Exploring IT Service Models: Toolsmiths, Citizen AI, and the Future of MSPs with Howard Cohen

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[00:01:20] [SPEAKER_03]: Today, I want to explore some ideas on ways to run your IT service provider.

[00:01:33] [SPEAKER_03]: Is being a tool Smith the right model for you?

[00:01:36] [SPEAKER_03]: Are we entering a post verticalization world?

[00:01:40] [SPEAKER_03]: And what does that mean?

[00:01:41] [SPEAKER_03]: And what do citizen AI projects mean for your relationships with your customers?

[00:01:48] [SPEAKER_03]: Howard Cohen joins me to discuss his thinking about the next generation of IT service providers.

[00:01:54] [SPEAKER_03]: Welcome to the Business of Tech Lounge, the live version of the Business of Tech podcast.

[00:02:00] [SPEAKER_03]: It's Wednesday, September 25th, 2024, and I'm Dave Sobel.

[00:02:04] [SPEAKER_03]: We'll be taking questions and comments throughout the show, so make sure to put them in chat.

[00:02:09] [SPEAKER_03]: If you have a question, we'll happily respond to it.

[00:02:14] [SPEAKER_03]: I want to thank SalesBuilder, our Patreon sponsor whose support makes this show possible.

[00:02:19] [SPEAKER_03]: Focus on your IT sales workflow with the power of automation and visit them at salesbuilder.com.

[00:02:26] [SPEAKER_03]: That's B-U-I-L-D-R dot com.

[00:02:29] [SPEAKER_03]: Reminder, I am watching that chat and will watch four questions.

[00:02:33] [SPEAKER_03]: Today, I have Howard Cohen, who's a longstanding writer and speaker in the IT industry,

[00:02:38] [SPEAKER_03]: calling himself a senior resultant.

[00:02:41] [SPEAKER_03]: He's served on many vendor advisory panels, including the Apple Compact HP IBM and NEC

[00:02:48] [SPEAKER_03]: Service Advisory Councils.

[00:02:49] [SPEAKER_03]: He's also served on the Ingram Micro Service Network Board and as a U.S.

[00:02:54] [SPEAKER_03]: board member of the International Association of Microsoft Channel Partners.

[00:02:59] [SPEAKER_03]: Howard, welcome to the show.

[00:03:00] [SPEAKER_03]: Hello, Dave.

[00:03:01] [SPEAKER_03]: Nice to be in the lounge.

[00:03:03] [SPEAKER_03]: It is nice to hang out with you.

[00:03:05] [SPEAKER_03]: We've known one another for a little while and it'll be fun to riff on a couple of your articles.

[00:03:10] [SPEAKER_03]: I want to dive in on our first one here.

[00:03:12] [SPEAKER_03]: So, let's talk about your article on the emergence of the tool Smith model in the IT industry.

[00:03:18] [SPEAKER_03]: So, for those listeners, this is where software developers and hardware manufacturers provide

[00:03:22] [SPEAKER_03]: tools for partners to create and deliver profitable services rather than simply reselling products.

[00:03:30] [SPEAKER_03]: In the article, Howard, you outlined the evolution of software providers and

[00:03:34] [SPEAKER_03]: managed services providers in response to the changing market dynamics and you focus

[00:03:38] [SPEAKER_03]: particularly on the shift from product sales to service-oriented models.

[00:03:43] [SPEAKER_03]: This approach allows providers to enhance profitability by creating new service offerings

[00:03:49] [SPEAKER_03]: around the software tools, ultimately transforming their business relationships with software

[00:03:54] [SPEAKER_03]: providers into more collaborative partnerships.

[00:03:58] [SPEAKER_03]: So, I want to talk a little bit about this idea because it seems at first glance,

[00:04:02] [SPEAKER_03]: what you're sort of saying here is, look, you want to focus your services around

[00:04:06] [SPEAKER_03]: the tools provider themselves.

[00:04:08] [SPEAKER_03]: But one of the things recently that I've been a little less keen on

[00:04:12] [SPEAKER_03]: is leaning into vendors to build stuff dependent on tools,

[00:04:16] [SPEAKER_03]: particularly with my concerns around the flood of private equity money on the software side

[00:04:22] [SPEAKER_03]: and the willingness of those vendors to squeeze their partners really hard.

[00:04:27] [SPEAKER_03]: The easiest example for me to think about is Broadcom and VMware right now,

[00:04:32] [SPEAKER_03]: taking as much heat as they can.

[00:04:34] [SPEAKER_03]: But that's just an obvious example.

[00:04:37] [SPEAKER_03]: So, give me a little bit of your thinking here as you think about the tool, Smith,

[00:04:42] [SPEAKER_03]: how they might navigate that tension.

[00:04:45] [SPEAKER_04]: Okay, I think the best way to illustrate, first of all, I think that

[00:04:49] [SPEAKER_04]: looking at it the way you just described, looking at it as being dependent upon the vendor

[00:04:55] [SPEAKER_04]: is kind of like saying that a carpenter is dependent upon Stanley tools or craftsmen.

[00:05:03] [SPEAKER_04]: They use their tools, but the fact is without the tool they couldn't do their job.

[00:05:09] [SPEAKER_04]: And the same thing is true here.

[00:05:11] [SPEAKER_04]: And first of all, let me lean on the title that you enjoyed, Senior Resultant.

[00:05:17] [SPEAKER_04]: I'll focus on the senior part of it.

[00:05:19] [SPEAKER_04]: The senior part of it is because I'm very near ancient and been around for a while.

[00:05:24] [SPEAKER_04]: In the earliest days, when we needed, we didn't mention, I spent 35 years in the channel

[00:05:31] [SPEAKER_04]: running companies that would eventually be called MSPs.

[00:05:35] [SPEAKER_04]: But we just called them solution providers way, way back when.

[00:05:39] [SPEAKER_04]: And if we wanted to get something new to sell to customers,

[00:05:44] [SPEAKER_04]: we would go to a distributor's catalog, look at the products and say,

[00:05:48] [SPEAKER_04]: that looks interesting.

