SMB Community Podcast

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. T...

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...

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 p...

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...

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 thei...

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...

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-n...

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 essentia...

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 e...

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, p...

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 du...

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 wi...

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. Microsof...

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 ...

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 enga...

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 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 o...

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...

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 act...