PAX 8's AI Solutions, Apple's Developer Access, Cybersecurity Policy Changes, and MSP Support Group

[00:00:02] It's Tuesday, June 10th, 2025, and I'm Dave Sobel. Four things to know today. PAX 8 wants MSPs to become managed intelligence providers, but the real play is owning AI distribution. Apple enters the AI fray with caution again, opening tools, but questioning the reasoning models. A shift in U.S. cybersecurity policy leaves providers exposed, and a new MSP group offers a people-first alternative to private equity.

[00:00:30] This is the Business of Tech. PAX 8 has announced the development of the first Managed Intelligence Toolkit, set to launch in the second quarter of 2026. Yes, 2026. This toolkit aims to empower managed service providers, or MSPs, to deliver artificial intelligence solutions at scale to small and medium-sized businesses.

[00:00:52] The Managed Intelligence Toolkit will integrate various Microsoft technologies, including Microsoft Co-Pilot Studio and Model Context Protocol, enabling MSPs to orchestrate automation for their clients. Scott Chasen, CEO of PAX 8, emphasized that MSPs are evolving from managed infrastructure to managing intelligence, thus becoming architects of digital transformation for their clients.

[00:01:14] The initial rollout of these integrations is expected to begin in the summer of 2025, with full commercial availability anticipated by fall 2025. Why do we care? PAX 8 is using the term managed intelligence provider. This gets a hard no from me. I'll get to that in a second. This is a strategic signal from PAX 8 that it wants to lead an AI distribution for SMB-focused MSPs, not just be a SaaS marketplace.

[00:01:39] The Managed Intelligence Toolkit is best viewed as a step towards operationalizing AI at scale within the channel, leveraging Microsoft's ecosystem dominance. But the term managed intelligence provider should be flatly rejected. It's reductive and short-sighted. IT service providers must maintain flexibility to guide customers across a spectrum of digital needs. Security, compliance, automation cloud, and yes, AI. The endgame isn't intelligence, it's outcomes.

[00:02:10] Savvy MSPs should treat this toolkit not as a new identity, but as an opportunity to deepen client conversations about what's possible with automation while maintaining the role of strategic, full-spectrum advisors. This episode is supported by Synchro. Synchro, the integrated remote monitoring and management and professional services automation platform, is designed for mid-sized and growing managed service providers.

[00:02:35] Its latest innovations include an AI-powered smart ticket management system with automatic ticket classifications, guided resolution steps using pre-approved scripts, and a natural language smart search function. These tools streamline ticket handling and improve response times. Discover more at SynchroMSP.com I also want to cover the few announcements from Apple's Worldwide Developer Conference that I think are notable for service providers.

[00:03:04] Apple has announced plans to open up its foundational artificial intelligence technology to third-party developers, marking a significant shift in its approach to AI integration. The decision comemits increasing scrutiny of Apple's ability to compete in the evolving AI landscape, especially as rivals unveil bold advancements. Apple has announced a significant change in how it names its operating systems, moving from version numbers to a naming convention based on the year.

[00:03:31] Starting next year, iOS, macOS, iPadOS, watchOS, tvOS, and visionOS will all be labeled with the year they are released, with the upcoming iOS 26 set to roll out for iPhones and macOS Tahoe 26 for computers. This new system simplifies Apple's previous approach, which had multiple operating systems with overlapping version numbers, such as iOS 18 being available alongside watchOS 11.

[00:03:57] And Apple has launched iPadOS 26, introducing a significant refresh that enhances multitasking capabilities and improves the user interface. The new operating system features a windowing system allowing users to fluidly resize app windows and place them anywhere on the screen, a notable shift in how the iPad operates compared to previous versions. The update also includes a revamped files app and a new preview app that supports viewing and marking up PDFs with the Apple Pencil.

[00:04:24] Developers will benefit from enhanced background processing for their applications, which will now appear in live activities. Oh, and this paper released right before WWDC. Apple's recent paper has cast doubt on the effectiveness of artificial intelligence reasoning models, suggesting they significantly struggle with complex problems.

[00:04:44] According to the study, while these models excel at simpler tasks, they face a complete accuracy collapse when the complexity increases, wasting resources and often providing incorrect answers. The research team, which includes experts in artificial intelligence and machine learning, conducted extensive experiments that revealed the limitations of reasoning models, specifically highlighting that current evaluation benchmarks are flawed due to data contamination issues.

[00:05:11] The paper's findings challenge the claims made by leading companies like OpenAI and Google, which have touted reasoning models as capable of handling complex issues. Apple argues that these models become less accurate as tasks grow more complicated, contradicting the narrative that they are designed to improve over time. Why do we care? Apple's pre-WWDC paper on the failures of AI reasoning models is the most quietly provocative move.

[00:05:39] While not a product announcement, it's a clear positioning effort. Apple is skeptical of the runaway claims from OpenAI, Google, and others about multi-step reasoning capabilities. Apple is not chasing the AI arms race, it's slow walking into it. For IT service providers, this creates both an opportunity and a guardrail. Apple's new developer access to AI tools is a chance to begin AI conversations with clients in the Apple ecosystem, but it won't deliver the enterprise-scale productivity tools seen elsewhere.

[00:06:08] The research paper criticizing AI reasoning is the most strategic breadcrumb. Apple is signaling that measured, controlled intelligence will define its playbook. That aligns well with MSP's real-world responsibility, ensuring that AI deployments are safe, accurate, and sustainable. Apple's announcements won't change the game overnight, but they offer a stable foundation for providers to build from if they can navigate the walled garden.

