Hybrid Work Trends, Microsoft Upgrades, AT&T vs. Broadcom, Intel's Future, and Zendesk Pricing

[00:00:02] [SPEAKER_00]: It's Friday, September 13th, 2024, and I'm Dave Sobel.

[00:00:06] [SPEAKER_00]: Four things to know today.

[00:00:08] [SPEAKER_00]: Hybrid Work and AI Productivity clash with RTO mandates, raising questions about leadership's

[00:00:14] [SPEAKER_00]: reluctance.

[00:00:15] [SPEAKER_00]: Microsoft forces Windows 11 upgrades and tightens office security as IT departments

[00:00:21] [SPEAKER_00]: brace for changes.

[00:00:23] [SPEAKER_00]: AT&T sues Broadcom over VMware subscription changes and

[00:00:27] [SPEAKER_00]: Intel's future, AI's role in the classrooms, and Zendesk's innovative pricing.

[00:00:33] [SPEAKER_00]: Key trends defining tech's next era.

[00:00:37] [SPEAKER_00]: This is the Business of Tech.

[00:00:40] [SPEAKER_00]: A recent Zoom survey reveals that hybrid work is becoming the dominant model, with

[00:00:45] [SPEAKER_00]: 83% of employees reporting higher productivity in such environments.

[00:00:50] [SPEAKER_00]: 64% of leaders have adopted hybrid models, prioritizing productivity while hybrid workers

[00:00:59] [SPEAKER_00]: The survey also indicates a shift towards greater workplace flexibility, with 95% of

[00:01:06] [SPEAKER_00]: leaders noting increased flexibility in recent years.

[00:01:09] [SPEAKER_00]: Additionally, generative AI is seen as beneficial, with 94% of leaders using it to enhance productivity,

[00:01:15] [SPEAKER_00]: although 75% of employees feel current remote work technology needs improvement.

[00:01:21] [SPEAKER_00]: The report indicates that 82% of leaders plan to increase flexible work options over

[00:01:26] [SPEAKER_00]: the next two years, reflecting that shift toward hybrid work models.

[00:01:31] [SPEAKER_00]: But despite this trend, many Fortune 100 companies still enforce return-to-office

[00:01:36] [SPEAKER_00]: policies requiring in-person work at least part of the week.

[00:01:41] [SPEAKER_00]: Mandating a return to the office can harm employee productivity and retention, as studies

[00:01:46] [SPEAKER_00]: show that employees perform better when given the choice of where to work.

[00:01:51] [SPEAKER_00]: Those with the freedom to choose their work environment are likelier to stay with their

[00:01:55] [SPEAKER_00]: organization, report higher job satisfaction and maintain healthier relationships with management.

[00:02:01] [SPEAKER_00]: Companies that listen to employee preferences see improved morale and business outcomes,

[00:02:06] [SPEAKER_00]: while many employers have lost talent due to strict return-to-office policies.

[00:02:11] [SPEAKER_00]: And those return-to-office mandates are seen as unfair by HR expert Daniella Herrera,

[00:02:16] [SPEAKER_00]: who argues they disproportionately affect certain workers and are often justified

[00:02:21] [SPEAKER_00]: by company culture and productivity kinds.

[00:02:24] [SPEAKER_00]: Herrera suggests that these mandates may also serve as a means to reduce head count

[00:02:29] [SPEAKER_00]: or regain control over employees, ultimately breaking trust and creating inequity, particularly

[00:02:34] [SPEAKER_00]: for caregivers and historically excluded groups.

[00:02:38] [SPEAKER_00]: And I thought I'd throw in this tidbit.

[00:02:41] [SPEAKER_00]: Australia has recently implemented a Right to Disconnect law, allowing workers to ignore

[00:02:46] [SPEAKER_00]: after-hours communications unless it's an emergency, joining other countries that

[00:02:50] [SPEAKER_00]: have adopted similar policies since France's introduction of a 2016 law.

[00:02:55] [SPEAKER_00]: This shift aims to combat the unhealthy stress of an always-on work culture,

[00:03:00] [SPEAKER_00]: particularly exacerbated by the pandemic.

[00:03:02] [SPEAKER_00]: While the U.S. lacks such legislation, experts highlight the need for public policies

[00:03:07] [SPEAKER_00]: to address work-life balance rather than relying solely on individual self-care strategies.