[00:05:49] [SPEAKER_04]: Let's pull that in.

[00:05:50] [SPEAKER_04]: And that was it.

[00:05:54] [SPEAKER_04]: Today, MSPs are challenged to grow their business.

[00:05:58] [SPEAKER_04]: And of course, there's only two components to the customer universe,

[00:06:04] [SPEAKER_04]: those who are customers and those who are not yet customers.

[00:06:08] [SPEAKER_04]: And it's five times easier to sell to those who are customers.

[00:06:11] [SPEAKER_04]: That's really true.

[00:06:12] [SPEAKER_04]: We've all experienced it.

[00:06:14] [SPEAKER_04]: So for me to sell more to an existing customer, I need to have new services to offer to them.

[00:06:20] [SPEAKER_04]: That's not going to be in a distributor's catalog.

[00:06:24] [SPEAKER_04]: And I noticed that some of the software vendors I was working with

[00:06:29] [SPEAKER_04]: parking back to something we used to call the consultant's license,

[00:06:33] [SPEAKER_04]: that is software that we bought and we used to do certain things for customers.

[00:06:39] [SPEAKER_04]: We didn't sell it to the customer.

[00:06:41] [SPEAKER_04]: It was our tool.

[00:06:42] [SPEAKER_04]: And we couldn't buy it once and use it universally.

[00:06:45] [SPEAKER_04]: That wasn't fair to the software developer and it was in violation of their license.

[00:06:51] [SPEAKER_04]: But we could buy a license for each customer that we used.

[00:06:54] [SPEAKER_04]: That's becoming the norm in my perspective.

[00:06:59] [SPEAKER_04]: I've run into more software developers and hardware manufacturers actually recently

[00:07:05] [SPEAKER_04]: that have adopted this model.

[00:07:07] [SPEAKER_04]: And I don't know that they ever saw my writing about it.

[00:07:11] [SPEAKER_04]: I think it just was a natural evolution for them.

[00:07:13] [SPEAKER_04]: The difference is that basically instead of...

[00:07:19] [SPEAKER_04]: Let's say you have a tool, let's say you have software that searches all of the traffic logs

[00:07:28] [SPEAKER_04]: in your network.

[00:07:29] [SPEAKER_04]: Simple enough.

[00:07:31] [SPEAKER_04]: Yeah, you can sell that to a customer and they can then take a look through all the

[00:07:36] [SPEAKER_04]: traffic logs in their network.

[00:07:38] [SPEAKER_04]: Many of them won't know what they're looking at.

[00:07:41] [SPEAKER_04]: They have no clue.

[00:07:43] [SPEAKER_04]: And some of them who are smaller don't have any staff to do that with.

[00:07:48] [SPEAKER_04]: Now an NSP can say, okay, well I'm going to buy a license for your software

[00:07:54] [SPEAKER_04]: and I'm going to look at that customer's traffic.

[00:07:58] [SPEAKER_04]: And I'm going to make recommendations based on what I see

[00:08:01] [SPEAKER_04]: and I'm going to sell new services to them to remediate whatever it is I find.

[00:08:08] [SPEAKER_04]: That to me is the tool Smith model.

[00:08:11] [SPEAKER_04]: The software developer is the tool Smith.

[00:08:14] [SPEAKER_04]: They're creating tools that the MSPs can use.

[00:08:20] [SPEAKER_04]: Many of the MSPs don't even identify the tools to the customer.

[00:08:23] [SPEAKER_04]: The customer never knows whose tools they were using and that is again,

[00:08:29] [SPEAKER_04]: consistent with the carpenter.

[00:08:30] [SPEAKER_04]: Do you know whose hammer your carpenter used or who saw?

[00:08:35] [SPEAKER_04]: I mean it's unusual if that is the case.

[00:08:38] [SPEAKER_04]: So I don't see the politics of the vendors feeding strongly into the MSP

[00:08:46] [SPEAKER_04]: unless of course the vendor goes poof.

[00:08:49] [SPEAKER_03]: Well, so this is one of those bits where like I instinctually love a lot

[00:08:54] [SPEAKER_03]: of what you're talking about here because as somebody who focuses on

[00:08:57] [SPEAKER_03]: the service of what we're doing and I think that our value as those

[00:09:00] [SPEAKER_03]: that think about IT services is to advise customers

[00:09:04] [SPEAKER_03]: and give them the best guidance to have business results that come through technology.

[00:09:08] [SPEAKER_03]: And I want to buy in but here's where I'm struggling.

[00:09:11] [SPEAKER_03]: So if I think of this like a crafts person which I like and I like this idea

[00:09:15] [SPEAKER_03]: and if I think about your hammer bit, okay, I'm totally on board

[00:09:20] [SPEAKER_03]: but in a craftsman's world, I don't have to subscribe to my hammer

[00:09:25] [SPEAKER_03]: and also then only buy nails that only fit a particular type of hammers

[00:09:31] [SPEAKER_03]: bit in order to drive more in and if I'm picking on them,

[00:09:35] [SPEAKER_03]: by the way, I'm going to use them because they are like the most extreme version right now.

[00:09:38] [SPEAKER_03]: If I think about VMware and I think about if I've been a solution provider

[00:09:44] [SPEAKER_03]: delivering virtualization here, helping my customers be more dynamic

[00:09:47] [SPEAKER_03]: and then I'd bought in to a particular way of doing business,

[00:09:53] [SPEAKER_03]: say buying licenses and deploying them

[00:09:55] [SPEAKER_03]: and then my hammer creator decides no, in order to use the hammer

[00:09:59] [SPEAKER_03]: now you have to subscribe to that.

[00:10:02] [SPEAKER_03]: I've opened myself up to a lot of real risk by kind of relying on my tools in a particular way

[00:10:09] [SPEAKER_03]: where I like to think if I'd been a solution provider

[00:10:13] [SPEAKER_03]: that was a little bit further away from the tools

[00:10:16] [SPEAKER_03]: that I might not run into quite as much problem.

[00:10:19] [SPEAKER_03]: What's your reaction to that?

