PC Market Growth Driven by Tariffs; AI in Customer Service Faces Trust Issues Amid Breaches

[00:00:02] It's Monday, June 2nd, 2025 and I'm Dave Solt. Four things to know today. PC sales are climbing but only due to tariff pauses, not sustainable demand. U.S. smartphone growth slows as prices rise. Workforce readiness lags behind AI adoption. And a nation-state breach of ConnectWise underscores RMMs as high-value targets. Plus announcements from Barracuda, Red Hat and Salesforce unveiling new AI-powered tools. This is the Business of Tech.

[00:00:31] International Data Corporation predicts that the personal computer market will see a growth of 4.1% in 2025, reaching a total of 274 million units sold. The firm attributes this growth to a temporary pause in exemptions on tariffs from personal computers, which have encouraged manufacturers to increase shipments. While IDC acknowledges potential challenges in the latter half of the year due to rising prices and declining consumer sentiment,

[00:00:56] they anticipate a strong demand for PCs driven by the ongoing migration to Windows 11. In 2024, PC sales were recorded at 254 million units, marking only a 1.3% increase from the previous year. U.S. smartphone prices are set to rise due to ongoing tariffs, leading to a decrease in sales forecasts for the year.

[00:01:17] The IDC has revised its growth predictions for smartphone shipments in the U.S. from 3.3% to just 1.9% as uncertainty around import taxes persists. Despite a recent ruling that deemed the tariffs imposed by the Trump administration unlawful, these tariffs remain in effect, causing consumers to delay purchases. As a result, the average selling price of smartphones in the U.S. is expected to increase by 4%.

[00:01:44] A new global study from Kindrel reveals that despite widespread implementation of AI, most organizations are struggling to align their workforce strategies with technology. The study shows that while 95% of global businesses have adopted AI, 71% of global leaders believe their workforces are unprepared to leverage it effectively. The report, which surveyed over 1,000 senior business and technology executives across 25 industries, highlights a significant skills gap in managing AI.

[00:02:12] For instance, 51% of global leaders report a lack of skilled talent to handle AI systems. Only 40% of surveyed leaders utilize AI-powered insights to enhance decision-making, indicating that most organizations are not yet realizing the full potential of AI.

[00:02:28] In what should be justification for tracking IT assets, 74% of asset tracking projects meet or exceed return on investment expectations, according to the IoT Asset Tracking and Visibility Adoption Report 2025 by IoT Analytics. Organizations are investing an average of $110 per asset each year for tracking inventory, equipment, or vehicles, indicating that these investments are yielding tangible results.

[00:02:55] The report also highlights a significant difference in satisfaction levels between commercially available solutions and the in-house developed tools. Companies utilizing internal asset tracking systems reported the lowest satisfaction scores, citing issues such as lack of reliability and port integration. Why do we care? Forecasted growth in PC shipments for the year may appear like a rebound, but the story underneath is one of artificial acceleration.

[00:03:23] This uptick is largely due to temporary tariff pauses, not sustainable demand. With Windows 11 migration cited as a driver, the surge is likely a last hurrah for the current hardware refresh cycle. For IT service providers, it's a reminder to position device procurement as part of broader lifecycle services, not a margin play. The risk, rising prices and weakening consumer sentiment in the second half of the year, could create inventory hangovers. The IoT Analytics report is a quiet but important signal.

[00:03:53] 74% of asset tracking projects deliver ROI, with commercial solutions outperforming do-it-yourself ones. This affirms the business case for managed asset tracking as part of your service, and the risk of internal builds that fail due to integration and reliability issues. For providers, it's a blueprint. Asset tracking intersects with compliance, security, insurance, and logistics, all of which benefit from outsourced management. When chaos hits, will your system survive?

[00:04:23] Comet Backup's full image backups protect your entire system, files, apps, settings, and even the OS, in one powerful automated backup. Comet is easy to deploy and bandwidth efficient. Full system backups for Windows, for Linux, for servers, for endpoints, all in one centralized platform. Whether you get hit with ransomware, hardware failure, or accidental deletion, Comet restores your system to physical VM or the cloud. Short on time?

[00:04:49] Restore individual files or folders to access critical data within moments. Try Comet Backup today. Reliable, secure, and made to scale. Visit cometbackup.com to protect what matters most. Get $100 free credit when you sign up with the promo code MSPRADIO. Comet Backup. Backup. Fast. Restore. Easy. More than 70% of IT solution providers in the U.S. report being affected by tariffs,

[00:05:17] with opinions divided on whether the impact has been positive or negative. According to the Global Technology Industry Association's latest channel economic tracker, 36% of channel companies view the current effect of tariffs as somewhat or very positive, while 39% perceive it as somewhat or very negative. Looking ahead, 40% of respondents anticipate a positive impact over the next year, compared to 38% who expect a negative impact.

[00:05:43] The tracker, which assesses sentiment monthly, reveals that 51% of those experiencing favorable effects reported increased sales, while 66% faced higher costs for goods. Carolyn April, vice president of research and market intelligence at the GTIA, emphasized the uncertainty surrounding tariffs and their potential impact on the technology industry and channel partners.

[00:06:07] A recent report from Cisco reveals that by the year 2028, 68% of customer service interactions with technology vendors could be automated through the use of artificial intelligence. The report, titled The Race to an Agentic Future, How Agentic AI Will Transform Customer Experience, surveyed nearly 8,000 business leaders across 30 countries, showing a strong interest in AI-driven solutions for enhancing customer service.