[00:03:13] [SPEAKER_00]: The law in Australia applies to companies with 15 or more employees

[00:03:17] [SPEAKER_00]: and includes provisions for resolving disputes regarding after-hours contact.

[00:03:23] [SPEAKER_00]: Why do we care?

[00:03:25] [SPEAKER_00]: The key question is not just why hybrid work is becoming so popular,

[00:03:29] [SPEAKER_00]: but why tech leaders, especially in Fortune 100 companies,

[00:03:32] [SPEAKER_00]: seem reluctant to embrace it fully despite clear evidence of its benefits.

[00:03:38] [SPEAKER_00]: If employees consistently perform better in hybrid environments,

[00:03:42] [SPEAKER_00]: leadership's insistence on RTO policies seems counterproductive.

[00:03:46] [SPEAKER_00]: From a business perspective, this could lead directly to impact morale,

[00:03:50] [SPEAKER_00]: retention and innovation for drivers of competitive advantage.

[00:03:54] [SPEAKER_00]: Additionally, the potential over-reliance on AI as a productivity booster may be hiding

[00:03:59] [SPEAKER_00]: that fundamental remote work tools may still be lacking.

[00:04:03] [SPEAKER_00]: Rather than focusing solely on AI, organizations should prioritize investments

[00:04:08] [SPEAKER_00]: in technology infrastructure that supports a seamless remote or hybrid work experience.

[00:04:13] [SPEAKER_00]: Note it's an and, not an or.

[00:04:19] [SPEAKER_00]: Looking to reach an audience of thousands of MSPs and IT service providers?

[00:04:23] [SPEAKER_00]: Put your ad right here on the business of tech

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[00:04:50] [SPEAKER_00]: Want to know more?

[00:04:52] [SPEAKER_00]: There's information at mspradio.com slash engage

[00:04:55] [SPEAKER_00]: including a button to book a time to talk.

[00:04:59] [SPEAKER_00]: I'm looking forward to that discussion.

[00:05:04] [SPEAKER_00]: Microsoft will begin force upgrading Windows 11 22H2 systems to version 23H2

[00:05:11] [SPEAKER_00]: starting October 8th, 2024 as the former reaches end of support.

[00:05:16] [SPEAKER_00]: This applies to various editions including Home and Pro.

[00:05:20] [SPEAKER_00]: The upgrade aims to ensure continued support and security updates for users

[00:05:25] [SPEAKER_00]: with details available on Microsoft's Lifecycle Policy and Support pages.

[00:05:30] [SPEAKER_00]: Windows 11 versions 21H2 and 22H2 are no longer supported,

[00:05:36] [SPEAKER_00]: meaning users won't receive updates or security patches,

[00:05:39] [SPEAKER_00]: increasing vulnerability to threats.

[00:05:42] [SPEAKER_00]: The next major update, 24H2, is expected by the end of the year,

[00:05:46] [SPEAKER_00]: giving 23H2 at least another year of support.

[00:05:51] [SPEAKER_00]: On Microsoft's September 2024 Patch Tuesday addressed over 70 vulnerabilities,

[00:05:56] [SPEAKER_00]: including three actively exploited bugs.

[00:05:59] [SPEAKER_00]: A critical issue affects Windows 10 version 1507,

[00:06:03] [SPEAKER_00]: causing it to revert security updates leaving systems vulnerable.

[00:06:07] [SPEAKER_00]: Users are advised to install the latest servicing stack

[00:06:10] [SPEAKER_00]: and security updates to restore protections.

[00:06:13] [SPEAKER_00]: Additional vulnerabilities were fixed across Azure,

[00:06:16] [SPEAKER_00]: SharePoint and other Microsoft products,

[00:06:17] [SPEAKER_00]: while Adobe and Intel also released patches for various security flaws.

[00:06:23] [SPEAKER_00]: Also starting in October 2024, Microsoft Office 2024 will turn off

[00:06:29] [SPEAKER_00]: ActiveX controls by default in Word, Excel, PowerPoint and Vizio

[00:06:34] [SPEAKER_00]: to enhance security following concerns over vulnerabilities exploited by hackers.

[00:06:39] [SPEAKER_00]: Users can revert to previous settings,

[00:06:42] [SPEAKER_00]: but interaction with ActiveX objects will be restricted.