[00:10:21] [SPEAKER_03]: Like, what am I getting wrong on my thinking here?

[00:10:24] [SPEAKER_04]: I don't know that you necessarily get anything wrong in your thinking.

[00:10:27] [SPEAKER_04]: I think maybe you're not thinking out further ahead enough.

[00:10:32] [SPEAKER_04]: The way I see it, if I'm using a particular vendor's tool,

[00:10:36] [SPEAKER_04]: first of all, I think we need to distinguish between platforms and tools.

[00:10:41] [SPEAKER_04]: VMware is a platform and it makes some sense to me that it's going to require

[00:10:48] [SPEAKER_04]: a certain amount of commitment to that platform.

[00:10:52] [SPEAKER_04]: But if I think about the tools that I've seen, one of the tools was a tool set.

[00:10:59] [SPEAKER_04]: It was a tool set that automated the things you'd ordinarily write in scripts.

[00:11:03] [SPEAKER_04]: Sure, a lot of people don't know how to write scripts,

[00:11:05] [SPEAKER_04]: don't want to know how to write scripts,

[00:11:07] [SPEAKER_04]: but this thing you could just simply tell them what you need to do

[00:11:09] [SPEAKER_04]: and it would just go do it automatically for you.

[00:11:12] [SPEAKER_04]: And there was a host of them and an MSP who ordinarily just kind of sits in

[00:11:18] [SPEAKER_04]: the background monitoring networks and hoping nothing goes wrong,

[00:11:22] [SPEAKER_04]: all of a sudden you get proactive and say we can make these improvements to your network with this.

[00:11:28] [SPEAKER_04]: And if you'd like, we can do this, we can do this, we can do this,

[00:11:31] [SPEAKER_04]: and all of those things were enabled by the tool.

[00:11:34] [SPEAKER_04]: If that MSP is selling enough of those services

[00:11:38] [SPEAKER_04]: and other MSPs are selling enough of those services,

[00:11:42] [SPEAKER_04]: a manufacturer would be a fool to change their model midstream without consulting those people,

[00:11:50] [SPEAKER_04]: at least without grandfathering those people.

[00:11:52] [SPEAKER_04]: So as you go down the road apiece, the tool will catch on

[00:11:56] [SPEAKER_04]: and it's not like you're subscribing to hammer per se,

[00:12:02] [SPEAKER_04]: you're deciding that you're going to use the same hammer all the time.

[00:12:06] [SPEAKER_04]: And you can change midstream even if it's a subscription model,

[00:12:10] [SPEAKER_04]: one of the great things about subscriptions is you can end one start another.

[00:12:14] [SPEAKER_04]: That suggests that down the road there will be competition in specific tools.

[00:12:21] [SPEAKER_04]: Right now my observation is that a lot of the toolsmiths have some pretty novel ideas,

[00:12:28] [SPEAKER_04]: terrific, but you know as well as I do no good idea goes uncopied.

[00:12:33] [SPEAKER_04]: So I think that's going to be the next stage for that.

[00:12:40] [SPEAKER_04]: But also I've just run into a network security provider and to me,

[00:12:47] [SPEAKER_04]: I mean you know by firewalls from them, but their messaging is completely different now.

[00:12:53] [SPEAKER_04]: Their messaging is you can offer this service, this service, this service,

[00:12:58] [SPEAKER_04]: and oh by the way all those services are delivered by our sock.

[00:13:02] [SPEAKER_04]: So you don't have to build a sock, you can simply use hours to do that.

[00:13:06] [SPEAKER_04]: And now those MSPs have a choice.

[00:13:09] [SPEAKER_04]: They can use the sock for those service sales which are subscription

[00:13:13] [SPEAKER_04]: or they can sell the hardware and the software and install it on site

[00:13:18] [SPEAKER_04]: or a combination of the two depending upon the appropriate architecture.

[00:13:23] [SPEAKER_04]: So to me I thought that was dynamite.

[00:13:27] [SPEAKER_04]: I thought what you know they had captured the best of both worlds.

[00:13:32] [SPEAKER_04]: And I see more of it.

[00:13:33] [SPEAKER_04]: I see that starting to become more and more,

[00:13:36] [SPEAKER_04]: I mean I think more and more of our manufacturers and software developers

[00:13:41] [SPEAKER_04]: are realizing that there are more and more smaller companies

[00:13:46] [SPEAKER_04]: and the bulk of the market is down there hard to justify hiring staff

[00:13:51] [SPEAKER_04]: easier to justify virtual staff using an MSP.

[00:13:57] [SPEAKER_03]: Well I mean I buy in and I think there's a subtlety to what you just described

[00:14:02] [SPEAKER_03]: that I want to bang on a little bit because I think it's important for us

[00:14:07] [SPEAKER_03]: to think about the difference between products and tools versus platforms in this context.

[00:14:14] [SPEAKER_03]: And I'd really like to get your take on the key characteristics of the two

[00:14:19] [SPEAKER_03]: because it feels like you're making a lot of really important decisions

[00:14:23] [SPEAKER_03]: when you're investing in a platform versus some versatility that you may get over on the tool side.

[00:14:29] [SPEAKER_04]: Right well that is if you talk to anybody who's manufacturing platforms they will tell you

[00:14:36] [SPEAKER_04]: that tools are a bad idea.

[00:14:38] [SPEAKER_04]: You're going to end up with tools for all.

[00:14:43] [SPEAKER_04]: I love that phrase tools for all.

[00:14:45] [SPEAKER_04]: You'll have too many tools when somebody leaves they're the only one who knows how

[00:14:49] [SPEAKER_04]: to use that tool.

[00:14:50] [SPEAKER_04]: Right they have to abandon that tool tools are bad bad tools.

[00:14:54] [SPEAKER_04]: Platform to them is the assembly of all those different tools into one consistent interface

[00:15:02] [SPEAKER_04]: and one one contiguous platform where they can all interact with each other share data

[00:15:07] [SPEAKER_04]: with each other and make life easier for the person using them all.

