Future of Cloud Pricing, AI Models, Microsoft 365 Copilot, and Tech Policy Impacts on MSPs

[00:00:13] [SPEAKER_02]: We're diving into the future of cloud pricing and AI models, two areas that could see seismic shifts.

[00:00:22] [SPEAKER_02]: We'll discuss how rising cloud costs and innovative pricing models like Zendesk's AI Pay for Performance are reshaping customer expectations.

[00:00:32] [SPEAKER_02]: Plus, we'll explore the mixed reception of Microsoft's 365 Copilot and how AI's value proposition is being challenged in the enterprise space.

[00:00:41] [SPEAKER_02]: And with the presidential debate behind us, what do the differing approaches on tech policy mean for MSPs?

[00:00:49] [SPEAKER_02]: TC Doyle joins me today to talk about that future.

[00:00:53] [SPEAKER_02]: Welcome to the Business of Tech Lounge, the live version of the Business of Tech podcast.

[00:00:58] [SPEAKER_02]: It's Wednesday, September 11th, 2024, and I'm Dave Sobel.

[00:01:03] [SPEAKER_02]: We'll be taking questions and comments throughout the show, so make sure to put them in chat.

[00:01:08] [SPEAKER_02]: If you have a question, we'll happily respond to it.

[00:01:12] [SPEAKER_02]: And I want to thank Sales Builder, our Patreon sponsor, whose support makes this show possible.

[00:01:18] [SPEAKER_02]: Focus on your IT sales workflow with the power of automation and visit them at salesbuilder.com.

[00:01:25] [SPEAKER_02]: And a reminder, we are watching that chat, we're watching for questions and comments, and we'll take them all throughout the show.

[00:01:35] [SPEAKER_02]: So let's talk about pricing pressures, models and changes.

[00:01:40] [SPEAKER_02]: First, cloud costs. Administrators are increasingly questioning the value of cloud services,

[00:01:47] [SPEAKER_02]: with over a third of organizations feeling their cloud transition has not delivered promised cost effectiveness, and more than half report rising bills.

[00:01:56] [SPEAKER_02]: A report indicates significant price increases for cloud services from major providers like Microsoft Azure, Google and AWS outpacing inflation.

[00:02:08] [SPEAKER_02]: So I want to talk about how pricing models might change.

[00:02:12] [SPEAKER_02]: First, an article from the information where Zendesk has introduced a new AI business model

[00:02:19] [SPEAKER_02]: where it charges customers only when its AI chat bot successfully resolves customer issues without human intervention, shifting from a usage-based pricing strategy.

[00:02:32] [SPEAKER_02]: And second, also from the information, Microsoft's AI assistant, 365 Copilot, has received a mixed response from customers due to performance issues and high costs, leading many businesses to pause its adoption.

[00:02:46] [SPEAKER_02]: While some companies like BlackRock and EY are expanding its use, overall adoption remains low, with only 0.1% to 1% of Microsoft 365 users paying for the feature.

[00:03:01] [SPEAKER_02]: So today I'm joined by TC Doyle, who's an accomplished technology and channel expert with over 30 years experience in strategic content creation and market analysis.

[00:03:10] [SPEAKER_02]: Most recently, he served as vice president of strategic content at Channelnomics, leading initiatives to build content libraries and provide actionable insights for world-class clients.

[00:03:21] [SPEAKER_02]: He's a seasoned editor and industry analyst, having worked with Cisco, Informa and VAR Business where he helped shape industry trends through content research and analysis.

[00:03:30] [SPEAKER_02]: And VAR Business is where we first met, and we've developed a friendship over all these years, and I'm thrilled to have him on for his first appearance. TC, welcome to the show.

[00:03:38] [SPEAKER_01]: Oh, it's great to be good to see you. And like you said so many years ago, but here we are today.

[00:03:44] [SPEAKER_02]: Here we are and riffing on kind of new interesting stuff. I kind of want to start with a bit of a baseline because it feels like the tension we're seeing over cloud costs is the place to start because it's probably going to get way worse with AI, which is significantly more expensive.

[00:04:02] [SPEAKER_02]: So even before we get into the AI stuff, like where do you think we're seeing a possible evolution around cloud pricing models based on the fact that customers are getting upset about their rising costs?

