Navigating Trends: Vendor Trust, AI Impact, Data Services, and Tech Fatigue with Carolyn April

[00:00:01] How Healthy is the IT Service Provider Channel? Are providers less dependent on vendors? What's

[00:00:07] going on with AI? And what might come next year?

[00:00:11] Carolyn April of CompTIA joins me today for a free-wheeling conversation as we dive into

[00:00:16] what might be coming base in the current state of the channel.

[00:00:20] Welcome to the Business Tech Lounge, the live version of the Business of Tech podcast.

[00:00:25] It's Wednesday, October 2nd, 2024, and I'm Dave Sobel. We'll take questions and

[00:00:29] comments throughout the show, so make sure to put them in chat if you have a question. We'll

[00:00:35] happily respond to it. I want to thank SalesBuilder, our Patreon sponsor whose support makes this show

[00:00:41] possible. Focus on your IT sales workflow with the power of automation and visit them at salesbuilder.com.

[00:00:51] And a reminder, I am watching that chat and we'll keep an eye out for your questions and

[00:00:56] comments. Carolyn April is the Vice President of Industry Analysis at CompTIA where she leads

[00:01:01] research and reports on key trends affecting the IT channel and broader tech industry. With over

[00:01:08] two decades of experience, she provides strategic insights into channel dynamics, workforce trends,

[00:01:13] and the evolving role of technology solutions providers. Carolyn, welcome to the show.

[00:01:20] So good to be here. So good to see you too, Dave.

[00:01:23] I am so excited to have you here to have this conversation. Now, there's some fascinating data

[00:01:28] in your state of the channel report. You highlighted in particular a surprising statistic that 36%

[00:01:35] of MSPs don't fully trust that vendors won't go directly to their customers. I will say,

[00:01:42] I thought that seemed like a lot. Layer on top of that, the fact that IT providers are

[00:01:46] enrolling in fewer programs, you saw the greatest growth in the category of firms enrolled

[00:01:52] in just one to four programs. And the percentage of channel firms involved in no vendor programs

[00:01:58] increased from 7% to 11% in a year. Now, I might argue that vendors are becoming less relevant.

[00:02:08] What's your take on this data set? It's an interesting one, isn't it? It was probably

[00:02:14] the biggest change if not a head scratcher from previous years of doing this study. And you

[00:02:21] could interpret it multiple ways. You could say vendors are less relevant or there's something a

[00:02:26] little bit more nuanced, I think, going on here. I think working with a zillion vendors is far less

[00:02:34] relevant today. I think that what we are finding in our data and anecdotally as well,

[00:02:41] so I talked to a lot of solution providers as you do, I'm sure, and MSPs and people out there

[00:02:47] is that what many of them are finding is having a line card filled with 20 different vendors or more,

[00:02:53] even 10 or more in some instances isn't manageable. It isn't manageable and the ROI on it is simply

[00:03:00] not there. There is much more to be gained these days by participating in fewer programs with

[00:03:07] vendors whom you would consider aligned with your goals, aligned with your business outcomes

[00:03:13] and invested in you as an MSP or solution provider, much more so than you serving as a sales arm for

[00:03:19] the organization. And a lot of this might seem very obvious and it's a shock to me that that

[00:03:24] hasn't been the case all along. But I think what we're seeing in this era of so many vendors

[00:03:30] out there to choose from, we've moved away, I'll backpedal a little bit, we moved away from

[00:03:35] the days when you had two or three major hardware vendors and two or three major software

[00:03:40] players and you were a reseller in the channel and you kind of like made your bets on which one

[00:03:45] you were going to be, I'm going to be an HP hardware reseller and I'm going to be a Microsoft

[00:03:49] software reseller. And I'm going to have that on my business cards and I'm going to,

[00:03:53] all of my marketing material is going to be about my allegiance to these programs.