[00:15:11] [SPEAKER_04]: And I agree this tremendous value if you can find a platform that does the things

[00:15:16] [SPEAKER_04]: you need to do or at least most of them.

[00:15:19] [SPEAKER_04]: Yeah invest in that platform because and the vendor is a reliable vendor.

[00:15:23] [SPEAKER_04]: Invest in that platform because it's got all the tools and they do work well together.

[00:15:29] [SPEAKER_04]: On the other hand if you want to become more of a proactive MSP and I guess that's

[00:15:38] [SPEAKER_04]: the distinction we haven't talked about here but to me I see most MSPs as being highly reactive.

[00:15:46] [SPEAKER_04]: They're monitoring and they're detecting and when they detect they identify they evaluate

[00:15:54] [SPEAKER_04]: and they remediate to a riff.

[00:15:57] [SPEAKER_04]: MBR is you know is everything.

[00:16:01] [SPEAKER_04]: A lot of a lot more MSPs these days want their customers to see them more often.

[00:16:06] [SPEAKER_04]: They want to be in their customers face a little more often so that at renewal time

[00:16:09] [SPEAKER_04]: it's not such a not such a burden.

[00:16:12] [SPEAKER_04]: And so they want to do things that are proactive that help improve the environment.

[00:16:19] [SPEAKER_04]: And I think that that's where tool makers toolsmiths can really shine by providing tools

[00:16:25] [SPEAKER_04]: that allow them to do things they hadn't been doing previously or they were creating themselves

[00:16:32] [SPEAKER_04]: and they were somewhat prehistoric in a lot of cases.

[00:16:41] [SPEAKER_04]: I think that that's where tools fit really really well.

[00:16:45] [SPEAKER_04]: So it's you're right there is a certain level of subtlety to it in terms of

[00:16:49] [SPEAKER_04]: how the MSP relates to their customer but I think it expands the relationship with the customer.

[00:16:55] [SPEAKER_04]: I think it makes it deeper where I'm not just waiting for things to go wrong

[00:16:59] [SPEAKER_04]: I'm making sure things don't and that's the difference I see between platforms and tools.

[00:17:06] [SPEAKER_03]: Okay so I'll buy and I don't disagree with you there at all and I think their answer might be

[00:17:11] [SPEAKER_03]: in the next bit. A reminder for those that are watching how are they happy to take questions

[00:17:15] [SPEAKER_03]: and your comments throw them in chat. Definitely respond to them.

[00:17:19] [SPEAKER_03]: So Howard, I want to I think it's important as we're thinking about then the value that

[00:17:23] [SPEAKER_03]: providers are doing on I have to talk about the transition to a post verticalization era

[00:17:29] [SPEAKER_03]: for technology service providers that you wrote about recently you sort of emphasize

[00:17:33] [SPEAKER_03]: you emphasize the need for specialization but you also lean heavily into collaboration

[00:17:37] [SPEAKER_03]: among professionals and you walk through the evolution from a generalist IT service provider

[00:17:43] [SPEAKER_03]: or managed services provider to the idea of a business technologist and you really advocate

[00:17:48] [SPEAKER_03]: for a shift in mindset and practices to enhance that professionalism and client service.

[00:17:54] [SPEAKER_03]: Yep. Talk to me a little bit about what you envision a post verticalization MSP looking like.

[00:18:01] [SPEAKER_04]: Okay so I've been very careful up until now to not plug any particular manufacturer including

[00:18:08] [SPEAKER_04]: the strengths that I've been working with but I will do a shameless plug for the National Society

[00:18:13] [SPEAKER_04]: of IT Service Providers. I've gotten involved with the organization primarily because

[00:18:19] [SPEAKER_04]: they share my dream of establishing professional stature for the people who work in our business

[00:18:27] [SPEAKER_04]: just like those who work in the legal profession, the architectural profession,

[00:18:32] [SPEAKER_04]: the accounting profession, the medical profession. I see the information technology profession

[00:18:40] [SPEAKER_04]: and as I look at that and I think about that the recent crowd strike thing is what I talk about

[00:18:47] [SPEAKER_04]: in the article which is in the evolving MSP and that's what I really talk about all the time

[00:18:53] [SPEAKER_04]: is how MSPs are evolving or how they can evolve and basically if I'm a doctor, okay,

[00:19:09] [SPEAKER_04]: let's say I'm a primary care physician something I'm very familiar with these days

[00:19:14] [SPEAKER_04]: as I age I'm seeing more and more doctors. There are certain things he's going to do for me

[00:19:21] [SPEAKER_04]: and then there are certain things he's going to say you know I need you to go see this doctor

[00:19:25] [SPEAKER_04]: who's a specialist and so I end up going to that doctor and I go to another doctor and I go to another

[00:19:31] [SPEAKER_04]: doctor. The difference I see with our profession as it becomes a profession is that as an example

[00:19:41] [SPEAKER_04]: with the crowd strike issue and also by the way as a fundamental component of artificial

[00:19:47] [SPEAKER_04]: intelligence where we're going with AI there's going to be a lot of legal wrangling.

[00:19:54] [SPEAKER_04]: There already has been and there's going to be more and it's going to get worse

[00:20:00] [SPEAKER_04]: and so if I'm an MSP I'm expecting that my customers are going to ask me well who do you

[00:20:06] [SPEAKER_04]: know who knows this AI thing and can help me make sure that I avoid any copyright infringement

[00:20:13] [SPEAKER_04]: or etc. If I have someone to recommend that's a good thing because it keeps the client under

[00:20:18] [SPEAKER_04]: my control and client control is something every MSP wants. So I see a time in which

[00:20:26] [SPEAKER_04]: IT professionals will be interfacing with legal professionals perhaps accounting professionals

[00:20:34] [SPEAKER_04]: and other professionals. I mean architectural professionals we've been working with

[00:20:38] [SPEAKER_04]: for years as we're installing new networks into new buildings the best time to put the

[00:20:43] [SPEAKER_04]: wires in the walls when the walls aren't there yet. So I see that becoming much more and more a part

[00:20:51] [SPEAKER_04]: of our lives where we're no longer talking to the customer just about speeds and feeds or

