SMB Community Podcast

The episode scrutinized the operational impact of accelerated patch velocity, largely attributed to AI-driven vulnerability discovery. Microsoft’s patch release cadence has intensified, as evidenced by the increase from 200 patches in June to 900 patches in September. Despite this uptick, panelists noted that patch delivery is now consolidated—vulnerabilities are addressed through a single cumulative update per cycle rather than via hundreds of discrete patches. This structural change reduces exposure to widespread outages, but risk must still be evaluated based on deployment timing and organizational context.

Delaying patch deployment by at least one week post-release was advocated as a ha...

Public speaking for technical professionals and the development of practical business process automation using AI were identified as areas with tangible operational impacts for MSPs. Structured preparatory practices, such as rehearsals and simulated audiences, were described as beneficial for reducing employee apprehension and improving presentation quality, according to Amy Babinchak. Applying a process-oriented approach, including content development and reference to audience-specific expertise, can support staff development, help mitigate presentation anxiety, and promote more effective communication of technical concepts.

Process automation and AI monetization were explored through concrete examples. Amy Babinchak outlined several applications, including contract obligation tracking...

Microsoft's Copilot platform has recorded a 33% growth, growing its user base from 20 million to 30 million seats in a three-month period, according to reported company data. Increased adoption is attributed in part to Microsoft's strategy of bundling Copilot licenses with existing products. Copilot lacks custom code-generation features, instead focusing on business process optimization and employee productivity. Microsoft's switch from OpenAI to Anthropic as the underlying model for Copilot reflects a shift toward features that align more closely with user workflow support.

Supporting this development, comments noted that Fortune 500 and Fortune 1000 organizations are increasing their adoption of Copilot. Analysts...

The episode centers on operational best practices and core risk factors for MSPs preparing to sell their businesses. The discussion highlights that a business must be able to function independently of its owner, with Amy emphasizing that the most important prerequisite for sale is organizational self-sufficiency. Buyers prioritize businesses that can maintain their operations, client relationships, and financial health following a change in ownership. The need for clean, auditable financials and contract organization is underscored as key requirements for reducing risk and promoting transaction confidence.

Further guidance is provided regarding exit strategy planning and business positioning. Owners...

A primary development addressed is the increasing scrutiny and demands from cyber insurance providers on MSPs and their clients. Amy highlighted a case where an insurer canceled a client policy after the MSP could not produce comprehensive reports and logs verifying device management for all endpoints, including BYOD and personal devices. This incident underscores rising expectations from insurers for documented security controls covering all systems interacting with sensitive data, and the risk of coverage denial when undisclosed devices or unmanaged endpoints are discovered following a breach.

Supporting discussion featured the operational gaps many MSPs face, especially regarding...

Merger and acquisition activity within the MSP sector has accelerated, with data cited indicating a 73% year-over-year increase in transactions for 2026 compared to 2025. Jay McBain’s reported statistics also highlight strong international momentum, particularly in EMEA, and a marked 800% rise in acquisitions specifically targeting managed security service providers (MSSPs). While the consolidated figures suggest heightened activity in large, visible deals, several participants noted that the true frequency of smaller, unreported transactions likely exceeds official tallies, underlining persistent underrepresentation in sector reporting.

According to podcast contributors, small MSP deals often go untracked in industry data, despite anecdotal evidence that hu...

Halo PSA has launched a customizable artificial intelligence capability and announced a price reduction for its product, separating its approach from other PSA vendors. According to Amy Babinchak, Halo’s model allows users to build their own AI agents for a range of business processes, including quarterly reporting and project management, without charging additional fees. The company indicates that future price reductions may occur as user adoption milestones are met. This development is especially notable in an environment where other providers are raising prices while limiting flexibility.

Halo’s differentiation is further underscored by its openness and a la...

The episode’s primary focus centers on the introduction of China-based Alibaba's new artificial intelligence (AI) model, which is positioned to rival existing US-developed models. This development has triggered concerns within the US federal government regarding the potential superiority of these foreign AI models and resulting security and data governance risks. The discussion further noted that recent import bans in the US have included consumer and business products containing AI elements, such as robotic vacuum cleaners, reflecting heightened regulatory scrutiny and caution toward foreign AI integration in both enterprise and consumer environments.

