Dave Sobel is the host of the podcast "The Business of Tech" and co-host of the podcast "Killing IT." In addition, he wrote Virtualization: Defined. Sobel is regarded as a leading expert in the delivery of technology services, with broad experience in both technology and business.
For this week's video, Sobel looks at how companies can conduct ethical business practices in a time where many are consumed with maximum profit and getting the best deal over ensuring both sides come out ahead.
Transcript follows below
Hey there. Thanks for joining me for this. This was originally intended to be a keynote presentation at the Channel Partners Expo and Conference in Las Vegas. But with that event being canceled, there's no reason we can't have this conversation, and you get that valuable information.
So thank you for joining me for this session, "Making Ethics Pay in a World of Big Tech and Distrust." I'm Dave Sobel. I'm currently the host of a podcast called "The Business of Tech." It's a five-minute daily news and commentary podcast, and it draws on my career-long experience of delivering technology services. I'm a technologist by background with a degree in computer science. So, I've actually been a developer and an implementer. I founded a managed services provider here in the Washington, D.C., area, serving not-for-profit associations, healthcare organizations, delivering technology services. During that time, I got super involved with the community as a member of CompTIA, as well as helping to found peer groups in Europe to grow the idea of sharing information.
I moved over to be a vendor channel chief for a couple of different vendors, first selling Level Platforms to AVG then helping with getting GFI becoming LOGICnow and selling that to SolarWinds. And now I'm positioning myself and looking at being an independent analyst. I'm here to provide insight and analysis for this space about what's coming and where I think the trends are.
Trust in the age of constant data breaches
What I want to talk about today is this problem of trust. Data is leaking everywhere, and it is rampant. Two of the examples I've been setting recently, what happened to Wawa in 2019. They had a breach in March, it wasn't discovered until December, a bunch of customer information around billing information, credit card information was all released. They had to disclose and let that information come out.
And password sharing attacks like what's happening with Ring. It's kind of creepy because they've got hackers that are breaking in and then talking to children and trying to scare families and really leveraging it in a social engineering style attack. And there's a real level of degrading trust. NATO-linked researchers did some investigation to try and understand what was going on, on social media. And they bought some fake social media accounts and were looking at how quickly they might get shut down. The companies really didn't find them and never found out their activities. Of course, the Facebook involved with the Cambridge Analytica stuff, that's just dominating the way that we discuss. And another story I've been tracking on my podcast, what happens from the ransomware perspective.
We could look at what's happening in the state of Louisiana. Local governments getting hit by numbers of different ransomwares at both the municipality level and local governments. And then it got so bad that at one point New Orleans, the entire city was under attack, had multiple agencies all infected at the same time. The city was forced to declare a State of Emergency to get those additional resources in. Let that settle in.
New Orleans declared a state of emergency the exact same way that they handled Katrina. That was the same mechanism. So, you've got Katrina and you've got ransomware attacks leveraging the same emergency response techniques. That shows you the level of difficulty that we're dealing with out there. In fact, recently the Louisiana Secretary of State Kyle Ardoin actually spoke to his fellow secretaries of state and specifically called out managed services providers as part of the problem and that they're not delivering enough security services and enough security insights.
I had him on my show and we had a long discussion about the impact of these service providers and what he was looking at. And he said, bluntly, that if service providers are not providing all of the security options, it's malpractice. And so you can catch that extended episode. I'd encourage you to do that because it's really insightful from a background. But that gives you a sense of where we're at culturally.
The Pew Research Center did a survey of the impact on society that tech companies have on the way things are going. And consistently that had been sort of 70% of the population was saying that was a positive influence, but between 2015 and 2019, that dropped 21 points in terms of trust. That's an aggressive drop. And by the way, let's put the cherry on top of this by saying, CIOs are concerned that IT is not providing enough of a competitive edge.
So you've got this situation where all of our trust is falling out, the big tech companies are not helping with what's going on from a headlines perspective; we've got security issues running rampant. We're not in a great place from a trust perspective. I want to start by saying the blocking and tackling stuff, I'm not spending time here during this presentation, but I'm assuming you're getting your security house in order. Because seriously you're going to go out of business if you don't. If you're not delivering true levels of basic security beyond just backups and patch management and antivirus, you've got a bigger problem, but I'm not going to talk about that because the impact of that is pretty ugly and already covered.
If you haven't caught the case, there's actually a lawsuit now where a customer who lost $1.7 million in a phishing scam is suing their managed services provider for the losses of $1.7 million. And, in fact, in the complaint, the customer is reflecting back the contract language.