[00:04:17] [SPEAKER_01]: Well, let's take a historical perspective. Cloud costs have only gone down. AWS, how many price cuts did they make? Well, inevitably, like Uber, like others, you got to make money on this stuff. Costs were eventually going to have to increase.

[00:04:31] [SPEAKER_01]: You've pointed out in some of your work, electricity and energy costs to run these data centers are increasing. The labor shortage has led to staffing and higher wages to the employees that work for these organizations and the intensity in which the cybersecurity aspect, that's only going to lead.

[00:04:51] [SPEAKER_01]: I think overall customers that have migrated from on prem to the cloud have found a number of advantages, but one major disadvantages. The damn stuff just turns out to be more expensive no matter what you promise, no matter how you implement, especially when you try to customize.

[00:05:07] [SPEAKER_01]: Then your costs really do start to rise. So cloud computing turns out it's more expensive. Does that not mean though it might be better off in the long run for you? That debate is as healthy as any going on right now.

[00:05:21] [SPEAKER_02]: I think that one of the big things that we're going to be seeing is that there is this massive opportunity for our solution providers to be looking at cloud cost management, the ways that a lot of organizations are seeing around cloud is the area that I think should be focused on.

[00:05:36] [SPEAKER_02]: And we're seeing a lot of the platform players start to get involved with cloud cost consumption as part of their thinking. I've been looking at a bunch of different vendors that focus on this space and the number of licenses that are still deployed that may go unused or unused space or machines that are left in the cloud that are still running or resources.

[00:05:56] [SPEAKER_02]: That's an area where solution providers can make sure that customers are actually taking advantage of the on-demand nature. Because as far as I can tell, as long as we've been doing technology, things don't necessarily get cheaper. We always capture more and more spend from customers.

[00:06:14] [SPEAKER_02]: The trick is to do that well. But let's get into some kind of interesting stuff because if we're thinking about this from a business outcome perspective, I kind of wanted to get your reaction to what Zendesk did.

[00:06:26] [SPEAKER_02]: They've introduced this innovative model for their chat bot where the bot, when it successfully resolves a customer issue, only then do they get paid. Give me your take on that model and some of its implications for both customers and potentially for solution providers.

[00:06:47] [SPEAKER_01]: So let's give some historical perspective on why we're here. Which is, and we're going to come to Zendesk in two seconds, very innovative idea, whether it's practical and useful for all. But let's think about it. Something we don't talk about as much that you and I talked about over the years is the rise of line of business buyers.

[00:07:05] [SPEAKER_01]: Someone with a credit card could go out and get some marketing software, some fintech, some other technologies. I'll give you a tiny personal anecdote. I worked for a major world-class publishing company. We did an inventory. We found out that we were using all kinds of digital services that somebody bought to help produce our magazine articles or web articles.

[00:07:27] [SPEAKER_01]: We were using like 60 different tools. We found out that some of them we were paying for all the time, but some of them hadn't been used in more than a year. Those people that bought them, they left the company. And so we had all these massive subscriptions. So what did we do? We turned to a third party, MSP, to come in, rationalize and make sense of it all.

[00:07:45] [SPEAKER_01]: Well, this leads us to now where we are with, we went from that subscription model where theoretically we're going to get licenses for anybody's use to the usage-based pricing to now what you're talking about with Zendesk outcome-based pricing.

[00:08:01] [SPEAKER_01]: The problem that I have is some of the use cases are not well defined. What Zendesk has said is, hey, we're only going to charge you per a customer outcome, a customer success. So you can use our software to clear tickets for customer support calls and things of that matter. Okay, we'll only pay a certain amount per.

[00:08:20] [SPEAKER_01]: But what happens if the company introduces a customer introduces a new product that might be problematic, and suddenly it has a spike in instances where customer support calls are off the charts? How do you charge for that? How do you factor in new products? In addition, who gets to define what constitutes customer success?

[00:08:40] [SPEAKER_01]: You and I have engaged with our bank or financial institution, maybe an automobile supplier that we have a question or we call. And sometimes we just like, oh, okay, to the bot, thank you very much. I'm done. Was that successful outcome? So there's a lot of definitions that the software developers, the customers themselves in that intermediate are going to have to define.

