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A significant development highlighted is the recent compromise involving ConnectWise Backup, which originated from ConnectWise’s acquisition of SkyKick. The breach stemmed from the compromise of OAuth app credentials within Microsoft 365 tenants, enabling attackers to access and elevate permissions, primarily targeting MSP tenants. The full method of credential compromise has not been disclosed. However, the presence of lingering OAuth permissions is posited as an ongoing risk vector. Further details presented by Amy Babinchak specify that attackers targeted a few hundred MSP tenants, seeking to elevate Exchange permissions and control additional ConnectWise-related OAuth apps. It is emphasized that deactivating an unused app is insufficient, as historic use of SkyKick over the past decade could still leave MSPs exposed. A recommended response is a comprehensive review of OAuth permissions, referencing guidance from Guardz, which outlines multiple mitigation steps for MSPs to follow, regardless of current product usage. Other topics addressed include evolving responsibilities when artificial intelligence (AI) tools direct users to malicious destinations. MSPs were advised to maintain protective controls and thorough documentation, as operational accountability typically resides with the MSP, especially when security layers like EDR effectively prevent incidents. Additional coverage centers on Anthropic’s creation of a public benefit corporation, MapQuest’s feature updates including surveillance detection, and Pax8’s announcement of AI agent solutions that MSPs may resell to clients. The practical implications for MSPs and IT decision-makers center on maintaining vigilance over third-party integrations and long-lived permissions, enforcing clear lines of communication with clients and vendors, and proactively documenting risk mitigation efforts. Vendor management and operational transparency, especially regarding software vendor issues or AI-related incidents, are underscored as essential practices for reducing harm and preserving client trust. Whose Responsibility Is It When AI Sends a User to a Malware Site?Show Rundown & Banter: AI security, the ConnectWise incident, MapQuest, Anthropic, and Pax8.Something Fun: Michelangelus FontMicrosoft’s project preserving Michelangelo’s work inspired a new font for Word.https://www.microsoft.com/en-us/download/details.aspx?id=108856Question of the Week: Who’s Responsible When AI Directs Users to Malware?A user followed ChatGPT’s instructions to a fake verification site. EDR caught the threat. Where does the MSP’s responsibility begin and end?ConnectWise Backup IncidentAttackers exploited application credentials and excessive permissions, affecting a targeted group of MSPs.https://app.notion.com/p/Connectwise-Backup-Incident-3f98e07a4534804c9181e7c8c603dde3?pvs=21MapQuest’s ComebackMapQuest adds surveillance-camera alerts to its maps.https://app.notion.com/p/MapQuest-surveillance-notices-3e88e07a453480f38df1d2fb15eeb486?pvs=21Anthropic’s Public Benefit CorporationA new structure aims to direct company equity toward a public-benefit mission.https://app.notion.com/p/Anthropic-public-benefit-LLC-3fe8e07a453480f0834fd414d8e470f9?pvs=21Pax8’s AI Revenue OpportunityMSPs can manage AI agents, control usage, and set their own pricing.https://app.notion.com/p/PAX-8-AI-money-making-opportunity-3fe8e07a45348022b281d63cd11355df?pvs=21Tales from the Field: The Ungrateful Client?An MSP worked nights and weekends to recover from a software update failure, only to be fired by the client. About the SMB Community Podcast: Weekly business advice for small MSP owners from Amy Babinchak and James Kernan of the Small Biz Thoughts community — MSP sales, MSP pricing and agreements, hiring and leading an MSP team, MSP operations, selling your MSP, and AI for small MSPs. Produced by MSP Radio. More for MSP owners at smallbizthoughts.com. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The discussion centers on the tradeoffs and risks associated with self-managing the sale of a Managed Service Provider (MSP) business, highlighting a real case in which the absence of professional M&A, legal, and tax advisory led to contract errors, unfavorable terms, and substantial financial exposure. Both James Kernan and Amy Babinchak, drawing from direct advisory experience, argue that while selling an MSP independently is technically possible, the lack of specialist counsel introduces significant pitfalls. The synopsis emphasizes concrete instances where negotiation leverage, contract accuracy, and legal safeguards were either secured or compromised depending on professional involvement. Supporting details include a specific example involving a failed contract provision: a business sale transacted without an M&A attorney resulted in an omitted clawback clause. Subsequently, more than half of the recurring revenue was lost after the sale, and the seller remained liable for the note without protection. Remediation only became possible after legal intervention, which reduced the seller’s exposure, though such outcomes are considered rare. Both speakers recommend establishing an advisory team comprised of an experienced M&A advisor or broker, a specialized tax expert, and a dedicated M&A attorney, underscoring that operational familiarity with contracts is insufficient for high-stakes divestments. Secondary topics addressed include risk management in cyber insurance procurement and leveraging Cybersecurity Awareness Month for internal team development and customer marketing initiatives. Amy Babinchak distinguishes between basic, low-cost cyber insurance add-ons and comprehensive policies, noting the latter’s higher cost is justified by enhanced coverage, embedded compliance services, and access to consultative support. The segment also briefly references the importance of leadership mindset, noting that focusing on team strengths as a management approach can drive better organizational outcomes. For MSPs and IT leaders, the episode’s discussions reinforce the operational