Navigating Price Sensitivity, AI Advancements, and AI Responsibility in IT Services

[00:00:00] It's Monday, July 1st, 2024, and I'm Dave Sobel. Three things to know today. Navigating Price Sensitivity, the value of IT services in cost-conscious markets. Expanding their global reach, Google Translate adds 110 languages using AI and why you care. And why assigning AI responsibility matters, insights from Gartner's new poll.

[00:00:25] This is the Business of Tech. Happy Monday everyone! This will be an abbreviated work week. This show is off on Thursday and Friday, and as it's Monday, let's look at new market data. Americans are increasingly intolerant of price hikes, causing businesses to lower prices and entice shoppers.

[00:00:44] This consumer resistance to price increases may contribute to disinflation and normalized price increases. The resurgence of fast food price wars and competition in the travel industry highlights the price sensitivity of consumers. According to a study by PagerDuty, 59% of IT leaders report an increase in high-priority

[00:01:06] customer-facing digital incidents over the past year. These incidents hurt companies' brands and revenue streams, with 90% of IT leaders believing outages have reduced customer trust. The rise in incidents is attributed to increased complexity, rapid expansion of digital services, and insufficient investment in IT infrastructure maintenance.

[00:01:28] Research from Sage highlights that medium-sized enterprises are increasingly looking to the channel for trusted advisory support in embracing digital services and AI. Over half of IT resellers have reported an increased role in providing strategic advice, focusing on AI tools and analytics to stay informed and flexible.

[00:01:48] Partners are prioritizing the latest technologies to improve agility, optimize business processes, align tech solutions with business goals, and offer insights on industry trends. Labor scarcity is becoming the new normal in the economy of the 2020s, with implications for corporate strategy, growth, and inflation.

[00:02:05] A new report from the McKinsey Global Institute warns that labor shortages, which emerged after the pandemic, are likely to persist. Businesses will need to find ways to maintain output with fewer workers, which poses a high risk to economic growth.

[00:02:23] The report also highlights that this is a global phenomenon, not just a temporary blip as the aging baby boom generation leaves the workforce. Higher wages can be expected in sectors with acute labor shortages, and the adoption of

[00:02:37] generative AI may help boost productivity in the face of persistent worker shortages. And the Russell 2000 is down 0.63% in the last five days and remains down 2.7% for the year, and the S&P 600 is down 0.6% in the previous five days, down 2.6% for the year. Why do we care?

[00:03:00] There's continued strong value in the core IT services offering, helping customers with their technology needs with strong advice and a steady hand to navigate rough waters. I'd argue that there's going to be less tolerance for increased cost without a direct link to business value.

[00:03:17] So are you driving revenue with IT? Automating incident response and improving coordination among IT teams noted as a valuable solution to reduce the prevalence and cost of incidents. Well, I want to extend that. Automating work to reduce costs is the key value.

[00:03:36] And to go further, expand the measurement into also helping employees not only be more productive but also removing stress or excess burden. Because as the data shows, keeping people is going to be critically important. Sure, focusing on increasing productivity is good, but what's great is helping those

[00:03:55] workers have better overall satisfaction with their jobs. Retention is the key as churn is expensive. Are you an MSP navigating the evolving landscape of Microsoft 365 and Copilot? Skykick is here to help you identify ideal clients for Copilot and mitigate risks for your customers enabling Copilot in their business.

[00:04:19] As MSPs, you all know it's not as simple as just turning it on. In eight steps, Skykick Automation will help you identify which customers are ideal candidates for Copilot and set a variety of standards to ensure their data is safe before Copilot is enabled. Embrace this AI revolution.

[00:04:36] Offer advanced automation, improve efficiency and reduce manual workload with Skykick's tailored solutions. Educate your clients on the benefits and adapt your services to include enhanced security measures. Don't just adapt to change, lead it. Elevate your MSP business with Skykick and Microsoft's Copilot.

