Rise in Remote Work Drives New Ventures; Insurers Address AI Risks as CISA Alters Info Sharing

[00:00:02] It's Tuesday, May 13th, 2025 and I'm Dave Solt. Four things to know today. Remote work is fueling a startup boom, reshaping the addressable market for IT services. The telework adoption is rising again despite RTO mandates driving demand for distributed infrastructure. Insurers are underwriting AI risks, signaling a new operational liability layer. And CISA cuts their force again in making the private sector take more ownership over cyber threat response. This is the Business of Tech.

[00:00:32] I spotted a couple of data points related to work of note. Recent studies found that companies with higher levels of remote work during the COVID-19 pandemic have seen a significant increase in employee startups. Researchers from Hong Kong University, the University of Notre Dame and University of California San Diego and the University of Toronto estimate that at least 11.6% of the post-pandemic rise in new business formations can be attributed to the phenomenon.

[00:00:59] The study, titled Entrepreneurial Spawning from Remote Work, analyzed data from LinkedIn and other sources to track transitions from employment to entrepreneurship. While remote work has helped some employees to explore business opportunities without the risk of losing their income, it has also raised concerns for employers about losing key talent to new ventures. A new study by Flatworld Solution reveals that remote work in the United States is gaining significant momentum in 2025, despite

[00:01:29] major corporations reinstating return to office mandates. The research indicates that telework adoption has increased from 19.9% in October of 2022 to 23.6% in January of 2025, reflecting an 18.6% rise.

[00:01:45] Notably, the District of Columbia leads the nation with a 56.5% remote work adoption rate, while Mississippi sits at just 4.7%. The report highlights demographic trends, with individuals aged 35 to 44 averaging a telework rate of 28.1%, and those 65 and older experience the largest growth in remote work. Additionally, the study identifies that computer and mathematical jobs lead telework rates at 69.9%, with the professional and technical

[00:02:15] services industry at the forefront, achieving a 56.3% adoption rate. As companies adapt to the changes, the emergence of global capability centers is becoming a pivotal trend, enabling firms to tap into global talent pools. However, challenges remain as 42% of companies enforcing return-to-office policies report higher employee attrition rates. A recent study by Roundstad reveals that nearly half of IT workers in the UK have left their jobs due to lack of work

[00:02:44] place flexibility, with 40% of place flexibility, with 40% citing inflexible work options as a primary reason for their departure. The research underscores the growing importance of flexible working arrangements, showing that 80% of surveyed IT professionals consider flexibility essential, a figure that is 13% higher than workers in other sectors. Moreover, the study indicates that more than half of IT professionals, at 56%, would quit if their requests for additional flexible work options were ignored.

[00:03:13] GrantStats Digital Chief Executive Greg Pagliari emphasizes that personalized work benefits are crucial not only for attracting talent, but also retaining it in a competitive market. The trend reflects the ongoing shift in worker demands, especially as flexible work options have become more prominent since the pandemic began. Why do we care? Despite the perception of a return-to-office wave, the data shows that increase in telework between late 2022 and early 2025.

[00:03:42] For IT services, this translates to continued demand for tools, platforms, and managed services that support distributed teams, especially in areas with high telework penetration, like professional services and computer roles. The entrepreneurship study suggests that over 11% of the rise in new businesses stems from remote-enabled entrepreneurial spawning. For employers, particularly in IT, where skills are highly portable, it's a talent risk.

[00:04:09] But for service providers, it signals a swelling, addressable market of startups and small teams needing IT services without building in-house teams. IT services firms that misread the shifts risk losing both staff and clients. But those that align with the data, flexible models, startup-friendly services, and global talent strategies stand to gain competitive advantage in a fragmented but growing market. This episode is supported by Synchro.

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[00:05:09] Insurers are beginning to address the risks associated with artificial intelligence by offering new insurance products for companies facing potential losses from AI-related errors. Lloyds of London has introduced a policy through the startup Armilla, which covers legal claims against businesses if customers are harmed by malfunctioning AI systems. As reported by the Financial Times, this initiative comes in response to increasing concerns over mistakes made by AI tools,

[00:05:36] such as customer service chatbots that can produce misleading or false information. The consequences of relying on inaccurate AI outputs can't be severe, leading to financial losses and reputational damage for companies. Kelwin Fernandez, CEO of Nilge.ai, emphasized the accountability dilemma, questioning who is liable when a human transfers responsibility to an AI system. Recent incidents, such as Virgin Money's apology for its chatbot's inappropriate response,

[00:06:05] and air Canada's legal troubles over a fabricated discount, highlight the need for such insurance products in AI. And while I'm talking AI, I wanted to note something. With the selection of the new pope, CNN highlights how the new pontiff selected his name as a nod to a previous pope, Leo, who guided the church during the Industrial Revolution. Quote, In our own day, the church offers to everyone the treasury of our social teaching in response to another industrial revolution

[00:06:34] and developments in the field of artificial intelligence that pose new challenges for the defense of human dignity, justice, and labor. End quote. That's what the new American pontiff said Saturday, speaking in flu, Italian. Why do we care? Once insurers are willing to underwrite specific AI risks, particularly errors leading to financial or reputational harm, it signals formal recognition that AI systems are operational risk vectors, not just smart tools.

