Tariff Whiplash Fuels Hardware Surge; Google, Anthropic, and Dell Innovate in AI and Cybersecurity

[00:00:02] It's Thursday, April 10th, 2025, and I'm Dave Solt. Three things to know today. Tariff Whiplash drives a hardware surge, but Canalys finds partners are pivoting to services for long-term growth. AI means business, Google automates workflows, Anthropic boosts power users, and Dell powers it all. And hackers get smarter, not louder. WatchGuard warns of a shift from malware volume to malware precision. This is the Business of Tech.

[00:00:31] In yesterday's live show, we adjusted for this coming news in real time. And that'll be on the podcast feed this weekend to give you insights into strategies for handling the tariff rollercoaster. It's also available now on YouTube. The NASDAQ composite surged over 12%, marking its second best day ever and the best session since January 2001. The rally was driven by a pause in tariffs announced by President Donald Trump for certain countries, leading to a significant rebound in the stock market.

[00:01:00] Notably, Apple shares soared more than 15%, recovering from a four-day trading slump that had seen its market value drop by $774 billion. Other major tech companies also saw impressive gains, with Tesla and Nvidia rising by 18% and 22%, respectively. The VanEck Semiconductor ETF, which tracked semiconductor stocks, soared over 17%, experiencing its best day ever. Also coming to light is what's happening with hardware.

[00:01:29] In the first quarter of 2025, PC shipments in the United States surged by 9.4% to 62.7 million units, driven by manufacturers rushing to deliver products ahead of impending tariffs. Notebook shipments rose to 49.4 million units, marking a 10% increase from the previous year, while desktop shipments grew by 8% to 13.3 million units.

[00:01:56] Analysts from Canalys reported that companies like Lenovo and HP increased their shipments to the U.S. by about 20% and 13%, respectively, as they prepared for potential cost hikes. By the end of the year, most major PC manufacturers are expected to have shifted U.S.-bound shipments out of China to enhance supply chain resilience.

[00:02:18] A recent Canalys poll found that 14% of PC resellers believe their small and mid-sized business customers are unaware of the end of support for Windows 10, which could lead to higher costs with these businesses eventually refresh their PC fleets.

[00:02:44] In fact, the company framework, who I covered earlier this week, gave some specific insights into how that works, quoting The Verge for the timeline. At 12.01 a.m. Eastern on Wednesday, Trump's new tariffs went into effect, including an incredible 104% tariff on China and 32% tariff on Taiwan.

[00:03:04] At 12.30 p.m. Eastern, framework announced a 10% price hike on all its computers, one it never thought it would need to introduce because it doesn't make computers in China. It does make them in Taiwan. At 11.18 p.m. Eastern, just over 12 hours after the new tariffs were officially put in place, Trump announced a 90-day pause on tariffs for most countries, but an increased 125% rate for China.

[00:03:29] At 1.48 p.m. Eastern, framework announced that nope, actually it's bringing prices back to normal. At 3.43 p.m. Eastern, framework announced that some prices will still reflect increased tariffs on China. Things are still a bit convoluted, but here's the general lay of the land. Since Trump is still imposing 10% tariffs on Taiwan, framework will continue a pause on selling some of its cheapest laptop configurations where we're unable to absorb the remaining 10% tariff.

[00:03:58] Additionally, some of Framework's made-in-China modules are now cost more, like $15 for a USB-C port rather than $9, or $49 for an Ethernet card rather than $39. And Framework says systems that ship with those modules will see those same price increases." End quote from The Verge. I found it interesting that CRN's reporting says customers are eager to purchase new devices. I've included a link to that story.

[00:04:24] Because according to a recent Global Partners survey conducted by Canalys, a significant shift in the business models of partners is underway, with hardware dropping to only 13% of profitability by 2025. The survey revealed that while hardware still represents a substantial market, with $1 trillion of IT hardware expected to be shipped alongside an equal amount of software, partners are increasingly moving toward profit-rich services such as consulting and managed services.

[00:04:51] In fact, for every dollar of hardware, there's an opportunity for $2 in managed services. The evolution indicates that partners are now participating in an average of 3.2 distinct business models highlighting the growing trend towards service-oriented revenue streams. Why do we care? Customers, and particularly SMBs, are pulling forward purchases to dodge cost increases. And Harley qualified that as being eager.

[00:05:17] While CRN reports enthusiasm for new devices, Canalys and the tariff timeline suggest SMBs may pull back if prices rise post-surge. More broadly, hardware is the doorway, not the destination. The Canalys survey underlies that for every dollar of hardware, there's $2 in managed services opportunities. The winners don't just resell hardware, they wrap it with service, lifecycle management, security hardening, fleet analytics, and AI integration.

[00:05:46] This quarter's spike is a reaction to policy uncertainty, not a durable demand trend. Once the pipeline clears, providers could face a dry quarter with delayed refreshes and margin compression. Short-term, grab the refresh cycle. Long-term, use it to pivot toward recurring services and consultative models. And catch more analysis on the live show, available now on YouTube and dropping on the audio feed here on Saturday.

