October 11, 2024

Episode 45: vAIO

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Erick and Rich discuss a wave of private equity-funded vendor M&A activity due in 2025 and what it means for MSPs, as well as advice for building a strong company culture. Then they’re joined by Sam Valme of AvePoint for a conversation about AI-related opportunities for MSPs in data management. And finally, one last thing: a new AI-powered ETF that uses an LLM trained on the wisdom of Warren Buffett among others to build an investment portfolio all on its own.

Discussed in this episode:

Your Favorite Vendors May be Headed for a Sale

Deepwater Managing Partner and AI Investing Expert Launches New Investment Firm, Intelligent Alpha, and First ETF to Deliver Alpha-Generating AI-Powered Investments

 

Transcript:

[00:00:00] And three, two, one blast off, ladies and gentlemen, welcome to another episode of the MSP chat podcast, your weekly visit with two talking heads, talking with you about the services, strategies, and success tips you need. To make it big in managed services, my name is Rich Freeman. I am the Chief Content Officer and Channel Analyst at Channel Master, the organization responsible for this show.

I am joined as I am every week by our other co host, our Chief Strategist at Channel Master, Erick Simpson. Erick, how goes it? It’s going great, Rich. It is as we record this today, It is the very beginning Q4 2024. So imagine that how the first three quarters of the year have just gone by and how little time we and our listeners have to close Q4 strong and start thinking towards Q4.

That’s the thing, actually, is yeah, I think like a lot of people, I was a little startled to suddenly find myself in Q4, but we’re at that point in the year where we’re going to have to start thinking ahead to Q1 of next year pretty soon too. Yeah, I’m reminded when I have my quarterly calendar as I’m dry erasing off the last month and putting the new one in and now I’m.

October, November, December. So those are, that’s what we’ve got left in the year. So it’s a stark reminder for me every day of all the things that I still have yet. Will accomplish that I’ve tasked myself to do well, three months to do it. And you’re not in that boat alone. I think there are a lot of us with some some 2024 objectives Q3, maybe bleeding into Q4.

And we’ve got some time to do it still But let’s let’s dive into our story of the week because, we were just talking about looking ahead to 2025 and that is actually a nice lead into the topic we’re going to be talking about here today. Let me set this up just a little bit.

And this has to do with the vendors. The MSPs in our audience do business with obviously for years, we’ve been watching private equity companies coming to the marketplace, buy up vendors who do business with MSPs. They the technology business, the software business has been a very good one, particularly for subscription based businesses that sell through managed service providers.

So it’s been a pretty robust market. But in recent years, we’ve seen a slowdown in a number of different things, and to some extent we’ve seen a slowdown in acquisitions because interest rates have been up in recent years and acquisitions typically involve a certain amount of borrowing higher interest rates make that borrowing.

Less attractive, but for similar reasons, we’ve also seen fewer exits. Private equity companies have been holding on to vendors that they own in some case have owned for years for a longer period of time than you would normally. In part because finding someone to sell these companies to has been difficult.

Same reason interest rates concerns about recessions as well global instability. I’ve been speaking very recently, Erick, with people who are immersed in this world and an expert in this world to a greater degree than I am. And we’re already starting to see we know interest rates have come down just a little bit recently.

There are expectations. They will continue to come down. We’re already starting to see a little bit of easing in this private equity world, a little bit more interest in exiting a little bit more interest from bigger upstream, larger private equity companies to buy vendors from some of these smaller ones.

It’s really just getting started now, but we can expect more of this in 2025. And as the year goes on I would expect the momentum there to increase. And so what you’re going to see is if you’re an MSP and you’ve got a set of vendors you like doing business with, and a lot of those companies are owned by private equity.

Some of those businesses, particularly the stronger, more successful ones, are likely to be on the sale block in 2025. Now is this a good thing or a bad thing? There are differences of opinion in this area. I know a lot of MSPs, I’m sure you do Erick, as well. Really just don’t like the effect of private equity on vendors.

And really don’t see anything healthier, constructive coming out of that. And for those companies and maybe for everyone, really it’s just something that you’re going to need to be mindful of as you’re deciding. Whether or not to add a particular vendor to your stack, if you’re deciding whether or not to invest more deeply in a [00:05:00] vendor you do business with night right now, you’re going to want to be mindful of the fact that some of these companies are going to be for sale and will in fact be.

sold and to be clear I hinted at this before, we’ll probably see some ipos But not a ton of those mostly what you’re going to see Is smaller private equity firms selling these companies to bigger private equity terms if you’re not a big fan of private equity this might not be what you want to hear But that’s the trend that that we’re going to see and so if this is something you don’t like or if it’s something that you think might actually be a beneficial impact because there is an argument to be made that private equity companies.

