Global IT Spending Surge, Meta's Regulatory Showdown, Legacy Tech Upgrades, and NATO Cyber Defense

[00:00:02] [SPEAKER_00]: It's Tuesday, July 23, 2024, and I'm Dave Sobl, three things to note today.

[00:00:08] [SPEAKER_00]: Global IT Spending to Surge by 7.5% this year, driven by data-centered systems and IT services.

[00:00:16] [SPEAKER_00]: Metas Regulatory Showdown, EU customers are denied access to the new Multimodal AI model, and

[00:00:22] [SPEAKER_00]: Legacy Tech Upgrades Costing Business's Millions, hindering AI adoption, and productivity.

[00:00:29] [SPEAKER_00]: This is the business of tech.

[00:00:33] [SPEAKER_00]: The CRODSRIT STORY Bumped My Monday Market Review, you didn't pick out for God, did you?

[00:00:38] [SPEAKER_00]: According to Gardner, worldwide IT Spending is projected to grow by 7.5% in 2024, reaching

[00:00:45] [SPEAKER_00]: a total of $5.26 trillion.

[00:00:47] [SPEAKER_00]: Data-centered systems spending is expected to increase by 24% due to the demand for

[00:00:54] [SPEAKER_00]: generative AI, while IT service is spending as projected to grow by 7.1%.

[00:00:59] [SPEAKER_00]: The forecast reflects slower spending in subsatements such as consulting and business

[00:01:04] [SPEAKER_00]: process services.

[00:01:06] [SPEAKER_00]: A survey conducted by Jump Cloud reveals that IT teams are increasingly turing

[00:01:10] [SPEAKER_00]: demanded services providers and raising their expectations.

[00:01:14] [SPEAKER_00]: The survey also highlights concerns about shadow IT, cyber attacks, and the complexity

[00:01:19] [SPEAKER_00]: of managing IT environments.

[00:01:21] [SPEAKER_00]: The report emphasizes the importance of providers and delivering security, productivity,

[00:01:26] [SPEAKER_00]: and cost savings with 67% of small and medium-sized enterprises planning to increase their

[00:01:32] [SPEAKER_00]: investments in MSPs.

[00:01:34] [SPEAKER_00]: Additionally, the survey highlights the growing threat of shadow IT, the need for centralized

[00:01:38] [SPEAKER_00]: IT management, and the challenges faced by IT teams in maintaining security and managing

[00:01:43] [SPEAKER_00]: diverse device environments.

[00:01:46] [SPEAKER_00]: Artificial intelligence is expected to have a significant impact on the cybersecurity field

[00:01:50] [SPEAKER_00]: in the next few years with 88% of surveyed professional stating that AI will significantly

[00:01:56] [SPEAKER_00]: impact their jobs.

[00:01:58] [SPEAKER_00]: However, the employment prospects for cybersecurity professionals remain strong, with projected

[00:02:02] [SPEAKER_00]: growth of 32% from 2022 to 2032.

[00:02:07] [SPEAKER_00]: While AI can automate certain tasks and improve job efficiency, it's unlikely to replace

[00:02:12] [SPEAKER_00]: fully human skills in the field.

[00:02:15] [SPEAKER_00]: Cybersecurity professionals are encouraged to embrace AI and develop AI-related skills

[00:02:20] [SPEAKER_00]: to today competitive in the job market.

[00:02:24] [SPEAKER_00]: Many small businesses are still struggling to find job openings with 37% reporting unfilled

[00:02:30] [SPEAKER_00]: positions in June.

[00:02:31] [SPEAKER_00]: This shortage of qualified candidates is affecting various industries, including construction,

[00:02:37] [SPEAKER_00]: transportation and retail.

[00:02:39] [SPEAKER_00]: Small businesses are raising compensation to attract and retain employees and some are considering

[00:02:44] [SPEAKER_00]: freelancers or unique job incentives.

[00:02:47] [SPEAKER_00]: While the situation is improving, business should be prepared for increased wages or creative

[00:02:52] [SPEAKER_00]: approaches to find quality candidates.

[00:02:56] [SPEAKER_00]: Why do we care?

[00:02:57] [SPEAKER_00]: The robust growth forecast for IT services despite those sub-segment indicates a

[00:03:03] [SPEAKER_00]: stained demand for managed services, cloud solutions and IT infrastructure.

