Business of Tech: Daily 10-Minute IT Services Insights
In 10 minutes daily, The Business of Tech delivers the latest IT services and MSP-focused news and commentary. Curated to stories that matter with commentary answering 'Why Do We Care?', channel veteran Dave Sobel brings you up to speed and provides resources to go deeper. With insights and analysis, this focused podcast focuses on the knowledge you need to be effective, profitable, and relevant.
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ConnectWise CEO Manny Rivelo: AI Agents Shift Ticket Resolution and Labor Costs for MSPs
<p>The episode details a structural shift within the managed services market toward increased operational automation and integration, framed by vendor-led consolidation of core service platforms with embedded AI-driven workflows. ConnectWise has combined previously separate systems—PSA, RMM, ScreenConnect, and others—into a unified platform powered by agent-based automation ("agentic AI") under the "Predictive IT" model. The associated risk for service providers is growing reliance on consolidated vendor ecosystems for both service delivery operations and automation capabilities, blurring the distinction between core service expertise and contextual tooling.</p> <p>A consequential data point highlighted is from Service Leadership benchmarking, which show...
Automation's Cost Curve: Why AI Usage Is Squeezing Profits Across IT Services
<p>Margin pressure driven by AI adoption and automation is fundamentally altering the economic model for IT service delivery and software. Trend Micro’s disclosure that operating margins fell from 19% to 15% while cloud and AI token costs nearly doubled, despite strong AI security product sales, highlights how AI-related expenses grow in step with usage. This shift breaks from the historical software margin structure, where scaling incurred negligible incremental costs, and signals a new landscape in which AI service operation continuously consumes resources.</p> <p>A significant development underscoring this trend is the $2 billion capital raise by Thrive Holdings at a $12 bi...
Lexful’s AI-Native Documentation: New Accountability and Risk for MSPs – With Pinar Ormeci
<p>The episode highlights the shift toward AI-driven knowledge management within the MSP sector, revealing increased operational dependency on structured data and sophisticated integrations. Lexful, an AI-native documentation platform designed specifically for MSPs, represents this trend by positioning itself not as a simple add-on but as a replacement for legacy documentation tools—controlling critical record-keeping functions and interfacing with principal PSA and RMM systems. This development signals greater infrastructure dependence on AI-based documentation and the implications of technical integration across diverse operational tools.</p> <p>According to Lexful’s CEO and statements made during the episode, the platform has completed inte...
N-able’s Security Revenue Faces Decline as License Portability Undercuts MSP Margins
<p>The episode details a structural shift for MSPs and IT service providers: the separation of security license resale from the value of human-led security services, and the resulting pricing and margin risks. Companies like N-able, SentinelOne, and SonicWall exemplify how technology offerings and delivery mechanisms are forcing providers to re-examine what differentiates their services beyond the products they resell.</p> <p>N-able’s financial results illustrate the risk of relying on product-based security revenue. The company reported a drop in annual recurring revenue, driven by lower renewal rates in Unified Endpoint Management and Endpoint Detection and Response lines—both of w...
Vendor License Loopholes Shift Breach Liability to MSPs
<p>The episode identifies an acute shift in liability and accountability across the software and AI supply chain, where risk increasingly moves from vendors to service providers and operators. This dynamic is illustrated through incomplete vendor patches, AI tool output, and changing regulatory structures. Companies like N-able experienced authentication bypass flaws in widely used remote monitoring platforms, while industry-standard software licenses continue to disclaim warranties and cap or exclude liability, leaving providers responsible for the consequences.</p> <p>A key development is N-able’s N-central authentication flaw, wherein a patch issued for an earlier vulnerability proved incomplete according to the Fe...
Consortium for Responsible IT Services: Cole Knuth Outlines New Path for MSP Accountability
<p>The dominant mechanism addressed is the development of a self-regulatory framework for IT service providers, specifically as Texas A&M University's Global Cyber Research Institute (GTIA) launches the Consortium for Responsible IT Services (CRITS). This signals a move toward organized self-governance and standard-setting within the MSP sector, in contrast to direct government-imposed regulation. The initiative is designed to shift the industry from fragmented standard adoption toward collective risk and professional accountability, using academic infrastructure and industry funding as its operational backbone.</p> <p>According to statements from Cole Knuth, GTIA’s facilitation of CRITS involves university-hosted development and company fu...
CMMC Pause Exposes High Compliance Costs for Small Defense Contractors — Jeremiah Jensen
<p>The core mechanism discussed is the regulatory pressure and resulting operational risk created by the Department of Defense’s (DoD) abrupt suspension of the CMMC Level 2 third-party certification mandate. IntelliGenesis, led operationally by Jeremiah Jensen, illustrates how rapidly shifting compliance expectations can expose defense contractors and their MSP partners to unrecoverable sunk costs, increased governance complexity, and unclear accountability. The episode highlights the structural disconnect between government-mandated cybersecurity standards and the practical realities of implementing and maintaining those requirements at scale.</p> <p>According to Jeremiah Jensen, IntelliGenesis incurred more than $200,000 in direct costs, invested four months of intensive la...
Dave Bloom: Why Small MSPs Can Sustain High Margins by Limiting Tool Overhead
<p>The episode examines margin disparity and operational strategy for MSPs serving regulated industries, spotlighting how compliance-driven overhead can become a structural moat for providers targeting underserved segments. The discussion centers on Trumbull Tech’s model, which leverages a minimal-staff, tool-focused approach to deliver compliant services to small client bases (1–50 seats) across legal, financial, and healthcare verticals. The analysis underscores the risk and complexity inherent in regulated environments, noting that as vendors begin to package compliance offerings alongside MSPs, the defensibility of this margin advantage may erode.</p> <p>Trumbull Tech operates with gross margins well above channel averages—reporting 55–60%, attribut...
How Blue Mantis Navigates AI and Security Demand Without Enterprise Budgets – Josh Dinneen
<p>The episode reveals a structural shift toward operational complexity and heightened accountability in the MSP sector, as service providers are increasingly required to integrate AI capabilities, consolidate security offerings, and deliver enterprise-grade outcomes for mid-market clients without matching enterprise budgets. Blue Mantis, highlighted as a case example, embodies this shift with its transition from a traditional product reseller and hardware focus to a recurring managed services model with 60% of revenue now coming from managed services. The company’s ongoing balancing act between recurring service delivery and legacy product sales illustrates the tension many MSPs face as the market demands in...
Losing Your Ticket Data: How Atera’s Automation Shifts Baseline Control to Vendors
<p>The episode identifies a core structural shift in the managed services industry: the decoupling of service measurement from observable work due to the adoption of autonomous service desk technologies. This shift is driven by the introduction of automation platforms—such as Atera’s Robin, Acronis AI Service Desk, and NinjaOne’s endpoint automations—that eliminate or obscure traditional service tickets, shifting operational baselines and the metrics used for client billing and value demonstration.</p> <p>Evidence of this shift includes Atera guaranteeing that within 90 days, its Robin system will autonomously resolve half of Tier 1 and complex Tier 2 tickets, enforced via comm...