[00:09:04] [SPEAKER_02]: Oh, and that's what fascinates me most about this is that when you say the intermediate has to define that, because I was thinking about it. And I want to get your take on this is that in a way we're kind of both channel people and that we've thought about this for a long time from the fact that there is a technology channel where software manufacturers, hardware manufacturers create things. They go through a technology advice channel to get delivered out to customers.

[00:09:30] [SPEAKER_02]: You know, we've been doing this long enough that the early days where it was like you sold hardware, you made money on it. Then that diminished. You sold software, you made money on it, that diminished. And then you move toward I sell services. When intrigued me about this idea that I thought was worth pondering was oftentimes the alliance of a solution provider in the middle would tend to skew a little bit towards their software vendors or hardware vendors because they were both trying to sell software.

[00:10:00] [SPEAKER_02]: So what are the solutions to the customer in a pure outcome based use of the technology? I wonder how much the alliance of the solution provider will move to the customer because they need to actually get away from not being paid on failure when it's not something they can control.

[00:10:19] [SPEAKER_02]: And let's just use Zendesk as an example, knowing I have not used it hands on. But in a theoretical sense, exactly you say it, is you think about it from the sense of, hey, I worked with my bank. I don't necessarily know what an outcome success is. Me as the solution provider, I may be a lot more comfortable sitting next to the bank manager trying to judge success and pushing back on the manufacturer.

[00:10:46] [SPEAKER_02]: Then I'll feel comfortable on the manufacturer side arguing with the customer over what a success is. That alliance switch, you know, you may ultimately be the leading version of trusted advisor in its most extreme take. You know, what was your take and reaction to the way you thought that that dynamic might change if we're focused on business outcomes?

[00:11:09] [SPEAKER_01]: Oh, I'm excited about your level of interest and excitement too. I can see it in your eyes. You and I talked about this for years. Most partners that we've worked with, we know them well, we've spoken to them at conference, we've engaged with them for years. They looked upstream to the vendor for sources of revenue, for sources of rebates, margin, training, other opportunities.

[00:11:32] [SPEAKER_01]: But this train heading downstream to customer outcomes, that could be the single biggest transition in the channel in years. Especially when you factor into a lot of partners and you and I talked a lot about this, they're willing to give up the transaction.

[00:11:51] [SPEAKER_01]: Let the customer buy it on a hyperscaler marketplace, let it go online and you know, I'll help choose, I'll help advise. But if you believe in the adage that for every dollar of technology that a partner helps influence, they make four to seven dollars, if that's the Salesforce model, similar with other software vendors, the Microsoft model, they make four to seven dollars on service to the end customers.

[00:12:14] [SPEAKER_01]: That whole focus shifts. This could literally be the biggest and most significant change in the channel in decades.

[00:12:22] [SPEAKER_02]: Big bold statement right here. But I think the interesting piece is this is incredibly undefined and may or may not be successful, particularly for Zendesk. I love an organization that comes out with some innovative thinking and tries to position differently, but there's a lot of risk here in terms of doing it, particularly when I layer on the fact that AI itself is pretty expensive.

[00:12:50] [SPEAKER_02]: You know, it's not just throw more cheap hardware at it. The hardware itself is expensive. The infrastructure behind it is expensive. The energy costs are expensive. Like everything about this doesn't quite fit our normal technology growth pattern of things get cheaper, faster, easier.

[00:13:10] [SPEAKER_02]: This one's not actually that this one is actually more expensive, more difficult in some cases to deploy the capital investors. Do you have senses of the way what you think customers are going to going to feel comfortable with from a pricing perspective? Are they along for the ride or are they going to be pushing back even more based on the cloud stuff?

[00:13:34] [SPEAKER_01]: Well, simply put, the customers do not want risk. They don't want unknowns. And while I say boldly that I think the shift from a partner looking upstream to its vendors for dollars to downstream to try to make more money from the customers is a significant shift, perhaps the biggest we've seen in the channel in years.

[00:13:55] [SPEAKER_01]: The problem is the use cases are ill defined. The technology is immature, and there are some and the the payment models and the go to market models. They're ill defined. So what could go wrong there? I think that's going to take some time. I think it's going to have to play out. But to answer your questions succinctly, the customers do not want risk. They don't want surprises which they're getting with cloud computing, the bills are larger than they were led to believe.

