SMB vs. Mid Business Outlooks. Maryland's New Privacy Law & Cybersecurity Shift at RSA Conference

[00:00:02] It's Monday, May 13th, 2024 and I'm Dave Sulp. Three things to know today. Small versus

[00:00:08] mid-sized businesses outlooks on the economy and revenue are both diverging. Maryland joins

[00:00:14] states enhancing consumer data rights with new privacy legislation and Secure by Design,

[00:00:20] a shift in cybersecurity promoted at the RSA conference. This is the Business of Tech.

[00:00:29] As is becoming the norm in this show, we'll start the week by reviewing new market data.

[00:00:34] According to a Forester report, the global IT services market is projected to reach $2 trillion

[00:00:40] by 2028 driven by cloud modernization. Despite near-term challenges, Forester expects an average

[00:00:48] annual increase of 16% in enterprise IT services spent through 2028. Hyper scalers like AWS,

[00:00:56] Microsoft and Google Cloud are leading the growth with infrastructures of service spending expected

[00:01:01] to double in the next five years. ETP Technologies has reported a significant increase in the value

[00:01:09] of GPU sales, sales more than doubling year-over-year from 2022 to 2023 reaching over 1.1 million pounds.

[00:01:18] The rise in GPU sales is attributed to the proliferation of AI and the fluctuating prices

[00:01:25] due to supply and demand imbalances. According to Amazon CEO Andy Jassy in the last earnings call,

[00:01:33] despite AWS' $100 billion plus annualized revenue run rate, 85% or more of the global

[00:01:41] IT spend remains on-prem. Jassy believes that AWS' generative AI strategy will drive companies to

[00:01:48] transition from on-prem IT environments to the cloud, presenting a significant opportunity for growth.

[00:01:55] The 2024 business owner report from Bank of America reveals that a majority of U.S. business

[00:02:01] owners anticipate revenue growth, with 87% of mid-sized business owners and 65% of small business

[00:02:08] owners expecting an increase in revenue over the next 12 months. Economic outlooks vary by

[00:02:14] business size, with three quarters of mid-sized business owners expecting national economy

[00:02:19] improvement compared to only one third of small business owners. Concerns over inflation remain,

[00:02:26] impacting 90% of mid-sized and 84% of small businesses. Small businesses are increasingly

[00:02:32] using credit cards with balances nearly 20% higher in 2019 levels, though inflation-adjusted

[00:02:40] balances remain lower. The Russell 2000, a proxy for small business, was only slightly

[00:02:46] up for the week, but it was quite coaster and the S&P 600, which looks at the smallest companies,

[00:02:52] mirrored the Russell's performance. Why do we care? Both Forrester's data and Jassy's review

[00:03:00] point to more shift from traditional on-prem infrastructure to more scalable, flexible cloud

[00:03:05] solutions. It's a good trend. While a majority in both S&P and mid-market anticipate revenue

[00:03:11] growth, the difference in their economic outlooks, more optimistic among mid-sized,

[00:03:16] highlights varying levels of confidence and resilience in facing economic challenges such

[00:03:20] as inflation. The significant impact of inflation on both segments, alongside increased reliance on

[00:03:26] credit among small businesses, points to underlying financial pressures that could

[00:03:31] affect their growth trajectories. Use that as context for your business strategy discussions

[00:03:37] with owners. Maryland has enacted the Maryland Online Data Privacy Act,

[00:03:45] which imposes stricter privacy standards on businesses and requires them to limit the data

[00:03:50] they collect from Maryland consumers. Consumer advocates view this law as having stronger

[00:03:55] consumer protections than similar laws in other states, while the tech industry has expressed

[00:04:00] concerns about varying state requirements. Maryland joins 17 other states with laws

[00:04:06] granting customers the right to know and correct their collected data.

[00:04:10] And Maryland Governor Wes Moore has signed a new law that centralizes the power of the state's

[00:04:16] chief information officer to carry out IT modernization projects. The law establishes an IT

[00:04:22] investment fund and requires some funds to be allocated for public health, education,

[00:04:27] and safety projects. It also centralizes IT management under the Department of Information

[00:04:33] Technology and aims to accelerate replacing outdated technology systems.

[00:04:39] The Federal Communications Commission has made a few weeks to its net neutrality rules

[00:04:44] following pressure from lobbying organizations. The final rules released on May 4 include the

[00:04:50] three bright line prohibitions of no blocking, no throttling, and no aid prioritization.

[00:04:56] Akamai Technologies, that hashing and content delivery network provider, successfully sought

[00:05:02] assurances that its business ties to broadband internet service providers would not be treated as

[00:05:08] paid prioritization. Small ISPs, however, did not receive a wholesale exemption from the

[00:05:13] net neutrality rules. For now, the FCC also decided to shield ISPs from contributing to

[00:05:20] the Federal Universal Service Fund. The FCC did not forbid states from adopting their

[00:05:26] own net neutrality laws, but it did not address specific state broadband affordability programs.