[00:20:58] [SPEAKER_04]: who's cloud service to engage. We're talking to them about what to be careful of as they're

[00:21:07] [SPEAKER_04]: starting this project and who they should be talking to to make sure that they're

[00:21:11] [SPEAKER_04]: compliant with whatever regulations they're subject to etc. This excites me personally I don't know if

[00:21:19] [SPEAKER_04]: it excites I hope it excites your audience the same way but the idea of being an IT professional

[00:21:24] [SPEAKER_04]: has left inside me for I don't remember how long and I just don't I don't understand how that

[00:21:31] [SPEAKER_03]: hasn't happened yet. Well it's interesting because actually so I'll do is I'm right there with

[00:21:37] [SPEAKER_03]: you I aspire to our field being that but I'll observe that there are sections of our field

[00:21:43] [SPEAKER_03]: that have achieved that right and so I'm going to observe in my early in my career you know I was

[00:21:49] [SPEAKER_03]: a consultant that worked for large you know Fortune 100 500 and 1000 type organizations and

[00:21:57] [SPEAKER_03]: we came in as professionals to work on projects at a high professional level and I for those

[00:22:03] [SPEAKER_03]: listeners who may not be aware you know I live in the Metro DC area and I most of my good friends

[00:22:08] [SPEAKER_03]: from school all are senior people at large you know consulting style organizations that that are

[00:22:17] [SPEAKER_03]: partners or project managers or senior people in a field that is treated very differently

[00:22:22] [SPEAKER_03]: than what happens in the SMB and lower mid-market and they command a higher level of pricing

[00:22:30] [SPEAKER_03]: they are measured on business outcomes they are at the table in a different way than our portion of it

[00:22:38] [SPEAKER_03]: which often has fallen into you know which has a predominantly less professional fit now I want

[00:22:46] [SPEAKER_03]: to highlight that there are distinctly organizations that run themselves at that high level and what

[00:22:53] [SPEAKER_03]: would love to hear your take on is is that a matter of the size and scale is it the organizations is

[00:23:02] [SPEAKER_03]: it just that there are certain customers that will pay for the higher amount at the you know

[00:23:07] [SPEAKER_03]: SMB level like what's what do you think the root cause of that kind of stratification in SMB is

[00:23:13] [SPEAKER_04]: I'll go step deeper into one of your choices and say that I think it's a function of the

[00:23:18] [SPEAKER_04]: success of the messaging of the organizations that provide those services they have established

[00:23:25] [SPEAKER_04]: themselves as credible with a market that will invest in their level of billing and that's great

[00:23:33] [SPEAKER_04]: it's fantastic it's something to aspire to but as you were saying it the the analogy that stuck

[00:23:40] [SPEAKER_04]: in my mind was the difference between that primary care physician and a brain surgeon

[00:23:48] [SPEAKER_04]: clearly the brain surgeon is a much higher order doctor but he's still a doctor right and the PCP

[00:23:57] [SPEAKER_04]: excuse me the PCP has a place too I guess the analogy there is the enterprise level

[00:24:05] [SPEAKER_04]: provider versus the SMB level provider mid-market provider I think that the SMB and mid-market

[00:24:13] [SPEAKER_04]: providers absolutely deserve no it's not deserve the customers would benefit that's really the

[00:24:22] [SPEAKER_04]: way to look at it sure the the the customers deserve to have some metric some flag that says

[00:24:34] [SPEAKER_04]: I'm dealing with somebody who has at least cleared the bar for this profession in medicine it's an

[00:24:45] [SPEAKER_04]: MD here it's come to a plus no that's not going to cut it so it's got to be something else but

[00:24:56] [SPEAKER_04]: the point is that customers right now enter into a relationship with somebody who either

[00:25:03] [SPEAKER_04]: is an MSP or somebody who excuse me for this is masquerading as an MSP

[00:25:09] [SPEAKER_04]: there are a lot of results you there listen I've written about this a million times

[00:25:14] [SPEAKER_04]: there are plenty of former resellers who there are plenty of former resellers who made the

[00:25:19] [SPEAKER_04]: investments got the education hired people developed methodology did all the things right

[00:25:27] [SPEAKER_04]: and became truly extraordinary IT service providers then another group and I think a

[00:25:34] [SPEAKER_04]: considerably larger group that went to their business card printer and had MSP stamped on

[00:25:40] [SPEAKER_04]: their business card and that latter group is making life very difficult for the better group

[00:25:46] [SPEAKER_04]: and for the and for the customer the FBI the New York Times sees that they've all issued

[00:25:52] [SPEAKER_04]: warnings don't deal with anybody who calls themselves an MSP that's not fair because

[00:25:58] [SPEAKER_04]: there are some great providers but it's become necessary because there's so many bad ones

[00:26:05] [SPEAKER_04]: I think we need something something official something accredited something that you can

[00:26:12] [SPEAKER_04]: salute that differentiates the true professional from the

[00:26:20] [SPEAKER_03]: charlatan and it's I think it's a fair analysis and I'm I am 100 with you and for listeners

[00:26:26] [SPEAKER_03]: I've said the same thing on my show before if you look at the history of those professions

[00:26:31] [SPEAKER_03]: that you just talked about particularly if we look at doctors and lawyers because they've been

[00:26:35] [SPEAKER_03]: around for a little while you know what happened was those industries came together to recognize

[00:26:41] [SPEAKER_03]: there was some charlatans let's particularly lean on the medical field they established

[00:26:46] [SPEAKER_03]: self regulation where that you know the the American Medical Association and then what

[00:26:51] [SPEAKER_03]: happened then was states and the federal level said we shall lead leverage this

[00:26:56] [SPEAKER_03]: self accreditation that the organization have put together and they set their own criteria for the

[00:27:02] [SPEAKER_03]: way they're regulated now there is external you know there is that external check from

[00:27:07] [SPEAKER_03]: government and regulators but most of all we know the doctors figured out their own way

[00:27:12] [SPEAKER_03]: to call themselves doctors it didn't just happen from the outside well I would ask the