[00:14:21] [SPEAKER_01]: So the vendors and the partners must work together more tightly to make sure that a we can define what a customer outcome is. And that's going to be per customer that there's just no blanket model you can adapt and develop. So defining what customer outcomes are on a per customer level, that's going to be labor intensive and leadership intensive, defining how the technology will be applied, defining the time horizons.

[00:14:51] [SPEAKER_01]: And defining how broadly this goes across a customer's product line and service. So there are so many unknowns to this to your point.

[00:15:01] [SPEAKER_02]: Now a reminder for listeners, we are going to be taking questions live throw them in the chat if you've got something to say. I want to hear it and I know TC and I will be happy to answer it. And I'll also throw one to you TC. I think this is actually an interesting point to talk about that adaptability because

[00:15:14] [SPEAKER_02]: Microsoft themselves are of course seeing that slower adoption. I was really fascinated to see the information's coverage of the adoption with only 0.1% to 1% of Microsoft's 365 users paying for the feature.

[00:15:29] [SPEAKER_02]: That's a clear indication of slow adoption. It's not going gangbusters for them. Yes, we've got some large firms that are embracing it. But what do you think that sort of lukewarm response to the AI assistant tells us about pricing and value perceptions around AI?

[00:15:50] [SPEAKER_01]: I think what you're finding is a lot of customers are look, they want CoPilot to help assist them with Office 365. We'll look at the applications that it impacts.

[00:16:02] [SPEAKER_01]: If I one of the ideas is hey we can give you this assistance pay more for it and we'll help you with Excel and spreadsheets and what have you.

[00:16:11] [SPEAKER_01]: Okay, but you know I'm a customer. We have all of our standards. We have all of our templates. Unless AI can adapt and work with what customers already have whether it's PowerPoint, Word, Excel, how they're implementing Azure.

[00:16:29] [SPEAKER_01]: It's a tough sell, especially when you try to then factor in. How do then works with the channel? Do they offer it as an upsell? Is it just a line card? Is it custom? You and I were talking previously.

[00:16:42] [SPEAKER_01]: Is it a customized service almost a consultative service that is CoPilot is sold like that or is it a line item on an MSP's line card that is a service they just charge on top of?

[00:16:54] [SPEAKER_01]: It can be very difficult for all those things to be determined. I think that's it works at the early. That being said, you know you talk about that point four to one percent adoption.

[00:17:07] [SPEAKER_01]: That's still millions of customers. So Microsoft does stand to make millions of dollars or potentially hundreds of millions of dollars if it's more widely embraced.

[00:17:15] [SPEAKER_01]: Right now the use cases, market models, the go to market strategies all ill defined. Nobody can really rationalize it and then the big looming problem is at some point doesn't Microsoft just bake that in?

[00:17:28] [SPEAKER_01]: Doesn't this AI technology CoPilot become indebted in the core package? And if so how do you charge for that? Is there an upcharge on that? Is there a third party service that can be built around that still to be determined?

[00:17:41] [SPEAKER_02]: It's interesting that you bring up on the use case stuff because actually in the in the mainline daily news show I literally just covered some of the adoption areas where we're seeing higher ROI on AI and it's where the use case is very well defined.

[00:17:58] [SPEAKER_02]: That it seems like the best implementations and the ones that are most successful is where the customer and the solution provider working with them have done a really good job of focusing the use case.

[00:18:09] [SPEAKER_02]: We've identified a very particular customer experience piece that we can enhance with AI, a data analysis portion and problem that we can enhance with AI.

[00:18:20] [SPEAKER_02]: The more specific you can be about the use case, the better the outcome and the more the ROI is seen there.

[00:18:28] [SPEAKER_02]: And I've been covering a lot of different use cases and stories on the show to try and give solution providers some insight into that.

[00:18:35] [SPEAKER_02]: TC this has been super fun to talk about this.

[00:18:37] [SPEAKER_02]: I'm going to pivot a little bit and remind everyone that as we have this conversation we would love to hear from you.

[00:18:42] [SPEAKER_02]: Make sure to throw those comments and questions in the chat and we will address them.

[00:18:46] [SPEAKER_02]: Now I'm going to we're going to venture into potentially difficult space and I'm going to set some rules up.

[00:18:53] [SPEAKER_02]: I want to talk some tech policy.

[00:18:55] [SPEAKER_02]: We're just coming off of the presidential debate last night where the candidates went on a number of different policies, but technology was not one that they went very deep into.