[00:06:46] [SPEAKER_00]: This change is part of a broader initiative to mitigate security risks

[00:06:49] [SPEAKER_00]: associated with legacy features in Office applications.

[00:06:53] [SPEAKER_00]: Why do we care?

[00:06:55] [SPEAKER_00]: These forced upgrades, while beneficial for security,

[00:06:58] [SPEAKER_00]: put additional pressure on IT departments.

[00:07:00] [SPEAKER_00]: Make sure you're proactive to avoid the higher level of pressure.

[00:07:04] [SPEAKER_00]: Constant updates, security patches and forced upgrades

[00:07:07] [SPEAKER_00]: mean businesses need to allocate more budget and resources

[00:07:10] [SPEAKER_00]: to IT infrastructure management.

[00:07:11] [SPEAKER_00]: So proactive investments in automated patch management solutions,

[00:07:15] [SPEAKER_00]: cybersecurity training and system monitoring tools

[00:07:18] [SPEAKER_00]: can help offset some of those costs.

[00:07:21] [SPEAKER_00]: However, smaller businesses without the resources of large enterprises

[00:07:24] [SPEAKER_00]: may struggle to keep up, leaving them vulnerable

[00:07:27] [SPEAKER_00]: to cyber attacks and compliance risks.

[00:07:30] [SPEAKER_00]: That, of course, is your opportunity

[00:07:32] [SPEAKER_00]: and justification for delivering those services.

[00:07:35] [SPEAKER_00]: ActiveX has long been a target for hackers due to its vulnerabilities

[00:07:39] [SPEAKER_00]: and this change should reduce attack surfaces across enterprise environments.

[00:07:45] [SPEAKER_00]: However, organizations that rely on legacy systems or custom solutions

[00:07:48] [SPEAKER_00]: involving ActiveX may face challenges as they adapt to the new security restrictions.

[00:07:54] [SPEAKER_00]: And there's opportunity there for sure.

[00:08:00] [SPEAKER_00]: So how are things going over at Broadcom?

[00:08:03] [SPEAKER_00]: Well, AT&T is suing Broadcom, claiming the chipmaker is attempting

[00:08:08] [SPEAKER_00]: to breach VMware contracts by withholding essential support services

[00:08:13] [SPEAKER_00]: unless AT&T agrees to purchase bundled subscription software,

[00:08:17] [SPEAKER_00]: which it does not want.

[00:08:19] [SPEAKER_00]: AT&T argues that this could jeopardize critical services

[00:08:22] [SPEAKER_00]: for first responders and national security.

[00:08:25] [SPEAKER_00]: The lawsuit seeks to enforce AT&T's right

[00:08:28] [SPEAKER_00]: to renew support services under a prior agreement.

[00:08:32] [SPEAKER_00]: Broadcom has 20 days to respond to the complaint,

[00:08:34] [SPEAKER_00]: asserting that it disagrees with AT&T's claims

[00:08:37] [SPEAKER_00]: and maintains that the shift to a subscription model is standard in the industry.

[00:08:43] [SPEAKER_00]: And the new stack catches up on VMware's transition

[00:08:45] [SPEAKER_00]: to a subscription licensing model after Broadcom's acquisition,

[00:08:49] [SPEAKER_00]: which has led to mixed reactions among users,

[00:08:52] [SPEAKER_00]: with a significant portion considering abandoning the platform due to cost concerns.

[00:08:57] [SPEAKER_00]: A survey indicated that while many users are dissatisfied,

[00:09:01] [SPEAKER_00]: most still plan to remain with VMware,

[00:09:04] [SPEAKER_00]: citing the need for infrastructure changes as a positive outcome.

[00:09:08] [SPEAKER_00]: VMware encourages users to optimize their resources to mitigate cost increases,

[00:09:13] [SPEAKER_00]: while competitors position themselves as alternatives.

[00:09:16] [SPEAKER_00]: Broadcom defends the subscription model

[00:09:18] [SPEAKER_00]: as a necessary industry standard to simplify pricing and support.

[00:09:24] [SPEAKER_00]: Why do we care?

[00:09:25] [SPEAKER_00]: I love how VMware's answer is

[00:09:27] [SPEAKER_00]: don't be wasteful as the answer to price increases.

