Business of Tech: Daily 10-Minute IT Services Insights

SMBs Boost Cybersecurity Spending but Lack Readiness; AWS Outage Highlights Knowledge Loss

Oct 21, 2025

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Small and medium-sized businesses (SMBs) are significantly increasing their spending on cybersecurity solutions, with managed detection and response (MDR) and network detection and response (NDR) expected to grow by 107% and 118%, respectively. However, despite this financial commitment, a recent study reveals that 83% of SMBs do not conduct formal security awareness training, and nearly half lack established incident response protocols. This operational gap is concerning, as the average financial loss from a security incident for these businesses is estimated at $1.6 million. The study emphasizes that technology alone cannot address the underlying issues of process and expertise that leave many businesses vulnerable.

Microsoft's sixth annual digital defense report highlights a troubling trend where over half of cyberattacks are now financially motivated, with ransomware and extortion being primary drivers. Critical public services, such as hospitals and local governments, are particularly at risk due to limited cybersecurity budgets and inadequate incident response capabilities. Nation-state actors are also evolving their tactics, with countries like China and North Korea increasing their cyber espionage efforts. Microsoft stresses the importance of organizations staying informed about threats and collaborating with industry peers to enhance their defenses.

For managed service providers (MSPs), this situation presents a unique opportunity. Clients are investing in cybersecurity tools but require assistance in operationalizing these tools into effective security measures. MSPs can help by building processes, training personnel, and conducting tabletop exercises to ensure that businesses are not just purchasing products but are genuinely prepared for potential threats. The podcast emphasizes that cybersecurity is not merely about acquiring tools; it is fundamentally about preparedness and having a well-executed plan tailored to the business's needs.

Additionally, the episode discusses recent product updates from various vendors, including Nerdio, SureWeb, and Veeam, which are introducing new AI tools and partner updates to enhance MSP operations. The importance of human capital in maintaining complex systems is also highlighted, particularly in light of Amazon's recent AWS outage, which was exacerbated by significant layoffs leading to a loss of institutional knowledge. The podcast concludes with a call for MSPs to audit their technology stacks and focus on the impact of workflows rather than just features, ensuring that they are prepared for any chaos that may arise.

Four things to know today

00:00 The Cybersecurity Paradox: SMBs Spend More Than Ever, But Stay Just as Vulnerable

04:21 ConnectWise’s Critical Automate Flaws Highlight the Growing Risk of On-Prem RMMs

06:11 From Layoffs to Latency: Amazon’s DNS Outage Reveals the True Cost of Lost Expertise

09:06 AI, Compliance, and Cloud PCs: Vendors Race to Redefine MSP Efficiency Ahead of Microsoft’s 2025 Shift

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