risks of do-it-yourself approaches in high-value transactions and regulated domains like cyber insurance. Key takeaways include prioritizing qualified external counsel for significant business events, maintaining adequate and tailored insurance coverage, and adopting intentional leadership and governance strategies. These measures serve to reduce organizational risk, safeguard asset value, and enhance decision quality in complex or regulated IT services environments. Can I Sell My Own MSP?Show Rundown & Banter: Why selling your MSP alone can be risky, the importance of cybersecurity insurance, Cybersecurity Awareness Month, leadership mindset, and more stories from the field.Question of the Week: What if My Clients Resist Change?Can I sell my own MSP? Yes, but should you? No — get professional help.Topic: Cybersecurity InsuranceUnderstand different insurance options and scenarios. James recommends working with an insurance professional to find the right coverage for you and your business.Topic: Cybersecurity Awareness MonthHighlight the importance of cybersecurity awareness and staying proactive about protecting your business and clients.Topic: Leadership MindsetInstead of asking, “What’s wrong, and how do I fix it?” ask, “What’s right, and how do I grow it?”Tales from the Field: The Importance of Using AttorneysBe careful with DIY contracts, agreements, and business deals. AI is not a substitute for legal advice. The NORCAL deal involved a seemingly favorable LOI, but handling the agreement himself led to a key detail being missed. Good agreements matter. About the SMB Community Podcast: Weekly business advice for small MSP owners from Amy Babinchak and James Kernan of the Small Biz Thoughts community — MSP sales, MSP pricing and agreements, hiring and leading an MSP team, MSP operations, selling your MSP, and AI for small MSPs. Produced by MSP Radio. More for MSP owners at smallbizthoughts.com. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The episode addresses the push for mandatory adoption of artificial intelligence (AI) tools among employees in MSP and IT service environments, citing cases where use of products like Microsoft Copilot is being enforced under threat of termination. Contributors emphasize that while AI proficiency is becoming a key factor for employability in the technology sector, mandating use through ultimatums is likely to provoke resistance and undermine change efforts. The consensus is that sustainable progress depends on providing structured training and fostering a collaborative culture rather than imposing requirements. Supporting discussion points include the importance of intentional staff development and recognizing parallels to previous technology shifts, like the migration to cloud services. Resistance to learning new tools can result in employee attrition, reinforcing the need for ongoing education and active change management. Companies are advised to educate and incentivize employees, creating an environment where continuous upskilling is the norm. Secondary topics include recent Microsoft incentive program adjustments. Panelists note reductions in partner margins for lower-tier licenses, while incentives remain for Business Premium and enterprise plans. New AI-related incentives, such as Copilot bonuses, now require a minimum of 50 users, which may prevent smaller MSPs from participating. The conversation also explores the spread of AI-generated language into everyday business communication and shares practical security incidents observed in the field. MSPs and IT leaders are advised to manage AI adoption through robust training, transparent communication, and regular review of changing vendor incentive structures. Shifts in vendor programs and rapid technological change require proactive workforce planning, risk mitigation, and careful attention to evolving operational and compliance demands. Should I force my employees to start using AI?Show Rundown & Banter: Amy is back from ChannelCon.Question of the Week: Should I force employees to use AI? Discuss technology laggards, employee adoption, and whether forced AI use is really the right approach.In the Economy: 29,000 jobs and 2.2% growth — what does the economy mean for MSPs?Microsoft Incentive Changes: Microsoft is reducing incentives on many cloud programs while rewarding usage growth and partner skills. What does this mean for MSP margins?Are AI Chatbots Changing the Way We Speak? “LLMisms” like “It’s worth noting,” “Here’s the thing,” and “This is the key takeaway” are showing up more in workplace communication.https://www.wsj.com/tech/ai/claude-chatgpt-ai-speak-chatbot-cb804933Tales from the Field: Another Tale of Espionage — a former employee continued accessing company systems and transferring client data to a new employer. About the SMB Community Podcast: Weekly business advice for small MSP owners from Amy Babinchak and James Kernan of the Small Biz Thoughts community — MSP sales, MSP pricing and agreements, hiring and leading an MSP team, MSP operations, selling your MSP, and AI for small MSPs. Produced by MSP Radio. More for MSP owners at smallbizthoughts.com. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

