SMB Community Podcast

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-history
MSP 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-report
AI 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.

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.

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?

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/

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 MSPs
Question 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 training
Meetings: How to run better weekly leadership meetings
ChannelCon: Managed Intelligence Alliance and MSP industry standards
Tales 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.

Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.