[00:03:58] Well today's day and age with the cloud and all of the SaaS players out there,

[00:04:01] the multitude of cybersecurity players, it's just, it's, there's a plethora of

[00:04:06] vendors to choose from. And I think it's caused a little bit of chaos on the minds of

[00:04:10] solution providers and MSPs, the choice is overwhelming. And so you could, and I think

[00:04:14] what we saw is for a while there, there were a lot of folks in the channel choosing a lot of

[00:04:20] vendors. They were like, well, we'll sign up for this many cybersecurity vendors and this many

[00:04:24] marketing automation vendors and you name CRM vendors, you name software vendor.

[00:04:29] And it got overwhelming. These are small companies often. They don't have anyone

[00:04:33] dedicated to managing the partner program and incentives and rebates and all of the things

[00:04:37] that they need to look for in these programs and they weren't getting as much out of it.

[00:04:40] They found themselves, you know what? I'm really only selling maybe five vendors here on a regular

[00:04:44] basis. They're bringing me a lot of money or making me significant margin. Why don't I double

[00:04:49] or triple down on them? I think that's the reality check that we've seen this year

[00:04:52] is that many MSPs and other solution providers out there are realizing we don't need that

[00:04:57] many vendors. We need the ones that mean a lot to us and are going to help us make money.

[00:05:01] Now it's interesting you say it that way because I'm trying to understand,

[00:05:04] need might be doing a lot of heavy lifting in that sense.

[00:05:07] I want to actually think this through a little bit because my understanding is,

[00:05:11] is particularly in a world of cloud and in particularly SaaS like in a world of SaaS

[00:05:16] in for a lot of small businesses, you actually have more pieces of software,

[00:05:22] not necessarily saying vendors specifically, but you have a lot of your SaaS software

[00:05:26] that a small to midsize organization is using is what's happening here that the

[00:05:32] supplier, the MSP who's supporting that. Is it essentially that they've just said we're only

[00:05:37] going to go in to work with a smaller group and just kind of make availability of the other ones?

[00:05:44] Like just make sure that the services are available and these are the ones that we're

[00:05:46] going to focus on or do you think it's just is are they actually trying to eliminate

[00:05:51] the number of things in their end customers? I think it comes down to the commitment

[00:05:56] that they make to a particular partner program. So it's not that a MSP or a solution provider

[00:06:03] won't sell a particular SaaS application or product, but they may not be enrolled formally in that

[00:06:09] program. They're not going to go and invest the resources they need to be in whatever tier

[00:06:16] that is considered a good tier to be in a particular vendor's program.

[00:06:21] The other thing that's in play here is that there are quite a few distributors today and

[00:06:26] are who are doing tons of aggregation of a lot of these SaaS applications so that the vendor

[00:06:32] themselves is kind of abstracted from the MSP and solution providers out there. They're not

[00:06:37] actually working with those vendors directly. They're working through the distributor level

[00:06:41] or the marketplace level of aggregated solutions and they don't necessarily in because they do

[00:06:47] it that way. They're not necessarily mandated to join a program formally with any of those vendors

[00:06:52] who happen to be in that bundle. So I think it's really a matter of disengaging from being so formally

[00:06:59] enrolled and that's what we're seeing in our data. And the other thing that I should point

[00:07:03] out is we're seeing higher satisfaction rates. So the enrollments that they are making, the

[00:07:08] formal enrollments and programs that channel companies are making with the vendors who

[00:07:12] matter to them most and who are aligned with their business outcomes, those relationships

[00:07:17] they're telling us are better. So those are more satisfied with their relationships. They're

[00:07:21] getting more out of them. But to your point Dave, it doesn't mean that they won't offer a

[00:07:25] certain solution to a customer. It just means that they're not necessarily going to be cemented

[00:07:30] to that vendor in terms of the partner program relationship. Interesting. Now a reminder for

[00:07:34] watchers you've got to post in our comment, throw it in chat. We'll definitely address it.

[00:07:38] You brought up distributors first because that's where my head went as well.

