Small and midsize businesses (SMBs) in the UK have doubled their use of AI tools over the last year, according to Google Cloud.

That includes Google's Gemini models but also Gemini Enterprise and AI Studio, said Maureen Costello, vice president for UK and Ireland at Google Cloud, in a blog post.

Costello said that the UK's five million-plus SMBs were the backbone of its economy. "Now, we're seeing these critical businesses begin to put AI to work, in order to operate more efficiently, move faster, and ultimately deliver better outcomes for their customers," she wrote.

She added: "At Google Cloud, we have a front row seat to this shift: SMBs have long utilized platforms like Google Workspace, and today, they're transforming with Google AI."

Partner bookings grew more than 100% last year, and the company told ITPRO that its partners contributed nearly 80% of Google Cloud's incremental revenue growth last year.

SMB struggles

Companies of all sizes have struggled with the AI rollout, in particular as return on investment (ROI) has proven elusive – a problem as costs of AI have started to rise.

Earlier this year, OpenAI said that SMBs were finding success with AI tools, though take-up remained sluggish in some parts of the UK. While more than nine in ten London-based SMBs were using AI, that was true of just one quarter in Yorkshire and Humber.

Microsoft noted that fear of falling behind was driving record adoption rates among UK businesses, with 84% now using AI for competitive advantages, versus 40% in 2025.

How SMEs use AI

According to Costello, SMBs have turned to AI for customer support, to automate repetitive actions in payroll and accounting, and to leverage data at work – without training to become data scientists.

She added that AI is helping smaller companies "rapidly create and implement new designs" for marketing. Smaller companies are also starting to let employees build their own AI agents for their day-to-day work.

She points to fintech Neural Alpha, which is using Gemini to read unstructured reports to automate digging out key facts, while security firm Sep 2 has developed autonomous AI agents for always-on threat modelling using Gemini Enterprise.

Design agency Sunhouse turned to Gemini Enterprise to hunt through its archives that are stored on Google Drive, events company Terrapinn automated manual tasks, and telecoms provider used Google Cloud AI tools to build autonomous workflows and make better use of data.

Google Cloud for British Business

Google pointed to a new set of resources designed to help smaller businesses navigate the new AI world.

That includes a new SMB Learning Path and Gemini Enterprise Agent Ready programme, which offers specialised agentic AI training. There's also Google Skills for Organisations, a free, on-demand learning platform that pulls together 3,000 AI courses, as well as Google's own certification platform.

"Whether you want to train your existing technical teams or democratize data tools across your entire workforce, these programs will help you build an AI-ready organization," said Costello.

Small and medium-sized businesses (SMBs) are increasingly prioritizing operational challenges over cybersecurity concerns, new research shows, and this trend is creating new opportunities for MSPs.

That’s according to the CyberSmart MSP Survey 2026 report, which surveyed 350 MSPs across the UK and Ireland. The study found that 46% of MSP customers are now more concerned about issues such as inflation and rising costs than security risks, despite growing threat levels.

Meanwhile, MSPs themselves identified AI-driven threats as the number one security challenge facing the channel, with almost half (49%) ranking AI as their top concern for the second year running.

Inflation and increasing costs jumped from fifth to third place (38%), likely driven by geopolitical instability and economic uncertainty.

MSPs also remain a key target for cyber criminals, the study found, with three-quarters of respondents revealing that they were hit by at least one breach over the last twelve months.

Over half (54%), meanwhile, said they had experienced two or more breaches over the same period, while 32% reported three or more incidents.

CyberSmart said the findings highlight the growing disconnect between rising cyber risk and the day-to-day operational pressures being faced by SMB customers.

“Cyber risk and economic pressure are now inseparable,” commented Jamie Akhtar, CyberSmart’s CEO and co-founder. “MSPs can no longer sell cybersecurity in isolation when rising costs dominate customer priorities. The real challenge has moved beyond the tech stack into liability, compliance and accountability.”

Notably, more than half (59%) of MSPs believe their customers are now at a greater cyber risk than they were a year ago.

Despite this, 46% of respondents said inflation and spiraling costs are now viewed as a greater threat to customers than ransomware and malware (41%), emerging AI threats (37%), and supply chain risks (25%).