[00:27:17] [SPEAKER_04]: question who else would you know that makes a lot of sense and actually that's really

[00:27:21] [SPEAKER_04]: where I think we are with the NSITSP at this point they've established a professional development

[00:27:27] [SPEAKER_04]: group that is establishing those definitions and establishing the set of ethics and establishing

[00:27:34] [SPEAKER_04]: you know all the procedures that are necessary and how we evaluate somebody to say yep they

[00:27:40] [SPEAKER_04]: they clear they clear the bar the next stage will be it basically the production

[00:27:45] [SPEAKER_04]: of a package to present to federal and state organizations to begin the process of achieving

[00:27:51] [SPEAKER_04]: accreditation it's new it's early but it's attracting a lot of great people and I'm really

[00:27:58] [SPEAKER_04]: pleased to see the progress that they're making you and me both now I would be remiss then if I

[00:28:03] [SPEAKER_03]: didn't bring up an additional force that you've recently covered that I think might be an

[00:28:07] [SPEAKER_03]: interesting factor on this you introduced the idea of the citizen AI and its emerging as a

[00:28:12] [SPEAKER_03]: layer of abstraction in app development allowing non-technical users to leverage both artificial

[00:28:18] [SPEAKER_03]: intelligence and machine learning without needing to understand the complexity and you in this

[00:28:24] [SPEAKER_03]: article where you outline citizen AI you actually talk about the fact that it may reduce the

[00:28:29] [SPEAKER_03]: reliance on traditional information systems teams and change structures as those citizen

[00:28:35] [SPEAKER_03]: developers be able to create their own stuff without minimal with minimal coder involvement

[00:28:41] [SPEAKER_03]: and the trick here is that it may it may also bring in more system experts to manage all the

[00:28:46] [SPEAKER_03]: components however this is interesting because if you think about that dynamic and what you just

[00:28:51] [SPEAKER_03]: outlined in terms of the the need for professionalization and the ability of end users to be able

[00:28:58] [SPEAKER_03]: to do their own stuff it sounds a lot like shadow IT and it sounds a lot like shadow IT

[00:29:03] [SPEAKER_03]: in a much more impactful way should we be worried about you know these citizen AI development teams

[00:29:12] [SPEAKER_03]: pushing out you know IT professionals well I guess you know if our friend

[00:29:20] [SPEAKER_04]: Mark Templeton were here he would he would differentiate between IT and IS

[00:29:25] [SPEAKER_04]: um and his definitions would be IT are the guys who actually may keep the plumbing working

[00:29:35] [SPEAKER_04]: and IS are the guys who actually fashion the applications that run through plumbing

[00:29:41] [SPEAKER_04]: um the the citizen AI article actually grew out of an observation and in the article what I

[00:29:49] [SPEAKER_04]: basically say is you know it hasn't been long since we first started seeing LC NC

[00:29:55] [SPEAKER_04]: low code no code platforms where you can move tiles around a screen to create your applications

[00:30:02] [SPEAKER_04]: thus enabling anybody who knows their process to create software to support their process

[00:30:09] [SPEAKER_04]: but what I'm predicting is that it won't last long that whole movement will come and go

[00:30:18] [SPEAKER_04]: because we're already seeing something and I'll harken back to my buddy Jay McBain who

[00:30:25] [SPEAKER_04]: observed that AI will stop being a product unto itself and start being a feature or an element of

[00:30:33] [SPEAKER_04]: other products here I see it becoming an element of other products very quickly anybody who's got

[00:30:40] [SPEAKER_04]: an LC NC platform on the market is already integrating AI into it if they haven't already

[00:30:46] [SPEAKER_04]: and they're rushing to do it um but I think that we don't see the passing of those interfaces where

[00:30:53] [SPEAKER_04]: you move the tiles around and you'll simply be sitting there saying um hey co-pilot I need

[00:30:59] [SPEAKER_04]: such and such an application to do such and such such and such then this one does this this

[00:31:03] [SPEAKER_04]: one does this and that one does that can you please put that together for me thank you very

[00:31:07] [SPEAKER_04]: much have a nice day and it's where everybody I see is talking about it going some of them already

[00:31:16] [SPEAKER_04]: have it um and I can't justify the idea of having any kind of manual interface if I have the ability

[00:31:23] [SPEAKER_04]: I mean think of that Star Trek right computer blow up that planet it's it's the same kind of

[00:31:30] [SPEAKER_04]: it's the same kind of thought um we're gonna talk to our computers tell them what we need

[00:31:35] [SPEAKER_04]: and work with them to develop it to be exactly what it needs to be and then yeah I think your your

[00:31:40] [SPEAKER_04]: traditional coder um they may be working on operating systems for a while or more sophisticated

[00:31:47] [SPEAKER_04]: things and I certainly think they're all going to gravitate toward quantum computing where the

[00:31:53] [SPEAKER_04]: magic is because nobody nobody knows the technology they all consider it magic which is cool um

[00:32:01] [SPEAKER_04]: but the it people have more and more of a uh not challenge but a body of work to do

[00:32:09] [SPEAKER_04]: because it does have some shadow it characteristics to it you're inviting users who don't know

[00:32:17] [SPEAKER_04]: anything about the infrastructure to be using the infrastructure and maybe in ways inadvertently

[00:32:23] [SPEAKER_04]: that they didn't anticipate so it's gonna have to become a lot more nimble in keeping tabs on

[00:32:30] [SPEAKER_04]: what the applications are actually looking for what resources they need and making sure it's possible

[00:32:35] [SPEAKER_03]: to provide them in a timely fashion now it's interesting because you bring up that it is

[00:32:40] [SPEAKER_03]: disparity which I think by the way is an important way to think about it but oftentimes the

[00:32:44] [SPEAKER_03]: reason it gets modeled is because when we're talking about smaller organizations it all

[00:32:48] [SPEAKER_03]: get lumps into the technology function right we expect if you're that small doctor's office

[00:32:54] [SPEAKER_03]: that you were talking about you kind of row that all in together and I just need a technology