[00:07:42] Do you have evidence that the distributor relationship is one of those key vendor

[00:07:47] relationships? And are you seeing that engagement level with distributors grow? Particularly as

[00:07:55] we kind of want to throw in the idea of marketplaces a little bit in there. But as I've seen,

[00:08:00] a lot of the distributors are leaning into building their marketplace of solutions that

[00:08:05] they can offer. Yeah, it's getting a little cloudy and strange. I just did a panel at my event at

[00:08:11] ChannelCon in August. And one of the panelists, Rob Bray, who's probably well known to everybody

[00:08:16] out there was talking about who works at PAX 8, which is obviously a cloud marketplace for

[00:08:22] cloud distributor. And he was talking about how distributors no longer want to be or at

[00:08:27] least PAX 8 doesn't want to be called the D word. They do want to be thought of as

[00:08:32] marketplaces, but marketplaces for the channel. Whereas the other big marketplaces we think about,

[00:08:37] the Googles, the AWS, the azures from Microsoft, they're more of the competitors to the channel

[00:08:43] in many ways. And we see that in our data. The number one competitor these days is to the channel

[00:08:48] is marketplaces. Distributors, I think are being a little sly here. They're kind of,

[00:08:52] they're stealing the nomenclature. So they want to be called marketplaces because there's

[00:08:56] something kind of cool about a marketplace. It seems like we're an open bizarre. We're

[00:09:02] they're selling themselves as the marketplace to the channel. And I think that's what I'm talking

[00:09:07] about where kind of leads solution providers and MSPs be able to deal with that marketplace

[00:09:11] that the distributor with the D on it is offering to them and abstracting them from

[00:09:17] the vendors who happen to live in that marketplace and having to be enrolled in their

[00:09:20] programs. So I think what we're going to see, and this gets to a little bit about maybe what

[00:09:25] we want to talk about for trends for 2025 and beyond is the role of distributor

[00:09:30] is really changing. And I know it's gone through many iterations for me, just the pack and ship

[00:09:35] kind of iteration when it did hardware fulfillment only to becoming much more around,

[00:09:40] much more involved in services and bundles and those kinds of solutions for their customers

[00:09:44] to entering the cloud age where they're trying to help customers navigate that

[00:09:49] to, I think we're seeing another phase with distribution where they are going to be

[00:09:54] billing themselves as marketplaces and they're going to be the go to not really for fulfillment only,

[00:10:00] but for helping MSPs figure out and solution providers. Ultimately those solutions that

[00:10:06] they're going to get to customers are going to be multi vendor. Yeah, it's interesting because

[00:10:10] I'm uncomfortable with their rebranding attempt mostly because it's mostly because

[00:10:15] I just don't think it's necessary. I think it's trying to be like a cool kid where

[00:10:19] I like that. I think it is them trying to be the cool kid for sure.

[00:10:24] Distributor is such a lame name now, you know, it's just sounds so old school, right?

[00:10:28] Yeah, but but embracing marketplace doesn't actually help the branding,

[00:10:32] the problem problem that they're trying to address. I think that there is a difference

[00:10:36] between when we talk about a marketplace like a Google one or an Amazon one or a Microsoft

[00:10:40] one. I think there is something different to that offering versus what a new distributor

[00:10:46] wants to be. But by the way, I don't think there's necessarily any shame in the line of business

[00:10:51] that they've come from and I think we're trying to throw it all together to be the cool kid because

[00:10:56] we are an industry that loves the cool new trend more than anything,

[00:10:59] but I'm not necessarily sure we're adding any value there.

[00:11:04] Now, I do want to move to a couple of things because something I spotted in your

[00:11:08] stack rank of business lines in the state of the channel report that really made me

[00:11:13] fascinated with was the idea of data services about 50% were highlighting. Now, I don't feel

[00:11:20] like enough people in our space are talking about data services. Can you elaborate a little

[00:11:26] bit about what is meant by that line item of what the channel is selling?

[00:11:32] Yeah, that's a really good question and I think data is something that is

[00:11:37] still being sorted out as what it means as a business line to many in the channel.

