from Canalys and TechIsle report that the MSP market is contracting, with 9.3% of MSP revenue being derived from government contracts.

[00:05:04] A survey by FedScoop indicates that 64% of federal IT decision makers are already using or considering working with an MSP. Experts suggest that, to survive, MSPs need to diversify their client bases and adapt to changes in the federal market, as the ongoing cuts may force many to consider layoffs.

[00:05:24] The potential for growth lies in state-level partnerships, particularly as Democratic-led states ramp up hiring and budgets to fill the gaps left by federal reductions. Why do we care? Just the threat of tariffs destabilizes enterprise IT budgets. That downward revision from 10% to 5% growth in global IT spending for the year isn't just a forecast tweak. It's a red flag for vendors, MSPs, and tech investors.

[00:05:55] Device pricing volatility is a specific concern. If tariffs hit hardware, expect small customers to delay device refreshes or switch to alternative brands, complicating standardization strategies. Beyond that, note the complexity in the public sector. Some providers may feel paralyzed by the downturn, assuming that public sector is simply too hard right now. Now, that is short-sighted. The vacuum left by federal cuts is creating opportunities in the states.

[00:06:24] The firms that pivot fastest and most strategically will win long-term contracts while others retreat. Of course, if it was easy, everyone would be doing it. CyberFox, a cybersecurity provider, has announced a strategic integration with Syncro, a leading platform for mid-sized managed service providers.

[00:06:43] The partnership aims to enhance security and operational efficiency for providers by integrating CyberFox Advanced Privileged Access Management Solution into Syncro's remote monitoring and management platform. Key benefits of the integration include enhanced automation, maximized efficiency, and a stronger cybersecurity posture.

[00:07:02] CyberFox's chief revenue officer, Adam Slutskin, highlighted that this collaboration simplifies security tools for providers, allowing them to increase security without sacrificing efficiency or budget. The integration is now available through the Syncro App Center, providing immediate access to improved security features. And Cohesity has announced an expanded partnership with Google Cloud, aimed at enhancing cyber resilience and data insights for organizations facing cyber threats.

[00:07:31] The collaboration introduces new solutions designed to help businesses detect, respond to, and recover from cyber attacks more effectively, significantly reducing downtime, which costs enterprises an average of $540,000 per hour, according to a survey by Splunk. These innovations include Google threat intelligence integration, advancing incident response capabilities, and establishing secure recovery environments in the Google Cloud.

[00:07:59] Additionally, Cohesity is introducing AI-powered search and reasoning capabilities to help organizations unlock deeper insights into their data. The new integrations are expected to be available by the summer of this year, with some capabilities already accessible. Why do we care? Both of these moves reinforce that cybersecurity isn't an add-on, it's infrastructure. Consider this, however.

[00:08:23] The more cybersecurity is essential, or required, or table stakes, the more it moves to commodity, and the less a differentiator it becomes. A chorus of vendors are pushing to sell more cybersecurity, a space which is now increasingly a commodity. I'm not saying you don't do it. I'm noting that how increasingly difficult it will be, and question the logic of it as a lead offering. Time for some big ideas.

[00:08:51] The 2025 AI Index showcases a maturing field with improvements in model efficiency and a notable increase in AI incidence. The report highlights that the smallest AI model, achieving over 60% on a benchmark, has shrunk from 540 billion parameters in 2022 to just 3.8 billion in 2024, marking a remarkable reduction.

[00:09:15] The cost of querying high-performing models has dramatically decreased, falling from $20 per million tokens to 7 cents in just over two years. While the United States continues to dominate in AI model production, China is quickly closing the performance gap, with notable AI models produced by U.S. institutions at 40 compared to China's 15.

[00:09:37] The report also indicates a troubling rise in AI-related incidents, with 233 recorded in 2024, a 56% increase from the previous year. Investment in AI remains robust, with private funding in the U.S. reaching $109 billion, nearly 12 times higher than China's $9.3 billion.

[00:09:58] Furthermore, the use of AI in businesses has surged, with 78% of surveyed organizations reporting AI integration, up from 55% in 2023. As states take the lead in AI regulation, legislation has increased from one law in 2016 to 131 by 2024.

[00:10:18] The report underscores a global divide in AI optimism, with 83% of respondents in China viewing AI advancements positively, compared to only 39% in the U.S. And I wanted a good story. This one about the benefits of long-lasting standards. From The Verge, Wi-Fi has established itself as a remarkable example of backward compatibility, seamlessly connecting over 60 devices across five generations since its introduction in 1999.

[00:10:47] This interoperability allows everything from the latest iPhone to older gaming consoles like the Nintendo Wii to access the Internet with minimal issues. The Wi-Fi Alliance, comprising over 900 member companies, certifies products to guarantee their compatibility, ensuring that devices bearing the Wi-Fi certified logo will work together. However, maintaining this compatibility can be challenging, especially as newer standards emerge.

[00:11:14] Despite this, backward compatibility remains integral to Wi-Fi's design, with manufacturers conducting rigorous testing to ensure devices can connect reliably. As the industry evolves, the future of backward compatibility may hinge on the continued support of the older 2.4 GHz band, which many legacy devices depend on. With ongoing advancements, users can expect their new devices to remain compatible with older technology for years to come. Why do we care?

[00:11:43] These two stories seem unrelated, AI acceleration and Wi-Fi's longevity, but they reflect two essential strategic truths for modern IT services. First, innovation needs guardrails. AI's cost drop is a game-changer, but managing risk is the unlock to long-term value. And stability is a differentiator. In a volatile market, the ability to deliver innovation without disruption becomes a competitive edge.

[00:12:12] Smart MSVs won't choose between these forces. They'll learn to do both. Fast when it helps, slow when it matters. How can you implement those guardrails for customers and leverage stability as the differentiator? Thanks for listening. Today is National Pet Day, National Cheese Fondue Day, and National Clean Up Your Pantry Day. And apparently, still National 8-Track Tape Day.

[00:12:42] I'll be speaking on a webinar on April 22nd about inbound marketing in the AI era with the author of a new book. Link to register in the show notes and description. I look forward to seeing you there. The Business of Tech is written and produced by me, Dave Sobel, under ethics guidelines posted at businessof.tech. If you've enjoyed the show, make sure you've subscribed or followed on your favorite platform. It's free and helps directly. Give us a review, too.

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