We’ll invest money in growing the companies that they acquire. Either way, you’re going to want to be mindful of the fact there’s going to be more vendor M and a activity in 2025 and just, factor that into your thinking about the technology stack decisions that you make. Yeah, that’s a great topic, Rich.

And. Yes, I think the ice is beginning to melt, right? We’re starting to see shifts in the tectonic plates of M& A. And I think partners find themselves in kind of three categories. I think there are the partners that You know, fear the culture and the soul of a vendor, strategic partner that they worked with for so long could go away over time.

As private equity begins, not only, so there’s those folks that have fear. There are folks that anticipate good things, like you said, because they see, oh, they’re going to inject more capital into, maybe accelerate improvements in the product or. Support for partners and things like that.

I think the savvy PE firms that have done this for a while that understand the MSP channel, understand that it is a very unique channel, community driven channel, very vocal in partners like what they like and they don’t like what they don’t like. And so the ones that are more successful tend to tune into that more.

And take care in how they message and the things that they do. Decide to change with an ear to the ground. And then there are those partners that simply have a wait and see attitude, or maybe are at the point in their career where they’re trying to exit their own companies and try to beat.

Any change ahead of time and things like that. So it’s very, I think, crystal ball ish exercise to try to predict, and assess all of the vendors that I’m working with and who might be a target for acquisition. It’s no secret that there’s a lot, there are a lot of rollups happening and a lot of complimentary.

vendor being rolled up to deliver a more comprehensive suite of portfolio services from one private equity firm. Think ConnectWise, think Kaseya, backed by private equity and what they’re doing. And the conversation that we’ve had several times on the show, Rich, about, having all that eggs in one basket mentality, right?

When these vendors begin getting acquired. For the folks that already participate in an ecosystem that’s backed by a private equity group who they are already partnered with say, or ConnectWise or somebody else, they probably welcome some of this acquisition, right? But for some of the other MSPs who feel that they distinguish themselves away from those groups by not being part of a large portfolio of services delivered from one vendor and want a more unique and distinct kind of bespoke, maybe boutique, maybe, higher level type of service model and value proposition for their clients.

Those might be the folks that, you know maybe a little bit more Local and concerned about this. Yeah. And, I framed the the situation or the topic in terms of decisions that you might want to make or strategies you might want to adopt in advance of a company being put up for sale, but I we should probably say before we move on what you do after a sale, when and if one happens is important as well.

And I would just discourage people. For moving too quickly, for making assumptions that, the acquiring company is going to destroy the culture, is going to shut down R& D, don’t, don’t make a rash decision you regret later based on assumptions that may or may not be true. My advice would be look at who did the acquisition.

What do you know about prior acquisitions that they’ve made and what can you learn even from peers? About what’s happened to companies acquired by whether it’s a private private equity firm or a strategic buyer owned by private equity, research the matter and make some [00:10:00] discerning decisions.

There are definitely going to be acquirers. Who yeah, maybe won’t have a constructive effect on a vendor you like a lot, but there are going to be others where that really isn’t the case at all. And so if you’re going in with one assumption about that, this can only mean bad things or it can only mean good things.

You’re probably going to wind up surprised and disappointed at least some of the time. That’s a really great advice, Rich, because we’ve seen that happen in reality and all the noise and, And turmoil that occurs when partners start making assumptions and fearing the worst and leveraging social media and every platform to.

Too early before, getting the data and experiencing what’s to come and then having their minds changed later. So that’s great advice. Temper your feedback and comments base that upon real data and real experiences and not fear, uncertainty and doubt.

We have been talking about culture here and how important culture is vendor culture to MSPs. It’s obviously an important topic for the MSPs themselves. And that is my leading to your tip of the week, Erick. Thanks, Rich. Nice handoff. Yeah. We’re talking about building and maintaining a strong company culture in your MSP practice.

And I got to say, Rich. I’ve seen the positive I’ve seen when that works well, and I’ve seen when it works the opposite, not so well. So if we fail to establish a clear. Culture mission and values. And we’re promoting, not only promoting it regularly to our teams, to our clients, to our strategic partners, but actually fulfilling the, that promise, then we tend to, fail to meet the expectations of ourselves, our own internal teams, and everybody else that’s relying on us.

To embody that, and a couple of good examples, Rich, that I can, share are some existing engagements that I’ve participated in where the company culture is either non existent or it’s a moving target. And, things that I think can And the examples of this is when we don’t have a strong company culture and we’re not only messaging in and promoting it, but enforcing it internally lead to things like some staff members and getting away with stuff or maybe other team members seeing someone that is not performing at the level that they expect the organization to perform to or what they hold themselves to, and it begin to erode morale internally, it begins to erode Customer satisfaction when you have team members that aren’t performing at the same level as others, right?

So those are some real negative effects or when we fail to establish our own company culture, it allows the opportunity for us to bring on clients that don’t align with that company culture. Don’t see our same values or share our same values and things like that. And over time, those become problematic, right?

