Mon Apr-15-2024: Strain on Small Businesses and AI Adoption in SMB Market, Microsoft Price Increases

[00:00:00] It's Monday, April 15, 2024, and I'm Dave Sobel, three things to know today.

[00:00:07] The financial strain on small businesses insights from the latest U.S. economic reports.

[00:00:12] AI adoption soars in S&B and mid-market.

[00:00:16] Channel partners are poised for growth.

[00:00:19] Amazon retires a checkout technology.

[00:00:21] Microsoft pushes upgrades.

[00:00:23] And Google bolsters work space security.

[00:00:27] This is the Business of Tech.

[00:00:30] Are you and your clients tired of the time-consuming ticket tennis of coordinating meetings and helpdesk

[00:00:38] calls?

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[00:01:00] It integrates into your workflow and makes scheduling appointments easy on you and your clients.

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[00:01:18] year of TimeZest.

[00:01:20] Kicking off a new week, let's look at some of the latest market conditions.

[00:01:26] The Russian trade has given a bunch.

[00:01:29] The Russell 2000 index lost approximately 3% during the previous seven days.

[00:01:35] Down turn comes as investors grapple with various concerns, including rising interest

[00:01:39] rates, inflation and geopolitical tensions.

[00:01:42] The small cap market has been a significant driver of growth in the US equity landscape

[00:01:47] and has recently faced headwinds.

[00:01:49] BS&P 600 is down 5.19% month to date.

[00:01:53] Small business owners has reached an 11-year low due to high inflation, hiring difficulties

[00:01:59] and tight financial conditions.

[00:02:01] The Small Business Optimism Index dropped to its lowest level since December 2012, with

[00:02:07] inflation being the top concern for owners.

[00:02:11] The unemployment rate may have dropped, but 37% of owners reported unfilled job openings.

[00:02:17] Economist Mohammad El-Iran sees this drop in confidence as a sign of a looming slowdown

[00:02:23] in the US economy.

[00:02:25] The latest Consumer Price Index report indicates that inflation in the US is higher than expected,

[00:02:30] potentially impacting plans to lower interest rates.

[00:02:33] The CPI rose 0.4% in March with poor CPI rising at an annualized pace of 4.5% in the last

[00:02:41] three months.

[00:02:42] This could lead to a shift in the Federal Reserve's interest rate projections and

[00:02:46] limit the number of rate cuts this year.

[00:02:49] But there is particularly good news for anyone with a small business and credit cards.

[00:02:53] Visa and MasterCard have reached a major settlement with merchants to cut and cap credit card

[00:02:59] processing fees, resulting in expected savings of at least $29.8 billion for US businesses.

[00:03:07] Merchants will have more flexibility in adjusting prices for good sold via credit

[00:03:11] cards, with fee rates expected to decrease over the next several years.

[00:03:17] Why Do We Care?

[00:03:19] A win for credit card fees is a win for most small businesses.

[00:03:23] Let's take it.

[00:03:24] Now, before we overthink the market, let's see what it means to technology.

[00:03:29] On to that data.

[00:03:33] And some insight on opportunities.

[00:03:35] According to Tech Isle's research, AI adoption in SMBs and mid-market presents significant

[00:03:40] opportunities for channel partners.

[00:03:43] Over 40% of upper-mid-market firms, nearly 40% of core mid-market firms, and almost

[00:03:48] 30% of small businesses expect AI-related IT spending to increase by more than 25% in 2024.

[00:03:56] However, potential risks exist, such as vendors bypassing the channel and customers'

[00:04:01] favoring partners who can leverage AI efficiently.

[00:04:05] Channel leaders are advised to adopt a sense and respond approach and align value propositions

[00:04:11] with customer decision makers.

[00:04:13] These solution categories for AI adoption include cybersecurity, customer experience, IT operations

[00:04:18] and management.

[00:04:20] Successful channel firms can capitalize on the rapid growth of AI in the SMB and mid-market

[00:04:26] by working with relevant solutions, products and suppliers.

[00:04:30] A survey of business leaders reveals concerns about quickly training employees to keep

[00:04:35] up with AI and tech developments.

[00:04:37] In a survey of 715 senior executives worldwide, including 680 from Forbes Global 2000 companies

[00:04:44] and 35 public sector organizations, 80% said it's never been this difficult to plan for

[00:04:51] future talent requirements.

[00:04:53] 92% of senior executives say they'll need a more flexible workforce in the next two

[00:04:58] years.