[00:06:15] With every new breach and threat that I cover, it's clear that cybersecurity isn't a luxury anymore. It's a necessity. That's where Huntress comes in. Their fully-managed cybersecurity platform is built for every kind of business. Not just the 1%. Huntress seamlessly integrates their products and threat hunting team.

[00:06:34] Their EDR, ITDR, SIM, and security awareness training solutions are purposely built for their elite 24x7 Security Operations Center to stop threats before anyone else even spots them. This potent combination of purpose-built cybersecurity and threat hunting expertise is one of the many reasons why G2 users have voted Huntress the number one rated EDR for growing businesses.

[00:07:00] To see what people-powered cybersecurity looks like, visit Huntress.com slash MSB Radio. Google has unveiled a new tool called Google Workspace Flows, designed to automate complex multi-step processes using artificial intelligence. Announced during the Cloud and Next 2025 event, this feature allows users to create custom versions of its Gemini AI, referred to as GEMs.

[00:07:25] With Workspace Flows, users can describe their needs in simple language and the system will generate logical workflows without the need for coding. The alpha program for this tool is now available. Additionally, Google is enhancing its productivity tools with new audio features in Google Docs and an on-demand analyst for Google Sheets. Anthropik has launched a new premium tier called the Max Plan, aimed at power users who require higher usage limits for their AI service, Claude.

[00:07:54] The plan includes two options, a $100 per month tier offering five times the usage of the existing Pro Plan, and a $200 per month tier providing 20 times the usage. The move comes in response to feedback from professionals who have integrated Claude into their workflows and frequently hit usage limits. Anthropik's product executive, Scott White, emphasized that the Max Plan is designed to offer professionals more flexibility without the need for an enterprise plan.

[00:08:22] Subscribers to the Max Plan will also receive priority access to new features. The launch follows the release of Claude 3.7 Sonnet, Anthropik's most intelligent model to date, which aims to drive deeper adoption and meet increasing usage demands. And Dell has announced significant updates to its storage and server lines to better support artificial intelligence workloads.

[00:08:43] This includes new releases of its PowerEdge servers and enhancements to its storage systems such as PowerStore, ObjectScale, PowerScale and PowerProtect. The PowerEdge servers will be equipped with Intel's latest processors and are designed for both traditional and emerging workloads. The PowerStore software now features AI-based analytics for improved efficiency, while ObjectScale has introduced a new all-flash system that doubles throughput compared to its predecessor.

[00:09:12] Additionally, the PowerProtect system is set to deliver up to 91% faster restore times. Availability from any of these products begins as early as April of this year. Why do we care? AI integration is moving from novel to normalized. Google is embedding AI workflows into productivity tools. Anthropik is monetizing usage patterns like cloud compute. And Dell is laying the groundwork for AI-driven infrastructure.

[00:09:38] For providers, this means rethinking services not around if AI is used, but how clients want it operationalized. Beware of overpromising. We've seen natural language to automation fail before, and robotic process automation continues to be a struggle. That said, the trend is notable.

[00:10:00] In a recent report by WatchGuard Technologies, a significant increase in network malware has been observed, with a staggering 94% rise in detections compared to the previous quarter. The surge highlights the growing sophistication of cybercriminals who are increasingly exploiting advanced and encrypted connections. Other notable findings include a 141% increase in crypto-miner detections and a spike in zero-day malware, which rebounded to 53%, up from 20%.

[00:10:30] Despite an overall historic 91% decrease in total unique malware threats, the report emphasizes that fewer but more sophisticated attacks are being launched. The data underscores the importance of proactive cybersecurity measures, as traditional defenses are increasingly challenged by evolving tactics from cyberadversaries. Why do we care? Fewer threats, but sharper knives.

[00:10:56] This isn't just a stats bump, it's a strategic pivot by cybercriminals. WatchGuard's data suggests attackers are trading quantity for quality, and it's working. While the total number of unique malware variants has dropped, the sharp increase in encrypted, evasive, and zero-day attacks signals a clear move toward higher precision and better ROI for attackers. This flips a key assumption in traditional security postures, that volume is the primary threat metric.

[00:11:25] Increased detection doesn't always mean increased successful attacks. Better visibility can inflate the numbers without changing the actual risk level. Providers must ensure their response is calibrated, not panicked. Remember, the core value is navigating complexity on customers' behalf. This report is a prompt to reaffirm that strategic role. This episode is supported by Comet Backup.

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[00:12:47] It's also National Siblings Day, so a shout out to all of mine. I'll be speaking on a webinar on April 22nd about inbound marketing in the AI era with the author of a new book. Link in the show notes and descriptions to register. I'm forward to seeing you there. The Business of Tech is written and produced by me, Dave Sobel, under ethics guidelines posted at businessof.tech. If you've enjoyed the show, make sure you've subscribed or followed on your favorite platform.

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