So how do we, foster this again, I mentioned establishing what the culture should be, promoting it consistently, and then holding everyone accountable, which is the hardest part, rich, holding everyone accountable to meet the standard of what we set out and delivering that consistent experience, not only for our clients, but also for our internal teams.

Because that at the end of the day is the most valuable asset that we have when we grow businesses is the team members on it and then recognize and reward team members when they exemplify and demonstrate that. And that again, helps build this team appreciation and it reinforces and builds that, that morale, that team spirit.

Others look up to and want to also attain. We have a lot of kind of team recognition when we’re doing, hitting milestones and hitting our numbers and KPIs and tickets and sales and all this other stuff, but I’m talking about exemplifying the culture and embodying the culture and representing that to our own team members and to our clients and strategic partners.

I don’t see a lot of, I see a lot more recognition based on performance rather than. Embodying and promoting the company culture, Rich. Yeah. It and you would know this better than me, but it culture does strike me as one of those undervalued, underappreciated contributors to success basically with MSPs.

I think everybody understands a company has a culture. It needs to have a culture. It’s part of what you do as a manager is create that and foster that, but the degree to which. That can really drive your success or lack of success. I think tends to get underplayed. And what I was thinking about as you were [00:15:00] talking there, Erick, is how many times I’ve spoken to a very successful MSP who has told me that one of the lessons that they really had to learn somewhere along the way is the value.

Parting ways with an employee, like a very strong employee from a technical standpoint, who’s just not a great cultural fit and that is a counterintuitive management move to make for a lot of people, but I can’t think of a case of anyone ever telling me, man, I wish I hadn’t done that, what people learn Is we can find somebody else with those technical skills, but everybody else in the company, everybody around that person, everybody who worked with that person, who wasn’t a great fit for our culture is going to be more effective when you do that difficult, somewhat counterintuitive thing and let the strong performer go for the sake of culture.

I’ve had many examples of that in my own experience, Rich, as well as working with partners. And the same goes with releasing customers do not align with the culture as well. Sometimes we feel like, oh my goodness, we’re going to lose that revenue stream, or we’re going to lose that internal, technical resource.

You’re better off making room for others that do align with that culture. And I can’t, express, Rich how deeply I can testify to that in, in, in the companies that I’ve, worked in and, and launched and sold, but also, from the ABC kind of evaluation for releasing C, D and F customers to make room for more of those A and B clients.

And one of those scorecard items when we’re bringing on new clients has to be cultural fit, just as it is when we’re bringing on a new technician. Or a new sales person or a new account manager or a support person or anybody into our loan organizations. Yeah, take it seriously, folks. Culture matters.

It is, building and maintaining and enforcing culture is one of those skills you need to have. As the successful owner and operator of a managed services practice. So with that, folks, we’re about to take a quick break. When we come back on the other side, we will be joined by Sam Baum. He is the channel chief for MSP at AvePoint.

Big, fast growing company. They do all sorts of things in cloud. And in particular, they do some interesting things around. Data management, which for reasons we’ve talked about on the podcast before is a big deal in the era of A. I. So we’re going to talk about opportunities generally for L. S. P.

S. And data management specifically as that relates to A. I. These days. That is all coming up. After the break, stick around folks, we will be right back.

And welcome back to part two of this episode of the MSP chat podcast, our spotlight interview segment, where we are very excited to be joined this week by Sam Valmay. He is the senior director of us channel sales for MSPs at AvePoint. And Sam, I just moments ago before the break mispronounced your name, but that aside.

We are really excited to have you on the show. Thank you so much for the time. I really do appreciate it. And like I said 10 points for getting it right. Even the second or third time, you guys are some of my friends who’ve known me for 20 years. So like a balm vowel, that, that accent really does it for a lot of Americans.

All right. Valmay, I got it now. Awesome. For folks who don’t know, you don’t know what you do at AdPoint, don’t even know all that much about AdPoint. Let’s just get them situated. So tell us about yourself and a little bit about AdPoint. Sure. Yeah. I’ve been with AdPoint going on 12 years now, started off in engineering, working in our services division.

And then I found my way into channels actually, as I was overseeing our public sector public sector solution engineering practice. Doing training for partners realized they could sell and talk about our solutions just as well as we can. So help with our partner program, roll out our first partner portal, partner enablements, and now I oversee our us channel sales, specifically some of our top MSPs.

And most recently, actually, I’m also overseeing a candidate too. So my first trip to Montreal was two weeks ago. Poutine is pretty good. The hype is there. So yeah, that’s been a bit about the journey. Tim Hortons, have you tried the donuts? I kept going by Tim Hortons, and I was like, what, I thought it was like a, I didn’t know what it was, actually.

