The Business of Tech Lounge - Thursday, April 11 2024

[00:00:00] .

[00:00:02] It's Thursday, April 11, 2024.

[00:00:07] And I'm Dave Sobel.

[00:00:10] Welcome to the Business of Tech Lounge.

[00:00:13] Today on the show, Goldman Sachs warns us about office space.

[00:00:17] How much are employees using generative AI without approval?

[00:00:21] Cloud migrations and value and more share of information

[00:00:25] from Google Open AI and Gradient MSP

[00:00:29] plus more about NIST 2 and a preview of my interview

[00:00:33] from this coming weekend.

[00:00:35] I want to thank SalesBuilder, our Patreon sponsor

[00:00:39] whose support makes this show possible.

[00:00:42] Focus on your IT sales workflow with the power of automation

[00:00:46] and visit them at salesbuilder.com.

[00:00:48] That's be you.

[00:00:50] I want to get your logo right here.

[00:00:53] Vendors, you can do so with our vendor Patreon program.

[00:00:57] It's a simple monthly subscription and visit patreon.com

[00:01:00] slash MSP radio to sign up.

[00:01:03] I can't do this show without support

[00:01:06] and thanks again to SalesBuilder for theirs.

[00:01:09] Now, I do take questions and comments throughout the show

[00:01:12] so I'm going to go ahead and share my thoughts

[00:01:15] on salesbuilder.com.

[00:01:17] Now I do take questions and comments throughout the show

[00:01:20] so make sure to put them in chat.

[00:01:22] We'll have a dedicated questions section in the show

[00:01:25] with lists or submitted questions

[00:01:27] but those comments will throw up on screen anytime.

[00:01:30] I'm really glad you can join in

[00:01:32] as we've got a few stories to catch up

[00:01:35] from the week that I was off.

[00:01:37] So let's dive in with our first top story.

[00:01:40] I covered a lot of jobs data on the show yesterday

[00:01:44] and today and I noted some related market conditions

[00:01:47] that I didn't want to miss.

[00:01:50] Goldman Sachs warns that office owners

[00:01:53] are running out of time as maturing debts

[00:01:56] cannot be delayed much longer.

[00:01:59] The pandemic has led to a work from home boom

[00:02:02] putting significant stress on the U.S. office segment

[00:02:05] of the commercial property market.

[00:02:07] Many troubled office loans have been extended

[00:02:10] or modified but the trend cannot continue

[00:02:13] indefinitely.

[00:02:15] The amount of outstanding commercial mortgages

[00:02:17] set to mature by the end of the year

[00:02:19] has increased significantly

[00:02:21] and while extending maturity dates

[00:02:23] and modifying loan terms has helped mitigate defaults

[00:02:26] funding costs are unlikely to return

[00:02:29] to pre-pandemic levels.

[00:02:31] Refinancing existing commercial mortgage loans

[00:02:34] is becoming increasingly expensive

[00:02:36] and office property values have declined.

[00:02:39] The risks of this trend breaking have risen.

[00:02:43] And let's continue with some second order effects.

[00:02:47] Employees are using unapproved generative AI apps

[00:02:51] to boost productivity causing a security showdown

[00:02:54] between IT departments and workers.

[00:02:57] A survey found that 22% of employees

[00:02:59] knowingly violate company rules

[00:03:02] on the use of generative AI

[00:03:04] with 34% using unapproved apps and tools.

[00:03:07] Workplace IT security policies designed for

[00:03:10] office networks and employer-owned devices

[00:03:13] are now facing challenges due to remote work.

[00:03:16] Security professionals express concerns about sensitive data,

[00:03:19] maliciously trained AI systems

[00:03:22] and AI enhanced phishing attempts.

[00:03:25] The use of publicly available generative AI tools

[00:03:28] at work is being restricted or banned by many companies

[00:03:32] but access to AI tools is expected to widen.

[00:03:37] Now why do we care?

[00:03:39] There's a coming change in real estate

[00:03:42] that I don't think we talk about enough.

[00:03:45] If I were an MSP today,

[00:03:47] I'd be tracking my customers lease arrangements.

[00:03:50] Besides the potential project work around to move,

[00:03:53] there'll be discussions to be had

[00:03:55] about whether those leases are even being renewed.