[00:11:42] The fact that it was so high on that list does not necessarily mean it is a single thing and

[00:11:48] it wasn't singularly defined in the study. It's not as though we said data services in parentheses,

[00:11:54] it means X, Y or Z. Check this box if you fit that. They could have interpreted data services

[00:12:00] in many different ways. It could be that they're offering literally like old school

[00:12:04] database services and database management services. It could be that they're helping

[00:12:09] companies with their AI models and helping them figure out data in that regard. It could be that

[00:12:14] they're focusing a lot of their cybersecurity efforts around their data protection and data

[00:12:19] protection could be the way that they go to market with cybersecurity. I just want to

[00:12:24] set the table there that there was no singular definition in that but the area of data I think

[00:12:30] is another one of these trends that just like we used to say that software development wasn't

[00:12:36] necessarily in the wheelhouse of most channel firms. They weren't doing coding, they weren't

[00:12:42] doing software development. We see that a little bit more now not necessarily at their writing

[00:12:46] applications but they do a lot of bridge work with coding and they're helping companies

[00:12:50] do integration and other things that require development skill. I think data fits into

[00:12:56] that bucket now is yet another frontier that the channel is going to need to tackle in some way

[00:13:02] because it touches on all areas of the tech stack. Really there's data everywhere and if you talk to

[00:13:09] customers and you're having business conversations with them, one of the most likely things even

[00:13:14] the non-technical folks that you might be selling to are going to start talking to you about is

[00:13:18] how do we protect our customer data? We read a lot about breaches, we read a lot about this.

[00:13:22] How do we take care of data or they talk about AI and they talk about data in that regard like

[00:13:28] I hear this thing about AI is only as good as the data that it's fed in the first place.

[00:13:32] How do we work a strategy around that? I think there may be a little bit of aspiration in the

[00:13:39] channel firms that check that box as we're doing a lot of data services and we see that with

[00:13:45] surveys. A lot of them can be aspirational in their answers but I do believe that it is going

[00:13:50] to be a lot of what we see in terms of next frontier lines of business for companies that

[00:13:55] are savvy and smart. That's the direction they should head for sure.

[00:13:59] We crossed the 13-minute mark without saying AI which actually leads to where my head was

[00:14:05] out on this is because the reason I'm so interested in talking about data and looking

[00:14:09] for data services and people that are talking about it is my feeling and my perspective on

[00:14:14] what's going to happen here is that data governance is a prerequisite for getting AI right

[00:14:21] but in order to do anything effectively particularly with generative AI that you don't want to give your

[00:14:27] entire data set to willy-nilly and you're going to have to divide up and think about the way

[00:14:31] data is used within it. While AI is really good with unstructured data, you can't just give it

[00:14:38] goo. You have to actually have it in some kind of format that is generally ready to be consumed.

[00:14:44] Time spent on data services is where that data governance is where that's going to grow

[00:14:52] particularly over the next say two years. If we dig into Microsoft's co-pilot guidance just as a

[00:14:58] specific tactical example, they're outlining, hey, you've got to get your all data ready.

[00:15:03] Kind of what I wanted to get at is you've been looking at this for a little while. Is that

[00:15:06] trend growing and where do you think and how do you think of that premise as someone who's

[00:15:13] analyzing where we're going to be going say next year or the year after?

[00:15:17] Sure. AI has been interesting with respect to the channel. I'd say the previous year and a half to

[00:15:24] two years it's been all about experimentation. We've asked on studies, where are you at with AI?

[00:15:29] What are you doing? Almost the large percentage of channel companies were not monetizing it in

[00:15:35] any way. They were working with it internally. They were maybe using it as part of their

[00:15:39] business just to see how things worked out. This year and into next year, the data is telling us

[00:15:46] that they are starting to figure out ways to monetize it. The interesting thing is when you

[00:15:51] ask, well, are you selling a product? Is there such a thing as an AI product? There really isn't.

[00:15:56] The way I think about AI is that it's more of an enabling technology that's going to be built in

[00:16:01] its functionality, very strong and capable functionality but also dangerous in some

[00:16:06] and in the wrong hands but built into other things. It's going to be part of a larger solution.

[00:16:12] So it's not if you're thinking real old school with resellers, when they try to wrap their head

[00:16:16] around, well, is it something that I go to my customer and sell? No, it really isn't.