I asked multiple times, and they were like, oh yeah, it’s like a, it’s like a Dunkin but better than a Dunkin Krispy Kreme, but better than Krispy Kreme. So I didn’t get a chance to try it, and I have to go back, so we got that scheduled. Alright, okay. You folks at that point do a bunch of different things, but what we really wanted to dive into with you on the show this week is some of the work that you do around data management, data protection because good data is the key to good AI and there are probably a lot of businesses out there that don’t have very good data.

What, at the typical SMB right now how good is the data? And what are maybe some of the problems with that data? I think that a lot of [00:20:00] MS, a lot of the SMB thinks that’s, I think the problem is there really isn’t a lot of thought to it because at the SMB level, a lot of times you’re still really running and managing the business.

There’s a lot of time that’s being spent making sure the lights are on, making sure that the customers are taken care of. And you really want to give everyone kind of that personal touch. And as you do that naturally, You just begin to accumulate more and more content. And the more you diversify your business, you might roll into different regulations.

You might roll into different industries that have a compliance requirements that you may or may not actually be aware of. So making sure that number one, you have a partner, like a great MSP who can help you oversee the different aspects of how your data should be managed based on their clientele. That’s going to help you overcome a lot of the challenges that the SMB customer is experiencing, which is I’m growing.

I’m dabbling into these new areas and I don’t have the time to keep up with these data regulations I’m being held against. Sam as a recovering MSP, I had the pleasure and pain of trying to help clients, this was 20 years ago, just about, when we launched our MSP practice and sold it a few years later.

But even then, data accumulation and the size of data and where it lives wasn’t quite as big a concern as it is today. It wasn’t structured data and all that, but it was mostly on prem. When we’re talking about AI and unleashing AI, on all of this data, I see a couple of different.

Potential services that MSPs can bring to the table. One of it is helping structure it, categorizing it. Identifying where the sensitive data is and taking some measures to protect it. And then maybe teaching these SMB clients of theirs, how to leverage AI best. What have you seen in terms of that conversation with your partners that says, AI is coming, we see it, we’re using it in our platforms and all that, but we really don’t yet know how to monetize it.

So what kind of services do you think. Are the crawl, walk, run type of services that an MSP can start with their clients in regards to data and AI, and as it pertains to cybersecurity and how do you see that evolving over time? Yeah. We actually just recently wrapped up a three city MSP, a roadshow around the AI readiness, specifically around getting folks ready for things like co pilot and we have Microsoft come in and speak at each of those roadshows.

And really when you get to the brass tacks of how they actually Really, it’s de sensationalizing AI to start. I think a lot of folks, they see it so much, it’s wow, this must be this revolutionary, crazy thing I’ve never experienced before. And it really paralyzes people into thinking, I have to have some profound new way of looking at this.

But ultimately, you’re doing a lot of similar conversations, but just with the knowledge that You’re not worried about a document popping up, but a new system inferring from that document, right? But the root cause is still the same. So really it starts off with having the basic conversations on what are the basic workflows and tasks that my team is doing today, right?

We don’t need to save the elephants as a tele team, right? Talk about the reports, the workflows, right? The consolidating of information that you’re doing on a word, on Excel, on PowerPoint, maybe in teams. And how can you help train? A new person, if you will, to infer and to consolidate that data, right?

And really, when you start writing down okay, we have this process that requires these three reports, I got to make a decision on these criteria. If I had a new hire, here’s how I would tell them to review the report. Okay, that new hire is now co pilot. You feed co pilot some examples of the report and tell them how you would score and grade it.

That becomes a workflow in a box. So what MSPs who are really good at this are good at doing is having those workshops to figure out how can I put a package around this particular work stream that I can then have Copilot do on behalf of this particular customer. And that is the service opportunity up front.

It’s actually having a small service engaging to figure out those individual workflows. And then on a monthly basis, say, Hey, we’re going to be rolling out Copilot in the environment. And then looking at a more consultancy perspective, maybe it’s once a month or once a quarter verifying. Is Copilot doing what we expect it to do to reduce the human cost of doing these different tasks?

And then can we find additional tasks for this tool to do better yet? Let’s train the team to create and do new workflows on their own. And that’s where the opportunity really is for the FSP. Now, on the data side, prior to that, you have to make sure that content that Copilot is interpreting is clean, is properly tagged.

That’s where folks like AdPoint come in to make sure that as you’re having those initial conversations around What are those different worksheets and bots you’re trying to build that the data that Copow will be looking at is secure, is properly under compliance regulations to make sure that new bot can now do what it needs to do to reduce those costs for your organization.

You guys on your website, at least refer to some of that work you were just [00:25:00] discussing there as data readiness. Folks in our audience here might think to themselves data readiness sounds interesting, but I’m not a data expert. Am I ready to actually provide data? Data readiness services to my clients.

