Virtual CISO Demand, AI Adoption, MSP M&A Market, Edge Computing, and More

[00:00:02] [SPEAKER_00]: It's Thursday, September 5, 2024, and I'm Dave Solple, 4th thing to note today.

[00:00:07] [SPEAKER_00]: The Sonomi Report revealing, high demand for virtual CISO services, but few providers are offering them.

[00:00:14] [SPEAKER_00]: Congress to hold hearings on the crowd strike outage, scale pads found or Chris Day returns

[00:00:19] [SPEAKER_00]: a CEO in what's he looking to do, and private equity role of his dominate the MSP M&A Market.

[00:00:25] [SPEAKER_00]: This is the Business of Tech.

[00:00:29] [SPEAKER_00]: Sonomi's 2024 State of the Virtual CISO Report highlights a significant gap between the

[00:00:35] [SPEAKER_00]: high demand for virtual CISO services among small-dominant-sized businesses, and the limited

[00:00:40] [SPEAKER_00]: supply offered by service providers.

[00:00:43] [SPEAKER_00]: With 75% of providers reporting demand but only 21% offering these services, there is

[00:00:48] [SPEAKER_00]: a substantial growth opportunity.

[00:00:51] [SPEAKER_00]: The report attributes the rising need for virtual CISO services to increasing regulatory

[00:00:56] [SPEAKER_00]: compliance, escalating cyber attacks, and a growing cyber security skill gap.

[00:01:01] [SPEAKER_00]: Service providers adopting virtual CSO services report improved margins and revenue enhanced

[00:01:07] [SPEAKER_00]: customer security and engagement. The majority of providers plan to offer virtual CSO services

[00:01:13] [SPEAKER_00]: in the near future, recognizing the competitive advantage it provides.

[00:01:18] [SPEAKER_00]: A new study reveals that small businesses can significantly benefit from generative AI,

[00:01:23] [SPEAKER_00]: if employees are encouraged to use it. Despite job security and data privacy concerns,

[00:01:28] [SPEAKER_00]: many employees recognize generative AI's productivity advantages.

[00:01:32] [SPEAKER_00]: To overcome hesitancy, small business owners should centralize data management and

[00:01:37] [SPEAKER_00]: integrate generative AI into their operations, emphasizing its role in enhancing productivity

[00:01:43] [SPEAKER_00]: rather than replacing jobs.

[00:01:45] [SPEAKER_00]: An employee should be encouraged to experiment with the technology to understand its capabilities

[00:01:49] [SPEAKER_00]: and limitations, fostering a collaborative environment and prioritizing data privacy.

[00:01:55] [SPEAKER_00]: Why do we care? I'm highly skeptical that customers ask for a virtual chief information

[00:02:01] [SPEAKER_00]: security officer by name. I doubt they're asking for generative AI by name, although broadly

[00:02:08] [SPEAKER_00]: asking for artificial intelligence. It's the services they understand and certainly need.

[00:02:14] [SPEAKER_00]: This is why advocate for a holistic approach to technology advising.

[00:02:18] [SPEAKER_00]: Customers want their technology needs a Dress and look to you to guide them.

[00:02:23] [SPEAKER_00]: We care about studies like these to identify customer pain points. Customize your services

[00:02:28] [SPEAKER_00]: to those needs, get avoid the trap of branding to a customer offering that they wouldn't recognize.

[00:02:35] [SPEAKER_00]: Address the pain, not the buzz word.

[00:02:40] [SPEAKER_00]: Today's episode is supported by Huntress. You want to focus on your clients and are always

[00:02:46] [SPEAKER_00]: looking for ways to get more time. Use Huntress's fully managed cybersecurity platform

[00:02:51] [SPEAKER_00]: to fight off cyber threats. Huntress is more than cybersecurity software for endpoints and

[00:02:57] [SPEAKER_00]: identities. It's a 24 by 7 security operations center. It's security awareness training,

[00:03:03] [SPEAKER_00]: community engagement and dedicated partner support with an average CSAT score of 99.3%. Technology

[00:03:11] [SPEAKER_00]: can only get you so far. Human expertise is what's needed to truly elevate and protect small businesses

[00:03:18] [SPEAKER_00]: and you get that with Huntress. Secure your clients and help them thrive with the number one

[00:03:23] [SPEAKER_00]: rated DDR for SMBs on G2. Visit huntress.com slash MSP radio to find out more.

[00:03:33] [SPEAKER_00]: The White House has published a roadmap to enhance internet routing security, specifically targeting

[00:03:37] [SPEAKER_00]: vulnerabilities in the border gateway protocol or BGP. The report highlights BGPs in adequacy

[00:03:44] [SPEAKER_00]: and security leading to incidents like route hijacking, which pose national security risks.