[00:03:59] If you don't need an office,

[00:04:01] well, you don't need an office.

[00:04:04] We also care about the increasing shadow IT around AI.

[00:04:08] Without policies and guidance,

[00:04:10] employees are left to their own devices,

[00:04:12] which is certainly the worst situation.

[00:04:14] But a block everything strategy just won't work either.

[00:04:18] It's not realistic.

[00:04:19] And the good news is all of this

[00:04:21] is consulting and advice opportunity.

[00:04:25] Got a question or comment?

[00:04:27] Put it on the chat if you're watching live.

[00:04:29] Certainly love to hear from you.

[00:04:31] Now we've got a few more stories

[00:04:33] as there's been some product moves we want to focus on.

[00:04:37] Google Workspace is introducing

[00:04:39] new features and capabilities at Google Cloud Next 2024.

[00:04:43] Updates include voice input

[00:04:45] and prompting in mobile Gmail,

[00:04:47] tabs feature in Google Docs,

[00:04:49] tables features in Google Sheets,

[00:04:51] Gemini for Google Chat

[00:04:53] with conversation summarization

[00:04:55] and automatic message translation

[00:04:57] and AI meetings and messaging add-on for enterprise.

[00:05:01] Google also announced an AI security add-on

[00:05:04] for file protection in Google Drive.

[00:05:07] Google has integrated Mandiant security offerings

[00:05:10] into its AI platform Gemini

[00:05:12] to enhance its security capabilities.

[00:05:15] The new features include automated security agents

[00:05:17] that use generative AI

[00:05:19] to detect and remediate cybersecurity attacks

[00:05:22] as well as provide faster investigations.

[00:05:25] Gemini's AI capabilities are also used to analyze code,

[00:05:29] summarize findings, and recommend actions

[00:05:31] for threat detection and prevention.

[00:05:33] The integration aims to improve the speed

[00:05:36] and effectiveness of addressing threats

[00:05:38] and neutralizing risks.

[00:05:40] OpenAI's chat GPT Enterprise

[00:05:43] is experiencing surging demand

[00:05:45] with over 600,000 people signed up to use it.

[00:05:50] Despite competition from other AI companies,

[00:05:53] OpenAI's COO Brad Leitkapp

[00:05:55] believes that this year

[00:05:57] will see significant adoption of AI in enterprise.

[00:06:00] OpenAI is also working on content licensing deals

[00:06:03] and plans to open an office in Tokyo

[00:06:06] to meet global demand.

[00:06:08] Gradient MSP has launched StatTracker,

[00:06:12] an AI-powered SaaS product designed to help MSPs

[00:06:15] track their business

[00:06:17] and make data-driven decisions.

[00:06:19] It provides insights into product category coverage,

[00:06:22] vendor spend,

[00:06:24] resell revenue and profitability,

[00:06:26] allowing MSPs to identify upsell opportunities

[00:06:29] and consolidate vendors for better margins.

[00:06:32] With automated product usage tracking,

[00:06:35] real-time data updates,

[00:06:37] and AI-driven data analysis,

[00:06:39] StatTracker offers comprehensive business insights

[00:06:42] and recommendations for improvements.

[00:06:44] Currently available to a small cohort of 100 MSPs,

[00:06:47] Gradient MSP plans to expand its availability

[00:06:50] in the future.

[00:06:52] Now, why do we care?

[00:06:55] Google versus Microsoft is not new territory.

[00:06:58] There's just new options in the feature wars.

[00:07:01] It's too early to say what killer features

[00:07:05] will drive change, but it's fun to watch.

[00:07:08] And early movers will get the ability

[00:07:11] to drive value with customers quickly.

[00:07:14] ChatGPT is the buzz,

[00:07:16] but ChatGPT Enterprise is where the metrics

[00:07:19] for business we care about are.

[00:07:21] There's clearly some adoption.

[00:07:24] And finally, I'm going to note two thoughts

[00:07:26] with regards to StatTracker.

[00:07:28] Gradient is now on its third product.

[00:07:30] On the first fizzle, the second is synthesized,

[00:07:32] their integration product, and now this.

[00:07:35] This is a data play.

[00:07:38] The value is in Gradient collecting the data

[00:07:41] and using it somehow.