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 harm-reduction strategy. The rationale is that “dead body Wednesday”—the day following Patch Tuesday—commonly reveals unforeseen operational disruptions. Forum monitoring and the identification of industry-specific tolerances are recommended, supported by the observation that most incidents arise from edge cases or latent infrastructure flaws exposed by reboot cycles rather than patch malfunction itself. The role of Microsoft in acknowledging and remediating issues was discussed, with a particular emphasis on the lag between incident emergence and vendor acknowledgment. A secondary focus addressed the expanded risk surface beyond Windows, emphasizing IoT, networking, and edge devices. The lack of standardized, automated patching for non-Windows assets, such as security cameras, printers, and other IoT endpoints, multiplies the challenge for practitioners. Neither firmware nor update methodologies are unified, necessitating manual intervention and physical connectivity in many cases. The episode further touched on IT governance concerns, particularly around excessive permissioning, data management, and the tendency for access requests to escalate rather than contract over time, exacerbating organizational risk. For MSPs and IT service providers, key implications center on risk-managed operations. Patch deployment processes should be routinely assessed and customized based on client risk profiles, infrastructure complexity, and historic pain points. Increased vulnerability discovery via AI necessitates enhanced organizational discipline around both patch timing and post-patch monitoring. Security governance—especially regarding permissions scopes, data segmentation, and the extensibility of third-party integrations—was underscored as an operational priority. Comprehensive asset management and organizational awareness of fragmented patch ecosystems, especially in IoT and edge contexts, will be essential for maintaining resilience and accountability. What should I do differently now that AI is throwing us so many patches?Show Rundown & Banter: Amy is joined by longtime Microsoft MVP Susan Bradley, the “Patchaholic,” to discuss Microsoft updates, patching, and what IT professionals need to watch.Question of the Week: How should MSPs change their patching strategy in the age of AI? Microsoft’s updated guidance calls for short quality-update deferrals and faster installation deadlines.https://learn.microsoft.com/en-us/windows/deployment/windows-autopatch/references/policies-quality-updatesTales from the Field: When reimaged machines started failing — Susan shares a story involving Dell machines and unexpected failures. Links mentioned in this episode: Question of the Week- Microsoft: Windows Autopatch quality update policies (deferral and deadline guidance) https://learn.microsoft.com/en-us/windows/deployment/windows-autopatch/references/policies-quality-updates- Microsoft Mechanics: Deploy Windows updates to counter AI-discovered threats https://techcommunity.microsoft.com/blog/microsoftmechanicsblog/deploy-windows-updates-to-counter-ai-discovered-threats/4534505 Resources- AskWoody, Susan Bradley's newsletter https://www.askwoody.com/- Third Tier, Amy Babinchak's patching series https://www.thirdtier.net/?s=patch   ← swap in Amy's exact link About the SMB Community Podcast: Weekly business advice for small MSP owners from Amy Babinchak and James Kernan of the Small Biz Thoughts community — MSP sales, MSP pricing and agreements, hiring and leading an MSP team, MSP operations, selling your MSP, and AI for small MSPs. Produced by MSP Radio. More for MSP owners at smallbizthoughts.com. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

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 through AI agents, automated identification and drafting of overdue invoice notifications via read-only accounting system access, and AI-driven verification of job site photographs. Each was presented as a method for improving operational efficiency and reducing manual workload, with an emphasis on direct business outcomes such as time savings and risk reduction. The discussion cautioned that routine use of generative AI for basic tasks like search and email drafting does not readily produce measurable value unless integrated into broader workflow optimizations. The episode also addressed marketing tactics relevant to year-end business cycles and inventory management. James Kernan recommended executing inventory reduction campaigns, such as open-box or scratch-and-dent sales, to address stock overages. The timing of client upgrade campaigns was connected to product end-of-life events, specifically referencing Windows Server 2016 and SQL Server 2016, as opportunities to drive sales while reducing client risk associated with unsupported software. The conversation further covered managed service delivery models, identifying potential risks and tradeoffs in offshoring, automation, and outsourcing core client-facing services. For MSPs and IT leaders, the operational implications are clear: public speaking proficiency and client communication should be built intentionally, involving structured practice to reduce risk of poor delivery. AI and automation initiatives should prioritize process alignment and quantifiable outcomes, not just adoption for novelty’s sake. Inventory and lifecycle management present opportunities for improving both sales and client relationships, but require a disciplined approach to timing and messaging. Regular review of outsourced or automated functions is encouraged, with attention to maintaining a personal client interface and managing the organizational and reputational risks of dehumanized service. How can I become a better public speaker?Show Rundown & Banter: What’s new?Question of the Week: How can I become a better public speaker? Focus on preparation, simple slides, eye contact, pauses, practice, breathing, and handling mistakes.AI Interest to AI Impact: Help clients move from experimenting with AI to delivering measurable results.https://www.channele2e.com/perspective/msps-need-to-push-clients-past-ai-experimentationMarketing Tips – Year-End Campaigns: Promote open-box/year-end projects, address Microsoft end-of-support deadlines, follow up with late payers, and host casual client events.https://learn.microsoft.com/en-us/lifecycle/end-of-support/end-of-support-2026Outsourcing Service Delivery: What should MSPs outsource — answering calls, dispatch, L1/L2 support, L3 escalation, or out-of-state projects?GTIA Acquires ASCII: What does the acquisition mean for the MSP community and channel?NinjaOne Browser Security: Discuss NinjaOne’s new browser-based security offering and what it could mean for MSPs.Tales from the Field: Timing is Everything. About the SMB Community Podcast: Weekly business advice for small MSP owners from Amy Babinchak and James Kernan of the Small Biz Thoughts community — MSP sales, MSP pricing and agreements, hiring and leading an MSP team, MSP operations, selling your MSP, and AI for small MSPs. Produced by MSP Radio. More for MSP owners at smallbizthoughts.com. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

