Microsoft's Recall Delay, Kaseya DattoCon Europe, VMware Revenue Decline, Google's Traffic Solution

[00:00:02] It's Friday, June 14, 2024 and I'm Dave Sobel. Four things to know today. Microsoft's Recall AI delayed for CoPilot Plus PCs, highlighting privacy and security challenges. Kaseya DattoCon Europe, Kaseya 365 growth, new partner initiatives and cyber insurance enhancements. VMware sees a $600 million revenue decline amid Broadcom's transition

[00:00:27] to subscription model and the weekend Friday Big Ideas. Apple's AI strategy, client-oriented IT and Google's traffic solutions. This is the Business of Tech. Microsoft is delaying the launch of its Recall feature for CoPilot Plus PCs to test it with

[00:00:47] the Windows Insider program. The feature, which screenshots everything done on the laptops, was initially promised as an opt-in feature with additional security improvements. Microsoft aims to ensure the experience meets high standards for quality and security

[00:01:02] for making it available. The delay means Recall won't be accessible to Windows Insiders or those purchasing CoPilot Plus PCs initially. Privacy advocates and security experts have raised concerns about the potential cybersecurity risks of Recall. Why do we care? Well, of course they

[00:01:20] delayed it. The backlash showed it wasn't fully baked. There's a distinct concern about how the data will be used and this wasn't addressed by the product choices here. Microsoft's Recall feature aggressively records everything. Apple's approach announced this week is about context

[00:01:36] awareness of existing data on your device. Comparing Microsoft's approach with Apple's more context-aware data handling reveals a critical strategic difference that could influence market preferences. This will be a fascinating area to watch, and fascinating is code for high

[00:01:54] value advice for customers. There was one other event this week, Kaseya DattoCon Europe. A three-day event in Dublin, Ireland. The company focused on Kaseya 365 and new capabilities such as the Partner First Pledge, Cyber Insurance Fast Track, and TruePeer expansion. Kaseya's Cooper

[00:02:15] Cares initiative is partnering with Irish Guide Dogs for the Blind to raise funds. Two details from the event, both from Channel Futures. Kaseya's new subscription program, Kaseya 365, has exceeded expectations with over 3,000 MSPs signing up and over 3 million endpoints on the

[00:02:33] platform. Kaseya believes its low prices have put competitors on alert and the CEO aims to increase MSP profit margins with the integrated software. Second, VP of Business Development Greg Jones said Kaseya plans to overhaul its global partner program, focusing on empowering partners

[00:02:53] in sales and marketing growth. The details of the new program have not been disclosed, but Kaseya has introduced the Partner First Pledge, which aims to share both the success and risk with partners. The company also highlighted flexible contract options, catastrophic loss prevention,

[00:03:08] and extended cyber insurance coverage. So I'll combine this story with another and tell you why in a moment. Spectra announces new certification and cyber resilience warranties in collaboration with Ingram Micro, allowing channel partners to differentiate their offerings and provide up to

[00:03:25] $1 million in coverage per customer. This partnership aims to establish better cyber insurance solutions and enhance cyber resilience in the digital economy. Spectra's business development team will attend the Ingram Micro S&B Unplugged event to celebrate the collaboration.

[00:03:41] The relationship between Spectra and Ingram Micro will expand next year to include channel partners worldwide. Now, why do we care? At first glance, I didn't think Kaseya announced anything. Kaseya's loyal customers moved over. So if assuming 25,000 customers, 12% have adopted their low-cost

[00:04:01] offering. Note something. The company didn't say new signups, just signups. But what intrigued me was the possibility, not the promise. Jones's comment about redoing a partner program alone is a standard future promise, as every channel company redoes its program every so often.

[00:04:20] But let's consider a move they might make that Ingram took a step towards, assumed responsibility. Kaseya's current offerings around loss prevention are non-zero and not particularly aggressive. The company is willing to differentiate in terms of finances and costs. Well, what if they were

[00:04:40] willing to differentiate on risk assumption? Their breach shows their response plans are solid and they understand the actual cost of recovery and thus could move into real recovery protection for partners. Is the new frontier for MSP platforms around assuming some of the risk? Now that's

[00:05:00] something worth switching to. Kaseya, or any of the platforms, has an opportunity to differentiate itself by assuming more financial responsibility for breaches and recovery. This could be a game changer in the MSP market where trust and security are paramount. Because remember,

[00:05:19] Sysa's secure by design moves and the Biden executive orders are aiming to have software vendors already assume more responsibility. Thus, take a mandate and make it into a feature, offering a compelling reason for partners to switch or remain loyal. Hey vendors, that advice is free.

