Kaseya's MSP Insights, Apple Encryption Case, and AI Breakthroughs from Meta, Google, and Microsoft

[00:00:02] It's Tuesday, April 8th, 2025, and I'm Dave Solt. Four things to know today. Kaseyas MSP report, cybersecurity growth, M&A plans, and the fight to keep clients. The Apple encryption fight goes public while new AI guidelines roll out at the U.S. government. Meta debuts Llama 4, Google launches Gemini 2.5 Pro, and Microsoft updates Copilot, what IT needs to know.

[00:00:26] And Framework pauses laptop sales due to tariffs while Zoom, Enable, DNS Filter, and SentinelOne make strategic plays. This is the Business of Tech. Kaseyas 2025 Global MSP Benchmark Report indicates that cybersecurity has become a critical revenue driver, with 67% of respondents identifying it as one of their fastest-growing revenue categories.

[00:00:51] Additionally, 76% of MSPs report that their clients are most concerned about security, highlighting the importance of integrating cybersecurity into service offerings. Operational efficiency remains crucial, with 95% of MSPs recognizing the need to connect their tools for smoother operations. The report also notes that co-managed IT services are on the rise, with 61% of executives reporting year-over-year revenue growth in the area.

[00:01:20] Meanwhile, mergers and acquisitions are gaining traction, as 53% of MSPs express plans to pursue this strategy to enhance their market presence. Despite these opportunities, providers face challenges in acquiring new customers, with 1 in 3 citing this as their biggest hurdle. The report emphasizes that top-performing MSPs distinguish themselves not just through technology, but by building trust and guiding clients in a complex IT environment. Why do we care?

[00:01:49] Just as cybersecurity is a requirement for customers, as more MSPs prioritize cybersecurity, the market will become oversaturated, making it difficult to stand out. Commoditization risk looms if every MSP markets similar services. To combat this, offer niche security solutions or industry-specific compliance support that can help differentiate offerings. But be warned, cybersecurity isn't the differentiator that one might think.

[00:02:18] While acquisition is highlighted as a challenge, the focus on expanding service lines, like cybersecurity, might inadvertently overlook client retention strategies. High churn rates can offset new client gains, making it vital to balance expansion with maintaining existing relationships, particularly given the potential for IT spending pullback this year. We've already seen the projected growth rate drop in half for IT service spend.

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[00:03:35] In a significant ruling, the Investigatory Powers Tribunal has denied the UK government's request for complete secrecy in the ongoing legal battle between Apple and the Home Office over encryption access. The tribunal found that public disclosure of the case, including the identities of the parties involved, would not harm national security.

[00:03:56] This case stems from the technical capability notice issued by the Home Office requiring Apple to provide UK law enforcement with backdoor access to encrypted data. The tribunal's decision follows legal arguments from various media organizations and civil rights groups advocating for transparency. The judges emphasize that holding a hearing in total secrecy would fundamentally violate the principle of open justice.

[00:04:21] Following this ruling, there is a potential for future hearings to include a public component. The Home Office maintains that such measures are necessary for national security and counterterrorism efforts. The Trump administration has issued new guidance for the use and acquisition of artificial intelligence in government, replacing prior Biden administration directives.

[00:04:43] Two memos released by the Office of Management and Budget outline priorities for federal agencies focusing on innovation, governance, and public trust. A key change includes a 200-day deadline for creating a web-based repository of AI procurement tools. The new guidance maintains core AI governance structures, such as chief AI officers, while imposing risk management practices on high-impact AI use cases.

[00:05:10] Analysts have expressed concerns about the implementation of these directives, particularly regarding the Department of Government Efficiency's commitment to following the established framework. The administration is also encouraging ongoing updates to public inventories documenting AI usage across agencies. Why do we care?

[00:05:29] The decision to allow public scrutiny of the case sets a precedent that transparency can outweigh government arguments about national security in the UK, especially when dealing with private sector data protection practices. We care to see this fight in public. If Apple loses, it could set a precedent for forcing tech companies to introduce vulnerabilities or backdoors directly impacting product security standards.

[00:05:55] There's a potential growth area for providers specializing in AI solutions for government compliance, plus the broader market opportunity in software integration, data management, and compliance expertise. I've been waiting for the administration's guidance, and now it's rolling out. I'll do the AI-related announcements first. Meta has announced the release of its newest AI models, Llama 4, which now enhance the Meta AI Assistant across platforms like WhatsApp, Messenger, and Instagram.