[00:06:34] In a new executive order, President Trump has rolled back key cybersecurity provisions established by the Biden administration, specifically targeting federal software acquisition rules and cybersecurity measures related to quantum computing and artificial intelligence. The order, issued on June 9, 2025, emphasizes a shift toward limiting cyber sanctions to foreign actors while removing stringent requirements imposed on software security practices.

[00:07:00] The directive amends previous cybersecurity orders from former Presidents Joe Biden and Barack Obama, significantly altering the landscape of U.S. cybersecurity policy. Notably, it changes the language from any person to any foreign person regarding sanctions for malicious cyber activities, aiming to prevent potential political misuse.

[00:07:20] The order also sets deadlines for the Cybersecurity and Infrastructure Security Agency and the National Security Agency to enhance measures against emerging threats, particularly from quantum computing, which is expected to breach current digital systems, including the integration of artificial intelligence into vulnerability management processes. Brett Leatherman, a seasoned FBI veteran with 22 years of experience, has been appointed as the assistant director to lead the FBI Cyber Division.

[00:07:48] This division is crucial to national security, focusing on investigating cyber crimes and counterintelligence efforts. In his announcement, Leatherman emphasized the division's mission to make malicious cyber activity unsustainable by disrupting criminal and state-sponsored actors while supporting victims of cyber crime. He has played a significant role in high-profile investigations, notably targeting ransomware groups such as Lockbit and addressing Chinese state-sponsored hacking operations.

[00:08:15] Leatherman takes over from Brian Vondren, who has led the cyber division since 2021, during a period of significant personnel changes within the FBI. The Federal Communications Commission is currently operating with only two commissioners, raising concerns about its ability to govern effectively. The departure of key figures has left the commission without a quorum, which is essential for making significant regulatory decisions.

[00:08:39] With only two commissioners remaining, the FCC faces challenges in addressing critical issues such as broadband access and telecommunications policy. The agency typically requires a minimum of three members to conduct official business, and the ongoing vacancies could delay crucial initiatives. Currently, the commission is working to fill these positions to restore its full functionality. Why do we care? This is a signal to IT service providers. Federal leadership on cybersecurity and digital infrastructure is weakening at a critical moment.

[00:09:09] While FBI operational capability remains solid under new leadership, policymaking is fracturing. Providers will need to double down on client guidance, especially interpreting, overlapping, or shifting cybersecurity compliance expectations. They need to proactively build their own standards of secure software vetting rather than relying on government baselines. And watch for AI and quantum threat guidance at a technical agency level, like NIST or NSA, as executive level clarity diminishes.

[00:09:38] Strategically, this moment is a reminder that service providers can't passively follow policy. They must shape and enforce best practices independently to protect clients in the threat landscape. And if you're interested in learning more about Leatherman's approach, he has been a guest on this show prior. That's available in the YouTube feed and podcast feed. Juan Fernandez, a veteran of the managed services provider sector, has launched the MSP Owners Group,

[00:10:06] a new initiative designed to support small to mid-sized managed service providers. The organization emphasizes community-driven growth and enables companies to maintain their culture while scaling operations. With its initial acquisitions of Prodigy Techs and Cool Technology Group, the MSP Owners Group aims to provide resources and a collaborative environment for its members. Paco LeBron, former CEO of Prodigy Techs, has been appointed CEO of the MSP Owners Group

[00:10:33] and stresses that the organization is not focused on traditional growth metrics like earnings before interest, taxes, depreciation and amortization or EBITDA. Instead, it seeks to assist struggling providers in growing while upholding their core values. This initiative is viewed as a significant shift in the industry, moving away from private equity-driven models toward a more supportive and community-oriented approach. Now why do we care?

[00:10:59] The traditional PE model views MSPs as cash flow vehicles ripe for centralization and optimization. But what Fernandez and LeBron are suggesting is that the real asset in an MSP isn't just MRR, it's trust, relationships and values. Their pitch is that growth doesn't have to mean cultural erosion. That'll resonate with many owners who don't want to sell out but need help scaling, are burned out but not ready to walk away, or want to stay involved but offload some of the burden.

[00:11:27] For MSPs navigating whether to grow, exit or merge, this model represents a third path and it's starting to gain traction. Now that said, you do need to make money and we'll question that EBITDA is an alternative metric. Now this is a strategic evolution in MSP financing and one that is gaining legitimacy. We're now witnessing the rise of roll-up alternatives rooted in peer support, long-term vision and sustainable growth.

[00:11:53] Now these models will not replace private equity, but they will exist alongside it, offering owner-operators more nuanced exit or collaboration paths. IT service providers should view this as a viable strategic path, particularly those who are too small for PE, culturally wary of outsiders, or want to keep leadership within the community.

[00:12:13] Whether it's MSP owners group or investment groups like what Empath is doing or future models to come, the M&A conversation in the channel is maturing and these new structures will be part of the next generation of growth stories. And for those tracking my predictions, I called this one. It just was a little early on the timing. Thanks for listening. It's National Ice Tea Day, National Bed Bug Prevention Day, and National Black Cow Day.

[00:12:40] Join me for a webinar sponsored by Nerdio, modern endpoint management with Intune, what works and what doesn't. Visit bit.ly slash Nerdio webinar with links in the show notes. 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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