[00:04:54] Visit skykick.com slash MSP radio to learn more and start transforming your services today. OpenAI is reportedly making more money from its chatbots than Microsoft. While Microsoft initially partnered with OpenAI to sell access to their models together, the terms changed when Microsoft invested more money into OpenAI.

[00:05:15] OpenAI reached $1 billion in annualized revenue from selling model access, surpassing Microsoft's Azure OpenAI service. Microsoft has cut prices for Azure OpenAI service to compete with OpenAI. However, it needs to be clarified how much Microsoft earns from Copilot and how much OpenAI earns from ChatGPT for enterprises.

[00:05:37] OpenAI has developed CriticGPT, a tool designed to help human trainers identify ChatGPT code output errors. This tool aims to improve OpenAI's AI models by providing trainers with an AI assistant to spot inaccuracies and write more comprehensive critiques.

[00:05:53] However, CriticGPT has limitations, including being trained on short ChatGPT answers and potential for generative AI to cause hallucinations and lead to mistakes. OpenAI acknowledges that evaluating extremely complex tasks or responses may still be challenging even with model assistance.

[00:06:12] OpenAI has announced a delay in launching its Advanced Voice Mode feature for ChatGPT voice assistants. The company needs more time to improve content detection, user experience, and infrastructure scalability. A small group of users will test the feature before being launched to all paying ChatGPT customers in the fall.

[00:06:30] The release of new voices and a camera understanding feature have also been delayed. And Google Translate is expanding its language support by adding 110 new languages, making it the largest expansion in the company's history. The addition of languages was made possible by Google's Palm 2 AI language model, which

[00:06:50] excelled in learning related languages. The newly supported languages include Cantonese, which has been highly requested, and a significant number of languages from Africa. Most of the new languages are spoken by at least 1 million people, with some spoken by hundreds of millions. Why do we care?

[00:07:09] OpenAI is the rocket ship of an energized startup. Microsoft will be the steady, wise investment over time. You can pick your risk tolerance level. Both will do well. But let's focus for a moment on that Google Translate enhancement. AI did that. And that's the trick.

[00:07:26] We're looking for outcomes less than the technologies themselves. I'm far more interested in copilot success than the specific LLM, because that's where the benefits to the business and the employees are. We're tracking earlier to gauge what's coming, such as critic GPT enhancements to copilot, for example.

[00:07:45] But the value is in the use cases. According to a recent Gartner poll, 55% of organizations have an AI board, and 54% have a head of AI or an AI leader. The poll highlights the need for an AI board to address multidisciplinary challenges and

[00:08:03] drive value, but the composition and scope of the board vary. Accountability for AI initiatives is often unclear, and the top focuses of the board remit are governance and strategy. Additionally, organizations have AI leaders more commonly than chief AI officers, as boards prefer to avoid expanding the C-suite.

[00:08:25] So, that's surveyed organizations, and let's assume that skews larger than the broad business population. The insight is not about the percentage, but the assignment of responsibility. A group or person is assigned to it, and the title is less important than the fact that it's been assigned.

[00:08:43] It's an obvious area for assistance or complete outsourcing for smaller organizations. And that's why we care. The advice continues to be where it's at. Today's episode is supported by CoreView. Your customers need your Microsoft 365 expertise, and CoreView has the only M365 management platform designed for MSPs.

[00:09:07] Manage hundreds of tenants, automate manual tasks, and monitor compliance, all while intelligently comparing to the baseline. With a no-code control approach, CoreView revolutionizes your Microsoft 365 administration. This powerful platform enables automatic reporting and remediation, ensuring optimal performance and security. The best part?

[00:09:29] You achieve this high level of service without the need for a large workforce, allowing you to focus on growing your business through efficiency. Want to know more? Visit coreview.com slash MSP and find out more. Thanks for listening. Today, International Joke Day.

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[00:10:48] I'll talk to you again on our next episode of the Business of Tech.