Supporting details outlined that Chinese te...

Private equity (PE) acquisition trends in the Managed Service Provider (MSP) sector are targeting smaller firms at increasing rates, with offers now being extended to MSPs in the $1–3 million revenue range. PE activity, once limited to companies exceeding $5 million in annual revenue, is now resulting in more than half of current offers for these smaller businesses coming from large financial entities. This development creates both opportunities and risks for small and boutique MSPs, especially those with specialization or unique market positioning.

Market data and discussion on the podcast highlighted a “void” in the $3–5 million MSP segment, attributed to susta...

A key focus of the episode is on practical approaches to conducting pre-sales assessments for prospective managed service clients, particularly those with existing MSP relationships and under 100 employees. Hosts discussed that frontline assessment methods often prioritize observational “walk-arounds” and targeted questioning rather than the deployment of specialized tools, except in cases where complexity or asset uncertainty warrants additional rigor. The conversation emphasized that visible signs of technological investment (or lack thereof) and management engagement provide valuable risk indicators to help MSPs assess prospect suitability and potential client alignment.

Supporting details included recommendations against using automated network scanning tool...

A significant development discussed in the SMB Community Podcast episode highlights the evolving Microsoft Partner Program. Microsoft has updated its partner program at the start of its fiscal year, introducing new opportunities and incentives. Notable changes include the loosening of Agent365 licensing, allowing its addition to Business Premium licenses and other tiers, and offering a 25% discount on Windows 365 licenses for both new and existing customers. Additionally, Copilot for Business is now available with a 15% discount for the upcoming year through the partner program. These updates present potential financial benefits and strategic advantages for MSPs engaging with Microsoft's offerings.

The episode addressed the heightened challenges MSPs and IT service providers face in client acquisition, with specific reference to a recent Kaseya report indicating that twice as many MSPs describe obtaining new clients as more difficult compared to the previous year. This shift is attributed, in part, to changes in marketing efficacy and the increased reliance on referrals rather than structured marketing strategies. These findings emphasize the need for a consistent, proactive marketing approach—moving beyond informal networks—to counteract periods of slow business and ensure stable revenue.

Discussion highlighted that many MSPs lack a formalized marketing plan...

The episode prioritizes the operational and exit-planning risks associated with MSPs lacking formal contracts. According to Amy , approximately half of MSP business owners operate without managed service agreements (MSAs), a decision that frequently results in reduced business valuation during sale negotiations. Both James and Amy emphasized that the absence of documented agreements is commonly flagged by buyers as a significant risk, often resulting in a devaluation of the acquired customer relationships. This exposes small and mid-sized providers to continuity risks, particularly where customer retention and service transferability are not contractually secured.

Further details outlined by Amy indicate...

The conversation focused on the practice of providing managed service pricing to customers during an initial meeting. One concept discussed was that MSPs are encountering prospects who increasingly expect immediate, transparent pricing, with many decision-makers opting to make choices after a single round of vendor meetings. The discussion explored how this shift contrasts with traditional industry advice that recommends withholding pricing until after an in-depth assessment and value-building process. Several points were raised, including the observation that coming prepared—with thorough research on the prospect and a clear pricing structure—can facilitate business wins, especially in competitive settings where pros...

The episode’s principal focus is on managing employee compensation requests within MSP operations, specifically addressing scenarios in which employees request significant raises. The discussion highlights the need for MSP leaders to weigh current market rates and organizational financial constraints in response to such requests. Both collaborative problem-solving—engaging employees in discussions regarding revenue generation—and performance-based compensation structures were identified as practical strategies for balancing employee retention with business viability.

Supporting this, the speakers emphasized transparent conversations with employees about the company’s billing structure, the sources of revenue, and the tradeoffs required to increase compensation. Performa...

A significant regulatory development affecting MSPs was discussed: the US Government ordered the suspension of access to the Fable 5 and Mythos 5 AI models by any foreign national, including those inside and outside the United States, citing national security authorities. As reported in the Anthropic company statement, this directive forced abrupt discontinuation of these AI tools for all customers, regardless of business impact. The decision resulted in the sudden loss of access to custom-built AI applications and business process automation tools that MSPs and their clients had integrated into daily operations. Immediate disruptions included the cessation of SEO and analytics...