Increased demand for compliance support

According to CyberSmart, the role of MSPs appears to be evolving beyond traditional IT and security services amid growing customer expectations around compliance.

The survey found that 61% of customers now expect MSPs to assist with these requirements, with providers responding by increasing investment in compliance and regulatory services.

CyberSmart added that MSP spending in this area has increased from 64% to 72% year-on-year.

With this greater demand, many MSPs are now positioning themselves as managed compliance service providers alongside their cybersecurity and infrastructure roles – particularly as frameworks such as Cyber Essentials are adapting to keep companies accountable for security commitments.

Shifting MSP investment priorities

As SMBs increasingly seek support in maintaining compliance throughout the year, MSPs said they are prioritizing investments in staff training (51%), continuous monitoring capabilities (46%), as well as proactive risk management (44%) across the next one to three years.

Amid this shift, the study also revealed that scrutiny on MSPs may be beginning to stabilize, with 70% reporting increased customer oversight in 2026 – down slightly from 77% last year.

CyberSmart said this decrease suggests security and compliance expectations are becoming a more standardized element of procurement and vendor management processes.

“For SMEs, the key is embedding security into day-to-day operations and working with trusted partners to maintain resilience without adding unnecessary complexity or cost,” Akhtar added.

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Many small and medium-sized businesses (SMBs) might struggle to afford third-party relationships - like those with channel partners - or have a specific need or capacity for models that see someone closely manage their technology for them.

Instead, they might want to do it themselves, creating a DIY-style initiative that builds a system with parts from many different platforms, tools, or cloud services.

Could such an approach be dangerous? Essentially, bringing with it risks to security, among other issues for internal operations such as compliance, delivery, and productivity. Or, is it entirely possible? And, if it can be achieved, how would this be done?

Eleanor Watson is a member of the IEEE, the world’s largest technical professional organization dedicated to advancing technology for the benefit of humanity. As an AI ethics engineer, she works principally as a machine intelligence researcher.

Watson is in agreement that for SMBs with limited budgets, the use of channel partners “might not be feasible”. She believes the DIY approach is sound and can work for SMBs but only “when treated as a disciplined strategy, rather than cost-cutting”.

“As a first step, businesses should map business-essential functions (finance, HR, sales, compliance) and assign clear ownership for each system’s uptime and data security,” she explains.

“Invest in architecture first: build a clean, modular stack using open standards (SSO, OAuth2, API-first systems), and document relentlessly. Begin with a manageable scope – self-hosted basics or low-code automation – while maintaining flexibility to integrate external providers later.”

That’s not to say there won’t be any challenges with such an implementation, as Watson is happy to concede. “Achieving interoperability without fragility is the primary challenge,” she warns. “Vendor APIs evolve; dependencies break. Without dedicated integration expertise, SMBs must maintain test environments and version control for configurations.”

Cybersecurity resilience is “equally demanding”, she adds, stating: “A single ransomware incident or supply-chain compromise can cripple an unsegmented network. Apply zero-trust principles – robust identity management, privilege separation, encrypted backups – as foundational defaults, not afterthoughts.”

Risks vs rewards

The most common types of IT channel partners are the likes of value-added resellers (VARs), systems integrators (SIs), managed service providers (MSPs), managed security service providers (MSSPs), and consultants. Vendors they use often include AWS, Google, IBM, and Microsoft, and a channel partner usually provides online training and certification to an SMB.

Ian Anderson, senior director of partner sales at Park Place Technologies, understands the “temptation” of DIY but concurs with Watson, believing the risks must be clearly identified and understood first if SMBs push ahead with this approach.

He cites how a good partner might “understand the business, environment, and resources in a way a DIY approach never can,” but does admit: “The reality is most channel partners have gaps in their service range. They can’t be experts in everything. This is why the smartest SMBs look for partners who are, in turn, supported by specialist service providers to fill those gaps – whether professional or managed services.”

However, for those who still wish to go it alone, Watson has more advice to follow. “Meaningful savings come from open-source platforms, consumption-priced cloud services, and internal automation replacing external consultancy,” she explains. “AI copilots for documentation, compliance drafting, or troubleshooting can substantially reduce administrative overheads.”

