AI Expansion: Government's Growing Toolkit and Microsoft's Strategic Shift

[00:00:02] It's Wednesday, January 8th, 2025 and I'm Dave Sobel. Four things to know today. From chatbots to body scanners, the government's AI toolkit is growing fast. The 2025 systems management race, new tools from Syncro, AppDirect and MacPaw driving innovation. The cyber Trustmark, the government's energy star for smart devices is here. And who's driving Microsoft's AI? Turns out it might not be OpenAI for law.

[00:00:32] This is the Business of Tech.

[00:00:35] The federal government has disclosed over 1,700 artificial intelligence use cases, more than doubling last year's total, according to a consolidated inventory released by the White House.

[00:00:48] This year, 37 federal agencies reported 1,757 public AI use cases, compared to 710 last year.

[00:00:58] The top use case categories include mission-enabling tasks, health and medical applications, and government services. Notably, while many use cases are in operation and maintenance phases, meaning they're being used right now, the inventories reflect use cases at various stages along the development lifecycle, including uses that are in acquisition and development, in the process of being initiated, or even use cases that have been retired.

[00:01:26] The Department of Health and Human Services reported the highest number of uses, with 271 cases, marking a 66% increase from the previous year.

[00:01:37] Initially established in December 2020, the new inventory process aims to provide a clearer picture of how the government manages AI development and usage.

[00:01:47] The Department of Homeland Security highlighted facial recognition systems used by Immigration and Customs Enforcement and a passive body scanner from Babel for detecting weapons.

[00:01:59] There are multiple generative AI examples, including summarization and data presentation projects.

[00:02:05] An example from HHS is, use generative AI to create maintenance and IT system outage alerts that will be sent to NIDCD staff.

[00:02:16] DHS has launched a new artificial intelligence-powered chatbot named DHSChat, now available to its approximately 19,000 employees at DHS headquarters and selected pilot users across 10 operating agencies.

[00:02:31] According to Michael Boyce, director of DHS-Ai Core, the chatbot utilizes generative AI technology similar to commercial tools like ChatGPT, but operates within a secure environment.

[00:02:43] The department has prepared staff for this transition by providing access to generative AI tools and training sessions.

[00:02:50] DHS Secretary Alejandro Mayorkas emphasized that this tool will help employees draft reports, summarize information, and streamline tasks, all while ensuring the highest standards of security and protecting civil rights.

[00:03:05] Why do we care?

[00:03:06] As customers adopt AI technology, there's a growing demand for IT services that can support these initiatives.

[00:03:13] Providers can position themselves to offer solutions that enhance AI integration, including data management, machine learning platforms, and compliance services tailored to regulations.

[00:03:24] For some customers, this will involve evaluating existing products' AI integrations for value and assisting with training and implementation.

[00:03:32] I'm releasing a bonus episode this weekend, a presentation I did recently on MSP success stories with AI.

[00:03:39] Examples help frame ideas.

[00:03:44] Syncro has launched a new IT management platform explicitly tailored for internal IT departments addressing their unique operational needs.

[00:03:52] The platform combines automation and artificial intelligence to enhance efficiency and productivity, featuring endpoint management, advanced scripting, and automated ticketing.

[00:04:02] Michael George, CEO of Syncro, noted that the demand for such tailored solutions has grown, stating that the platform, originally designed for managed service providers, is now adapted for corporate IT environments.

[00:04:13] The platform is already used by organizations like the Highland County Sheriff's Office in Florida, with manages over 1,800 critical assets, including mobile computer terminals in patrol cars.

[00:04:26] I asked about specific plans to handle potential channel conflict, and here is the answer.

[00:04:31] Quote, we actually eliminate any conflict by providing a shared environment that both MSPs and internal IT teams can use.

[00:04:41] For example, internal IT organizations who have elected to use Syncro can look for MSPs using Syncro to help co-manage their environment.

[00:04:50] Conversely, MSPs who use Syncro can make it available to internal IT to facilitate a co-managed environment.

[00:04:57] End quote.

[00:04:59] End quote.

[00:04:59] When noting those who are not working with MSP, quote, these are not in conflict with our MSP partners, as these are companies who have the staffing slash resources and wish to manage their own IT operations.

[00:05:12] End quote.

[00:05:14] AppDirect has acquired FirstBase, an IT asset management platform, enhancing its offerings for managing technology assets within organizations.

[00:05:22] This strategic move integrates FirstBase's capabilities into AppDirect's platform, allowing advisors to provide a single destination for managing telecom, software, and IT assets.

[00:05:35] FirstBase, supported by prominent investors like Andreessen Horowitz and Kleiner Perkins, aims to simplify the procurement and management of business equipment for in-office hybrid and remote teams.

[00:05:46] This acquisition follows AppDirect's previous purchases of BuiltFirst and ADC.com.

[00:05:55] MacPaw has launched CleanMyMac Business, a new software designed to simplify Mac maintenance for small and medium-sized businesses and managed services providers.