How much skill training experience do you need to provide these kinds of data readiness services? How much tooling are you going to have to invest in? And there, I love our marketing team. I love marketing as much as anybody else. I really do. But so once again, that’s sensationalizing.

Of the conversation, oh, I’m not a, I’m not an expert in data. You’re, if you’re an MSP, you probably are an expert in kind of the how their your customers do their business. You understand generally what they need as far as technology and some of those workflows. So if you back up from the data itself, the ones and zeros, and focus more on what are the actual workflows, what are the services that this SMB customer is actually providing to their end customer and.

What are the regulations around that? Are you aware of that? Now in some cases you should already be because you’re managing their IT infrastructure, so you have to be aware if someone were to come in for a third party audit who that person might be. So really, it’s just applying that and focusing less on trying to become a data and AI expert and focusing on be more become more of a business and workflow expert and partnering with that customer to talk through how they run their business today.

And once again, figure out simply. Okay. Here are the workflows. Here are the practices here. We see where we think we can actually reduce your time and providing that many consulting time for that particular customer. And what you’re going to end up finding is as you constantly go through and realize, okay, based on this particular workflow.

This regulation might apply or this standard might apply. That’s when you’re going to begin building a template that you’re seeing a commonality. Many MSP service specific verticals or common customer types. And as you do this with many customers, you’re going to start building and putting together your own template.

And if you have a tool set like AppPoints that has the ability to take those templates and then apply them to multiple customers, you can now have those best practices you built in house, now benefit many different customers along the way, reducing further the time it takes to even have those upfront conversations around data readiness.

Sam, I really appreciate the terminology that you’re using to frame the perspective, like desensationalizing AI, right? That’s really that’s key. I think that might be a good, Episode name, rich desensationalizing AI. And, you also brought up. This business process perspective or role.

So my question is, as MSPs think about instructing some services to support their clients with, with AI, with co pilot with your organization and other things that they’re putting together, is it. Are they going to be billing at the same rate that they build their other work or because this is so much more strategic and slides into maybe the opportunity to market and promote more of a business process optimization service, leveraging a ID how profitable.

Do you see both sides of that coin, i. e. we want to distinguish ourselves and differentiate ourselves from our competition. AI is one avenue to do that. If we start adjusting our marketing and our sales presentation to focus on more of a, what I would perceive as a more kind of a strategic role as a business process optimization expert with AI.

Thank you. Would that cause or would that allow MSPs to bill more and be more profitable because these services are much more strategic to end clients? Yeah so this definitely goes into the first question of as the MSP, how involved in the And customers business. Are you really right? Having those customers naturally, you just have to have a general understanding of their business to understand their I T needs.

But as far as their business process and workflows to your point, do you actually have the person on staff that can have those conversations? I can actually be a true consultant, right? So many MSPs that we work with and we have, several hundreds of thousands and look at it globally. Everyone’s looking at really two things for us.

Top priority, increasing profits, right? Explaining it to new service lines. This is a key opportunity for those that are early adopters to get to that second piece, which is to increase those different service lines you’re offering. So this might be a net new hire, someone that has that consulting background to actually pull the information out of the customer.

Another interesting new opportunity for MSPs is having somebody dedicated for that AI success. When I was in Canada a couple weeks ago they claim it, I can’t verify it, but I think it might be true. They have the first co pilot set person on their staff. It’s the first person in Canada, they said.

That was actually said, and all that person’s job was to do was to verify that the MSP customers they have leveraging co pilot are getting value out of it. That’s another opportunity for additional increase in revenue. It’s, Hey, you have a dedicated engineer for your account that’s going to verify and work with your end users to make sure that these [00:30:00] workflows, these things we set up originally right with that console we have on staff.

Now we’re actually going to put our money where our mouth is and give you someone to talk to. So you’re actually getting that ongoing value. These licenses are not cheap for these AI tool sets like co pilot depending on the flavor you want to go with. So you want to make sure that as the MSP, if you’re going to charge more for doing the initial understanding and discovery of these tool sets, that you actually have that success motion in place as well to verify that when it comes time for renewal, they don’t say Yeah, I remember we did that thing 12 months ago, but we really didn’t use it that much.

We really didn’t get that much value out of it, right? Having that person on staff to make sure that they continue to get that value justifies an increase in costs, but it also verifies when it comes time for renewal, they’re going to keep those licenses in house. You’ve partly answered the question I’ve been wanting to ask for a little while here, which is, what the mix looks like for an MSP who’s offering the kinds of business process optimization, workflow optimization services we’re talking about here.

What’s the mix between project work, one time work and recurring revenue opportunities, services you can provide a month after month and, which are maybe going to be more. for you over time. Yeah, I think that’s what we’re seeing, especially from what I hear and see Microsoft pushing is this idea of doing the assessment up front, right?

