Sharon Florentine on Why Most SMBs Deploy AI Without Budgets or Governance

[00:00:00] Dave Sobel here reporting from the floor of ChannelCon, joined today by Sharon Florentine. She is the manager and research analyst at GTIA. Now, Sharon spent 25 years as a technology journalist, editorial director at Channel EDE and MSSP Alert, and before that, CIO.com and CRN, and joined GTIA back in March. She's been presenting new AI research that's coming out even just next week. I want to tell the audience, I haven't even seen this yet. We're all learning it in real time together, so Sharon's going to walk it through.

[00:00:30] And actually, in full disclosure, I got a GTIA number wrong last week and had to issue a correction. So Sharon's going to walk me through this. Sharon, welcome to the Business of Tech. Hey, thanks. Great to be here. So I'm excited to hear. Tell me about what data you're presenting. Okay. So this study is called End User AI Adoption. How ITSP customers are really using AI.

[00:00:54] So this is a, like I said, an end user study. And what we were trying to figure out is how end customers of ITSPs are integrating AI, what they're doing with it, where it is in their business, and then what the opportunities are for ITSPs, how they can go in and help their customers either do better, what they're already doing,

[00:01:22] or identify new places where they would be able to assist them with integrating AI in some way. Well, what do we find? How's it going with end customers? Like 98% of businesses in general are using AI. Like 97%, 98%. Everybody's using it.

[00:01:41] What we found is that 20%, 25% are doing so strategically. And that means that they have governance around it. They've got it assigned under a leadership role in the organization. There's policies, procedures for how the companies can use it and the individuals in the companies can use it.

[00:02:03] So there is a huge opportunity there in that other 75% for an ITSP to come in and help these end users figure out how to get into that strategic or tactical implementation of AI.

[00:02:21] We also found that only about a quarter have any kind of dedicated AI budget. So the majority are just kind of winging it. And where is the money coming from? Are they pulling it from other IT priorities? Is it coming out of other budgets? Are they finding $20 on the street and using that? We're not sure.

[00:02:50] So let's baseline the audience then. So you surveyed how many people and what do they look like? Tell me a little bit about the audience. We surveyed 520 small to mid-sized businesses. 11 different verticals are represented. There's some manufacturing. There's some healthcare. There's some finance. Some MSPs, MSSPs, the whole gamut. So the audience can recognize it like, hey, this is my customer base. These are the kinds of people. Yes.

[00:03:19] What surprised you? I bet there was a particular data point that jumped out and was your favorite.

[00:03:23] Yes. So what surprised us the most was the budget versus the adoption. So while almost everyone is using AI, integrating it in some way, the fact that they don't have a budget for it was, that's really, really surprising.

[00:03:51] And a little bit confusing because if you're going to be using this, if you're already integrating it into your business, how are you paying for it? Why aren't you paying for it? Why are you not planning to pay for it? And what happens in the future if you need to pay for it and you don't have the budget allocated? So that's the open question for the next round is, hey, you've identified this piece. So by the way, listeners, you should ask your customers, this is a great leading question here. Yes.

[00:04:20] So give me a little bit of a sense, like, you know, when you have the opportunity to work on research like this, like how does the methodology work? Like is it only a set of questions? Do you get to follow in multiple rounds? Like explain for people how this works. When we're putting together a piece of research, we start with a big broad question that we're trying to answer. And then we identify who the audience should be that would benefit from answering that question.

[00:04:48] In this case, it's the SMBs that we surveyed and then ITSPs. And we put together a set of questions that allow us to figure out what they're thinking about certain topics. Those get winnowed down into a manageable number because nobody wants to spend 4,000 hours filling out a survey. Right.

[00:05:13] And then it gets pushed out to the respondents. They answer. The data comes back. We do a quick check on a selection of data to make sure that the results coming in look like we would expect them to. Then we do our magic analysis. So now that you've spent some time thinking about this data, like are there certain elements of this that you say, hey, these are the pieces that we've identified are the most important for MSPs?

[00:05:43] Like you were alluding a little bit to the opportunity piece, but I bet there's a little bit more there in terms of like these are the things that you think are most important. Yeah, I think that the opportunity piece is huge for ITSPs. They're always looking for how they can help their customers. Yes.

[00:05:59] But it also helps them better understand what challenges their customers are having so that they can be proactive, I think, instead of reactive.

[00:06:14] They are able to go into a customer engagement and say, I bet you're having this problem and here's how I can help you rather than the customer fighting with an issue and having to reach out to their MSP and say, hey, can you please come help me? That goes a long way with trust and with building that engagement and real partnership between customer and ITSPs.

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[00:07:09] Try ControlMap for free today. Visit scalepad.com slash Dave to get started. That's scalepad.com slash Dave. So you've switched roles. Yes. And I want to get a little bit of sense of, because now you're asking questions in a different way. Like, compare for me a little bit the difference between being an analyst and what you're doing now on research versus the journalism side.

[00:07:31] The analyst side is different because I am absolutely allowed to make and encouraged to make predictions, to make correlations between data, to tell folks what I think the data says instead of simply presenting the data and telling them that they need to make the connections themselves.

[00:07:58] And that has been the biggest challenge, really, instead of just saying, well, X percent of MSPs said this. And then I don't get to say anything else because that's how journalism works. You know, I have to tell them what the data means. And that's been a little bit of a learning curve.

[00:08:21] So let's try and what are what's one thing that MSPs need to be thinking about in the next 12 months based on what you've been spending time on the data? Like, what's the thing you would say? Hey, I've been reading all this data. MSPs, this is what I want you thinking about the next 12 months.

[00:08:34] I want MSPs thinking about budgets for AI and I want them thinking about cybersecurity for AI because I think that based on what we found in the survey, that's where customers are focused and that's where the opportunities are going to be in the next year. Here's what I'm hearing from MSP owners in the communities I watch every week. AI isn't making things simpler.

[00:09:03] It's creating new headaches. Clients are making bad decisions based on it. Tool stacks keep growing and every vendor is claiming to have the answer. Pax8 is different. They're not selling you another tool. They're building the platform that pulls it together. An intelligent cloud marketplace, curated vendors, an education that maps how to monetize AI and build a scalable managed intelligence practice.

[00:09:29] If your goal is a cleaner, more profitable operation, not just more tech, that's exactly what Pax8 is built for. Check them out at Pax8.com. That's P-A-X, the number 8, dot com. Let's make this a little bit actionable. You spend some time thinking about governance. You can think about the structures. If there's a resource or a direction, what would you direct MSPs to say, hey, now that you've identified this one piece as a thing they should do?

[00:09:58] Is there a next step? Is there a specific action you want them to take? I think for MSPs, they should be thinking about, yes, AI and yes, integration. But they can't forget about the bread and butter IT infrastructure. They can't forget about data. They can't forget about all the things that they've been doing up to this point before AI even entered the picture.

[00:10:27] And I think to do that would be a grave miscalculation. There we go. There's the actionable advice. Sharon, thanks so much for joining me. We'll have to mix it up on the live show sometime. Let's do it. Awesome. Okay, thank you. Thanks a lot. The hardest part of running an MSP? Doing it alone. The Small Biz Thoughts community has been the room where independent operators compare notes for nearly 20 years. Real peers, real numbers, real answers from people running businesses just like yours.

[00:10:57] Pull up a chair at smallbizthoughts.org. Interested in advertising? Head to mspradio.com slash engage. The Business of Tech is written and produced by me, Dave Sobel, under ethics guidelines posted at businessof.tech. Thanks for listening. I'll see you on the next episode. Produced by Picture This Video.

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