[00:06:33] 93% of respondents believe that incorporating AI into customer interactions will lead to more personalized and efficient experiences. However, the report also emphasizes the importance of human involvement, with 89% of participants stating that it remains critical for humans to be part of customer service interactions. Despite the anticipated rise of AI agents, 96% of those surveyed still view human-to-human relationships as vital. Why do we care?

[00:07:02] More than 70% of U.S. providers are affected by tariffs, but sentiment is evenly split, with nearly equal numbers seeing opportunity or harm. This ambivalence is telling. Tariffs are functioning as a wild card, not a trend. The key takeaway is the disconnect between increased sales and increased costs. It suggests any upside is not rooted in margin expansion, but potentially in reshort business, urgency-based buying, or temporary market shifts.

[00:07:31] Tariff sentiment may create decision paralysis. If nearly equal parts of the market see tariffs as good or bad, providers may find clients postponing decisions, undermining predictability and project pipelines. And AI automation can erode customer trust if over-deployed. If clients feel they're being deflected rather than helped, especially during incidents or escalations, reputational damage will follow. And cost increases from tariffs plus automation investments equals margin pressure.

[00:08:01] Providers could get squeezed from both ends unless pricing is actively managed. Bottom line? The lesson here is nuance. Success lies in measured deployment, clear communication, and flexible planning, not hype or fear. Smart providers will treat both tariffs and AI as levers to be managed, not absolutes to be avoided or blindly embraced. Barracuda Networks has launched Barracuda One, an artificial intelligence-powered cybersecurity platform

[00:08:30] designed to enhance threat protection and cyber resilience. The platform consolidates various security functions into a single integrated system, allowing managed service providers and channel partners to manage layered security defenses from a centralized dashboard. The platform is now available at no additional cost for customers utilizing Barracuda's existing services, such as email protection and cloud-to-cloud backup. Red Hat has introduced a new generation of AI-driven system administration tools

[00:08:58] aimed at enhancing Linux management and addressing the skills gap in the industry. The latest addition, Red Hat Enterprise Linux 10 Lightspeed, integrates a generative AI assistant that offers context-aware recommendations directly within the command line, helping users troubleshoot issues and apply best practices efficiently. Salesforce announced its acquisition of Informatica for $8 billion, aiming to enhance its data management capabilities and strengthen its position in the enterprise software space.

[00:09:27] The acquisition is part of Salesforce's strategy to integrate data and artificial intelligence, providing a unified architecture for deploying advanced AI solutions across organizations. Informatica, founded in 1993, has evolved from a pioneer in the extract-transform-load market to a leader in cloud and data management. According to Forrester analysts, this acquisition fills a critical gap in Salesforce's data management offerings, which are essential for building an AI-ready enterprise. Why do we care?

[00:09:56] Well, these moves highlight that AI in the enterprise is pivoting toward infrastructure and operational leverage, not hype. Providers should think less about deploying flashy AI features and more about simplifying security, enabling underskilled teams, and building strong data foundations. That's where the durable value and differentiation will be. While I mentioned this story last week, a bit more detail. ConnectWise has confirmed it was the target of a cyber attack

[00:10:25] by a nation-state threat actor, affecting a very small number of its ScreenConnect customers. The company announced that it's patched the software and implemented enhanced monitoring and hardening measures to secure its environment. This incident comes shortly before the annual IT Nation Secure Conference and follows prior vulnerabilities found in ScreenConnect, which were patched in February of 2024. Will Thomas, a senior threat intelligence advisor at Team Symeroo, noted that remote monitoring management tools are increasingly targeted,

[00:10:53] with Russian and Chinese intelligence services implicated in recent breaches of similar software. ConnectWise is currently collaborating with Google Cloud-owned company Mandiant for an investigation and has communicated with all effective customers. The activity was isolated to the ScreenConnect product, and since the implementation of a security patch on April 24th, ConnectWise has not observed further suspicious activity. Why do we care?

[00:11:19] Well, ConnectWise's disclosure of a nation-state cyber attack adds to a growing body of evidence. Remote monitoring and management, RMM tools, are now top-tier targets for advanced threat actors. While ConnectWise frames the impact as minimal, the optics are troubling, especially with prior vulnerabilities disclosed just months earlier and the breach surfacing days before their security-focused event. Now, this isn't just ConnectWise's problem. It's a channel-wide wake-up call.

[00:11:48] RMM tools are now critical infrastructure in the eyes of hostile foreign actors. If you're not rethinking your architecture, your vendor stack, and your client communications, you are exposed, technically and reputationally. The providers who take this seriously and act transparently be the ones still standing when the next breach hits. Are you and your clients tired of the time-consuming ticket tennis of coordinating meetings and help desk calls?

[00:12:17] Wouldn't it be better to automate this process with a tool that connects directly to ConnectWise Manage or Autotask? TimeZest offers scheduling automation that gives you complete control of your schedule and eliminates the hassle of calendar ping pong. As the only service designed specifically for MSPs, it integrates into your workflow and makes scheduling appointments easy on you and your clients.

[00:12:44] Plus, you can try TimeZest for free. Visit timezest.com slash MSPRadio and use the code MSPRadio to get 10% off your first year of TimeZest. Thanks for listening. Today is National Bubba Day, National Leave Work Early Day, National Rotisserie Chicken Day, and National Rocky Road Day. So skip out of here, Bubba. Have some chicken and ice cream.

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