A central discussion in the podcast focused on the applicability of the Entrepreneurial Operating System (EOS) for small Managed Service Providers (MSPs). Divergent perspectives were presented regarding whether the EOS framework is suitable for MSPs with very few staff. The conversation highlighted that while EOS provides accountability, transparency, and structured communication, some very small organizations (e.g., four employees or fewer) may find the framework’s meeting cadence and process requirements disproportionate to their operational needs. It was noted that EOS promises value in promoting ownership and alignment but that this benefit is more likely realized when an organization re...

Discussion centered on the evolving role of Artificial Intelligence (AI) in the MSP technology stack, emphasizing the necessity for MSPs to deploy tools that can comprehensively manage AI, particularly concerning security and shadow IT. Multiple participants highlighted the lack of current solutions that aggregate and control AI activity via a single interface, with an explicit focus on the requirement to educate clients about AI privacy, security, and usage costs. The practical challenge of MSPs asserting thought leadership in AI was underscored, as was the complication of usage-based AI billing models leading to unexpected customer expenses.

Supporting details...

A central development addressed is the projected effect of AI on the per-seat pricing model that underpins many MSP service offerings. According to the discussion, AI could reduce white-collar jobs by 30-50%, leading to fewer user seats for MSPs to support and bill for. This scenario presents significant revenue risk for MSPs reliant on per-user contracts. The discussion also references Microsoft’s introduction of Agent365, a product designed to license AI agents within enterprise environments, indicating a move by vendors to adapt licensing models while protecting enterprise relationships.

Participants noted that if customer organizations reduce headcount, MSPs wi...

The most consequential development discussed is the rapid proliferation of Shadow IT in client environments, with emphasis on the unchecked adoption of cloud SaaS applications and artificial intelligence (AI) tools by end users. Speakers noted that this has led to a substantial loss of MSP control over client IT environments, eroding trusted advisor status and prompting clients to question the ongoing necessity of working with their MSP. The pervasive use of AI and SaaS products without guidance or oversight introduces governance and security risks, particularly relating to sensitive business data being accessible to third-party vendors and potentially incorporated into...

Recent reports highlight that Google Chrome and Anthropic’s desktop applications have introduced covert, non-optional downloads onto user devices without explicit notification or opt-out mechanisms. According to referenced analysis, Chrome has been silently installing its Gemini Nano AI model, and Anthropic’s Claude desktop app is deploying browser integrations across all Chromium-based browsers. These installations are performed without seeking user consent and, in some cases, persist even after attempted removal, raising direct concerns for device security and user privacy.

The increased risk is substantiated by internal testing from Anthropic, which found that these browser integrations increased successful cybe...

Employee recognition structures and their risk-reduction implications received primary focus in this discussion. Both Amy Babinchak and James Kernan outlined verification-based strategies, such as leveraging Microsoft Teams' Praise app and Bonusly, a peer-to-peer micro-bonus platform, as cost-neutral or low-cost starting points. They emphasized that implementing structured recognition—either verbally, digitally, or via peer-nomination systems—directly supports workforce engagement and mitigates retention risk. James Kernan described anonymized in-house recognition systems, where peer acknowledgements are aggregated and rewarded via a monthly raffle, which included prizes typically sourced from vendor swag.

Specifics included integration of recognition apps within established workflows and...

Compensation models for technical staff in MSPs require careful alignment with business objectives and operational capacity. Both James Kernan and Amy Babinchak emphasized that financial incentives such as commissions or bonuses can be appropriate when technicians are directly responsible for generating additional monthly recurring revenue (MRR) or securing new accounts. However, they noted that proper monitoring tools are essential to track productivity and ensure fairness—without adequate systems, variable compensation based on efficiency or project profitability can introduce operational risk and potential inequities.

Supporting this, Amy Babinchak described implementing a tiered productivity incentive where technicians received additional pa...

A central theme of the episode is the challenge of communicating and defending pricing for managed services. Amy Babinchak and James Kernan described frequent client objections regarding cost, focusing on the importance of articulating clear value propositions. They noted that most client resistance either stems from an inadequate understanding of the provider’s value, or from attempts to negotiate lower pricing. Responding effectively requires MSPs to explain differentiators and to consciously decide whether a prospect aligns with their value-based approach.