[00:19:06] [SPEAKER_02]: I did a recent episode where I actually presented two of the policy platforms.

[00:19:10] [SPEAKER_02]: And as a quick reminder, I'm going to run through the two party policy platforms and we're going to talk a little bit about the policies and what they mean.

[00:19:20] [SPEAKER_02]: And we're going to try and put people aside on this and just talk policy.

[00:19:24] [SPEAKER_02]: When I looked at the Republican policy position, it focuses on three major areas.

[00:19:28] [SPEAKER_02]: They have definitions on cryptocurrency, artificial intelligence and infrastructure protection.

[00:19:33] [SPEAKER_02]: On cryptocurrency, they actually oppose the creation of a central bank digital currency and they focus on what they call the Democrats unlawful crackdown on cryptocurrency.

[00:19:44] [SPEAKER_02]: On AI, the policy plans to repeal Joe Biden's executive orders on AI, claiming they hinder innovation and impose left-leaning ideology.

[00:19:53] [SPEAKER_02]: And finally, they also focus on critical infrastructure protection where the policies intended to make defending critical infrastructure a national priority using all the tools of national power to raise cybersecurity standards and defend critical systems.

[00:20:08] [SPEAKER_02]: The Democratic Party's technology policy platform emphasizes a balanced approach to innovation, data privacy and AI.

[00:20:15] [SPEAKER_02]: There is specifically no mention of cryptocurrency.

[00:20:18] [SPEAKER_02]: Democrats recognize both the promise and risks of AI in their party platform, focusing on ensuring AI development aligns with public interest, safety, security and equity and transparency and site initiatives like the AI Bill of Rights and the AI Safety Institute.

[00:20:34] [SPEAKER_02]: In data privacy, they focus on the consumer privacy bill of rights.

[00:20:38] [SPEAKER_02]: They focus on the idea of promoting competition in the tech industry by supporting legislation that prevents large platforms from a stifling competition and additionally aim to invest in cybersecurity to protect critical infrastructure and collaboration.

[00:20:53] [SPEAKER_02]: So let's get into it a little bit. T.C., I wanted to get your sense. We're going to sort of start on the deregulation front.

[00:20:59] [SPEAKER_02]: One of the things that seems to happen is particularly as we think about AI that we've just been talking about, the Republican Party position seems to be focusing on more of industry deregulation where the Democratic Party is leaning into both the executive orders that have been put forth this year and potentially leaning into more of those.

[00:21:17] [SPEAKER_02]: How do you look, particularly with a historical eye, of what level of regulation drives service provider revenue?

[00:21:27] [SPEAKER_01]: Good question. I think it's more sophisticated in a deeper conversation. The Republicans are de facto let the marketplace decide and the Democrats are de jure.

[00:21:40] [SPEAKER_01]: Let's have some tight guardrails because underneath whatever the administrations have, you have individual members of Congress, a lot of Californian Congress people representing various interests there that might not be aligned with what the overall

[00:21:55] [SPEAKER_01]: policy objectives are of one given administration to the other.

[00:21:59] [SPEAKER_01]: I think what we're going to find though is that we have to apply the lessons of social media and we have no guardrails or minimal guardrails and we've lost security, we've lost privacy, we've lost a lot as a result of that.

[00:22:13] [SPEAKER_01]: And the unintended consequences of having a laissez-faire marketplace have kind of bitten us in the ass a bit.

[00:22:19] [SPEAKER_01]: Now, others can say, well, you know, this was the democratization of information and anybody can say whatever they want. It was the highest expression of the First Amendment ever.

[00:22:30] [SPEAKER_01]: It's hard to refute that except when you look at the excesses and how that came to be. As far as the service provider revenue, you can make money either way with heavy regulation or laissez-faire regulation.

[00:22:42] [SPEAKER_01]: There are significant opportunities. What we can't, as an industry, sustain is student body left, student body right. An era of no regulation, then a new administration comes in and then we have heavy regulation.

[00:22:56] [SPEAKER_01]: That is what screws up the ability for service providers to consistently develop business cases, develop go-to-market models and make money.

[00:23:06] [SPEAKER_02]: That's an interesting observation that it's the swings that are most dangerous because I think oftentimes we do think about it in pure perspective of, hey, we are dealing with a single election.