[00:09:31] [SPEAKER_00]: For businesses relying on VMware,

[00:09:34] [SPEAKER_00]: this situation highlights the importance of closely reviewing contracts

[00:09:37] [SPEAKER_00]: and negotiating for terms that protect access to critical support services,

[00:09:41] [SPEAKER_00]: especially in scenarios like AT&T's.

[00:09:44] [SPEAKER_00]: The IT leaders should recognize that subscription models

[00:09:46] [SPEAKER_00]: are becoming standard across the industry.

[00:09:49] [SPEAKER_00]: However, this also means that organizations must proactively negotiate terms

[00:09:54] [SPEAKER_00]: that align with their operational and financial needs,

[00:09:57] [SPEAKER_00]: ensuring that they don't get locked into rigid pricing structures.

[00:10:01] [SPEAKER_00]: I've been talking about cost management a lot lately.

[00:10:05] [SPEAKER_00]: This is a component of that and another element to a valuable service.

[00:10:12] [SPEAKER_00]: It's time for some big ideas, back on a Friday.

[00:10:15] [SPEAKER_00]: Ben Thompson and Stratecary dove into Intel,

[00:10:18] [SPEAKER_00]: attributing its decline to a failure to adapt in the face of competition

[00:10:23] [SPEAKER_00]: from AMD and TSMC, particularly in mobile and AI markets.

[00:10:27] [SPEAKER_00]: Despite efforts like IDM 2.0 to separate manufacturing from design,

[00:10:32] [SPEAKER_00]: Intel struggles with outdated processes and design inefficiencies.

[00:10:37] [SPEAKER_00]: The company's future hinges on the ability to innovate and compete effectively,

[00:10:41] [SPEAKER_00]: potentially requiring significant government support

[00:10:44] [SPEAKER_00]: to ensure its survival in the semiconductor industry.

[00:10:49] [SPEAKER_00]: At a book highlight, Dr. AK Pradeep's new book,

[00:10:52] [SPEAKER_00]: NeuroAI, How to Win the Minds of Consumers Using Neuroscience-Powered Generative AI,

[00:10:58] [SPEAKER_00]: explores how global brands can leverage neuroscience and generative AI

[00:11:03] [SPEAKER_00]: to influence consumer behavior.

[00:11:05] [SPEAKER_00]: It details practical applications for appealing to the non-conscious mind

[00:11:10] [SPEAKER_00]: where most purchase decisions occur,

[00:11:12] [SPEAKER_00]: and emphasizes the importance of embedding neuroscientific principles

[00:11:16] [SPEAKER_00]: into product innovation and marketing strategies.

[00:11:19] [SPEAKER_00]: The book is aimed at practitioners in innovation and marketing,

[00:11:23] [SPEAKER_00]: providing insights into consumer understanding, product innovation,

[00:11:27] [SPEAKER_00]: sensory design, and desire creation.

[00:11:30] [SPEAKER_00]: And from Business Insider, Professor Megan Fritz observed students using

[00:11:34] [SPEAKER_00]: ChatGPT for an introductory assignment in her Ethics and Technology class,

[00:11:40] [SPEAKER_00]: sparking a debate on AI's role in education.

[00:11:43] [SPEAKER_00]: While some educators defend AI as a tool similar to calculators,

[00:11:47] [SPEAKER_00]: Fritz argues that it undermines critical thinking and the goal of humanity's education.

[00:11:53] [SPEAKER_00]: She expresses concern over students' declining attention spans

[00:11:57] [SPEAKER_00]: and reliance on technology, suggesting that educators face challenges

[00:12:01] [SPEAKER_00]: addressing AI usage while maintaining educational integrity.

[00:12:05] [SPEAKER_00]: The conversation reflects that broader academic tension

[00:12:08] [SPEAKER_00]: regarding integrating AI in learning environments.

[00:12:12] [SPEAKER_00]: Forrester dives into AI copilots gaining traction in organizations,

[00:12:16] [SPEAKER_00]: but measurable business returns are lacking.

[00:12:19] [SPEAKER_00]: A pragmatic approach is needed to maximize their value,

[00:12:23] [SPEAKER_00]: focus on employee experience, overcome adoption challenges,

[00:12:26] [SPEAKER_00]: clarify funding responsibilities and foster collaboration among diverse stakeholders.