[00:16:21] So what we have been recommending and what I've seen in some of the more cutting edge

[00:16:25] solution providers is just what you're talking about becoming an AI expert with respect to

[00:16:31] the various things that matter. And one of them is data. In fact, it's probably the biggest one

[00:16:36] is building data models, having data governance, so understanding how to use data and use it

[00:16:41] effectively and use it in a safe manner. And what we're recommending is what you need to do with

[00:16:49] your customers not necessarily go out there and push some sort of AI product on them,

[00:16:53] but you could build an entire practice around helping them come up with their AI strategy.

[00:16:58] It's really more of consulting than anything else, but I personally think we're going to see

[00:17:03] the greatest opportunity in the short term here for channel companies around AI consulting work.

[00:17:09] So they can go in and take a customer that doesn't hear a lot about AI, but really doesn't know

[00:17:13] anything about what it means for their company and sit down with them and work out how to

[00:17:18] leverage AI for that customer's business no matter what particular use they use it for,

[00:17:24] but doing that sort of work with customers and that requires extreme skill. You need to know

[00:17:29] what you're talking about, you need to understand how you can explain to customers about how to

[00:17:32] protect their data, how to use the right data, how to build a model that's effective and not

[00:17:36] junky AI results that you're going to get out of it, how to secure it, that's going to be

[00:17:41] another big area. So I think consulting and you can put data services in that bucket is

[00:17:46] if you choose to tackle it probably your biggest opportunity with AI in the short term.

[00:17:51] I want to get a little bit of your take on. So as I dug into it, you were looking at the fact

[00:17:55] in the data that the smallest channel firms are the most cautious about diving into AI sales,

[00:18:01] about 29% projected to do so and then that compares to 46% of small firms, 52% of medium-sized

[00:18:07] firms and 67% of large firms. I'm intrigued by the inverse that I spotted on this and I

[00:18:13] wanted to get your kind of taken reaction to it. It felt to me like larger firms actually

[00:18:19] might have higher risk of danger of the hallucinations impacting their operations or the fact that

[00:18:29] they would have much more need to get the data governance right, the data allocation,

[00:18:33] data security right, whereas smaller firms actually in a way have a lot less to lose

[00:18:39] because they might maybe be able to lean in and get some productivity gains without

[00:18:44] necessarily having a huge suite of intellectual property they're trying to protect.

[00:18:51] What am I missing there in terms of thinking that because it feels like the smaller firms

[00:18:56] should be much more experimentations or experimental right now and they aren't.

[00:19:03] Are we talking about smaller, we're talking about channel firms now or are we talking

[00:19:06] about end customers? In a way let's focus on the channel firms first and then we can go

[00:19:11] out to end customers because I feel like the smaller firms might have more space at channel

[00:19:15] firms would have more space for experimentation with a little less to lose.

[00:19:20] I think you're right. I think that the key hurdle here is skills and resources. The smaller

[00:19:29] channel firms, when we're talking small channel firms, you're talking typically our

[00:19:32] average size channel firm is about a million in business, 10 or fewer employees. Which of

[00:19:38] those employees is going to be your AI experimenter and who has the skills to do it? If you don't

[00:19:43] have the skills on staff with data or whatever is needed to become an AI expert, do you have

[00:19:49] the money to go out and hire somebody? I think it's less of the fact that channel firms

[00:19:56] haven't realized that maybe these smaller ones that we're in a position where we can be

[00:20:00] more nimble. We could experiment with this stuff. We have less risk to take and more

[00:20:05] of a case of but they don't have the resources to do so and they don't have the skills in house.

[00:20:09] That would be my assessment. Again, don't have data to back that up but that seems the most

[00:20:15] logical to me whereas a larger firm has the capacity. They will have people in house already

[00:20:21] who may not have AI skills but they've got skills that are adjacent to that already that

[00:20:25] easily apply themselves to the things you need to be able to do in order to take advantage

[00:20:29] of AI. They can go ahead and start right out of the gate. Does that mean that they have less risk?

[00:20:35] No, it probably means that they're going to step over things in the process but I think for

[00:20:41] the smaller firms it really comes down to just capacity and the ability to have people on staff

[00:20:46] and the money to do it. Gotcha. That makes some sense. I'm going to switch gears a little

[00:20:51] bit. I want to get your take particularly because you're a journalist at heart. Your degree

[00:20:57] time is there. Now you spent a lot of time thinking about the application of data.