[00:07:43] It's the somehow you want to know more about.

[00:07:46] Second, StatTracker looks a lot like

[00:07:49] Navistack from Channel Program.

[00:07:51] I'll broadly say I'm not a particular fan of tools

[00:07:54] that let you visualize your stack.

[00:07:57] If you can put a package of products together

[00:08:00] in buckets like this, it's all a commodity

[00:08:03] as each bucket is just an interchangeable part.

[00:08:06] Well, there isn't that much uniqueness there.

[00:08:09] But more importantly, remember if you're giving

[00:08:12] your data up and if it's free,

[00:08:15] you're the product.

[00:08:18] Now reminder, we're taking questions

[00:08:20] and I'm watching the chat for those comments.

[00:08:22] Certainly love to hear what you're thinking,

[00:08:24] put it on there and we'll throw it up on screen

[00:08:26] or answer the question a little bit later.

[00:08:29] Now let's revisit that interview from Monday.

[00:08:32] NIST 2 is the EU's new policy directive

[00:08:35] coming in October.

[00:08:37] Let's hear a part of my interview from the weekend

[00:08:39] with Eric John Frazier.

[00:08:41] Now we were talking before

[00:08:43] and one of the reasons I was interested in this

[00:08:45] is that you looked at this and your interpretation

[00:08:47] is that there's actually going to be a lot of American companies

[00:08:50] that are swept up in this

[00:08:52] in ways that they may not be aware of.

[00:08:54] Give me some of the examples of the scenarios

[00:08:56] that you've been thinking about

[00:08:58] that my American listeners need to be aware of.

[00:09:01] So what we see is

[00:09:04] that we get a lot of questions asked by different companies

[00:09:07] and they ask us like,

[00:09:09] how is your tool working for us for NIST 2?

[00:09:11] And then I look at these companies

[00:09:13] and they ask them why do you want to become

[00:09:15] compliant to NIST 2?

[00:09:17] Because you don't have to become compliant.

[00:09:19] But then these companies

[00:09:21] they quickly say to me,

[00:09:23] we have these companies that we work with in Europe

[00:09:26] and we expect that they will ask us

[00:09:28] to also comply to these NIST 2 requirements.

[00:09:32] And that's why we specially designed

[00:09:34] also a supply chain portal for them

[00:09:37] to show that they have

[00:09:39] compliance to the minimal requirements

[00:09:41] that NIST 2 is asking them.

[00:09:44] And it's pretty broad, right?

[00:09:46] Because if I'm an American company

[00:09:48] and I manufacture something

[00:09:50] and I sell a unit to a European

[00:09:53] I'm now swept up in this, right?

[00:09:55] Like I would have to make sure

[00:09:57] that that sale and all the data

[00:09:59] related to it is involved, right?

[00:10:01] Walk me through it.

[00:10:03] I mean, it's that granular?

[00:10:05] What do I have to protect?

[00:10:07] So it's really depending on which customers

[00:10:09] do you offer your service to in Europe.

[00:10:11] And if these customers are in these critical sectors

[00:10:14] then you can expect them to ask you

[00:10:17] that you comply to the most of the requirements

[00:10:20] that are being asked inside of the NIST 2.

[00:10:25] And there's the key insight.

[00:10:27] You've got to understand which ones

[00:10:30] which leads us to why do we care.

[00:10:32] Europe, this set of regulations

[00:10:35] is expansive enough

[00:10:37] and includes literally any transaction

[00:10:39] that's happening with European companies.

[00:10:41] Particularly for my American listeners

[00:10:43] and those of us that think only about the US market

[00:10:46] it's easy to think we don't necessarily

[00:10:49] have customers in Europe

[00:10:51] but it only has to be

[00:10:53] one or two transactions

[00:10:55] that make all of the difference.

[00:10:57] And there is pretty broad definition

[00:10:59] of which sectors come into that.

[00:11:01] It includes things like waste management

[00:11:03] as well as general services

[00:11:05] that are part of critical infrastructure.

[00:11:07] I think this is much more expansive

[00:11:09] than most Americans come to think about

[00:11:11] and the deadline is not that far out.

[00:11:13] It's October to make sure that you're in place.

[00:11:16] This is yet another opportunity

[00:11:18] to lean in to understanding your customers.