[00:03:49] [SPEAKER_00]: The roadmap promotes the adoption of resource public key infrastructure or RRPKI to mitigate

[00:03:56] [SPEAKER_00]: these risks, aiming for increased implementation in both public and private sectors. The FCC

[00:04:02] [SPEAKER_00]: supports the initiative and emphasizing addressing BGP security to protect critical infrastructure

[00:04:07] [SPEAKER_00]: and personal information. And the congressional hearing on the global crowd strike outage is set

[00:04:13] [SPEAKER_00]: for September 24th of this year. The hearing will assess the company's trust levels in

[00:04:18] [SPEAKER_00]: Washington and among customers. The incident caused by a faulty security update affected approximately

[00:04:24] [SPEAKER_00]: 8.5 million Windows devices and has led to increased scrutiny of crowd strikes deals.

[00:04:30] [SPEAKER_00]: The hearing aims to highlight the importance of cyber hygiene and supply chain security.

[00:04:35] [SPEAKER_00]: Why do we care? Slow is the hand of legislation? Yet, continuing to push forward. We'll keep

[00:04:42] [SPEAKER_00]: tracking. I have three tactical moves to talk about. Verizon is acquiring frontier

[00:04:49] [SPEAKER_00]: communications for $20 billion to expand its fiber network, adding 2.2 million subscribers

[00:04:55] [SPEAKER_00]: and enhancing its competitive position against the AT&T. The acquisition aims to address

[00:05:00] [SPEAKER_00]: Verizon's slowing revenue and leverage frontier existing infrastructure despite frontier's recent

[00:05:06] [SPEAKER_00]: financial struggles, including a chapter 11 bankruptcy in 2020 and legal issues regarding internet

[00:05:13] [SPEAKER_00]: speed misrepresentation. Chris Dave founder of scale pad has taken over as CEO,

[00:05:20] [SPEAKER_00]: focusing on creating an integrated suite of products rather than pursuing new acquisitions.

[00:05:26] [SPEAKER_00]: Outgoing CEO Dan Wenzley will remain as shareholder and advisor. Dave aims to double

[00:05:32] [SPEAKER_00]: subscription revenue in two years and enhance user experience through technology investments,

[00:05:38] [SPEAKER_00]: particularly in data science and AI. And TechCrunch will the profile of fleet, a bootstrap

[00:05:44] [SPEAKER_00]: laptop, leasing startup based in Paris, aiming to be the IT companion for small businesses

[00:05:50] [SPEAKER_00]: by offering hardware leasing alongside software services like device management and cybersecurity.

[00:05:57] [SPEAKER_00]: Despite challenges in the French tech ecosystem, fleet has diversified its revenue and client base.

[00:06:03] [SPEAKER_00]: Now serving 1500 companies across 120 countries. The company focuses on optimizing operations

[00:06:11] [SPEAKER_00]: without external funding, emphasizing its vision to provide an all-in-one IT solution for small

[00:06:17] [SPEAKER_00]: and medium enterprises. Why do we care? Verizon's acquisition shows a continued lack of competitiveness

[00:06:24] [SPEAKER_00]: in connectivity in the US. There's now one less player. I will generally observe that a

[00:06:30] [SPEAKER_00]: founders' return is not an endorsement of the management that's leaving. I have a bias here

[00:06:35] [SPEAKER_00]: worked for Dan Wenzley on the vendor side. Something wasn't happening as fast as Ourship wanted.

[00:06:41] [SPEAKER_00]: So here we're looking for that change in strategy. Less acquisitions, more investment.

[00:06:47] [SPEAKER_00]: We'll see where it goes. Thanks to the list of William for the attention to fleet.

[00:06:52] [SPEAKER_00]: Consider an organization handling the hardware and software stack as a full lease for SMBs

[00:06:57] [SPEAKER_00]: and doing it entirely bootstrap. That's an MSP.

[00:07:03] [SPEAKER_00]: I have some big ideas for this shortened week. One in a highlight of piece and forms is AI

[00:07:09] [SPEAKER_00]: right for your SMB consider these five points first. Small businesses should carefully

[00:07:14] [SPEAKER_00]: evaluate the implementation of AI by considering its alignment with their identity,

[00:07:19] [SPEAKER_00]: the potential impacts on personalized service, the availability of expertise,

[00:07:24] [SPEAKER_00]: ethical implications, and the hype surrounding AI. I'm sure to approach that focuses on

[00:07:29] [SPEAKER_00]: genuine value and aligns with long-term goals as a such a four successful integration.

[00:07:35] [SPEAKER_00]: In Rich Freeman and Channel Hall, it dives into the economics of private equity purchases.

[00:07:40] [SPEAKER_00]: His article discusses the ongoing trend of consolidation in the managed services industry

[00:07:45] [SPEAKER_00]: driven by private equity firms engaging in platform grabs where multi MSP rollups acquire each other.