To verify like, all right, who’s prepared to actually have this conversation. And in some cases, Microsoft is actually funding some of these projects too. But really just making sure Hey Is this customer really optimized to be able to start AI in their business? So that’s a lot of revenue.

Number one. Now some folks might look at that as a lead gen activity. Maybe you pair that down to a two or three hour consultation, a conversational project, and maybe that ends up being a free for your customer base, right? To just use that as lead gen. Cause you do want to verify as well. You don’t want to offer things like AI to everybody and realize, you get into it and Hey, There might be a problem on the data side.

So I think that there is an immediate opportunity to do these assessments and build out what that means for you. Now, a piece of that is going to be analyzing their data. And that points our solution and offering that is so we have called policies and insights that allows you to actually scan the M365 environment and see what things in the easy to read report might be out of compliance, right?

If you have a tool set like that, where you can set it up and run the scan within, 60 minutes. That’s going to really increase the likelihood that a customer might say, Hey, our environment is actually not as bad as we thought. Let’s talk about this whole AI thing a little bit more, right? And then maybe you have a small five to six hour engagement where you actually build out those initial workflows.

And that’s built up front. But really it’s the ongoing piece. I think you’re going to see the most profitability, right? Hey, we’re now going to administrate the AI experience inside your environment. You have that dedicated engineer. This is going to be an additional, 10 per user per month that you have in the organization.

We’re going to verify that all these business processes that we penciled out are actually being used. And the smart MSPs here are going to realize, Hey, these business processes, by the way, how much did that cost that FTE to actually do that before? Oh we were paying no 20, 000 a month before.

Great. These licenses are going to cut that by a fifth and you use that to justify the increase in monthly cost because you’re saving operational costs with actually getting things done now, right? So I think that as time goes on, we’re going to see managing these AI services being the norm.

Because it requires that business process workflow requires an ongoing person to help with the training, right? And they’re going to expect that level of support. And then on the back end, as this new data is being created, having tool sets like AppPoint, as I mentioned, our policies and insights tool can do that upfront assessment with an ongoing, right?

Continuing to scan. For those customers during that customer’s environment, for that information that’s being generated, making sure that it stays compliant, stays labeled correctly. So as AI continues to grow, you’re in a safe environment, making sure your content’s continually being curated. Sam, I love this conversation.

You’re bringing a lot of answers to the questions that Rich and I, ponder on the podcast about AI and what’s, what the opportunity is for MSPs. And, one thing that you said really resonated with me in terms of hiring somebody specifically for this new role.

I think as MSPs think, oh, okay, that’s another service, how do we deliver it ourselves? This is so different and so much of a distinct opportunity for the, early adopters. I think there’s early or, first mover advantage conversations here as MSPs look at the opportunity.

I love the idea of having someone that’s dedicated to this that’s not, you’re not time slicing with another billable engineer and trying to, have them juggle more fireballs. And I also am appreciating the approach that sounds to me very similar to A-V-C-I-O or VC o kind of a role where you’re meeting with a client.

On a [00:35:00] regular basis, having these strategic meetings and then guiding them down this path of leveraging AI. And then the icing on the cake was when you said, Hey, we’re actually going to do these assessments. And we’re going to have this continual conversation. And then the calculator that I imagined in my brain, when you said, Hey, let’s assess what it’s costing you today, how much you can save, how much of this noise we can reduce using AI and leveraging these workflows and processes.

And now you can get better utilization out of your internal teams for more strategic Things that you do in your business and then you can scale much more broadly without having to go through, tons and tons of hiring. It’s almost the same conversation we have with MSPs about integrating and optimizing.

Platforms and workflows and things like that. Is that a parallel that, that resonates with you the way I’m describing it and how would you add to that and encourage MSPs to think outside their existing team to deliver these services? Yeah. At the end of the day, ai, it’s funny you mentioned V vi the VCIO or VVC sauce, like I guess would be A-V-A-I-O.

So one of the agonists is going to list it on there. At the end of the day, AI is a tool the same as any other. The challenge is that it’s the difference in a hammer being a tool in a computer being a tool, right? That’s how we had to start these conversations with a lot of our partners to expand their minds on it, right?

A hammer is very clear, right? Word, Excel, PowerPoint. Those are hammers. Very clear what they’re for, right? The computer though, what am I supposed to do with this thing on my desk? Probably 50, 60 years ago, that was a really common question. What am I supposed to do with this thing on my desk? It’s what is it?

What is it for? It can do so much, but what it took time for people to realize, Oh, I can do the email part of my job. I can do the communications, right? I can do the the research portion of my job, right? So AI is that computer again, and you’re seeing a lot of that pullback of what do I do with this?

So you have to dedicate the time and the resources because what’s what you’re going to realize is the more people that learn how to use that computer, they’re going to be in a different stratosphere. I was talking to we were talking to another rep from Microsoft and they were talking about even introduce things like co pilot into the government.