[00:11:21] Asking about who your customers are

[00:11:24] and making sure you understand

[00:11:26] the expanse of their business

[00:11:28] is exactly where you can position yourself

[00:11:30] to be most valuable

[00:11:32] and help them understand these implications.

[00:11:34] Compliance as a large space

[00:11:36] is critically important.

[00:11:38] That's why it covers many laws as I do

[00:11:40] on the show

[00:11:42] because you never know which ones you're covered by

[00:11:44] unless you've gone deep with your customers

[00:11:46] and are tracking all of that.

[00:11:48] So that's why we care

[00:11:50] and that interview came out on Monday

[00:11:52] and I'd encourage you to dive further into it.

[00:11:54] Now remember we continue

[00:11:56] to take questions and you can submit

[00:11:58] any time in the chat window

[00:12:00] or submit for next week

[00:12:02] if you're watching the recording

[00:12:04] sending to question at MSPRadio.com

[00:12:08] I've got a couple more stories I want to hit on

[00:12:10] that we might have missed from the previous week.

[00:12:13] According to a study by Flexera

[00:12:15] 58% of tech professionals and IT leaders

[00:12:18] plan to migrate more workloads

[00:12:20] to the cloud in 2024.

[00:12:22] Organizations are also optimizing

[00:12:24] their use of current cloud resources

[00:12:27] and adopting FINOP's teams.

[00:12:29] Multicloud usage and hybrid cloud strategies

[00:12:32] are growing in sophistication

[00:12:34] with increased application siloing,

[00:12:36] failover capabilities

[00:12:38] and data integration between clouds.

[00:12:40] The use of public cloud generative

[00:12:42] AI services is widespread.

[00:12:44] Challenges in cloud migration

[00:12:46] include understanding app dependencies

[00:12:48] and assessing on-premises

[00:12:50] versus cloud costs.

[00:12:52] European companies

[00:12:54] are hindering their cloud computing ambitions

[00:12:56] by focusing too much

[00:12:58] on IT improvements

[00:13:00] rather than transforming their business operations

[00:13:03] according to a study by McKinsey.

[00:13:05] While 95% of European companies

[00:13:07] claim to capture value from the cloud

[00:13:10] few are realizing significant financial benefits.

[00:13:14] The study found that the majority of value

[00:13:16] remains in isolated pockets

[00:13:18] and at subscale.

[00:13:20] European companies also tend to measure

[00:13:22] cloud impact primarily in terms

[00:13:24] of IT improvements and cost savings

[00:13:27] rather than non-IT outcomes

[00:13:29] and revenue generation.

[00:13:31] McKinsey suggests that European firms

[00:13:33] should prioritize higher value cloud use cases

[00:13:36] and shift their focus toward revenue uplifts

[00:13:39] and cost savings in business operations.

[00:13:42] The study also highlights the pace

[00:13:44] of cloud adoption in Europe is slow

[00:13:46] with less than a third of enterprises

[00:13:48] having 50% of their workloads on the cloud.

[00:13:51] McKinsey recommends that companies

[00:13:53] focus on business value,

[00:13:55] utilize small cross-functional teams,

[00:13:57] build sufficient foundations

[00:13:59] for effective cloud operations.

[00:14:01] Now, why do we cloud care?

[00:14:04] Well, it's all about more cloud.

[00:14:06] I don't want listeners to get hung up

[00:14:08] on the fact that this data

[00:14:10] and study focused on Europe.

[00:14:12] We know the US looks very similar

[00:14:15] and this is very much a widespread problem.

[00:14:18] The key here,

[00:14:20] the big insight is revenue generation.

[00:14:23] It's the holy grail of adoption

[00:14:25] and where the best focus should be.

[00:14:28] It's hard, no doubt about that,

[00:14:30] but it's also not common.

[00:14:33] A unique value prospect is not your people.

[00:14:36] It's not your customer service.

[00:14:39] It's not your technical stack.

[00:14:41] It's the ability to use technology

[00:14:44] to drive revenue outcomes.

[00:14:47] Full stop.

[00:14:49] Now, make sure to put questions in the chat.

[00:14:52] This is our coming into our question section

[00:14:54] and I do love taking them.

[00:14:56] Remember, bring your questions live

[00:14:58] and you'll get a live response.