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 highlighted Microsoft’s historical pattern of entering competitive spaces from a less dominant position and gradually increasing market presence. This strategy, combined with integration into widely used platforms, has contributed to the acceleration of Copilot’s uptake. The focus of the current Copilot version remains on facilitating business tasks rather than technical automation. A secondary discussion covered marketing challenges for MSPs in a business environment shaped by the proliferation of AI tools. Peer group insights stressed that traditional digital marketing channels such as search and online advertisements are declining in effectiveness, with leaders instead reporting positive results from personalized outreach methods. Techniques identified as effective include public speaking at local business events, distributing real-time security and AI tips via email and video, and leveraging social media with authentic, direct content. Separately, a new CISA Insider Threat Guide was highlighted for its practical utility in offboarding, job change, and broader operational security processes. For MSPs and IT service providers, the reported trends emphasize the need to adjust operational approaches in both services delivered and go-to-market strategies. The rapid expansion of Copilot signals increased customer expectations for workflow-integrated AI features and raises questions of vendor dependency and differentiation. At the same time, the diminishing value of broad digital marketing highlights the risks of relying on legacy lead-generation channels. Instead, practical field examples and security case studies suggest a shift toward higher accountability, lateral risk management, and more direct forms of engagement to mitigate threats and maintain competitiveness. AI Killed Marketing- Now What?Show Rundown & Banter: What’s up? End of boating season and football season.Question of the Week: AI killed marketing! What’s actually working now?CISA Insider Threat Guide: How MSPs can help clients detect insider threats, manage employee offboarding, secure access, and build an ongoing insider threat program.https://www.cisa.gov/Get Clients Ready for Copilot: Copilot adoption is growing. Discuss readiness reports, data governance, and security guidance before rollout.AI Solves a Difficult Math Problem: OpenAI reportedly solved the Navier–Stokes problem using AI agents. Is this progress for mathematics, or could it weaken human scholarship?Tales from the Field: The case of the underquoted bids — a security investigation reveals an employee leaking quotes to a competitor About the SMB Community Podcast: Weekly business advice for small MSP owners from Amy Babinchak and James Kernan of the Small Biz Thoughts community — MSP sales, MSP pricing and agreements, hiring and leading an MSP team, MSP operations, selling your MSP, and AI for small MSPs. Produced by MSP Radio. More for MSP owners at smallbizthoughts.com. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

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 are advised to clarify the desired type of exit—such as complete disengagement versus remaining in the business post-sale—and to consider factors such as buyer preference and legacy concerns. Both buyer and seller risk are increased by high client concentration, undefined leadership teams, and missing or ambiguous vendor commitments. Steady, incremental growth—rather than stagnation or decline—was cited as a marker of business stability and a factor that increases attractiveness to potential acquirers. Adjacently, the conversation addresses developments relevant to technology and operational security. The discussion notes Microsoft’s release of updates to address over 400 vulnerabilities in Windows in a single month, which represents a four to ten times increase over the previous year’s counts for the same periods. The accelerating pace of vulnerability discovery and exploitation, driven in part by adversarial and defensive use of AI, is causing traditional patching regimens to become inadequate. Amy described this collapse of the patch window as a significant industry risk, with particular exposure in under-patched IoT and embedded systems. MSPs and IT decision makers are advised to update succession and sale-readiness practices, stressing the importance of organizational hygiene, data transparency, and realistic self-assessment. The acceleration of security threats and increased complexity of vendor landscapes indicate that risk management processes must evolve rapidly. Owners should prioritize eliminating operational dependencies, ensuring rigorous contract and financial management, and modernizing their approach to security and resilience to preserve value—both for ongoing business health and as preparation for potential sale or transition.What are the top 10 things I should do before I sell my business? Question of the Week: Top 10 things to do before selling your MSP — prepare the business, finances, operations, team, customers, legal documents, and due diligence.Facebook’s $17B Settlement: What does it mean for tech companies and accountability?https://www.azag.gov/press-release/attorney-general-mayes-announces-largest-big-tech-settlement-historyMSP Market & PSA Trends: Jay McBain’s latest market-share and growth trends.Microsoft Patching: 400+ vulnerabilities fixed in August. What does this mean for MSPs and proving value?https://www.techrepublic.com/article/news-microsoft-august-2026-patch-tuesday/Marketing for MSPs: What’s actually working for lead generation?https://www.connectwise.com/resources/msp-marketing-reportAI Agent Safety: Key safety rules for using AI agents and meeting assistants.Tales from the Field: Why are you selling — burnout or retirement? Get your story straight. About the SMB Community Podcast: Weekly business advice for small MSP owners from Amy Babinchak and James Kernan of the Small Biz Thoughts community — MSP sales, MSP pricing and agreements, hiring and leading an MSP team, MSP operations, selling your MSP, and AI for small MSPs. Produced by MSP Radio. More for MSP owners at smallbizthoughts.com. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