[00:21:02] I was digging into a recent interview of yours and you highlighted that you think there's a need

[00:21:06] to make sure that business owners have the ability to have a look at analyzing business

[00:21:11] trends data and understand it and comprehend it in a way that they can apply to their business

[00:21:16] or they need an explainer-in-chief. I thought that was a nice way of saying it.

[00:21:21] By the way, it doesn't show that both of us have jobs as explainer-in-chief. Tell me a little bit

[00:21:26] more about your thinking about that need to do analysis of business trends data.

[00:21:33] I don't want to be all analytics. Sometimes I hate what analytics is done to sports. My

[00:21:38] beloved sports where everything is about a data point and you make every move based on that.

[00:21:43] However, there's clearly some there there when it comes to doing analysis. I think

[00:21:49] that we have to find a balance in business between going completely on gut instinct,

[00:21:53] which a lot of small companies do. Let's face it, both small channel firms and their small

[00:21:58] customers. My dad ran a small business and the number of times he did everything on gut

[00:22:04] instinct with astonishment. It was like he'd hit the jackpot sometimes. It was a great

[00:22:09] decision. Then it was the best decision ever. Then other times, it was the worst decision

[00:22:13] ever. He would have benefited back in the day from a little bit of data insight.

[00:22:20] My dad, however, I can't say that doing analytics is necessarily a bad thing. I think

[00:22:27] every business could benefit from being able to look at some numbers and some trends

[00:22:31] and be able to plot those out and see what they could do better, what their company isn't

[00:22:38] doing well now and then make some forecasts and some projections for the future. Is every

[00:22:43] business going to be good at doing that or have people on staff that understand how to

[00:22:47] read the data necessarily? No. That's where you need these explainer in chief. You can get an

[00:22:52] explainer in chief by hiring one or you can use outside firms. This is another reason I think

[00:22:57] that from a channel perspective, this is a great opportunity for you to become that

[00:23:01] explainer in chief. It replaces the idea that we had of being the virtual CIO. It

[00:23:07] doesn't fully replace it. That to me is more tactical with dealing with your customers

[00:23:11] infrastructure and their technology and their devices and all of that and helping them with

[00:23:15] buying that sort of stuff. Whereas the explainer in chief on data needs to be a business analyst

[00:23:21] and be able to bridge the worlds of technology and business and have a conversation with a

[00:23:29] company owner or a business owner that's in the vernacular that they understand

[00:23:33] and isn't in tech speak. I don't know if that fully answered your question or if I went

[00:23:38] around in circles here, but I think having data insights and the ability to explain those to

[00:23:44] your customers is going to be really important. If you don't have the ability to do that with

[00:23:49] your own business, so a lot of MSPs need to be able to do that with their own business,

[00:23:53] it's very hard to translate that as something that you charge for customers.

[00:23:58] Right. That's fair. Let's have a little bit of fun because we know,

[00:24:01] I know you normally work on the channel trends. The state of the channel is published

[00:24:06] usually around February, so you work hard on it in January. We're talking in October,

[00:24:11] I have a sense that there's a few things in your crystal ball that you're starting to think about

[00:24:16] as trends you're watching. Give me a little bit of the insight into the trends you're watching

[00:24:20] right now. Yeah, we're getting started, believe it or not, on state of the channel.

[00:24:24] We're in the middle of working on our IT outlook, which will be specific trends for 2025.

[00:24:30] A couple things that come to mind. I'll start with this one because I think this is a big one,

[00:24:37] and I've read a couple of articles about this, and we sort of talked about this a little bit.

[00:24:42] I am wondering if there is a looming sense of tech fatigue, and what do I mean by that?

[00:24:52] Our businesses and business owners beginning to grow a little bit weary,

[00:24:57] and I'm not trying to undercut. We're all in business because of technology.

[00:25:00] We grow a little bit weary of throwing the next best tech solution at a problem or at

[00:25:08] something that they'd like to do that's not a problem necessarily, but some new innovation

[00:25:13] they want or something they want to do within their business that'll help it in a positive way.