[00:05:38] And providers, if I'm right, share this episode. I'm just saying. You're looking for security solutions for your MSP and Bitdefender has new ones for you. With advanced protection, simplified management, 24 by 7 analyst led security, threat hunting,

[00:05:56] and end-to-end protection options, it's time to check out Bitdefender's new offerings. With the ability to customize the security solution for what you and your customers need, you'll find a cost-effective selection with adaptive and scalable security. Want to check it out? Bitdefender would

[00:06:14] love to schedule a demo for you. Just visit bitdefender.com or the link in the show notes. Okay, I missed this one. I talked about Broadcom yesterday, but what about VMware revenue specifically? VMware's quarterly revenue has fallen by $600 million during its first full

[00:06:34] quarter of ownership by Broadcom. However, Broadcom as a whole reported strong growth in forward bookings and significant cost cuts at VMware. Broadcom sees potential in transitioning all VMware products to a subscription licensing model and has signed multi-year deals with a

[00:06:51] substantial number of customers. Broadcom's software business, including VMware, CA, and Symantec, has also shown positive results with increased revenue. Broadcom's silicon business also showed improvement with revenue growth in AI-related products and networking.

[00:07:07] Now, why do we care? I missed that VMware revenue dropped, and that's worth noting. The $600 million revenue drop at VMware highlights the typical challenges faced during a major business model transition. Broadcom's strategic shift toward subscription licensing is aimed at securing

[00:07:25] long-term stability and growth despite the short-term revenue hit. Those who've moved from product sales to subscriptions know there is a brutal revenue drop as you move over, sacrificing those one-time revenue spikes for long-term steady income. And as you do so,

[00:07:41] you see a revenue drop. This told me they're right in the drop and fully committed. It's a detail I didn't want to miss. Ready for the weekend? Let's get into some big ideas. Wrapping up the Apple stuff this week, InterConnects looked at Apple Intelligence

[00:07:59] and broke down the strategy. By focusing on personalization, performance, and size, Apple's core models demonstrate strong performance compared to other language models. The company's alignment strategies include fine-tuning techniques and the use of novel algorithms for reinforcement learning. Additionally, Apple has developed adapters

[00:08:18] and on-device strategies to optimize memory usage and latency speeds. This comprehensive approach positions Apple as a significant player in the AI race and emphasizes the transformative potential of AI for billions of users. Ben Thompson wrote about how Apple

[00:08:36] Intelligence is right on time. He highlights the importance of smartphones as nearly perfect devices for the tasks we ask them to do, and the app ecosystem as a natural state of affairs. He then explores the infrastructure concerns of AI and the competitive threats Apple faces,

[00:08:53] particularly from Google. He offers that Apple's deliberate approach to AI aligns with its brand promise of privacy and security. Information Week with Should IT Treat Users Like Clients? Moving beyond my flippant yes, Mary Shacklett argues that IT departments should adopt

[00:09:13] a more client-oriented approach toward internal users to improve customer service and build long-lasting relationships. This includes demonstrating empathy, following up with users after projects, and anticipating their needs. While many IT departments have made progress in

[00:09:28] improving internal customer service, there's still work to be done such as relationship building and interpersonal skills. CIOs are crucial in advocating for a client-focused IT and should lead by example. And I'll end with a great use case. The Wall Street Journal covers Google expanding its

[00:09:46] GreenLight product. It uses data from new cars and navigation apps to optimize traffic light timing, creating green waves of consecutive green lights. The system has already showed a 30% reduction in stop-and-go traffic at intersections in cities where it's deployed. This approach could

[00:10:04] significantly reduce time spent idling at traffic lights and improve traffic flow. It also eliminates the need for expensive and time-consuming studies to change traffic signal timing. Why do we care? Big thoughts that I want to stand on their own and you enjoy over the weekend.

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[00:11:08] Visit corevue.com slash msp and find out more. Thanks for listening. It's Flag Day in the US, National Bourbon Day, and World Blood Donor Day. Celebrate the bourbon a couple hours after you give blood and have some water. Be careful.

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