[00:06:23] The two new models, Llama 4 Scout and Llama 4 Maverick, offer impressive capabilities. Scout can operate within a single NVIDIA H100 GPU and has a context window of 10 million tokens. Meta claims it outperforms Google's Gemini 3 and other competitors in various benchmarks. Meanwhile, the larger Maverick model shows comparable performance to OpenAI's GPT-4. Meta is also training a third model, Llama 4 Behemoth,

[00:06:51] which boasts 288 billion active parameters and aims to excel in STEM benchmarks. The company has transitioned to a mixture of experts architecture for Llama 4, enhancing efficiency by optimizing resource use. However, Meta's licensing restrictions have drawn criticism, with some arguing that it limits the open-source nature of the models. And Google has launched Gemini 2.5 Pro, its most advanced artificial intelligence model to date,

[00:07:18] which is now available at a competitive price of $1.25 per million input tokens and $10 per million output tokens. The model, designed for developers, aims to increase accessibility and has drawn significant interest since its release. Google has responded to the enthusiasm by raising rate limits and moving Gemini 2.5 Pro into public preview in the Gemini API. Developers using the model during this preview phase will benefit from increased limits,

[00:07:48] while the experimental version remains free but with reduced capabilities. Microsoft has unveiled significant updates to its AI assistant, Copilot. The new features include memory capabilities that allow Copilot to remember user preferences and interests, enhancing personalization. Users can now tailor their interaction with Copilot, even opting for nostalgic appearances like clipping.

[00:08:12] Additionally, the assistant will gain the ability to perform tasks online, such as booking tickets and making purchases. The updates also introduce Copilot vision, enabling the AI to analyze content from screens and camera feeds. Why do we care? For IT service providers, the challenge lies in choosing the right tools that align with client needs while balancing performance, cost, and compliance.

[00:08:37] Strategic adoption requires not just technical integration, but also risk assessment related to licensing, pricing, and data privacy. And the insight from yesterday from Microsoft. There's more use case value staying six months behind the frontier models. Zoom has announced the general availability of its new task management feature, Zoom Tasks, which utilizes artificial intelligence to suggest and complete tasks for users.

[00:09:06] The feature is part of the company's broader push toward integrating AI into its workplace tools, and is included with eligible paid plans. The company reported a 68% increase in monthly active users of its AI companion. Enable has enhanced its unified endpoint management platforms with a built-in vulnerability management feature. The new capability integrates vulnerability discovery, prioritization, and remediation directly into existing tools,

[00:09:35] streamlining the management of risks across various operating systems, including Windows, macOS, and Linux. Disclosure, a shareholder. DNS Filter has announced its acquisition of Zorus, a company specializing in endpoint-based web filtering and user behavior analytics. The move, revealed on April 8th, aims to bolster DNS Filter's capabilities for MSPs by integrating Zorus' advanced technologies with its own artificial intelligence-driven threat intelligence.

[00:10:06] SentinelOne has introduced its global PartnerOne program aimed at enhancing partners' success and growth in the cybersecurity market. The program offers tools and support tailored for different partner types across four key tracks – manage, sell, build, and deliver. Each track is designed to cater to the specific needs of managed service providers, resellers, independent software vendors, and service providers.

[00:10:30] And in tariff news, Framework, a consumer electronics brand, has announced a temporary suspension of sales for certain laptop models in the U.S. due to newly enacted global tariffs. The affected models include the Ultra 5 and Ryzen 5 versions of its laptop 13. Originally priced with a 0% tariff in mind, the recent 10% tariff would have forced the company to sell these products at a loss.

[00:10:56] As a result, the Ultra 5 model is currently not listed on their website, while the Ryzen 5 version remains available for purchase. Why do we care? While I could linger on any of these, I'm going to note two. SentinelOne had, to date, not engaged directly, and instead used an integration and resell route, letting most MSP platforms be their entryway into the market. And now they are coming directly to you, MSPs. Just note that they aren't inclined to exclusivity.

[00:11:26] See my earlier comments about commoditization. While Framework's move is consumer-facing, the lower part of the S&B market behaves like consumers. Expect to see more product lineup changes to come due to tariffs. Today's episode is supported by Huntress. Most cybersecurity solutions are built for massive enterprises with big budgets. Not Huntress.

[00:11:51] They're the fully managed cybersecurity platform built for all businesses, not just the 1%. Huntress purposely builds security solutions like EDR, ITDR, SIM, and security awareness training to equip their team of elite threat hunters to handle the heavy lifting of security for you. When threat actors strike, Huntress's 24x7 global sock shuts them down before they're even on anyone else's radar. But they do more than just chase alerts.

[00:12:18] They lead the charge in industry research and knowledge, bringing expert protection and peace of mind. That's why users on G2 rate their EDR number one for growing businesses. To see how their expert threat hunting team gets the job done, visit Huntress.com slash MSB Radio. Thanks for listening. Today is National Empanada Day and International Be Kind to Lawyers Day.

[00:12:45] I'll be speaking on a webinar on April 22nd about inbound marketing in the AI era with the author of a new book. Link in the show notes and description to register. The Business of Tech is written and produced by me, Dave Sobel, under ethics guidelines posted at businessof.tech. If you've enjoyed the show, make sure you've subscribed or followed on your favorite platform. It's free and helps directly. Give us a review, too.

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