Retail Growth, AI Advancements, Cybersecurity, and New Funding in the MSP Landscape

[00:00:01] It's Monday, October 21st, 2024, and I'm Dave Solve. Five things to know today.

[00:00:07] Amid retail strength and AI growth, IT leaders face infrastructure gaps and cloud experience shortages.

[00:00:14] Microsoft's Dynamics 365 AI agents and OpenAI's ChatGPT desktop for Windows launched.

[00:00:21] Evo Security launches Evo 2.0 and PAX 8 expands their security program and marketplace.

[00:00:27] Apple introduces Business Connect to strengthen brand trust.

[00:00:31] And a new $25 million Founders Fund from Top Down Ventures backs MSP players.

[00:00:38] This is the Business of Tech.

[00:00:41] The U.S. economy showed continued strength as retail sales rose by 0.4% in September, following a 0.1% increase in August.

[00:00:50] This data, described as better than expected, counters previous concerns of an economic slowdown.

[00:00:56] Notably, categories such as clothing shops, restaurants, and food shops all experienced spending increases, while pet stores saw the largest surge at 4%.

[00:01:07] In contrast, furniture and electronics stores reported declines of 1.4% and 3.3%, respectively.

[00:01:15] Kindrel's 2024 Readiness Report reveals a striking paradox.

[00:01:20] While 90% of executives believe their IT infrastructure is top-notch.

[00:01:24] Only 39% feel it's prepared for future challenges.

[00:01:28] While 94% of leaders prioritize technology modernization, Kindrel notes that 44% of critical IT infrastructure is nearing or at the end of its life cycle, posing significant risks.

[00:01:40] A recent study by Cisco reveals that IT partners worldwide expect a significant shift in revenue towards AI technologies over the next four to five years.

[00:01:51] And according to a recent survey by the International Data Corporation, 70% of IT leaders report that AI has improved their data processing capabilities.

[00:01:59] The integration of AI tools is streamlining operations and enabling better decision-making through enhanced data insights.

[00:02:07] As businesses increasingly rely on data-driven strategies, the adoption of AI in data management is becoming critical for maintaining a competitive edge in the industry.

[00:02:17] And in 2024, 40% of small businesses in the U.S. are utilizing artificial intelligence tools, a significant increase from 23% in 2023, according to research by the U.S. Chamber of Commerce.

[00:02:31] The primary applications of AI among these businesses include marketing, gathering customer insights, and enhancing communication with customers.

[00:02:39] The most popular AI-enabled tools being adopted are search engines, social media platforms, email services, financial management software.

[00:02:48] The artificial intelligence market is now valued at approximately $9 trillion, with enterprises just beginning to explore its potential, according to a recent State of AI report co-authored by two AI investors.

[00:03:00] Key predictions for the coming year include the viral success of no-code apps, significant changes to data collection practices by Frontier Labs, and the continued dominance of NVIDIA in the AI chip market.

[00:03:14] The report also highlights that traditional robotic process automation is set for an AI-driven upgrade, with innovative approaches like J.P. Morgan's FlowMind achieving 99.5% accuracy in workflow understanding.

[00:03:27] And ServiceNow's Senior Vice President of Global Partnerships, Erika Bellani, highlighted how mid-size managed service providers, or MSPs, leverage generative artificial intelligence tools like NowAssist to carve out niche markets.

[00:03:42] While larger MSPs target massive enterprise contracts, these mid-market players focus on specific verticals such as healthcare, finance, and manufacturing, allowing them to thrive despite their smaller scale.

[00:03:54] Bellini emphasized the importance of specialization, relationship building, and agility in responding to market changes, that pricing pressures are mounting, and MSPs need to demonstrate their value through integrated services and consulting.

[00:04:08] A recent survey conducted by CDW of 962 IT decision makers reveals that organizations increasingly rely on internal and external expertise to manage their cloud services.

[00:04:19] The survey found that 88% of respondents feel they can effectively manage their cloud environments, with Half stating they do so very effectively.