Boardman relied upon the representatives of Involta and accepted Involta's offer to let Boardman's IT staff focus on innovation and business-oriented tasks while Involta was to protect Boardman's bottom line with secure, highly available services hosted in Involta's enterprise-class facilities. This is pulled from their contract language and the lawsuit itself. Because the trusted advisor is dead. That model is not working. Customers are not looking for just advice. They want investment in business outcomes: 61% of channel partners are transforming their organizations to focus on delivering business outcomes, but customer expectations stand at 78% expecting that. So, you can't just be advising.
Collaboration and investment over outperforming competitors
Now, I promised some insight so let me give you some of that great insight into where we might go, and it's going to come from kind of an unusual place. I'm going to take us to explore Amish country.
Now you go, "Dave, why are you taking us to Amish country?" Hear me out because I think they got the information we're going to learn is super interesting. Because, if you look, sociologist David Kraybill has done some investigation into Amish businesses and what he found was that after five years, 95% of them are still operating. And that number of success is way higher than general society.
So, what can we learn from the Amish? What are the principles that drive this? And interestingly, there's three major factors that contribute to this success. The first is the idea of the way Amish look at competition. They don't view trade secrets and proprietary information in any of the same ways that we do. And an example of this is one farmer will teach his neighbor his farming techniques because he views them as collaborative to work together produce a better output. He knows that if the market's doing better in the engagement together, he's helping his competition but his competition's also going to help him, that it drives everybody forward. They don't have this idea of, "I must protect my secrets."
Additionally, they have some very different views of finances. They're not absolute in the way that we are in general society about every single dollar or every single accounting measure. As an example, an Amish man was selling to another family within his community that he didn't know particularly well. And as it was getting close to the end of the deal they'd been communicating and the buyer was just a little bit short and wasn't quite there in terms of their ability to raise the financing. And so the seller said, "You know what I'm going to do? I'm going to leave $10,000 in the account. That way you can get finished set up, you can transfer the business, and you can just pay me back when you're ready."
Again, let that sink in. Think about the way that we do business and the idea of someone just trusting and investing that way and collaborating on a financial level, that's just a really different way but it shows the way they are thinking long term about those deals and about joint success in a very different way than we necessarily do.
And the final big factor is the way they view the market. They're not necessarily looking at everything as, "I must get the best price every single time." In fact, the Amish are found to invest more in their local community even if it's not necessarily the best price, because they understand the value of collaboration and investing in their own market. And again, these are really different.
But when we think about the frame of ethics, there's actually some lessons we can take from that. When we think about competition, see what's happened from peer groups, the way people collaborate and actually share information really openly within our space and those businesses outperform because they do have this very different view of competition.
How about the ones on financials, where they're actually finding ways to collaborate and not necessarily dealing with it in that same way? In fact, I would point to the way that when I did my sale was much that kind of way. We were very collaborative to make sure the deal worked for everybody because that was the end goal. And think about it from a market perspective, what if we invest in our communities and not necessarily always go for the best price or the most aggressive pricing or maximizing profit? What if we actually look at that? And it's timely. I'm recording this presentation right at a time where we're in something of a societal push and you see technology companies looking at the community and making leadership moves to invest that way. And it's having a positive effect in their perception. So, when you think about ethics, I want to actually make it concrete, because again, I'm giving you some specific ideas, but what about taking opportunity out there?
Consider the Contract for the Web
I want to point you to a resource called the Contract for the Web. Tim Berners-Lee, the founder of the internet, helped put this together. And it's a series of principles around the idea of building a better technology piece. And let's dive in just quickly on the "Companies" section. There are some basic principles, and I want to give you an example of this because it becomes quickly a consulting opportunity.
Think about principle five, the idea of respecting and protecting people's privacy and personal data to build online trust. When you dive into this principle, it actually discusses all of the privacy policies and all of the way you can handle data and do that in an open and transparent way. And if you flip it just easily, it's all of the consulting things you need to do with your customers. It becomes very clear that it's a very strategic way of putting a framework on this discussion.
So if you're looking for things that you can dive into, this contract for the web gives you a framework, not only for your own company, but to go out to your customers and help them do better. Because by leveraging this idea of doing better investing in ethics and pushing the industry forward that way, we can actually make a difference. Because, by the way, we're in that position where we need to. Trust is on the down and this gives us a way of moving forward.
About the author
Dave Sobel is the host of the podcast "The Business of Tech," co-host of the podcast "Killing IT" and authored the book Virtualization: Defined. Sobel is regarded as a leading expert in the delivery of technology services, with broad experience in both technology and business. He owned and operated an IT solution provider and MSP for more than a decade, and has worked for vendors such as Level Platforms, GFI, LOGICnow and SolarWinds, leading community, event, marketing, and product strategies, as well as M&A activities. Sobel has received multiple industry recognitions, including CRN Channel Chief, CRN UK A-List, Channel Futures Circle of Excellence winner, Channel Pro's 20/20 Visionaries and MSPmentor 250.