[00:23:17] [SPEAKER_02]: We're dealing with a single outcome there. But instead, it's the flow, the ebb and flow of that. I think it actually interestingly applies a lot to the potential changes to the cybersecurity and infrastructure security agency.

[00:23:29] [SPEAKER_02]: If you look at the two-party platforms, you can actually see that the Democrats are looking to invest more in it as it extends right now.

[00:23:36] [SPEAKER_02]: The Republicans are actually looking to do away with certain organizations and restructure the government in a much more swing chase.

[00:23:45] [SPEAKER_02]: One of the things that I look at that is, say that I think, I will say my own bias here.

[00:23:50] [SPEAKER_02]: I tend to think that CISA has done a very good job of moving us as an industry toward more organization around security and it's having some really good conversations.

[00:24:02] [SPEAKER_02]: And I worry about disrupting that with a governmental reorganization.

[00:24:07] [SPEAKER_02]: I wanted to get your take because that's mine on CISA. Have you been tracking the moves with the cybersecurity and infrastructure security agency and have any particular sense of their impact and potential impact?

[00:24:21] [SPEAKER_01]: Absolutely. And as you point out, I'll go back to what I was saying. It's the swing. Project 2025. Love it, hate it, not going to get into that policy.

[00:24:32] [SPEAKER_01]: However, it's not official part of the Republican platform, but it calls for CISA to be moved into the Department of Transportation.

[00:24:41] [SPEAKER_01]: Well, that's a kind of a curious move. And as you point out, it's gained momentum. It's codified some policy.

[00:24:48] [SPEAKER_01]: It's attracted some eyeballs. It's gotten more congressional interest. It's localized and zeroed in on a focus.

[00:24:55] [SPEAKER_01]: And now if you're going to be moving it and ping ponging around with various divisions of the government that have different objectives, it's going to lose its momentum.

[00:25:04] [SPEAKER_01]: It's going to lose its ability to stand up and say things and create policies because now it's a sub agency of a bigger division of government.

[00:25:15] [SPEAKER_01]: That's a dicey proposition. So you have stated policy, but then you have interests that are trying to manipulate things for their own good.

[00:25:25] [SPEAKER_01]: And that might be at the detriment of what is best for our nation. You talk about different administrations, whether one is pro policy and pro regulation and one is a little more laissez faire.

[00:25:37] [SPEAKER_01]: But then you have the individuals that are working with underneath that. You know, Trump is cozier with Putin than say the Biden administration. Is that a good thing?

[00:25:46] [SPEAKER_01]: Well, we have a lot of cyber interference and cyber hacking from Russia. What would happen in a new administration?

[00:25:52] [SPEAKER_01]: A lot of change. And that change is what really degrades our ability to stay laser focused and come up with workable solutions that are both good for industry and good for the citizen.

[00:26:03] [SPEAKER_02]: It's interesting because the Democratic platform, if you read through it, emphasizes international cooperation as a headline in the text that they've written.

[00:26:11] [SPEAKER_02]: Whereas the Republican platform focuses on national efforts. They're very much talking about the national efforts.

[00:26:17] [SPEAKER_02]: And I think that's an interesting dynamic for MSPs to consider, particularly if you think about the organizations that you might be working with, both CISA and the FBI,

[00:26:26] [SPEAKER_02]: in terms of their ability to leverage programs to come to the benefit of your own customers.

[00:26:32] [SPEAKER_02]: And I think that that's some of the stuff that I wanted to make sure that we highlight here. Now you highlighted this.

[00:26:37] [SPEAKER_01]: If I may jump in, Dave, please. It's extraordinary development. Well, we now have the EU telling American tech companies how to ship their businesses, defining what they can and can't do in ways we've never seen before.

[00:26:51] [SPEAKER_01]: So the world is getting to be a more complicated regulatory framework.

[00:26:56] [SPEAKER_01]: And how American tech giants that have here for operate pretty much at their own best are now having to think about, do I have to sell off these assets?

[00:27:05] [SPEAKER_01]: Do I have to change my models? Do I have to pay these massive fines? What happens if the Saudis decide to do that to us or the Chinese tell us the same thing?

[00:27:16] [SPEAKER_01]: We're entering in a very dicey period that we're going to need precise definitions.