[00:04:28] However, key challenges persist, including a lack of governance or cloud strategy cited by 63% and a lack of cloud skills by 61%.

[00:04:38] The demand for cloud expertise remains steady, with over three-quarters of respondents planning to migrate at least 25% of the remaining on-prem applications to the public cloud within the next three years.

[00:04:51] The benefits of cloud technology are recognized, with 74% of respondents reporting that cloud's advantages have met or exceeded their expectations.

[00:05:01] Why do we care?

[00:05:02] The consistent themes across these reports are modernization, AI adoption, and specialization.

[00:05:09] The retail resilience is a signal for IT services to target growth areas like food services and customer-focused tech.

[00:05:17] Kindrel's findings on infrastructure readiness highlight ongoing vulnerabilities in that legacy tech, an opportunity to push lifecycle management and future-proofing as key offerings.

[00:05:27] Meanwhile, rising AI adoption, especially among smaller businesses, opens the door to refine affordable, easy-to-deploy AI solutions.

[00:05:36] For providers, the lesson is to avoid competing head-on with larger players, rather hone a vertical focus where you can uniquely add value.

[00:05:45] And across all these trends, the demand for expertise, whether in AI, modernization, or cloud, is clear.

[00:05:52] Service providers that can offer strategic advisory along with execution will have an edge, particularly as organizations grapple with both opportunity and risk in their tech stacks.

[00:06:05] With as many breaches and security concerns as I report on this show, it should be obvious that cybersecurity is not just about technology, but also the human expertise needed to interpret and respond to complex threats.

[00:06:18] Huntress is focused on the world.

[00:06:24] Huntress has a suite of fully managed cybersecurity solutions powered by a 24x7 human-led SOC dedicated to continuous monitoring, expert investigation, and rapid response.

[00:06:36] And the proof is the execution.

[00:06:38] Huntress is the number one rated EDR for SMBs on G2.

[00:06:44] Want to know more about the platform?

[00:06:46] Visit huntress.com slash MSP radio to learn more.

[00:06:52] Microsoft has introduced AI agents for its Dynamics 365 platform, aimed at enhancing operations in sales, customer service, finance, and supply chain management.

[00:07:02] The move follows a similar announcement by Salesforce and is expected to save companies around $50 million annually, equating to the productivity of 187 full-time employees.

[00:07:13] The new agents will automate various tasks, such as qualifying sales leads and managing supplier communications, and will be available for public preview starting later this year, extending into early 2025.

[00:07:26] Microsoft anticipates that organizations will increasingly rely on various autonomous agents to improve efficiency and decision-making processes.

[00:07:34] OpenAI has launched a new Windows desktop application for its popular AI chatbot, ChatGPT, following its earlier release from macOS.

[00:07:43] Currently available in preview for ChatGPT Plus, Enterprise Team, and EDU subscribers, the app allows users to access the AI assistant via a keyboard shortcut from anywhere on their PC.

[00:07:55] OpenAI has updated ChatGPT's Canvas feature to include track changes, allowing users to see modifications made to generated text or code.

[00:08:04] This update, rolled out on October 20th, highlights additions in green and deletions in red, enhancing the editing experience similar to tools like Google Docs.

[00:08:15] Why do we care?

[00:08:17] Well, Microsoft's AI agents and OpenAI's product updates highlight two shifts.

[00:08:21] The deepening integration of AI in business processes and the need for innovative, intuitive, accessible AI interfaces.

[00:08:28] For providers, the key takeaway is the growing importance of expertise in AI deployment, training, and optimization to support businesses in transitioning to AI-enhanced workflows.

[00:08:39] With reports of co-pilot adoption being low, the key trend to watch here is how these more specialized agents deliver value and if customers respond.

[00:08:49] PAX 8 has launched a new security program aimed at empowering managed service providers to enhance their cybersecurity practices.

[00:08:56] The program, based on the CIS Control Framework, provides partners with a structured enablement journey guided by dedicated account teams and various resources.

[00:09:06] The program features two tracks focused on business education and vendor-specific training, collaborating with major cybersecurity companies like Microsoft, SentinelOne, and CrowdStrike.