[00:07:02] This elevates AI failures from IT incidents to insured business events. Companies offering AI services or operating AI-based solutions, especially ones facing the client, like chatbots or recommendation engines, now need to consider how to structure SLAs, disclosures, and fail-safes to meet underwriter requirements. While the Lloyd's policy is high-profile, it's still niche and largely untested.

[00:07:27] The scope of what it covers, exclusions, and how claims would be assessed in practice is unclear. Insurance policies may offer a false sense of security without solving the upstream governance issues. Now, while the Pope's AI framing is notable, and that's why I highlighted it, it doesn't have a direct impact on tech strategy. It, however, does reflect a mood, and that mood could influence future social policy. Now, tying it too tightly to business trends risks over-reading the moment. It's notable, however.

[00:07:58] The Cybersecurity and Infrastructure Security Agency has announced a significant shift in how it shares information, stating that only urgent alerts related to emerging threats will be posted on its website. Routine updates and guidance will now be distributed primarily through email, RSS feeds, and the social media platform X, formerly known as Twitter. This change aims to highlight critical information and improve accessibility, according to CISA officials.

[00:08:24] The agency has faced staffing cuts, leading to concerns about its capacity to respond to increasing cyber threats, which are projected to cost the global economy $10.5 trillion by the end of the year. Former agency chief Jen Easterly criticized proposed budget cuts that could reduce CISA's funding by 17%, arguing that such reductions undermine national cybersecurity efforts. Why do we care?

[00:08:50] CISA's shift in how it disseminates cyber threat information, along with looming budget cuts, should ring alarm bells for IT services firms, MSPs, cybersecurity vendors, and anyone reliant on U.S. government signals for threat intelligence. This isn't just a policy change, it's a visibility risk, a resourcing red flag, and a broader sign of shifting responsibility from public infrastructure to the private sector.

[00:09:14] Cybersecurity teams that relied on scraping CISA's site or pulling directly from a central API will need to adapt fast. Missing a threat notification or routine advisory because it only appeared on a social media post creates operational risk. Less funding means slower response times, fewer initiatives, and likely reduced collaboration with private sector actors. Organizations that once counted on CISA for free support, threat advisories, or frameworks like zero-trust maturity models

[00:09:42] may now get less help, or slower help, when it matters most. For IT services firms and MSPs, it's a forced pivot. More responsibility is being shifted to the private sector for threat detection, response, and coordination. If you're not ready to track fragmented alerts across multiple channels or cover gaps left by reduced public funding, you risk delayed responses and missed threats. Prepare for more distributed risk and more fragmented defenses.

[00:10:10] Microsoft has announced an extension of support for its Office applications on Windows 10, committing to provide security updates until October 10, 2028. This decision marks a significant shift from the earlier plan to end support following the operating system's cutoff date on October 14, 2025. Initially, Microsoft had warned users that Office applications would no longer be supported on Windows 10, urging businesses to upgrade to Windows 11.

[00:10:37] However, the company has now stated that it will deliver security updates through standard channels for an additional three years, allowing users to transition more smoothly to the newer operating system. Microsoft has now been able to do it. This change reflects a broader trend in the technology sector, where companies adapt their support strategies in response to user needs and market conditions. Why do we care? Microsoft previously framed Windows 11 adoption as an urgent security and compatibility imperative, backed by the planned cutoff of Office support on Windows 10 in 2025.

[00:11:07] That created dual pressure, migrate the OS, and upgrade Office in tandem. By extending Office support through 2028, Microsoft has effectively decoupled these upgrade cycles. The initial push towards Windows 11 has phased user resistance due to hardware requirements, cost, and compatibility issues. Microsoft's reversal suggests it's aware that forced upgrades risk alienating enterprise customers and slowing Office 365 adoption in edge cases.

[00:11:34] For IT service providers and enterprise teams, it opens tactical breathing room, but it doesn't eliminate the strategic need to modernize. It's a win for operational planning, not a retreat from Microsoft's long-term roadmap. Treat it as a grace period, not a permanent shift. And use the time wisely. Thanks for listening. Today is International Hummus Day, National Apple Pie Day, National Fruit Cocktail Day,

[00:12:02] and IEEE Global Engineering Day. Want to draw your attention to a podcast that dropped on the weekend, sponsored by SysCloud. We dive deep into the needs of MSPs in an AI-driven world around search and what it means to discovery. It's a fascinating dive into what that means and what you can do now. I want you to catch it in the podcast feed or YouTube available right now.

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