[00:27:22] [SPEAKER_01]: Otherwise, it's going to be very difficult for American companies to plan, strategize, develop their models and make their money.

[00:27:31] [SPEAKER_02]: And interestingly, you brought up the EU. I cover them all the time on the news show because they are so impactful now in terms of regulation.

[00:27:37] [SPEAKER_02]: Like the likelihood of a listener now who's a managed service provider, any IT service provider having a customer with European customers is significantly higher than it's ever been before.

[00:27:50] [SPEAKER_02]: And the environment is so interconnected that you likely do.

[00:27:54] [SPEAKER_02]: And by the way, I put it up there. If you've got one now, we'd love to hear about it because the idea that you only have to know your own local law is not necessarily reasonable.

[00:28:06] [SPEAKER_02]: Particularly if we think about it now, like California law just in the United States alone dominates so much of the technology companies and their headquarters.

[00:28:16] [SPEAKER_02]: I would be remiss as a resident of Virginia if I didn't point out that 50% of US data centers are in Virginia.

[00:28:23] [SPEAKER_02]: So at some level you may be dealing with Virginia law in terms of where the data resides. There is a complicated regulatory framework.

[00:28:31] [SPEAKER_02]: But TC, as you alluded to, like all of these are the opportunity for solution providers to be working with their customers to make sure they're compliant.

[00:28:41] [SPEAKER_02]: But it's the swings that will get you. And if you're having to redo all of that work continually based on swings, it's going to be incredibly difficult.

[00:28:48] [SPEAKER_02]: And I'm not necessarily convinced, as you allude to, that the social media taught us that we probably need to think about some of this stuff early and we've got an opportunity to do so with AI.

[00:29:00] [SPEAKER_02]: I'm going to ask you, the idea of an AI Bill of Rights, when you look at something like that and you're trying to analyze the impact on the market,

[00:29:10] [SPEAKER_02]: do you think that that is going to create more compliance burdens or do you think it's going to actually sort of simplify an approach for solution providers and their customers if it's more defined?

[00:29:21] [SPEAKER_02]: How do you look at it?

[00:29:22] [SPEAKER_01]: Well, is God in the details or is the devil in the details? It all comes down to what actually is in that Bill of Rights.

[00:29:30] [SPEAKER_01]: I think what we need though is an understanding that you and I have talked that AI is one of the biggest intellectual property heists in human history.

[00:29:40] [SPEAKER_01]: It's a security risk. So it's a, we've got copyright issues, we've got security issues, and it just goes on and on and on.

[00:29:47] [SPEAKER_01]: At the end of the day, I think people have recognized that in order to avail themselves of these digital services, they're going to have to give up their privacy.

[00:29:55] [SPEAKER_01]: Privacy as we once knew is gone. Okay, that's a trade-off that either customers or consumers are going to have to make.

[00:30:03] [SPEAKER_01]: Fine. But is it on a per use case basis? Is there a standard the industry wide?

[00:30:12] [SPEAKER_01]: Do I have to have the same level of relationship with my Marketo software as I do with a social media platform?

[00:30:19] [SPEAKER_01]: How does that Bill of Rights take in all the different ways an individual or an organization might engage a technology service platform?

[00:30:28] [SPEAKER_01]: That's going to be very difficult to decide. So ostensibly, yeah, it would be great to have a Bill of Rights.

[00:30:36] [SPEAKER_01]: Do I think it's realistically going to happen? No. But getting back to what you were and then where would it apply here in the United States only?

[00:30:43] [SPEAKER_01]: We all know that if you work in the car industry in Detroit, we all know that Sacramento is really what regulates how you bring your vehicles to market.

[00:30:53] [SPEAKER_01]: What happens in a world where Brussels or The Hague are determining what my cybersecurity AI Bill of Rights are?

[00:31:05] [SPEAKER_01]: We're getting into an area where is that out of Beijing? Is it out of Moscow? Is it out of the Brussels?

[00:31:10] [SPEAKER_01]: Who gets to determine what tail is wagging my AI Bill of Rights? I think it's going to be very difficult going forward to get that.

[00:31:19] [SPEAKER_02]: Yeah, I think I would agree with you. And I will go even so further as to say like we've had a smart conversation about the differences between the two party positions.