[00:25:18] Have we reached a point with some companies out there, customers, who are saying,

[00:25:22] what we're doing today with technology is good enough. I'm not going to take another risk and

[00:25:27] another chance and spend more money on additional technology this year. Let's settle in with what

[00:25:32] we've done thus far, and this one's sort of counter to all this excitement around AI,

[00:25:37] but again, I have read a number of articles where there's a lot more thought going into ROI

[00:25:46] and not necessarily backlash about technology, but more about like, hey, slow down.

[00:25:51] Can we see if this one works first before we throw it out and start over again? I think

[00:25:55] tech fatigue, and I have not coined that term, but I think that's something to keep an eye on next year.

[00:26:01] Well, I'm intrigued by that one. We're going to riff a little bit on that because I actually

[00:26:05] will tell you, I think cybersecurity is part of the problem. My reasoning goes this way.

[00:26:13] I am not a cybersecurity expert, but no matter how many times I have them on,

[00:26:17] even if I give them infinite money, they cannot promise an actual solution to the security problems.

[00:26:24] They'll play the risk management game. They will talk about minimization. They will

[00:26:29] talk about planning. They'll do all kinds of work, but even with infinite piles of gold,

[00:26:35] showering them from the sky, they cannot actually solve the problem.

[00:26:39] And I get it. I'm not blaming them for that, but if you're a business owner

[00:26:44] and you've been hearing all the time how much you have to invest in security and how much you

[00:26:48] have to invest in it, and you owe money at the problem and things still happen and it doesn't get

[00:26:54] any better, you might at some point say, hey, this is a problem. And if you layer on top of that,

[00:27:00] the fact that everybody's cloud costs just continue to go up. The SaaS vendors continue

[00:27:06] to increase pricing. There's pricing. There's pressure on there both for the SaaS companies

[00:27:11] to continue to grow revenue and thus customers keep having to buy more. If you're a small or

[00:27:19] mid-sized business owner, your budget keeps going up and you're not necessarily getting

[00:27:24] more results for your spend. And so I would posit that yeah, I think tech fatigue is real

[00:27:30] and some of it is self-inflicted. I'm doing it for ourselves.

[00:27:34] I couldn't agree more. I mean, cybersecurity, absolutely. It's an exhausting problem. It's like

[00:27:42] the unsolvable Rubik's Cube for me as some people can solve that thing, but I can't and

[00:27:48] eventually you put it down and you say, I can't do this and you give up. And I think there are

[00:27:56] are levels of cybersecurity protection and risk that business owners are weighing today where

[00:28:04] they do get to a point where they're like, I think it's good enough. It's good enough. We'll take

[00:28:08] our chances that the asteroid is going to hit the earth. We'll take our chances. If that happens,

[00:28:14] oh well. But the one in whatever million chance that it's going to happen,

[00:28:20] I'm just going to take a risk there. Now, is that folly? Perhaps. I mean, we need to be as

[00:28:26] protective as we can and I think that everyone in the channel, my data bears it out you in this

[00:28:30] report that we're talking about today. It's all about selling cybersecurity services. It's the

[00:28:34] most in demand by customers, but I think we reach a ceiling where people start to just get

[00:28:39] exhausted and they don't want to hear about yet another risk that they have to worry

[00:28:43] about, which means another check that they have to write. And I think you can extend

[00:28:47] that to some other things. It could happen with AI where customers are like, listen,

[00:28:51] this stuff sounds really cool, but do I really need it? How is this... You need to show me for real

[00:29:00] how I'm going to save money or make money by deploying some of the solutions that you're

[00:29:05] talking about right now. So again, I'm not here to throw water on the whole. The possibilities

[00:29:12] of technology in 2025, I think they're all still there. We're still going to have jobs

[00:29:16] and we're still going to be buying technology, but I do think there's a little bit of fatigue

[00:29:20] that's crept in. So what's the uncovered trend? The trend that kind of has gone below the radar

[00:29:25] that has your sort of interest in analysts and journalist interest per... Oh, God,

[00:29:31] that's a tough one because I think the tech fatigue one is the one that I really

[00:29:35] thought about is uncovered. It's good. I know it is good. It's an interesting

