MSPs Face Economic Squeeze: Rising Costs, Cloud Management Growth, and New AI Threats

The economy is currently facing a challenging combination of slowing growth and rising inflation, which is impacting managed service providers (MSPs) and IT services firms. The Personal Consumption Expenditures Price Index has shown a significant increase, indicating heightened inflation, while consumer spending is weakening. This economic squeeze is forcing businesses to reassess their budgets, leading to a potential increase in demand for MSPs that can offer cost-effective solutions and efficiency improvements. As organizations seek to navigate these turbulent times, the need for integrated security platforms and open-source AI technologies is becoming increasingly critical.

A recent survey by Flexera highlights a notable shift in how organizations, particularly small to medium-sized businesses, are turning to MSPs for public cloud management. The percentage of small businesses utilizing MSPs has risen from 36% to nearly 50%, reflecting a growing trust in these providers to manage complex cloud environments. Despite the increase in cloud spending, cost management remains a significant challenge, with many organizations identifying it as their top concern. This trend underscores the importance of differentiation among MSPs, as the market becomes more competitive.

In the realm of technology advancements, Amazon is set to launch its new AI-enabled assistant, Alexa Plus, which will introduce various features aimed at enhancing user experience. Meanwhile, Microsoft is rolling out new AI tools for Microsoft 365 Copilot, designed to improve research and data analysis capabilities. These developments highlight the ongoing evolution of AI technologies and their practical applications in business settings. However, as new capabilities emerge, it is essential for businesses to focus on enhancing outcomes rather than getting caught up in the hype.

Security threats continue to evolve, with a new phishing-as-a-service operation identified that employs advanced techniques to evade detection. Microsoft is also transitioning to passwordless authentication methods across its platforms, aiming to enhance user security for billions of users. The Pentagon has issued warnings regarding vulnerabilities in messaging apps like Signal, emphasizing the need for caution in communications. As these changes unfold, it is crucial for providers to assist clients in adapting to new security measures and to educate them on the benefits of transitioning to passwordless environments.

Four things to know today

00:00 Economic Squeeze: Need Smart Moves as Costs Rise and Growth Slows

05:35 MSPs See Surge in Cloud Management Demand

07:38 Alexa Gets Smarter, Microsoft Gets Analytical

09:44 Phishing Gets Sneaky with DoH, While Microsoft Says Bye-Bye to Passwords

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