[00:15:00] This is so much fun

[00:15:02] and if you don't want to do it

[00:15:04] and you don't want to show up live,

[00:15:06] you can always submit them ahead of time.

[00:15:08] Q&A gives you a chance

[00:15:10] to get involved with the show.

[00:15:12] So let's take our first submitted question

[00:15:14] came in via email.

[00:15:16] What is your take on MAC management

[00:15:18] within the MSP community?

[00:15:20] Oh, it's so interesting to dive into this.

[00:15:22] Now I've got huge bias

[00:15:24] in that I am a MAC user myself.

[00:15:26] One of the things that I looked into

[00:15:28] when thinking about this particular question

[00:15:31] was the strategies

[00:15:33] that successful organizations take on.

[00:15:35] Too often, MAC is added

[00:15:38] as a quick add-on

[00:15:40] with a hope that an existing team

[00:15:42] can handle it.

[00:15:44] And what I found was those organizations

[00:15:46] that were claiming the best success

[00:15:48] with implementation

[00:15:50] had dedicated teams

[00:15:52] and dedicated process

[00:15:54] for handling MAC adoption.

[00:15:56] Remember, 10% of the market

[00:15:58] broadly is MAC

[00:16:00] and what you'll find

[00:16:02] when you dig into it is as often

[00:16:04] as very high value people

[00:16:06] within the organization.

[00:16:08] The next time you go look at some of your customers,

[00:16:10] look around the rooms and find out

[00:16:12] which people are the ones that have MACs.

[00:16:14] They tend to be executives

[00:16:16] executives or senior creatives

[00:16:18] or people in specialized role

[00:16:20] and that translates

[00:16:22] into high value

[00:16:24] and high billable rates.

[00:16:26] Note that all things do not have to be the same.

[00:16:28] You can customize

[00:16:30] your offering as it makes

[00:16:32] sense to your customer base.

[00:16:34] I've seen a number of MSPs

[00:16:36] that say they just do it across the board,

[00:16:38] but the really savvy ones

[00:16:40] do pricing per user.

[00:16:42] So they've got a strategy

[00:16:44] specifically for handling

[00:16:46] those MAC users.

[00:16:48] Really appreciate all of these questions

[00:16:50] that come in when they come in ahead of time.

[00:16:52] We do make sure to do the research,

[00:16:54] but if you want to hear me answer it live,

[00:16:56] show up and answer any time.

[00:16:58] If you've got one while you're here,

[00:17:00] put it in the chat

[00:17:02] and we will take it right away.

[00:17:04] But in lieu of that,

[00:17:06] I want to thank you all

[00:17:08] for all your questions

[00:17:10] and I want to give you a preview

[00:17:12] of coming this weekend's interview.

[00:17:14] Now, this weekend, I will be releasing

[00:17:16] an interview with John Gillum

[00:17:18] who's the founder of originality.ai.

[00:17:21] As we think about our policies for AI,

[00:17:24] how do we build them? What are the parameters?

[00:17:26] And maybe we should talk

[00:17:28] to somebody who's been thinking

[00:17:30] about the detection of AI

[00:17:32] and he's got some insights for us.

[00:17:34] Let's hear part of that upcoming interview.

[00:17:36] You brought up a really

[00:17:38] interesting question

[00:17:40] beforehand and I wanted to bring it to my listeners.

[00:17:42] What inspired you

[00:17:44] to focus on the intersection of

[00:17:46] AI and its potential physical

[00:17:48] impact on people?

[00:17:50] Yeah, so with what

[00:17:52] originality.ai does is

[00:17:54] an AI content sector

[00:17:56] that identifies if content

[00:17:58] has been human created

[00:18:00] or AI created

[00:18:02] and

[00:18:04] it's important for a lot of companies

[00:18:06] to truly understand where their

[00:18:08] content was. AI created because

[00:18:10] there's a whole bunch of risks that come with that

[00:18:12] or whether it was a human

[00:18:14] created and what inspired us

[00:18:16] was we had run our own

[00:18:18] content marketing company.

[00:18:20] We then eventually sold that content marketing company

[00:18:22] and we had seen this sort

[00:18:24] of intersection of where

[00:18:26] humans in the loop,

[00:18:28] where our AI is in the loop

[00:18:30] and that was what had inspired us

[00:18:32] to try and build their own

[00:18:34] detector that was able to understand

[00:18:36] when humans were creating content

[00:18:38] or AI's were creating content.