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 the management of BYOD and personal devices. Amy and James both emphasized that insurance companies are increasingly insistent on verifiable evidence that data protection policies apply to every device with data access. Failure to comply with these mandates, or misrepresenting coverage in pre-insurance questionnaires, may not only result in claim denials but also expose the MSP to downstream liability and litigation risk. They also stressed the need for clear contractual exclusions and robust internal insurance for the MSP to mitigate risk transfer. A secondary theme centered on the competitive pressure local and regional MSPs face from consolidation through roll-ups and the expansion of national firms. Both speakers identified differentiating on local presence and community engagement, such as sponsoring local events or supporting local causes, as key strategies for smaller providers. Additional discussion covered the new NSITSP accreditation and CE program, designed to establish a credentialing framework for MSPs, analogous to existing models in law and accounting. Amy suggested that the ability to market accredited status would address client needs for objective quality comparison between providers. Takeaways for MSPs, IT service providers, and decision-makers include the importance of establishing precise, documented security controls aligned with insurance requirements, especially for unmanaged or BYOD endpoints. Clear, detailed contractual language is necessary to define service boundaries and liabilities. Maintaining up-to-date accreditations and engaging in ongoing staff education were discussed as foundational to both risk management and market differentiation. Finally, operational alignment with insurance, accreditation, and community expectations represents both a risk-reduction tool and a practical framework for navigating consolidation and regulatory scrutiny in the current environment.How do I protect my MSP from roll-ups and national firms? Question of the Week: How do I protect my MSP from competition from roll-ups and big national firms? Lean into being local, unique, and personal. NSITSP CE Program: NSITSP launches CE-accredited programs, with Bigger Brains, IT Services University, and Karl Palachuk among the first providers. What does this mean for MSPs, and who is leading education in our industry?https://nsitsp.org/education/ Cyber Insurance Controls: Insurers are demanding more than security controls—they want a complete inventory of every device touching client data, including BYOD and contractor devices. What MSPs need to know.https://www.channelpronetwork.com/2026/08/26/cyber-insurance-device-requirements-what-msps-need-to-know/ Tales from the Field: The computer that turns itself off — a story from Nathan Fay. About the SMB Community Podcast: Weekly business advice for small MSP owners from Amy Babinchak and James Kernan of the Small Biz Thoughts community — MSP sales, MSP pricing and agreements, hiring and leading an MSP team, MSP operations, selling your MSP, and AI for small MSPs. Produced by MSP Radio. More for MSP owners at smallbizthoughts.com. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

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 hundreds or thousands of such transactions occur annually. Larger deals, such as a $20 million transaction mentioned, receive public acknowledgment, but the majority of M&A activity is conducted without broad disclosure. The consolidation trend among larger entities—exemplified by Charter’s $34 billion merger with Cox and ScanSource’s $220 million acquisition of MicroAge—has resulted in fewer choices for business clients, though new regional providers are emerging as market gaps appear. Secondary discussions addressed operational and governance topics relevant to MSPs. The adoption and enforcement of AI acceptable use policies (AUPs) was emphasized as an accountability measure for clients whose employees are integrating AI tools into workflows. Additional topics included the stabilization of supply chain pricing by major vendors Dell and HPE, who have committed to 30-day price locks amidst recent volatility, and tactical sales advice regarding quote expiration to manage project timelines and risk exposure. For MSPs and IT leaders, these developments entail both opportunity and risk management considerations. M&A trends point to increased scrutiny and potential market concentration, emphasizing the need for transparency and due diligence in both dealmaking and vendor relationships. The recommended adoption of AI AUPs reflects heightened governance expectations, aiming to mitigate operational and reputational risks. Meanwhile, shifts in vendor pricing policies and resale practices invite closer review of contract terms to ensure financial stability and customer accountability. What if my clients resist change? Question of the Week: What is the best CRM for small MSPs? It depends on the size of the MSP and what you need the CRM to do. Popular options include Zoho, Pipedrive, HubSpot, and Campaign Monitor.Zoho: https://www.zoho.com/Pipedrive: https://www.pipedrive.com/HubSpot: https://www.hubspot.com/Campaign Monitor: https://www.campaignmonitor.com/ I, MSPs & Channel Trends: Is AI replacing the need for MSPs? Discuss M&A activity, AI acceptable-use policies, and supply-chain challenges.M&A Trends: https://www.linkedin.com/posts/jaymcbain_ma-activity-across-managed-services-is-accelerating-share-7490450073336799232-SHiL/ ScanSource to Acquire MicroAge: $220.5M acquisition expands cloud, cybersecurity, data center, and AI services.https://www.scansource.com/about/press-releases/2026/scansource-to-acquire-microage Charter Completes Cox Merger: The $34.5B deal creates a cable and broadband giant serving roughly 37 million customers.https://www.linkedin.com/news/story/charter-completes-cox-merger-creating-cable-giant-7531516/ Dell Matches HPE’s 30-Day Price Quote Validity: The change gives partners more pricing stability amid rising memory costs.https://www.crn.com/news/channel-news/2026/hpe-extends-price-quote-validity-to-30-days-partners-cheer-new-pricing-stability Tales from the Field: How do you handle a customer dispute over a $100 item when they threaten legal action? About the SMB Community Podcast: Weekly business advice for small MSP owners from Amy Babinchak and James Kernan of the Small Biz Thoughts community — MSP sales, MSP pricing and agreements, hiring and leading an MSP team, MSP operations, selling your MSP, and AI for small MSPs. Produced by MSP Radio. More for MSP owners at smallbizthoughts.com. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