[00:31:28] [SPEAKER_02]: I am under no delusions that those policy positions are even in the top five issues for most voters, probably not even in the top five issues for listeners of this show that are directly affected by it.

[00:31:43] [SPEAKER_02]: So we're having a conversation that is an interesting intellectual exercise.

[00:31:47] [SPEAKER_02]: I think it's much more under about what might be on the other side of the election than I necessarily think that this is a top voting issue for users and listeners.

[00:31:57] [SPEAKER_02]: But I think it's important for us as technologists to consider both of those outcomes and those the cyclical nature of swings back and forth.

[00:32:08] [SPEAKER_01]: Let me just add two seconds. I completely agree.

[00:32:11] [SPEAKER_01]: It may not be a top issue now, but the second a Citibank, a Chase, a PayPal gets hacked, that is going to move up the ladder of priorities too sweet.

[00:32:22] [SPEAKER_02]: It's amazing how fast that all those have become a priority in the middle of a crisis, isn't it?

[00:32:27] [SPEAKER_02]: This has been super fun, TC. Thanks for joining me. If listeners are interested in getting in touch and understanding what you're up to, what do we got going on right now?

[00:32:34] [SPEAKER_01]: Oh, I'm working away and they can reach out to me at TC Doyle forever at Gmail.com.

[00:32:41] [SPEAKER_02]: Awesome, TC. This has been great fun. Thank you for joining me today.

[00:32:44] [SPEAKER_02]: Now for you listeners, I want to give you a highlight of what I've got coming up this weekend.

[00:32:49] [SPEAKER_02]: Brett Leatherman, who's a senior executive with the FBI, discussed cybersecurity trends impacting small businesses.

[00:32:56] [SPEAKER_02]: But he highlighted ransomware as a major concern for businesses and shared insights on the FBI's perspective and resources for tackling cybersecurity threats.

[00:33:05] [SPEAKER_02]: I want to give you a preview of that interview.

[00:33:09] [SPEAKER_00]: We do is we search our holdings for IOCs, indicators of compromise, tactics, techniques and procedures that the adversary uses so that we can provide that to you to aid you in identification of the adversary and containment of the adversary.

[00:33:23] [SPEAKER_00]: At the same time, our dialogue to you or your third party incident response firm is this is the information we would like you to hold on to not destroy in your eradication process, but hold onto for evidence of criminal conduct.

[00:33:39] [SPEAKER_00]: And those things can include like we talked about for IOCs. They can include log files.

[00:33:44] [SPEAKER_00]: We may ask for wallet addresses of the bad actors because, as we all know, you can follow money through the blockchain and that will give us some visibility into into who the actors may be.

[00:33:56] [SPEAKER_00]: And so there's information we will probably ask for pretty early on to help with that attribution work.

[00:34:03] [SPEAKER_02]: It's a fascinating discussion about real ideas of what the FBI is going to ask you and what they're interested in learning more about.

[00:34:12] [SPEAKER_02]: My Patreon supporters already have this interview. If you want to listen now, it'll drop on the weekend on YouTube and the podcast feed.

[00:34:20] [SPEAKER_02]: If you're interested, I really do encourage you to listen.

[00:34:23] [SPEAKER_02]: Visit patreon.com slash MSP radio if you want to sign up right now and get access.

[00:34:28] [SPEAKER_02]: I want to thank Sales Builder, our Patreon sponsor, whose support makes this show possible.

[00:34:33] [SPEAKER_02]: Focus on your IT sales workflow with the power of automation and visit them at salesbuilder.com.

[00:34:38] [SPEAKER_02]: That's BUILDR.com. Vendors, you too can get your name mentioned on the live show.

[00:34:45] [SPEAKER_02]: It's a simple monthly subscription. Visit patreon.com slash MSP radio for more.

[00:34:52] [SPEAKER_02]: And listeners, you can also support the show. Like, share and follow on your favorite platforms.

[00:35:00] [SPEAKER_02]: Support directly on Patreon with our Give What You Want model. You set what you think the content is worth.

[00:35:07] [SPEAKER_02]: If you have a question and are listening to the recording, send it in to question at MSPradio.com.

[00:35:13] [SPEAKER_02]: And David, thank you too for listening. I appreciate it.

[00:35:16] [SPEAKER_02]: Thank you all for joining me in the Business of Tech Lounge. And I will see you next time.