[00:29:46] time for MSPs. I'll be a little... This is going to be, I think, a little wonky as an

[00:29:51] uncovered trend and it's something that's been talked about for a while, but one of the things

[00:29:54] we're looking at moving ahead is what the MSP business model is going to look like as things

[00:30:03] like cybersecurity continue to be an issue and are we going to see tighter controls with respect

[00:30:10] to regulation, formalized regulation requirements for credentials and certifications as you would see

[00:30:17] in other professions have to take hold. And I know this is a subject that's been talked about quite a

[00:30:22] bit, but it seems to have a renaissance these days is do we need to have more oversight on MSPs

[00:30:29] and what their business actually is? Are there more checklists that have to... They need to

[00:30:34] be able to check off that say that they have X, Y, and Z, which makes them a real MSP versus

[00:30:39] somebody who hangs out a shingle and says they're an MSP. So it's one of the trends that we're going

[00:30:44] to talk about for 2025 and I'm curious how the industry responds to whether or not they think

[00:30:49] more control needs to be handed down, whatever entity it is. If it's a government thing,

[00:30:55] whether it's an internal control, whether we all our peers are controlling ourselves,

[00:30:59] I'm not sure. But I think there's a little bit of a reckoning coming for the MSP business

[00:31:05] model with respect to accountability. Oh, that's a great place to leave it, particularly because

[00:31:11] I'm going to allude for those listeners that caught us last week when Howard Cohen joined me.

[00:31:15] He has some thoughts on regulation as well. Carolyn, this has been fascinating.

[00:31:19] Really appreciate you joining me today. Of course. I loved it. It had so much fun.

[00:31:22] I'll come back anytime and it was really good to talk to you, Dave.

[00:31:25] Oh, it's great having you. We'll mix it up soon. All right.

[00:31:28] Frank Petronella provides a fascinating insight into the current state of regulatory

[00:31:32] compliance, particularly around cybersecurity maturity model certification or CMMC for the

[00:31:37] defense industry. Frank discusses with me on an interview that's releasing this weekend how

[00:31:43] CMMC could become a unified compliance standard across various sectors. There's a critical need

[00:31:49] for more robust enforcement mechanisms and third-party audits to ensure businesses meet

[00:31:54] security requirements rather than, as he argues, just checking boxes. He also explores the

[00:32:00] role of software manufacturers in improving security by design and how AI compliance tools

[00:32:05] could help streamline the process for organizations. Here's a preview of that interview.

[00:32:11] Problem, in my opinion, with a lot of these compliance regulatory frameworks is there's no

[00:32:18] centralized or no consistent framework for everyone to follow. In my opinion, it

[00:32:26] caused a lot of confusion. I think my prediction in the future is that CMMC will help with that

[00:32:33] and basically make it so that businesses have a consistent framework to follow.

[00:32:40] It's interesting you bring it up that way because my follow on and the way I've been

[00:32:43] thinking about this is like, look, right now different industries do have specific compliance

[00:32:48] requirements. Is your thinking that the way this is going to go is CMMC will essentially

[00:32:53] just take over everywhere and will be the single standard across all industries?

[00:33:02] My Patreon supporters already have this video if you want to listen now. It'll drop on the weekend

[00:33:07] on YouTube and the podcast feed. If you're interested, I really do encourage you to listen.

[00:33:12] He's got some great thoughts on where the industry is going. Visit patreon.com

[00:33:16] slash MSB radio to get access. I want to thank Sales Builder, our Patreon sponsor,

[00:33:21] whose support makes this show possible. Focus on your IT sales workflow with the

[00:33:25] power of automation and visit them at salesbuilder.com. That's B-U-I-L-D-R dot com.

[00:33:32] And vendors, you too can get your name mentioned on the live show. It's a simple monthly

[00:33:36] subscription. Visit patreon.com slash MSP radio to learn more. And listeners,

[00:33:41] you can support the show like, share, and follow on your favorite platforms. It's

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[00:34:01] If you have a question or listening to the recording, send it in at question at MSP radio.com.

[00:34:07] Thanks for joining me for the Business of Tech Lounge and I will see you next time.