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 lack of legacy constraints. James Kernan states that Halo is experiencing rapid market share growth, currently behind established players such as Kaseya and ConnectWise. The transcript notes customer concerns regarding restrictive contracts and limited support from these larger incumbents. In contrast, Halo’s policy of integrated AI features without additional fees, as well as its responsive approach to MSP feedback, positions it as a vendor that some perceive as more adaptable to industry needs. Additional discussion addresses emerging risks related to MCP servers, which now facilitate the integration of client data across multiple platforms. Amy Babinchak raises liability concerns, noting that bringing client data into MSP-controlled systems may expand organizational exposure if security or compliance failures occur. The episode also reviews a backup vendor failure, in which an MSP was notified that Microsoft 365 backups were irretrievable due to a catastrophic vendor system failure. Both speakers underscore the severity of this scenario and recommend that MSPs seek written assurances from their backup vendors regarding data replication and recoverability practices. For MSPs and IT service providers, these developments highlight several operational considerations. The integration of customizable AI tools and falling PSA pricing offer new opportunities, but also present due diligence and alignment challenges. Expanded MCP server capabilities and recent backup vendor failures illustrate the necessity of strict data governance, contractual clarity, and continuous risk assessment. Technology leaders are advised to verify vendor practices surrounding security, data ownership, and incident response to mitigate both business and client risk.TITLE: How to Create People-Led Learning Culture? MSP Question of the Week: Create a safe space, encourage questions, use group training, and teach without doing the work for people. Halo introduces AI and lowers prices: Halo launches AI Studio for AI agents and plans to keep lowering prices. Could this spark an AI pricing war? https://www.crn.com/events/2026/halo-launches-ai-studio-mcp-push-to-help-msps-automate-service-delivery MCP: Friend or Foe? MCP gives AI access to MSP systems, but creates new security, data, and liability concerns. AI Shared Responsibility is now an MSP problem: MSPs need AI governance, approved tools, access controls, data policies, training, and incident reviews.https://petri.com/ai-shared-responsibility-is-now-an-msp-problem/ Tales from the Field: A backup failure raises a critical question: who is responsible when protected Microsoft 365 data cannot be recovered?https://www.reddit.com/r/msp/comments/1vm9dcs/heads_up_cove_backup_isnt_backed_up/ About the SMB Community Podcast: Weekly business advice for small MSP owners from Amy Babinchak and James Kernan of the Small Biz Thoughts community — MSP sales, MSP pricing and agreements, hiring and leading an MSP team, MSP operations, selling your MSP, and AI for small MSPs. Produced by MSP Radio. More for MSP owners at smallbizthoughts.com. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

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 technology companies have released an increasing number of AI models, including both large-scale and smaller, task-specific models. According to the discussion, the trend toward “distilled” or smaller models, which are trained based on larger systems, introduces efficiency benefits but also creates concern about loss of fidelity or intelligence in iterative retraining. Reference was made to a lengthy public statement by Meta’s CEO on the risks and advantages of model distillation and to US regulatory actions responding to these broad technology shifts. A key secondary topic was the launch of the Managed Intelligence Alliance (MIA), formed at ChannelCon 2026 to address AI standards, accreditation, and governance for MSPs. However, analysis pointed out that the Alliance’s executive leadership is comprised primarily of large aggregators and vendors, with a notable absence of direct representation from operational MSPs. The structure involves engagement with Texas A&M University for association-building, but concerns were raised regarding industry self-regulation, stakeholder representation, and the practical function of such alliances for the broader MSP segment.TITLE: Probing Client AI Opportunities and Managing Leadership Meetings for MSPsQuestion of the Week: What are some good pre-sales probing questions to get the conversation going with a prospect around AI opportunities? AI: Chinese AI models, smaller/distilled models, and AI trainingMeetings: How to run better weekly leadership meetingsChannelCon: Managed Intelligence Alliance and MSP industry standardsTales from the Field: The value of a small MSP business The discussion concluded with practical implications for MSPs and IT service providers, emphasizing risk management, the importance of understanding both external technological developments and internal AI adoption, and the need for clear standards and governance amid evolving vendor and regulatory landscapes. The conversation highlighted the necessity for MSPs to critically assess tool adoption, process discipline in meetings, and asset valuation, while maintaining vigilance over the security, accountability, and ownership structures within emerging technology initiatives and industry alliances. About the SMB Community Podcast: Weekly business advice for small MSP owners from Amy Babinchak and James Kernan of the Small Biz Thoughts community — MSP sales, MSP pricing and agreements, hiring and leading an MSP team, MSP operations, selling your MSP, and AI for small MSPs. Produced by MSP Radio. More for MSP owners at smallbizthoughts.com. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