They were talking about how, there’s this conversation on, is it even equitable to give AI to a certain portion, but not the other, because once you have it, it’s in a different lane of what you can go, where you can go, where you can proceed. So I think that these are going to be conversations around investments, around how much effort you want to put into it up front.

But eventually everybody is going to realize they need a computer, you’re going to need AI in order to be able to do it, and you’re going to be outpaced by your peers who have figured out how to reduce that OPEX cost 20, 30, 40 percent by doing some of those redundant minutiae tasks with these new tools that we have available, but there’s going to be some folks who just want to keep doing it the old fashioned way and they’re going to have a challenge pretty soon.

You referenced compliance a little while ago, which calls to mind a data related issue. We haven’t actually talked much about. We’ve talked about data readiness and data management and workflow optimization, not so much about data protection. To what extent? Are data security data backup, specifically in the context of AI incremental opportunities for MSPs, given maybe the volume of data particularly businesses with LLMs might be generating and the strategic importance of that information.

Yeah, I think that a big piece of that is going to be around the Not only the disaster recovery aspect of it, which is a conversation, but also on the compliance side, I think that compliance is going to be really key. You’re going to need deeply to understand what kind of regulations you’re being held against in your organization.

And you are going to have a system in place that’s able to scan for those different compliance requirements. In, Almost real time, at least event based, right? Because at the speed in which a tool like Copilot can generate content, you’re going to want to make sure that every new piece, every new asset that’s created is tagged correctly because so many different people might have access to to a tool set like this, and they might not even understand that something that was referenced from a document was actually uh, now high risk, or there might be situations where if you look at what Copilot needs.

Just read access inside of the environment, two or three pieces of content that it might have referenced to create something new might not have been considered, needing to be within compliance, but now that it’s joined together, it is. And this might be the first time that particular user is experiencing that.

So you have to, if you’re going to give folks the ability to create in real time, this whole idea that you need to go into every single document in your one [00:40:00] drive and mark what needs to be confidential and mark what needs to be considered compliant, you have to remove that because you’re going to need the system to be smart enough.

It’s if it’s smart enough to create, data that needs compliance, it needs to be smart enough to recognize and tag it for itself. Okay. So you need tools that are going to be able to take that burden off of the user, right? I think that’s a huge opportunity for MSPs and understand that to actually provide those kinds of services and tools.

Upfront along with this conversation and then of course, yes, as more and more data is being created, the backup and recovery strategy needs to be holistic across all the different areas where that data might be stored to make sure that you can have that paper show to go back if you need to pull back a new version or a previous version and to make sure that if there is any event of things like ransomware, you can actually restore out of place to get access to your content as well.

Very interesting thoughts and conversation, Sam. We thank you so much for joining us on the show. Before we move on for anyone in the audience here who would like to. Learn more about you, get in touch with you, maybe get in touch with AdPoint, where should they go? You can always start, of course, AdPoint.

com or Partners. AdPoint. com. That’s going to be the easiest way to register for our partner program. You can find me on LinkedIn Sam Valmet Jr. Not Dr. Sam Valmet, that’s my dad. I’m, I didn’t go that far. Yeah, LinkedIn’s probably the best place to get a hold of me and Partners. AdPoint. com. Partners.

atpoint. com if you want to become part of the program, learn more about what we can do to increase your revenues and diversify your solution sets for your customers. Fantastic. Sam Valame from At Point, thank you again for joining us on the show. Folks, Erick and I are going to take a quick break here.

When we come back on the other side, we’re going to share a few final thoughts. About this very interesting conversation with Sam. Have a little fun, wrap up the show, stick around. We are going to be right back.

And welcome back to part three of this episode of the MSP chat podcast. Great conversation there. It’s really interesting Erick, I, in a way, two things are really particularly interesting about that. One is. I set it up as a data and a data management conversation, and a lot of what we talked about didn’t have all that much to do with data in a sense.

And then the other thing that struck me, and I’m sure it struck you as well, is how consistently, when we have these, AI focused conversations on the podcast with people who really spend a lot of time thinking deeply about this topic. It, you find out right away that the way to approach this is not to think about it in terms of tools or licenses or deployment or management is all about.

Consulting and providing strategic value to the end user and, business process optimization, workflow optimization. We’re going to understand how your business operates, where the pain points are. We’re going to help you get more effective, more efficient, more profitable. AI is going to be how we do that.

Data is what’s going to enable AI to do that. But the real conversation we’re having is about. Helping you be more successful through the smart application of technology. Yeah, rich. It’s a completely different opportunity than what MSPs are used to that aren’t already doing some sort of, business process optimization or management.

I like, and we’ve heard that for years in the industry. It’s like business process optimization. That’s one of the. One of the higher level strategic values that you can deliver to your clients when you do that. And it’s not something that I typically run into when I’m talking to partners or working with partners, the larger ones, yes.