Supporting this discussion, Amy Babinchak argued that many MSPs risk commoditization by relying on standardized, transactional service of...

Managed Service Providers (MSPs) face measurable hurdles when scaling businesses past certain revenue thresholds, particularly the $10 million annual mark. The episode’s primary focus is the operational and sales methodologies implemented by Brian Strong, who reported helping lead an MSP from $2.2 million to $19 million in annual revenues over five years. This growth was attributed to instituting systematic sales processes, prioritizing revenue generation, and building organizational redundancy, which Strong identified as essential for sustaining and supporting large-scale managed services operations.

Supporting this central narrative, Strong detailed specific challenges encountered, such as a company operating at a $300,000 monthly loss af...

NinjaOne’s reported growth and positioning within the MSP software landscape presents a notable development for service providers evaluating vendor ecosystems. According to statements reviewed by Ryan Morris and Dave Sobel, NinjaOne claims an annual recurring revenue (ARR) exceeding $500 million, a valuation above $5 billion, and a customer base of more than 35,000. This self-reported data, while not independently verified due to NinjaOne’s private ownership, places the company within the top tier of platform providers for endpoint management, alongside ConnectWise and Kaseya. The expansion and platform focus suggest material choices ahead for MSPs considering stack consolidation, endpoint management, and integration requ...

The episode centers on profit margins and service mix strategies for MSPs, emphasizing the importance of maintaining recurring revenue margins above 50%, preferably targeting 65–70% for long-term sustainability. Industry averages indicate recurring revenue margins as low as 35%, which Speaker B and Speaker C note presents a risk to driving profit down to the bottom line. The discussion identifies that margins tend to erode with organizational growth due to overhead but underscores the necessity of regular price adjustments built into client contracts and regular scrutiny of margin performance as core practices to avoid financial shortfalls.

Supporting these observations, Speaker C ad...

Microsoft’s decision to increase pricing across its Microsoft 365 product suite, excluding Business Premium, is a notable development for MSPs and IT service providers managing client subscriptions and budgets. According to discussion on the SMB Community Podcast, the price hikes range from 8% to 30% across various plans and products, with only Business Premium escaping the adjustment while still adding new features. Microsoft is also expanding mailbox storage, with each mailbox now receiving an additional 50GB, raising the individual mailbox limit from 50GB to 100GB.

Additional details provided in the podcast highlight that Microsoft Business Premium continues to receive fe...

https://www.theinformation.com/articles/iran-war-imperils-300-billion-gulf-ai-spending?utm_campaign=article_email&utm_content=article-16718&utm_medium=email&utm_source=sg

The war: The USA has bombed three data centers owned by Amazon. This is the first time I've seen data centers be targets. It won't be the last. 

The war: Middle eastern countries have promised $300 billion in AI infrastructure investment. Some in their countries and some in ours. That investment is in  jeopardy now as the bombs fall.  

A significant risk area discussed is the challenge of “invisible work” in managed services due to increasing automation and the adoption of artificial intelligence (AI). Customers, according to participants, increasingly lack awareness of the work being performed on their behalf, which raises doubts about the value of services provided by MSPs. With prices for services escalating, clients are demanding higher-touch engagement and visibility into operations, creating a disconnect between automated backend activities and client expectations for tangible service.

Supporting this, hosts cited the difficulties in proving the value of proactive prevention, such as security incidents that did not...

The most consequential development highlighted in the episode is Anthropic’s refusal to alter its AI contract terms for the US federal government, specifically regarding the prohibition of mass domestic surveillance and the deployment of autonomous lethal robots. Anthropic declined to allow the government unrestricted, legally permitted use of its software, resulting in the cancellation of a $200 million federal contract and the company’s designation as a supply chain threat. This sequence underscores ongoing concerns about ethical, operational, and governance risks associated with AI technologies deployed at scale by government agencies.

Supporting details reveal that all other majo...

The primary discussion in the episode centers on the increasing risk to data privacy posed by the adoption of artificial intelligence (AI) applications within SMB environments. Panelists highlighted the challenge of educating clients on how AI systems may access, process, and transmit sensitive information, sometimes integrating client data into broader training datasets owned by third parties. Specific emphasis was placed on the operational reality that data, once shared with AI models, may no longer be under the original owner’s control. This development directly affects both regulatory compliance and client trust, especially for service providers tasked with protecting client en...