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 sustained PE buyouts and the slower organic growth required to fill this gap. Growth beyond the $2 million threshold remains a structural challenge for many MSPs, requiring investment in management layers and business process sophistication. PE acquirers are described as increasingly eager, but both success rates and culture-fit issues remain a concern, with statistics reportedly indicating that many PE integrations do not succeed in the long run. Diligent vetting of acquirers and focus on internal operational maturity were emphasized as risk mitigations. Other topics examined included the implications of third-party cloud outages, such as the Microsoft incident of July 24, 2026, and their effects on MSP–client communication protocols. It was noted that responsibility for outages often lies outside the MSP’s control, making timely, empathetic, and proactive client communication essential. Additional segments addressed risks associated with misaligned business ethics—such as using misleading job advertising—and the operational significance of transparency and genuine client interaction. Opportunities for skill development were identified through emerging partner programs in AI, specifically pointing to free certification offerings from Google and Anthropic, with the observation that 65.7% of MSPs have no public-facing AI narrative. For MSP leaders, these findings point to a need for robust organizational processes: strategic specialization, internal reinvestment, and strong core value alignment to withstand shifting acquisition patterns and integration risks. Vendor and platform accountability, particularly regarding service continuity, should remain central in client management practices. Skill development in AI and transparent business operations are positioned as differentiators in a market where rapid change and client trust are both key risk and opportunity factors. On July 24th Microsoft had an outage that covered a lot of North America for about 5 hours. https://www.instagram.com/p/DbKyeZVmauy/ What if you don’t want to sell your company? PE is snapping up the larger end of the MSP market. Is that an opportunity or a threat for smaller MSPs? https://ctacquisitions.com/guides/private-equity-msp-2026/ The MSP of the future. Amy has been writing for 3 years on this topic and now has a summary article. https://www.thirdtier.net/2026/07/23/the-msp-of-the-future-pulling-the-threads-together/ About the SMB Community Podcast: Weekly business advice for small MSP owners from Amy Babinchak and James Kernan of the Small Biz Thoughts community — MSP sales, MSP pricing and agreements, hiring and leading an MSP team, MSP operations, selling your MSP, and AI for small MSPs. Produced by MSP Radio. More for MSP owners at smallbizthoughts.com. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

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 tools as a default during the sales process, especially for smaller prospects. Instead, initial technology and business process understanding should be driven by reviewing company websites, social media, and conducting direct observation and informal dialogue with staff. For more complex environments or where asset counts are ambiguous, tools such as Galactic Advisors, RapidFire Tools, or Lansweeper were suggested, but only after careful consideration of the actual information gap. MSPs were advised to leverage preexisting documentation and probe for differences with prior MSPs, focusing on gaps in service, dissatisfaction, or unaddressed needs. Secondary topics included the necessity of formal Master Service Agreements (MSAs) and the operational risks of long-running unwritten arrangements. The hosts reported that customer pushback on contracts is rare; those unwilling to sign can be managed through premium pricing or operational discretion. The use of digital document management and auto-renew online agreements was cited as a means to streamline governance and ensure that contractual terms keep pace with operational changes. The conversation also addressed best practices for Quarterly or Technology Business Reviews (QBRs/TBRs)—advocating for business-oriented, forward-looking discussions rather than technical or ticket-driven reporting, and highlighting risk in overinvesting staff time in meeting preparation. The episode concluded with a practical case study on recurring revenue management, highlighting a systematic approach to price increases after extended periods without adjustment. The case demonstrated that fears of customer attrition due to price adjustments are often overstated, particularly when supported by transparent communication and a graduated rollout to well-aligned clients. The discussion reiterated the importance for MSPs to maintain accountability, regularly review contractual agreements, manage operational costs, and structure client engagements to reduce risk exposure while improving alignment with organizational goals. Title:   How do you complete an assessment for a prospect? Topics/Events Question Of The Week: How do you complete an assessment for a prospect?  What to do if you don’t have agreements in place, but you’ve worked with recurring clients for years.  QBRs – what questions should you be asking during your regular QBRs with your clients CMMC third-party audits are paused. The channel opportunity isn’t. ChannelE2E https://share.google/4vXDd5G3ysgflU6PU STORY:  Reviewing a MSP’s current agreements, James realized the MSP hadn’t had a price increase for over 5 years.  About the SMB Community Podcast: Weekly business advice for small MSP owners from Amy Babinchak and James Kernan of the Small Biz Thoughts community — MSP sales, MSP pricing and agreements, hiring and leading an MSP team, MSP operations, selling your MSP, and AI for small MSPs. Produced by MSP Radio. More for MSP owners at smallbizthoughts.com. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