[00:07:53] [SPEAKER_00]: Predictions indicate that over half of M&A deals in this sector will involve larger PE firms

[00:07:59] [SPEAKER_00]: buying smaller ones. Operational integration is essential with successful rollups needing standardized

[00:08:05] [SPEAKER_00]: processes to achieve higher valuations. Additionally, the article touches on the cautious approach

[00:08:10] [SPEAKER_00]: MSPs are taking towards AI highlighting the need for confidence and knowledge in delivering

[00:08:15] [SPEAKER_00]: AI services to clients. And reiterating a conversation I had with Anaregg Agarol on the live show

[00:08:22] [SPEAKER_00]: The new stack with the article, the future of LLMs is in your pocket.

[00:08:27] [SPEAKER_00]: The future of large language models is shifting towards local processing on consumer devices,

[00:08:32] [SPEAKER_00]: moving away from reliance on cloud-based systems. This transition will reduce costs

[00:08:37] [SPEAKER_00]: enhance user experience by eliminating latency and improved data privacy.

[00:08:43] [SPEAKER_00]: While current high-parameter models may not run locally, smaller models can deliver effective

[00:08:48] [SPEAKER_00]: capabilities and advancements in hardware and software are facilitating this change.

[00:08:53] [SPEAKER_00]: Developers will need to adapt their strategies, focusing on fine tuning,

[00:08:57] [SPEAKER_00]: and creating differentiated models while new opportunities for infrastructure innovation

[00:09:01] [SPEAKER_00]: will arise to support this evolution.

[00:09:05] [SPEAKER_00]: I want to highlight a very long read by Nicholas Carlinie called How I Use AI. Here's a snippet.

[00:09:12] [SPEAKER_00]: So in this post, I just want to try and ground the conversation. I'm not going to make any arguments

[00:09:17] [SPEAKER_00]: about what the future holds. I just want to provide a list of 50 conversations that I,

[00:09:22] [SPEAKER_00]: a programmer and research scientist studying machine learning, have had with different large language

[00:09:27] [SPEAKER_00]: models to meaningfully improve my ability to perform research and help me work on random

[00:09:32] [SPEAKER_00]: coding side projects. Among those, building entire web apps with technology I've never used before,

[00:09:38] [SPEAKER_00]: teaching me how to use various frameworks having never previously used them,

[00:09:42] [SPEAKER_00]: converting dozens of programs to see or rush to improve performance 10 to 100 fold.

[00:09:48] [SPEAKER_00]: Trimming down large code bases to significantly simplify the project,

[00:09:52] [SPEAKER_00]: writing the initial experiment code for nearly every research paper I've written in the last year,

[00:09:58] [SPEAKER_00]: automating nearly every monotonous task or one-off script, almost entirely replacing web

[00:10:03] [SPEAKER_00]: searches for helping me set up and configure new packages or projects and about 50% replaced

[00:10:08] [SPEAKER_00]: web searches for helping me debug error messages. Now why do we care? I love use cases,

[00:10:16] [SPEAKER_00]: and here a researcher gives some helpful insight into their process. These real-life use cases

[00:10:21] [SPEAKER_00]: tell me a trend is taking hold. I included the Forbes article to provide insight into what customers

[00:10:27] [SPEAKER_00]: are reading and the logical process laid out by the author, an endpoints are becoming interesting

[00:10:32] [SPEAKER_00]: again with AI requiring compute power at the edge. A rich provides insight into growth and investment

[00:10:38] [SPEAKER_00]: dynamics, and give you lots to ponder. Looking to reach an audience of thousands of MSPs and IT

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[00:11:22] [SPEAKER_00]: to book a time to talk. I'm looking forward to that discussion. Thanks for listening. Today is

[00:11:29] [SPEAKER_00]: a national cheese pizza day, which is good for my birthday. I'll enjoy one tonight. I'll be

[00:11:34] [SPEAKER_00]: speaking at Pulseway Nexus on September 11 and 12 so make sure to sign up and register to attend.

[00:11:41] [SPEAKER_00]: The link is in the show notes and description. If you have a question you want to answer,

[00:11:45] [SPEAKER_00]: we take those, send them in ideally as a voice member or video to question at MSPradio.com.

[00:11:51] [SPEAKER_00]: I answer list of questions live each week on our Wednesday live show on YouTube and LinkedIn

[00:11:55] [SPEAKER_00]: 3 p.m. Eastern next week. If you've got a comment or a thought, put it in the comments if

[00:11:59] [SPEAKER_00]: you're on YouTube or reach out and link them if you're listing the podcast. I will talk to you again

[00:12:04] [SPEAKER_00]: on Monday. The business of tech is written introduced by me Dave Sobel under ethics guidelines,

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[00:12:46] [SPEAKER_00]: I'll talk to you again on our next episode of the Business of Tech.

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