[00:03:07] [SPEAKER_00]: Addressing shadow IT and cyber security represents both the risk and an opportunity.

[00:03:12] [SPEAKER_00]: That way MSPs can differentiate themselves by offering comprehensive centralized IT management

[00:03:17] [SPEAKER_00]: solutions.

[00:03:19] [SPEAKER_00]: Of course, simple security done right is the most powerful solution, being both difficult

[00:03:24] [SPEAKER_00]: to implement and maintain.

[00:03:25] [SPEAKER_00]: But it's not more tools.

[00:03:31] [SPEAKER_00]: Today's episode is supported by CoreView.

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[00:04:21] [SPEAKER_00]: Meta, the parent company of Facebook, will withhold its next multi-modal AI model and future

[00:04:28] [SPEAKER_00]: ones from customers in the European Union due to a lack of clarity from regulators.

[00:04:33] [SPEAKER_00]: This decision sets up a showdown between meta and those EU regulators and reflects a growing

[00:04:38] [SPEAKER_00]: trend among US tech giants to withhold products from European customers.

[00:04:43] [SPEAKER_00]: The move is not related to the still being finalized AI act, but rather concerns how

[00:04:49] [SPEAKER_00]: meta-contrained models using data from European customers while complying with GDPR.

[00:04:54] [SPEAKER_00]: The United Kingdom, which has a similar-lotted GDPR, will still have access to better

[00:04:59] [SPEAKER_00]: new model.

[00:05:01] [SPEAKER_00]: Former President Donald Trump's allies are working on an AI executive order that would launch

[00:05:06] [SPEAKER_00]: man-hatton projects to develop military technology and review regulations.

[00:05:11] [SPEAKER_00]: The order aims to support Silicon Valley investors and companies and includes creating

[00:05:16] [SPEAKER_00]: industry-led agencies to evaluate AI models and secure systems from foreign adversaries.

[00:05:21] [SPEAKER_00]: The approach differs from the Biden administration strategy outlined in a previous executive

[00:05:25] [SPEAKER_00]: order that focuses on safety testing for AI systems.

[00:05:30] [SPEAKER_00]: The AI act, a series of rules for technology companies operating in the EU will come

[00:05:35] [SPEAKER_00]: into law on August 1, 2024.

[00:05:37] [SPEAKER_00]: The law ban certainly uses the AI tools and sets compliance deadlines for companies.

[00:05:42] [SPEAKER_00]: The first deadline is February 2, 2025 for the prohibition of certain AI applications.

[00:05:48] [SPEAKER_00]: By August 26, the rules will apply generally to companies operating in the EU with specific

[00:05:54] [SPEAKER_00]: compliance timelines for different types of AI systems.

[00:05:58] [SPEAKER_00]: Failure to comply will result in fines.

[00:06:01] [SPEAKER_00]: NATO has announced plans to establish a new cyber defense center at its headquarters in Belgium

[00:06:06] [SPEAKER_00]: to protect allied cyber space operations.

[00:06:09] [SPEAKER_00]: The NATO-integrated cyber defense center will provide alerts about threats and vulnerabilities

[00:06:14] [SPEAKER_00]: in cyberspace to NATO military commanders.

[00:06:17] [SPEAKER_00]: This move comes in response to the increase in politically motivated cyber attacks since

[00:06:22] [SPEAKER_00]: the Russian invasion of Ukraine in 2022.

[00:06:26] [SPEAKER_00]: The NICC will bring together civilian and military personnel, as well as experts from the

[00:06:31] [SPEAKER_00]: cybersecurity industry to enhance collective resilience and defense.

[00:06:36] [SPEAKER_00]: Why do we care?

[00:06:38] [SPEAKER_00]: Years ago, I noted that NATO having declared cyber warfare being equal to physical warfare

[00:06:44] [SPEAKER_00]: as a significant milestone in cybersecurity.

[00:06:47] [SPEAKER_00]: Well, now we see resources specifically deployed around cyber warfare.

[00:06:52] [SPEAKER_00]: I've made two recent quips.

[00:06:54] [SPEAKER_00]: First, I often cite how the EU is driving regulation, where now seeing GDPR play out

[00:07:00] [SPEAKER_00]: with product development.