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 also touches upon the increased adoption of onboarding fees among MSPs. While some MSPs prefer to integrate initial setup costs into project-based work, a growing percentage now charge explicit onboarding fees. One discussed model involves charging a fee equivalent to one month's recurring service cost, with some offering waivers for multi-year agreements. Another creative approach noted is using the onboarding fee to fund sales commissions, providing sales representatives with negotiation leverage. This trend suggests a shift in how MSPs are structuring their client acquisition and initial service delivery processes. Further discussions in the podcast address the broader labor shortage in the technology sector, which is reportedly more significant than concerns surrounding AI's impact on jobs. The shortage particularly affects highly educated IT professionals, including those with degrees and senior engineering expertise, with an estimated 50,000 jobs at risk. This situation presents opportunities for existing industry professionals to advance and for AI or new entrants to fill entry-level roles. Concurrently, there is a recognized need for enhanced business acumen and financial literacy among IT professionals to better understand client business needs and articulate the return on investment for technology solutions. For MSPs and IT service providers, the updated Microsoft Partner Program offers tangible financial incentives and opportunities for service expansion, particularly with the introduction of the Copilot specialization. The increasing prevalence of onboarding fees warrants a review of client acquisition strategies, balancing revenue generation with potential client apprehension. The persistent labor shortage underscores the importance of continuous training and upskilling, with a particular emphasis on developing business and financial literacy alongside technical expertise. Finally, the discussion on mergers highlights the critical importance of cultural alignment and clear, written agreements regarding governance and exit strategies, as poorly managed mergers can significantly diminish business value. Is it worth it to become a certified Microsoft Partner?    Labor shortage link: https://www.linkedin.com/news/story/record-labor-shortage-may-pose-larger-threat-than-ai-8379017/   About the SMB Community Podcast: Weekly business advice for small MSP owners from Amy Babinchak and James Kernan of the Small Biz Thoughts community — MSP sales, MSP pricing and agreements, hiring and leading an MSP team, MSP operations, selling your MSP, and AI for small MSPs. Produced by MSP Radio. More for MSP owners at smallbizthoughts.com. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

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 and treat the absence of active marketing as a matter of pride, despite clear evidence that consistent marketing activities are essential for growth and resilience. According to James Kernan, "marketing is the oxygen of your business," and its absence correlates directly with reduced new business opportunities. Strategies such as recurring in-person or online engagement with clients, regular assessment of marketing practices, and leveraging written marketing plans were identified as actionable recommendations for sustaining pipeline health. A secondary focus examined operational risk and opportunity related to "shadow AI"—unauthorized or unmanaged use of AI tools by clients’ staff. Amy Babinchak detailed three core risks: accidental exposure of confidential data, violation of contracts or regulatory requirements, and a lack of auditable records for actions taken by shadow AI tools. The discussion identified practical risk mitigation steps, including staff education, policy development, and implementation of monitoring tools, all of which represent billable opportunities for MSPs while reducing downstream liability in the event of a breach. For technology service providers and decision-makers, the episode underscores the operational imperative of formal, consistent marketing—even during slow periods—as well as the need for vigilant governance over emerging technology risk vectors such as shadow AI. By proactively engaging clients through both marketing and risk education, MSPs can better protect their businesses while expanding stable, recurring revenue streams rooted in demonstrable expertise and accountable service delivery.Title:   How do I get more business when it’s slow? M&A Topic: Why is an elevator pitch for my business important? Article: Why is finding new clients harder? Double the number of MSPs in Kasaya reported said so. https://www.kaseya.com/blog/msp-growth-challenges-2026/ QBR Talk: Talk to your clients about Shadow AI https://www.thirdtier.net/2026/06/25/speak-to-your-client-about-shadow-ai/ Tales from the field: A fictional tale about the Trunk Slammer from Hell.  https://www.reddit.com/r/msp/comments/1u82vnh/i_got_obsoleted_by_ai_so_i_wrote_you_all_a_bofh/ UPCOMING CHANNEL EVENTS Mastermind LIVE in Omaha NEJuly 30-31st Register:  https://kernanconsulting-mastermind.mykajabi.com/mastermind-event About the SMB Community Podcast: Weekly business advice for small MSP owners from Amy Babinchak and James Kernan of the Small Biz Thoughts community — MSP sales, MSP pricing and agreements, hiring and leading an MSP team, MSP operations, selling your MSP, and AI for small MSPs. Produced by MSP Radio. More for MSP owners at smallbizthoughts.com. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.