[00:06:04] This solution centralizes monitoring and maintenance through a user-friendly web dashboard.

[00:06:11] A survey conducted by MacPaw revealed that 41% of administrators manage their organization's Mac devices due to being the most technically savvy team members, often without adequate tools or time.

[00:06:23] The software includes tools for malware protection, disk cleaning, and automated maintenance tasks.

[00:06:29] Why do we care?

[00:06:31] The systems management space continues to surprise me.

[00:06:35] A listener shared with me that the acquisition of FirstBase is notable for the MSP space, and I'll highlight MacPaw's press release specifically highlighting MSPs.

[00:06:45] Syncro's offering of its products directly shouldn't surprise providers.

[00:06:50] Co-managed IT is rather typical as customer size increases, and the fact that the channel conflict answer steered to this answer is unsurprising.

[00:07:00] While channel professionals clutch their pearls about channel conflict, I wouldn't be overly concerned for providers.

[00:07:07] This isn't a significant risk if your core value is linked to customer business outcomes.

[00:07:13] Will 2025 bring more competition in this space?

[00:07:18] That's the reason for these stories.

[00:07:22] The United States government has launched the CyberTrust Mark, a new initiative to enhance consumer confidence in smart home devices.

[00:07:31] Similar to the Energy Star label for energy efficiency, this mark signifies that a device meets rigorous standards for cybersecurity.

[00:07:39] Companies can voluntarily apply for the label by having their products tested by accredited labs.

[00:07:45] Consumers can expect to see products bearing the CyberTrust mark on store shelves by the end of 2025, as companies are now submitting their products for evaluation.

[00:07:55] Features such as unique default passwords, software updates, and data protection are essential for certifications.

[00:08:02] Consumers will also have access to a QR code for additional security information.

[00:08:07] Devices meeting the cybersecurity criteria set by the National Institute of Standards and Technology will deploy the CyberTrust mark.

[00:08:15] The mark is expected to appear on store shelves in 2025 and will be mandatory for federal government purchases by 2027.

[00:08:25] Why do we care?

[00:08:26] The CyberTrust Mark program could lead to challenges and opportunities.

[00:08:30] On the one hand, the requirement for devices to meet new cybersecurity standards may necessitate reevaluating the products you recommend or support.

[00:08:38] This could lead to the need for additional training or expertise in the newly certified devices, thereby increasing operational costs.

[00:08:45] On the other hand, the program presents an opportunity for providers to enhance service offerings centered around compliance and security assessments.

[00:08:52] As organizations look to ensure that their IoT deployments align with the Trustmark standards, MSPs could position themselves as essential partners in navigating these regulations.

[00:09:02] This could include services such as compliance audits, security assessments, and ongoing monitoring of IoT device security, now with entrance criteria on hardware.

[00:09:12] Let me also note something else. The association that will be left after the CompTIA brand is sold has a problem on its hands now.

[00:09:19] The Trust Space Mark name broadly, but specifically the Cybersecurity Trust Mark with no space between the name, is now untenable.

[00:09:28] Cyber Space Trust Mark by the U.S. government has squished it.

[00:09:32] The new association has a dual problem, its own branding rebuilding, and how or if to restart this initiative.

[00:09:41] It's a good opportunity to rather than focus on technical certification, which the for-profit CompTIA will do, instead focusing on criteria for professionalism in the industry.

[00:09:52] Microsoft is reportedly shifting away from exclusively using OpenAI models for its Microsoft 365 CoPilot assistant, aiming to enhance efficiency and reduce costs.

[00:10:04] The company is developing smaller in-house artificial intelligence models and considering third-party options, as reported by Reuters.

[00:10:11] Microsoft has invested billions to secure exclusive rights to OpenAI's GPT-4 model, which powers CoPilot, priced at $30 per user per month.

[00:10:20] The transition comes amidst a growing partnership with a new AI subsidiary led by Mustafa Suleiman, focusing on proprietary models.

[00:10:29] Microsoft CEO Satya Nadella closely monitors these developments, including integrating new AI models from Anthropic and Google into GitHub CoPilot.

[00:10:39] Why do we care?

[00:10:41] I want to make a point with this story. For most customers, if the core useful product is CoPilot, then they should not care.

[00:10:48] They do not care what model drives the product.

[00:10:51] More broadly, as the vast majority of customers are likely getting AI integrated into products, they too would not care which model.

[00:11:00] I use the wine analogy a lot when talking about AI.

[00:11:04] If the models are grapes and you sell red wine, you generally only care about the quality of the wine.

[00:11:10] The choice of grapes may impact quality, and different grapes may have matches to different dishes, and the expertise is to match a quality meal.

[00:11:19] That's the value.

[00:11:21] With AI, you sell solutions, and the quality of the models is a component of the outcome, not the entire solution.

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[00:12:26] Today is National Bubble Bath Day, National English Toffee Day, and National Take the Stairs Day.

[00:12:33] The stairs that lead to toffee in a bath, apparently.

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