[00:32:58] [SPEAKER_03]: person that has to involve all of the components of what an IS person would do and an IT person will do

[00:33:05] [SPEAKER_03]: it's interesting that you bring up the fact that you think AI will do that we've we've managed to

[00:33:10] [SPEAKER_03]: go pretty far into a conversation about technology without bringing it up AI so we

[00:33:14] [SPEAKER_03]: should give ourselves a pat on the back for that um but this is the right this is the second

[00:33:18] [SPEAKER_03]: time in kind of two or three weeks in this conversation where AI has been disruptive

[00:33:23] [SPEAKER_03]: in a conversation in a way that really points to a big change so the last time I had this

[00:33:29] [SPEAKER_03]: conversation was about report building right and the idea is as we've been struggling for a long

[00:33:33] [SPEAKER_03]: time with the idea of you know report builders either they're badly pre-canned reports or you

[00:33:39] [SPEAKER_03]: try and give a user an incredible interface where they can build all their own stuff

[00:33:43] [SPEAKER_03]: and they never use it because it's too complicated with your your your widgets and

[00:33:47] [SPEAKER_03]: boxes and stuff that you drag around and so AI and particularly generative AI will allow you to

[00:33:53] [SPEAKER_03]: query a pile of data by just talking to it here you outline I can now build applications by just

[00:34:00] [SPEAKER_03]: talking to it and you know building it so what I'm getting at here is is should we be thinking

[00:34:07] [SPEAKER_03]: about the builders in broadly in all parts of technology being disrupted because in that sense

[00:34:15] [SPEAKER_03]: if we think about the builders being disrupted those that keep the plumbing working almost become more

[00:34:21] [SPEAKER_03]: important there what's your what's your thought to all of that in terms of the the builder disruption

[00:34:27] [SPEAKER_04]: that's coming here yeah I think we're going to have conversations like this for a while to come

[00:34:32] [SPEAKER_04]: but I remember I'll remember back to when um video conferencing was first introduced

[00:34:40] [SPEAKER_04]: and uh it was Intel Intel introduced something called the team station and the team station was

[00:34:49] [SPEAKER_04]: described by a number of analysts at the time as um a solution in search of an application

[00:34:56] [SPEAKER_04]: I think the same thing is true now and I think it's very real that AI is a solution in

[00:35:04] [SPEAKER_04]: search of application uh as a matter of fact I'm about to start a new column in pure AI magazine

[00:35:12] [SPEAKER_04]: and all I want to talk about are practical applications of AI I'm sorry I don't see investing

[00:35:20] [SPEAKER_04]: in having something that can write my memos for me or make prettier pictures of me or you know

[00:35:26] [SPEAKER_04]: whatever uh you know I think that a lot of people are using AI frivolously and unfortunately the

[00:35:35] [SPEAKER_04]: frivolous uses are getting the promotion they're getting the visibility um there are a few companies

[00:35:42] [SPEAKER_04]: out there that I've seen that have some pretty spectacular applications of AI where quite frankly

[00:35:51] [SPEAKER_04]: you wouldn't really see what the AI is doing unless you were really intimate with the application

[00:35:57] [SPEAKER_04]: and to me that's probably how it's going to be um it's not it's it's not going to make

[00:36:03] [SPEAKER_04]: it's it's going to be invisible it's going to be transparent it's just going to work

[00:36:07] [SPEAKER_04]: and so in this new column in pure AI I really want to reach out and highlight those

[00:36:14] [SPEAKER_04]: applications because those are the ones that I think will pave our path to the future

[00:36:19] [SPEAKER_03]: I'm with you I'm 100 with you but I want to actually I want to spur your thinking that if

[00:36:24] [SPEAKER_03]: you're still in the writing perspective and I want to give you a thought and see what you think of it

[00:36:27] [SPEAKER_03]: as we sort of wrap this up you're exactly right that a lot of this is frivolous

[00:36:31] [SPEAKER_03]: but I think the trick about the the the frivolous implementations are what they're

[00:36:37] [SPEAKER_03]: teaching us and let me let me give you the most ridiculous one of my of my favorite

[00:36:41] [SPEAKER_03]: frivolous apps you remember back when the iPhone launched right and we were all like

[00:36:46] [SPEAKER_03]: the app store created and we were all figuring out what it could do and a lot of those initial apps

[00:36:52] [SPEAKER_03]: were very very silly my two favorites were iFART apps and iBeer apps and in particular the iBeer

[00:36:59] [SPEAKER_03]: app was the kind of thing where you could put like you make your iPhone look like a

[00:37:03] [SPEAKER_03]: pint of beer and if you moved it the lines all change and the flow it all changed

[00:37:08] [SPEAKER_03]: what was interesting was not the the end result of it but it was teaching people

[00:37:13] [SPEAKER_03]: about the model and what an accelerometer in a device did for you in terms of space

[00:37:20] [SPEAKER_03]: that you could then recognize that the device understood space and end users used a frivolous

[00:37:27] [SPEAKER_03]: application for it to be something I think we're in the same bit here where we're you the frivolity

[00:37:33] [SPEAKER_03]: of a lot of what we're seeing is allowing both developers and users to start saying oh

[00:37:41] [SPEAKER_03]: I think I see some of the pieces that are useful here and it's the stuff that's coming

[00:37:48] [SPEAKER_03]: that will be much more interesting which give me a reaction to that first of all I'll take

[00:37:54] [SPEAKER_04]: your 2007 iBeer yeah and raise you a 1984 Mac Playmate perfect yes app on the right

[00:38:03] [SPEAKER_04]: there's Mac that showed you I mean it showed you things it shouldn't show you but it showed

[00:38:08] [SPEAKER_04]: things click on them and things would happen because you click on it and it was very

[00:38:13] [SPEAKER_04]: disruptive it was very illustrative I agree with you that we need to lead the horses to water

[00:38:18] [SPEAKER_04]: we need to show them what is possible and that's fine um I being optimistic I think that it has

[00:38:29] [SPEAKER_04]: fired up the imagination of some very very strong thinkers people who have wonderful minds