But for the folks that are delivering services to the SMB, who are the large, probably the, I would say from MSP is the largest target for their services in general are going to be, The SMBs that a smaller percentage will be, delivering services to the mid market and then a smaller percentage to the enterprise, right?

More in kind of in a co managed relationship. But when we own that strategic relationship, we are the the IT department and we’re looking to add value and not be seen as a commodity or a cost center moving into this type of consulting work with AI, I think is the ticket. I love and while we were recording with Sam Rich, I was chatting you on the side when we were talking about this and I said, virtual AI officer, question mark and Sam brought it up.

He said, oh yeah, VAIO. And I think that’s a thing. I think that, again, not to have partners spin a lot more plates, but look at this as I’m building another division of the organization, it starts with. Someone that can manage and lead these conversations. And I think it will create a tremendous amount [00:45:00] of additional stickiness when we are focusing on these critical things that a business owner thinks about, but may not think about getting it from their MSP.

Yeah, I totally agree. And anytime you’re talking about a service. That begins with the letter V and ends with the letter O, whether that’s V C I O, V C V A I, officer. That, that word officer is important. It means that what you’re doing is strategic to the organization. It is an executive level service that you’re providing.

And yeah, you do that well. And I think you’re totally right, Erick. That is extremely sticky. So I’m going to claim that basically said at first. So if anybody hears, be AIO or virtual AI officer, I’m going to claim that we claimed it first here on the MSP chat podcast, rich. Yes. And you’ll be hearing from our attorney.

So that that leaves us with time for just one last thing this week on the MSP chat podcast folks. And as long as we’re talking about AI. Let’s just talk about it a little bit more Erick here, because, financial services firms, they’ve been using generative AI pretty much since the debut of chat GPT to streamline various work processes, they’re even using it in or tools like it in very sophisticated ways to accelerate analysis and crunch numbers.

AI is really good at that. Very recently there was an ETF. That is built around a portfolio 100 percent selected by AI, which is something that we haven’t actually seen before. This is fry. The the firm is called intelligent alpha. It was created by a parent company. Called Deepwater Asset Management.

This ETI uses GPT, Claude and Gemini to assemble an investment portfolio, and it’s been told a few very broad parameters. That the fund is interested in investing in AI Latin American equities, Asian equities, renewables, energy, one or two other things. So here’s where we want the investments to focus.

You go out and tell us what to invest in and without any sort of human oversight, we’re going to go out, build that portfolio, buy exactly what you told us to buy. And what’s interesting and significant about this Erick is the service is not just going out onto the web and, reading the wall street journal or whatever the LLM under this has been trained on the writing and the thinking and the biographies of famous investors Warren Buffett Peter Singer.

I’m looking for some of the more, some of the other names that they have trained to this thing to to mimic Stanley Druckenmiller. If you’re in the investing world, you’ve heard of some of these people. So they have used three different LLMs to train their own, their custom LLM to think like Warren Buffett and some of these other investors go out and make these investments.

And they’re going to sit back and see if AI outperforms human portfolio managers. I’m very interested in this story, Rich. And You know something that I don’t think that the etf will be recommending is bitcoins or stable coins or doge coins or any of that stuff. Cause I know that some of these investors, some are in, but I know where I’m Buffett is definitely not not an investor in any of those kinds of investments, but interesting ETF I’m going to keep an eye on it.

Yeah. Yeah. No, it’ll be, it’ll be very interesting. Yeah. To see how it does and I’ll say this. i’m happy to let other people test it out I don’t know that I want to put my 401k in the hands, of artificial intelligence just yet but I will be interested to see how it does i’m with you All right, folks.

That is all the time we’ve got for you this week on the msp chat podcast Thank you so much for joining us. We’re gonna have another episode for you in a week’s time Until then, I will just remind you, this is both a video and an audio podcast. If you are listening to us, but might like to check us out on video, go to YouTube, look up MSP chat.

You’ll find us there. If you are watching the YouTube version of the show, but you’re into audio podcasts too go to wherever it is. You get your audio podcasts and look us up there as well. You are sure to find us either way. Please subscribe. Great review. It helps other people find and enjoy the show just as much as you do.

This show is produced by the great Russ Johns. It is edited by the also great Riley Simpson. They are part of the team with us here at Channel Master, the organization responsible for the show. They are ready, willing, and able To do a podcast for you, if you’d like to, and podcasts are a tiny sliver.

What we do for our clients at Channel Master to learn more about that, go to our website, www. channelmaster. com. Channel Master has a sister organization called MSP Master. That’s Erick. Working directly with MSPs to grow and optimize their business. You can learn more about that organization at www.mspmaster.com.

So once again, we thank you for joining us. We’re gonna see you in a week, folks. Until then please remember, you just can’t spell channel without [00:50:00] MSP.