[00:09:15] Initially launched in the U.S., the program is set to expand to EMEA in October.

[00:09:20] And PAX 8 has announced the addition of Commvault to its marketplace, coinciding with the release of a new global survey by Channelnomics, which highlights the growing importance of online marketplaces for IT solution providers.

[00:09:33] The survey found that 90% of respondents are experiencing significant benefits from marketplaces, with expectation for marketplace sales to rise by 2029.

[00:09:42] Notably, over a third of solution providers generate more than 20% of their revenue through these platforms.

[00:09:48] And Evo Security has announced the launch of Evo 2.0, a unified identity and access management platform tailored for managed services providers.

[00:09:57] The rebranding emphasizes that managed security starts with identity.

[00:10:01] Evo's new offerings include a revamped admin portal, mobile apps, enhanced multi-factor authentication, and a brandable single sign-on solution, all designed to streamline security management for MSPs.

[00:10:13] The new brand identity will be unveiled at DattoCon 2024 on October 28th in Miami.

[00:10:21] Why do we care?

[00:10:22] The theory behind the marketplace model is that it simplifies sourcing and management for providers, allowing them to access a wide range of solutions from a single interface.

[00:10:31] The survey data indicating marketplace growth projections through 2029 signals that shift in how IT solution providers do business, but it's a slow move.

[00:10:40] I'm increasingly having a number of identity-related conversations.

[00:10:45] Love to hear from you.

[00:10:46] Are you too?

[00:10:49] Apple has announced that all verified organizations, including those without a physical retail presence, can now manage their identity across Apple Maps, Wallet, and the iOS mail and phone apps through the new Apple Business Connect platform.

[00:11:04] This free service enables businesses to enhance their brand visibility to over a billion users daily.

[00:11:10] David Dorn, Apple's Senior Director of Internet Software and Services product, emphasized the importance of providing accurate information to users.

[00:11:19] Companies can sign up using an existing Apple account and set up branded mail for customized branding in customer emails.

[00:11:25] In 2025, businesses will also gain the ability to use business caller ID, displaying their name and logo on inbound calls, helping to differentiate verified identities from spam.

[00:11:38] Why do we care?

[00:11:40] Well, this is intensely tactical, yet a valuable service.

[00:11:44] Businesses can make themselves more easily identifiable to their customers.

[00:11:48] Need a free offering?

[00:11:50] Well, here's one.

[00:11:53] Top Down Ventures has successfully announced the first close of its Founders Fund, totaling $25 million, aimed at supporting early-stage software-as-a-service companies within the managed service provider sector.

[00:12:07] Founded by industry expert Chris Day and his partners Joel Abrissom and Mark Scott, the firm boasts a strong track record, having previously scaled notable companies such as Fully Managed and IT Glue.

[00:12:18] The Founders Fund specifically targets high-potential SaaS companies generating over $1 million in annual recurring revenue, with investments reaching up to $3 million.

[00:12:29] Joel Abramson anticipates three new investments by the end of the year.

[00:12:34] Why do we care?

[00:12:36] Well, I'm starting to track specific investment funds focused on the MSP space, and there's a growing ecosystem of vendors and investors committed to helping them scale and succeed.

[00:12:45] The choice to target SaaS companies within the sector indicates an understanding of the specific pain points and opportunities in the market.

[00:12:52] If you want a market sign to validate the industry, here's another one.

[00:12:58] Looking to reach an audience of thousands of MSPs and IT service providers?

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[00:13:19] Podcast listeners are more engaged, have a higher level of brand retention, and are more willing to listen to ads here than any other avenues.

[00:13:30] Want to know more?

[00:13:31] There's information at mspradio.com slash engage, including a button to book a time to talk.

[00:13:39] I'm looking forward to that discussion.

[00:13:43] Thanks for listening.

[00:13:44] Today is October 21st, the day Marty McFly goes back in time to set off the sequence of events for the movie.

[00:13:51] So, happy Back to the Future Day.

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[00:14:52] Once again, thanks for listening to me.

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