[00:12:32] [SPEAKER_00]: Key questions include understanding the true benefits,

[00:12:34] [SPEAKER_00]: addressing adoption difficulties, determining funding sources,

[00:12:38] [SPEAKER_00]: and defining responsibilities for implementation.

[00:12:42] [SPEAKER_00]: And for those who missed it live,

[00:12:43] [SPEAKER_00]: you'll get a discussion about this article from the information.

[00:12:47] [SPEAKER_00]: Zendesk has introduced a new outcome-based pricing model for its AI customer support software,

[00:12:53] [SPEAKER_00]: charging businesses only when the AI successfully resolves customer issues

[00:12:57] [SPEAKER_00]: without human intervention.

[00:12:59] [SPEAKER_00]: This approach, which aims to adapt to the increasing automation in the industry,

[00:13:04] [SPEAKER_00]: may lead to lower short-term sales but could attract more customers

[00:13:08] [SPEAKER_00]: seeking cost-effective solutions.

[00:13:09] [SPEAKER_00]: Other companies like Intercom and Forthought also adopt similar models,

[00:13:15] [SPEAKER_00]: reflecting a potential shift in the software industry

[00:13:18] [SPEAKER_00]: as businesses look for measurable value from AI investments.

[00:13:22] [SPEAKER_00]: However, some executives express skepticism about the viability of this pricing strategy

[00:13:26] [SPEAKER_00]: due to its unpredictability and potential negative incentives.

[00:13:32] [SPEAKER_00]: Why do we care?

[00:13:33] [SPEAKER_00]: I'm particularly intrigued by Zendesk's move.

[00:13:36] [SPEAKER_00]: Tomorrow on the Podcast Feed, you'll hear my discussion with T.C. Doyle about it.

[00:13:40] [SPEAKER_00]: It's already on YouTube.

[00:13:42] [SPEAKER_00]: Check out the last live stream.

[00:13:45] [SPEAKER_00]: On AI ethics, this discussion extends beyond education.

[00:13:48] [SPEAKER_00]: Companies leveraging AI in any capacity must think about the ethical implications.

[00:13:53] [SPEAKER_00]: Whether in business, marketing or customer service,

[00:13:56] [SPEAKER_00]: understanding the balance between AI efficiency and human input

[00:14:00] [SPEAKER_00]: will be key to responsible AI adoption.

[00:14:04] [SPEAKER_00]: I hope I've given you a lot to think about.

[00:14:08] [SPEAKER_00]: Thanks for listening.

[00:14:09] [SPEAKER_00]: Today is National Peanut Day as well as International Chocolate Day.

[00:14:14] [SPEAKER_00]: There are two tastes that are great together.

[00:14:18] [SPEAKER_00]: I'm speaking on a webinar for CoreView next week entitled

[00:14:21] [SPEAKER_00]: Differentiate Your EBMSP Business by Governing and Securing M365.

[00:14:27] [SPEAKER_00]: Join me on the 19th of September at 10am Eastern.

[00:14:30] [SPEAKER_00]: Link in the show notes to sign up.

[00:14:33] [SPEAKER_00]: And if you have a question you want answered, I take those list of questions.

[00:14:35] [SPEAKER_00]: Send them in to question at MSPRadio.com.

[00:14:39] [SPEAKER_00]: Answer list of questions live each week on the Wednesday live show,

[00:14:42] [SPEAKER_00]: LinkedIn and YouTube 3pm Eastern.

[00:14:45] [SPEAKER_00]: And if you enjoyed this show, give a review.

[00:14:47] [SPEAKER_00]: And most importantly, make sure you've subscribed

[00:14:49] [SPEAKER_00]: and followed on your favorite platform and share with a colleague.

[00:14:53] [SPEAKER_00]: Have a great weekend.

[00:14:54] [SPEAKER_00]: You'll get that episode live dropping in the feed tomorrow

[00:14:57] [SPEAKER_00]: as well as my interview episode dropping on Sunday.

[00:15:00] [SPEAKER_00]: Talk to you on Monday.

[00:15:02] [SPEAKER_00]: The Business of Tech is written and produced by me, Dave Sobel,

[00:15:06] [SPEAKER_00]: under Ethics Guidelines posted at businessof.tech.

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[00:15:40] [SPEAKER_00]: Once again, thanks for listening to me.

[00:15:43] [SPEAKER_00]: I'll talk to you again on our next episode of The Business of Tech.