[00:07:01] [SPEAKER_00]: Second, I noted that the GOP will need to present its vision of AI regulation.

[00:07:06] [SPEAKER_00]: So far they have not as the Trump campaign notes.

[00:07:10] [SPEAKER_00]: No aspect of future presidential staffing or policy announcements should be deemed

[00:07:14] [SPEAKER_00]: official unless they come directly from Trump or an authorized member of his campaign team.

[00:07:21] [SPEAKER_00]: Really like to know what that policy proposal is.

[00:07:26] [SPEAKER_00]: According to a core site report, most organizations prefer hybrid IT strategies that combine

[00:07:32] [SPEAKER_00]: private and public cloud with co-location data center deployments.

[00:07:37] [SPEAKER_00]: The increase in hybrid adoption reflects the need to control IT spending while maintaining

[00:07:42] [SPEAKER_00]: scalability and connectivity.

[00:07:44] [SPEAKER_00]: CIOs are seeking optimal environments for specific workloads, with variable compute needs

[00:07:50] [SPEAKER_00]: benefiting from public cloud provisioning, unless fluctuating workloads running more

[00:07:54] [SPEAKER_00]: efficiently on prem.

[00:07:57] [SPEAKER_00]: Co-location facilities offer a middle ground for high-density workloads and many CIOs

[00:08:01] [SPEAKER_00]: are deploying generative AI tools in off-prem data centers.

[00:08:06] [SPEAKER_00]: Cost and cloud connectivity are driving co-location adoption, but multi-cloud interoperability

[00:08:11] [SPEAKER_00]: remains a challenge.

[00:08:13] [SPEAKER_00]: Additionally, there is a capacity crunch in major markets leading to increased rental fees

[00:08:18] [SPEAKER_00]: for co-location space.

[00:08:21] [SPEAKER_00]: Legacy Tech upgrades cost the average business $2.9 million last year, with over

[00:08:27] [SPEAKER_00]: two thirds of businesses investing more than $2 million on maintaining and upgrading

[00:08:31] [SPEAKER_00]: legacy systems.

[00:08:33] [SPEAKER_00]: Tech and full-dead, including outdated code, negatively impacts the data stack of over

[00:08:38] [SPEAKER_00]: three and five IT leaders.

[00:08:40] [SPEAKER_00]: Legacy systems also require significant time and resources for maintenance and patching, impacting

[00:08:46] [SPEAKER_00]: productivity and the bottom line.

[00:08:47] [SPEAKER_00]: Additionally, Legacy Tech poses challenges for implementing emerging technologies

[00:08:52] [SPEAKER_00]: with up to 25% of legacy systems unable to support AI tools and workloads.

[00:08:59] [SPEAKER_00]: Now why do we care?

[00:09:01] [SPEAKER_00]: We're focusing on cost-efficient scalable solutions and addressing the pain points of

[00:09:05] [SPEAKER_00]: multi-cloud interoperability and technical debts.

[00:09:09] [SPEAKER_00]: Providers can better serve their clients in position, selves, as strategic partners

[00:09:13] [SPEAKER_00]: in their client's journeys.

[00:09:15] [SPEAKER_00]: Your major deliverable should be the comprehensive modernization roadmap to help businesses

[00:09:20] [SPEAKER_00]: transition from legacy systems to more agile scalable ones.

[00:09:24] [SPEAKER_00]: This includes cloud migration strategies, infrastructure updates and data management improvements.

[00:09:31] [SPEAKER_00]: Emphasizing the long-term return on investment of upgrading those legacy systems and highlighting

[00:09:36] [SPEAKER_00]: how modern systems can reduce maintenance costs, improve productivity and enable the adoption

[00:09:41] [SPEAKER_00]: of new technologies.

[00:09:43] [SPEAKER_00]: Measure it all and then measure that impact on going.

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[00:10:29] [SPEAKER_00]: I'm looking forward to that discussion.

[00:10:33] [SPEAKER_00]: Thanks for listening.

[00:10:34] [SPEAKER_00]: It's International Yadayada today which apparently started back in 2015

[00:10:38] [SPEAKER_00]: and Jerry Seinfeld himself noted it on July 23rd, 2017.

[00:10:43] [SPEAKER_00]: So you too can make up a day. Yadayada.

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