[00:18:40] And how do you link this to physical harm?

[00:18:42] What's the physical harm

[00:18:44] angle for how an AI

[00:18:46] can actually hurt people?

[00:18:48] There was a situation where

[00:18:50] AI's had written

[00:18:52] books and

[00:18:54] those books had been

[00:18:56] published on Amazon and then

[00:18:58] we were involved in some research with The Guardian

[00:19:00] and they had been recommending that

[00:19:02] the book that was published

[00:19:04] on Amazon had been recommending that

[00:19:06] if

[00:19:08] foragers, people that were picking mushrooms

[00:19:10] were unsure if a mushroom was safe

[00:19:12] they should just paste it a little bit to

[00:19:14] check. And so

[00:19:16] that ability of

[00:19:18] AI to hallucinate

[00:19:20] and then to not end up with any human in the loop

[00:19:22] is a really

[00:19:24] interesting risk

[00:19:26] trajectory that a lot of companies are

[00:19:28] exposed to if they aren't

[00:19:30] having their policy tight around

[00:19:32] the use of AI.

[00:19:34] So what are you recommending

[00:19:36] then as the approach

[00:19:38] let's start with the companies that are

[00:19:40] thinking about using it. How do they

[00:19:42] implement

[00:19:44] correctly to make sure that they're avoiding these kinds

[00:19:46] of harm for their own customers?

[00:19:48] Yeah, so every company

[00:19:50] is going to have different risk profiles. Some

[00:19:52] need to be concerned about the impact

[00:19:54] of math producing AI content

[00:19:56] and then getting slapped by Google.

[00:19:58] That's one of the risks they need

[00:20:00] to manage. Others are concerned about

[00:20:02] reputational harm such as

[00:20:04] publishing

[00:20:06] hallucinated news stories. Like a lot of

[00:20:08] companies have been caught doing. And

[00:20:10] somewhere there's legal harm

[00:20:12] where if they're working for

[00:20:14] a law firm and they need to make

[00:20:16] certain that lawyers are not using

[00:20:18] generative AI to shortcut the work

[00:20:20] and so it's

[00:20:22] a nuanced approach

[00:20:24] as I think probably your audience is

[00:20:26] familiar with that, you know, the answer to most

[00:20:28] things is, well, what's the right

[00:20:30] solution for me? Well, it depends.

[00:20:32] It's pretty common, commonly the answer

[00:20:34] and the right answer.

[00:20:36] I think it's the same situation here

[00:20:38] where

[00:20:40] companies need to have an understanding

[00:20:42] on where content is being produced in their

[00:20:44] organization and then understand the risk

[00:20:46] associated with if it's

[00:20:48] marketing content, if it's legal content, if

[00:20:50] it's contractual content

[00:20:52] and wherever writers are typing

[00:20:54] in words,

[00:20:56] there's an incentive for them to use

[00:20:58] AI and that produces

[00:21:00] a risk for the company.

[00:21:02] They need to be understanding it and then

[00:21:04] our tool is there to help them

[00:21:06] help them

[00:21:08] truly understand how much AI has

[00:21:10] potentially polluted parts of their

[00:21:12] work that they don't

[00:21:14] wish it wasn't involved in.

[00:21:18] John's really insightful where

[00:21:20] on the way that AI can be used

[00:21:22] to do detection has a lot of thoughts

[00:21:24] on the right places and the right

[00:21:26] scenarios and walks through the differences

[00:21:28] in, say, their tools versus

[00:21:30] some of the stuff that was created by open AI.

[00:21:32] I really encourage you to listen

[00:21:34] to this interview as it comes out this weekend

[00:21:36] because you're going to get a lot

[00:21:38] of insights in the way policies link

[00:21:40] to these kinds of detection tools.

[00:21:42] And a reminder for listeners,

[00:21:44] my Patreon supporters already

[00:21:46] have this interview and you can get

[00:21:48] all my interview content early

[00:21:50] as a supporter. If you visit

[00:21:52] patreon.com.

[00:21:54] You can get access right now

[00:21:56] to that video.

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