[00:38:35] [SPEAKER_04]: wonderful innovative minds and they are doing some things that I think will be

[00:38:40] [SPEAKER_04]: incredibly beneficial and already are and I'll be featuring those I do you know I agree with you

[00:38:51] [SPEAKER_04]: that people need to see what AI is capable of I think we need to be careful though in that

[00:38:58] [SPEAKER_04]: we don't want to give the impression that AI is just a toy I've seen several analysts

[00:39:05] [SPEAKER_04]: comment that it really just seems to be a toy it may be a passing fancy it may it's not it's not

[00:39:12] [SPEAKER_04]: I'm with you it's a set of algorithms that allows software to do things that are much more subtle

[00:39:18] [SPEAKER_04]: than the things it could do in the past and I think that the thing we that I feel the need

[00:39:24] [SPEAKER_04]: to do is is remind people that you do not have to be afraid of artificial intelligence

[00:39:32] [SPEAKER_04]: artificial intelligence is able to create um relationships between things that simple boolean

[00:39:42] [SPEAKER_04]: algebra never did and that's great it's very useful we've seen some really terrific applications

[00:39:47] [SPEAKER_04]: of it what we all need to be aware of quite frankly is what the terminator movies predicted

[00:39:54] [SPEAKER_04]: which is artificial awareness when a computer is sentient and understands that it is somebody

[00:40:04] [SPEAKER_04]: it is a thing unto itself is when it can start to think about hmm you know what's threatening me

[00:40:13] [SPEAKER_04]: and that's when the danger just starts to begin and all these highfalutin professors who are

[00:40:19] [SPEAKER_04]: saying I'm scared I'm very very scared then they should be very very scared well Howard I think

[00:40:27] [SPEAKER_03]: you've given me exactly the point to say we're gonna wrap this up because when you write that

[00:40:31] [SPEAKER_03]: article I'll have you back on and we'll talk more about it any sense of what that's coming out

[00:40:37] [SPEAKER_03]: it'll be soon you really soon well then make sure you let me know about how this has been

[00:40:41] [SPEAKER_03]: great fun thanks for joining me for this thank you so a preview of what I'm working on that's

[00:40:47] [SPEAKER_03]: coming out this weekend former FBI operative Eric O'Neill provides a fascinating look into the evolving

[00:40:54] [SPEAKER_03]: world of espionage and cybersecurity O'Neill who played a pivotal role in capturing the notorious

[00:41:00] [SPEAKER_03]: spy Robert Hansen joined me to share his expertise on how the landscape of spycraft

[00:41:06] [SPEAKER_03]: has dramatically shifted over the past two decades here's a preview of that interview

[00:41:12] [SPEAKER_03]: as we think about AI getting as part of this and how do you see cyber security

[00:41:16] [SPEAKER_02]: sort of evolving over the next say five years well you know just as criminals have become

[00:41:22] [SPEAKER_02]: incredibly adept at levering AI for everything from deep fakes to impersonation attacks to these

[00:41:28] [SPEAKER_02]: brilliant confidence scheme attacks that leverage entire fleets of AI avatars avatars

[00:41:33] [SPEAKER_02]: that show up on zoom calls and completely fooled someone until they feel like they're

[00:41:37] [SPEAKER_02]: all of their bosses have just told them to do something right you know real time in a

[00:41:42] [SPEAKER_02]: conversation on a virtual call cyber security is is must and is working along the same lines

[00:41:49] [SPEAKER_02]: using effective AI to fight the bad AI so you know we've been in this cyber war for a very

[00:41:56] [SPEAKER_02]: long time and it's been mostly humans versus humans in this battle over our data now it's

[00:42:02] [SPEAKER_02]: going to be AI doing a lot of this fighting AI looking for the for the malicious AI the

[00:42:07] [SPEAKER_02]: malicious AI doing counter surveillance to try to find the cyber security AI it's really fascinating

[00:42:13] [SPEAKER_02]: but it's gonna it's gonna happen so much behind the scenes and rely so much on technology

[00:42:20] [SPEAKER_02]: I think it's going to confound us for humans clearly that's going to be the conversation

[00:42:25] [SPEAKER_03]: that leads going forward and i'm not alone on that one David I see your comment in here

[00:42:30] [SPEAKER_03]: exactly the same way that you found the best use of AI as a personal coach you input and

[00:42:35] [SPEAKER_03]: the AI AI is your personal virtual 24 by 7 coach that you bounce ideas on and allows you to grow

[00:42:42] [SPEAKER_03]: your knowledge I am right there with you that's one of the use cases that I also use it for

[00:42:46] [SPEAKER_03]: I'm also using it for idea ideation when I have an idea I will put it in there and I will

[00:42:53] [SPEAKER_03]: ask questions like what did I miss what angles did I not consider and I think that's the

[00:42:57] [SPEAKER_03]: conversation we'll be having on going if you're interested in what Eric O'Neill has to say

[00:43:01] [SPEAKER_03]: my patreon supporters already have this interview if you want to listen now it'll drop on the weekend

[00:43:08] [SPEAKER_03]: on youtube and the podcast feed if you're interested I really do encourage you to listen it was a

[00:43:13] [SPEAKER_03]: fascinating conversation you can visit patreon.com slash MSP radio to grab it right now I want to

[00:43:20] [SPEAKER_03]: thank sales builder our patreon sponsor whose support makes this show possible focus in your

[00:43:25] [SPEAKER_03]: IT sales workflow with the power of automation and visit them at sales builder.com that's

[00:43:32] [SPEAKER_03]: BUILDR.com and vendors you too can get your name mentioned on the live show it's a simple monthly

[00:43:39] [SPEAKER_03]: subscription visit patreon.com slash MSP radio to learn more and listeners here's what you can do

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[00:44:10] [SPEAKER_03]: if you have a question and are listening to the recording send it in at question at msp

[00:44:16] [SPEAKER_03]: radio.com thank you cane for that recognition I really do appreciate you watching and paying

[00:44:22] [SPEAKER_03]: attention and thanks for joining me for the business of tech lounge I will see you next time

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