This Week's Highlights:

1. Elevating Your Business Conversations

Ever feel anxious about those business-focused meetings with customers? You’re not alone! In this episode, Amy Babinchak and James Kernan share their personal experiences—like ice-breakers for introverts, why finding common ground matters, and how to move the business convo from awkward to actionable. Here’s Amy’s advice: listen actively, ask about their growth and goals, and let those insights lead you into productive IT conversations. You don’t need to come to the table with all the answers—just be ready to listen and respond.

2. Why...

In this episode, hosts James Kernan and Amy Babinchak dive into practical insights for MSPs and IT service providers, powered by Small Biz Thoughts.

They kick things off by tackling the question of the week: What should you say in front of a crowd of 100 decision makers if you only have five minutes? James Kernan and Amy Babinchak share strategies for making a memorable impact and overcoming public speaking nerves—offering actionable tips and stories from their own experiences.

The episode also covers important industry news, including Microsoft’s cancellation of standalone OneDrive and SharePoint lice...

In this episode of the SMB Community Podcast, hosted by James Kernan, guest Amy Slater from Innovative Events discusses her transition from the medical field to marketing and events. Amy shares insights on how her company helps MSPs with their marketing, including detailed strategies and processes. She emphasizes the importance of building a strong foundation in marketing and how her team ensures consistent engagement before, during, and after events. Moreover, Amy discusses her involvement with the Managed Service Providers Association of America (MSPAA) and the upcoming events she will participate in. Listeners can learn about her approach to personalized...

Overview:

In this episode of the SMB Community Podcast, Amy interviews Steve Shattuck, VP of Global Partner Ecosystem and Business Development at GoTo. Steve shares his extensive background with AI from his tenure at Hewlett Packard Enterprise and discusses the transformative impact AI is having on the MSP industry. They delve into how AI can enhance rather than eliminate technician roles, the potential for AI to level the playing field between small and large MSPs, and the integration of AI in GoTo's product suite like LogMeIn Resolve. Key topics include automating mundane tasks, enhancing documentation processes, language...

Overview:

In this episode of the SMB Community Podcast, our host James Kernan welcomes Justin Maxwell of Big Life Financial to discuss crucial changes in the tax law surrounding R&D tax credits for tech companies. They delve into the history and importance of the R&D tax credits, misconceptions about qualification, and the significant financial benefits these credits can bring. Maxwell emphasizes the importance of having a cohesive team of financial advisors and offers a complimentary review for businesses to determine their eligibility. Don't miss this insightful conversation that could be a game-changer for your business's...

Overview:

Exploring the Future of MSPs: AI, Cybersecurity, and Building Trust In this episode of the SMB Community Podcast, host James Kernan interviews Tim Thomson, founder of Cyber Trends, who shares insights on the future opportunities for Managed Service Providers (MSPs) in 2026. They discuss the role of AI and automation, the importance of cybersecurity and compliance, and strategies for proving value to clients. Tim explains his journey from founding his first MSP in 2002 to building a consulting firm that helps MSPs grow and scale. He emphasizes the need for MSPs to build personal brands and leverage partnerships...

Overview:

In this episode of the SMB Community Podcast, hosts Amy and James discuss their upcoming travel plans and the busy start to 2026. They tackle a key listener question about how much to invest in training for IT teams, emphasizing the importance of continuous education and proposing strategies for incorporating both free and paid training within organizations. Additionally, they cover recent news in the tech industry, including Walmart's drone delivery expansion, layoffs in Kaseya, and the latest updates from companies like Ninja One, CrowdStrike, and others. The episode also touches on future technological predictions and top job...

Overview:

In this episode of the SMB Community Podcast, hosts James and Amy discuss the key challenges and opportunities MSPs (Managed Service Providers) will face in 2026. They emphasize the importance of AI integration, staff training, tool consolidation, and strategic partnerships. They also highlight the need for MSPs to focus on soft skills and personal customer interactions, as AI takes over more technical tasks. The episode concludes with positive news about U.S. productivity and an announcement about the acquisition of Small Biz Thoughts and IT Service Provider University by MSP Radio.

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