[00:05:34] Why do we care? Well, it's another privacy law to be aware of. That's not my focus today.

[00:05:39] By establishing an IT investment fund, specifically earmarks for public health,

[00:05:44] education, and safety projects, it's not only targets efficiency but also aims to enhance

[00:05:50] the state's service delivery in critical sectors. I'm intrigued.

[00:05:55] The omission of guidelines on state broadband affordability programs could lead to a patchwork

[00:05:59] of regulations that might complicate compliance for service providers operating across multiple

[00:06:05] states. Good. Apply as needed to your own business.

[00:06:12] Also wanted to highlight some of the news from last week's RSA conference.

[00:06:17] At the conference, several AI security companies showcased products aimed at using AI

[00:06:22] to mitigate cyber threats. Calypso AI introduced a feature to create a vulnerability scanner without

[00:06:29] coding. Protect AI released Sightline, an AI and machine learning supply chain vulnerability

[00:06:36] database. Trellix rolled out Trellix-wise for threat detection. And Deep Instinct introduced

[00:06:43] Diana, DIA, NNA to predict AI's tactics. Some key themes emerged. The surge in distributed denial

[00:06:53] of service attacks, targeting web applications, the importance of AI-driven next-gen SIM solutions,

[00:06:59] the escalating cyber threats from financially motivated crime groups, and China-backed

[00:07:04] threat actors, the latest developments in quantum cryptography, and the ongoing ransomware

[00:07:10] crisis and the need for improved defensive capabilities. The cybersecurity and infrastructure

[00:07:16] security agency's new Secure by Design pledge relies on the commitment of 68 tech manufacturers to

[00:07:23] enhance product security. The pledge includes increasing multifactor authentication, reducing

[00:07:28] security bugs, speeding up security patches, and publishing a vulnerability disclosure policy.

[00:07:34] However, CISA does not plan to strictly enforce this pledge, leaving companies accountable for

[00:07:40] their promises. CISA plans to convene signatories throughout the year to discuss progress.

[00:07:46] The pledge focuses on enterprise software products and services aiming to shift the security

[00:07:51] responsibility from individuals to manufacturers. The pledge includes all those glows, including

[00:07:57] reducing the prevalence of vulnerabilities and being more transparent about them.

[00:08:02] Why do we care? It's the Secure by Design pledge that's known to pay attention to

[00:08:07] who signs and who doesn't. For me, that's the headline coming out of the event.

[00:08:13] The emphasis on AI-driven solutions in the move towards Secure by Design principles

[00:08:18] suggests being more proactive and foundational in their approach to cybersecurity.

[00:08:22] And so let's not lose sight of foundations. That assumes you and your customers are

[00:08:27] already executing there. With as many breaches and security concerns as I report in this show,

[00:08:35] it should be obvious that cybersecurity is not just about technology, but also the human

[00:08:40] expertise needed to interpret and respond to complex threats. Huntress is focused on elevating SMBs

[00:08:47] and MSBs around the world. Huntress has a suite of fully managed cybersecurity solutions powered by

[00:08:54] a 24x7 human-led SOC dedicated to continuous monitoring, expert investigation, and rapid

[00:09:01] response. And the proof is the execution. Huntress is the number one rated EDR for SMBs on G2.

[00:09:10] Want to know more about the platform? Visit huntress.com slash MSB radio to learn more.

[00:09:19] Thanks for listening. Today, National Apple Pie Day is also International Hummus Day,

[00:09:24] clearly if you're listening outside the US. Have a question you want answered? We take

[00:09:29] those list of questions. Send them in. Ideally, it's a voice memo or video to

[00:09:32] question at MSBradio.com. I answer them live each week on the Wednesday Live show. This week,

[00:09:38] 3pm Eastern on YouTube and LinkedIn. And if you got a comment or a thought, I do want to hear

[00:09:43] them put them in the comments if you're on YouTube. Reach out on LinkedIn if you're

[00:09:47] listening to the podcast. I'll talk to you again tomorrow.

[00:09:52] The business of tech is written and produced by me Dave Sobel under ethics guidelines. Post it

[00:09:58] at business of tech. If you like the content, please make sure to hit that like button, follow

[00:10:03] or subscribe. It's free and easy and the best way to support the show and help us grow. You can

[00:10:10] also check out our Patreon where you can join the business of tech community at Patreon.com

[00:10:16] slash MSB radio or buy our Why Do We Care merch at business of tech. Finally, if you're

[00:10:23] interested in advertising on the show, visit MSBradio.com slash engage. Once again,

[00:10:30] thanks for listening to me and I will talk to you again on our next episode of the business of tech.

[00:10:39] Part of the MSB radio network.