[00:04:59] Why do we care?

[00:05:02] So this is where I see the two stories coming together.

[00:05:05] First, a flexible workforce does not mean full-time employees necessarily.

[00:05:10] Instead, one option is working with a partner to deliver skills and capabilities that will

[00:05:14] be of higher value when needed.

[00:05:17] Layer in AI, the productivity boosts can offset inflation costs, tying the two together

[00:05:22] and linking them to revenue will be a successful choice.

[00:05:26] Sense and respond.

[00:05:27] There's an awful lot to unpack there.

[00:05:30] To sense, you need to be very close to your customers and not only hear what they say but

[00:05:35] also sense unspoken concerns.

[00:05:39] Respond implies you're prepared to do so with appropriate solutions.

[00:05:44] I agree with the approach and want to point out that those who execute will be both

[00:05:48] scarce and more profitable.

[00:05:53] There's also some interesting platform news.

[00:05:56] Amazon is removing its just walkout technology from all fresh grocery stores in the US.

[00:06:02] The self-checkout system, which relied on cameras, sensors and human monitoring, faced issues and

[00:06:07] was expensive to install and maintain.

[00:06:10] Privacy concerns were also raised due to the collection of biometric information.

[00:06:14] Amazon plans to revamp its retail grocery arm by introducing Dash smart carts that

[00:06:19] allow customers to skip the checkout.

[00:06:22] Zoom has undergone its first major overhaul in nearly 10 years, utilizing artificial intelligence

[00:06:28] to enhance the video calling experience.

[00:06:31] The redesign includes a fresh look with customizable color themes and meeting backgrounds and new

[00:06:36] features like multi-speaker view, document collaboration, portrait lighting, personalized

[00:06:41] audio isolation and dynamic reactions.

[00:06:44] Improved collaboration features such as the meetings tab and meeting event hub

[00:06:48] have also been implemented.

[00:06:50] New workplace is available at no additional cost for eligible paid plans.

[00:06:55] Microsoft has announced price increases of between 9.26% and 16.67% for its Dynamics 365 business

[00:07:03] applications, citing the release of new features and enhancements as the justification.

[00:07:09] The price changes will take effect on October 1st of this year.

[00:07:12] US government users will see a 10% increase in October 2024, followed by another minor

[00:07:18] increase in October 2025 to align with commercial pricing.

[00:07:23] Microsoft plans to introduce recommendations in the Windows 11 Start menu essentially adds

[00:07:29] for apps in the Microsoft Store.

[00:07:31] The feature is naturally being tested with a small group of US beta channel Windows insiders.

[00:07:37] The recommendations can be turned off and are currently limited to a subset of those

[00:07:42] beta channel Windows insiders.

[00:07:44] However, the feature could be released more widely in the future.

[00:07:48] Microsoft is using full screen prompts to encourage Windows 10 users to upgrade to Windows 11,

[00:07:54] even though not all PCs are eligible.

[00:07:57] The prompts thank users for their loyalty and provide information about the end of

[00:08:00] support date.

[00:08:02] Microsoft has not clarified if this is a one-time notification or if it will appear

[00:08:06] regularly over the next 18 months.

[00:08:09] The prompt does not mention that consumers can continue using Windows 10 securely beyond

[00:08:14] the end of the support date if they are willing to pay for extended security updates.

[00:08:20] Windows 11 uptake has been slower due to stricter hardware requirement.

[00:08:25] And Google Workspace is introducing a multi-admin approval feature for high-risk setting changes

[00:08:30] to enhance security and prevent unauthorized modifications.

[00:08:34] This feature requires multiple admins to approve sensitive actions, adding an extra

[00:08:39] layer of security and preventing isolated decision-making.

[00:08:42] It aims to prevent compromised accounts from making harmful changes and lower the risk of

[00:08:47] lowering the overall security level.

[00:08:50] Why do we care?

[00:08:52] First, I want to note that Amazon is abandoning a major investment.

[00:08:55] There's a lesson in abandoning technology and plans when they aren't working.

[00:09:00] Microsoft sure is squeezing that upgrade, full screen ads.

[00:09:04] And you end up with more ads in Windows 11.

[00:09:06] Not sure I'm so keen on this.

[00:09:08] Distinctly, this is your opportunity to send feedback.

[00:09:14] Today's episode is supported by CoreView.

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[00:10:04] Thanks for listening.

[00:10:05] Today is tax day in the US, but it's also National Laundry Day.

[00:10:09] Really.

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