Watson also points to the issue of believing you are making savings when actually you might cost yourself more in the long run, adding: “The real economic advantage is agility: direct system control enables rapid iteration without vendor lock-in. However, cheap setups requiring costly rescue operations are common – beware of these false economies.”

Smart work vs hard work

The risk of a DIY approach is greater for mid-sized organizations compared to those smaller businesses, according to Matt Fox, chief operating officer at technology consultancy TXP.

“If mid-sized organizations are to avoid a piecemeal approach to IT modernization, they require a joined-up approach to technology and people,” he says.

“Mid-sized organizations can work smarter, not harder, by working with an external IT provider that has the skills and resources required to fully address their IT needs.”

Fox adds: “However, channel providers need to go beyond simply augmenting team numbers or selling products to provide a transformational service. A successful relationship with a channel partner will involve at least some element of knowledge transfer as experts share their expertise with their partner’s team.

“This ‘teacher-learner’ relationship brings value beyond a simple transaction to working with the channel, and it ought to be the gold standard when working with partners for IT implementation.”

In the real world, there are no clear rules on when to DIY, when to begin with a channel partner, or when to move from doing it yourself to getting third-party help and guidance.

But Siyar Isik, CEO of Eskritor, an AI-powered writing assistant tool, believes DIY is possible when the right guardrails are in place. “Not every small business has to lean on channel partners for IT,” he admits.

“Some can manage on their own, but only if they stay realistic about what is possible.”

Isik’s first advice would be “to start simple” with tools like Google Workspace or Microsoft 365, which have been built with small teams in mind.

“They come with great support communities and plenty of clear documentation. That takes a lot of pressure off the team,” he says.

While it is possible to reduce overheads by cutting costs and avoiding long contracts, there are clear areas where it would be dangerous to compromise, according to Isik.

“Data protection, backups, patching, and continuity planning need to be airtight,” he insists.

“Skipping those is like skipping insurance. A DIY approach can work, but only if a business goes in with clear eyes about its limits and refuses to cut corners on the areas that matter most.”

Weighing up the time outlay

Watson is also concerned about other pitfalls. “Most DIY IT failures stem from underestimating complexity debt,” she explains.

“Integration across accounting, customer relationship management (CRM), and inventory systems can spiral without professional oversight. Security hardening, patch management, and compliance consume more time than expected. Staff turnover erases undocumented expertise, orphaning systems.”

And although the use of Agentic AI tools in an SMB setting might offer simplified management, these can also “amplify errors when unsupervised”, Watson warns.

“Autonomous misconfiguration – AI making confident but destructive changes without full context – is an emerging risk,” she highlights. “Governance remains essential regardless of tooling intelligence.”

There are also real benefits, however, according to Watson. These include full control over architecture, data, and priorities, plus faster iteration and innovation cycles. Deep understanding of your digital infrastructure and reduced dependency on opaque vendor ecosystems are two more.

“Properly managed, DIY IT builds organisational technological literacy – a durable competitive asset,” she adds.

At BI Worldwide, a partner with 300+ Fortune 500 clients, there is clearly an appetite for help from customers who do not wish to go down the DIY path or can’t do so. Deborah Watson, its client and solutions strategy director, suggests asking what a good partner might “bring to the table” before choosing one.

She explains: “This means asking the right questions: is your partner part of a programme that rewards them for investing in training, support, and customer success? If not, you may not be getting the full benefit of what a channel relationship can offer.

“SMBs should ask whether their chosen partner is part of such a programme – it can be a strong indicator of the quality and reliability of the support they’ll receive. Understanding whether their partner is supported in this way can help assess the long-term viability of a DIY approach versus a channel-supported model.”

Planning for growth

For Colin Crow, managing director at digital transformation specialist Nexer Enterprise Applications, the big risk with DIY is “you only know what you know”.

“You might be fortunate enough to have a small team of tech talent in-house, but that doesn’t necessarily mean they are experts in the specifics of the new system you’re implementing or on how to manage the change across the organization,” he says.

“With a partner, you can get the best of both worlds: control over your vision, with expertise on tap to keep you on track.”

However, Zayed Ahmed – who started as a call center agent before founding outsourcing company ASL BPO – believes the go-it-alone route has plenty of positives. They believe it’s just about understanding where the pitfalls are on your journey that might then mean you need greater levels of outsourced help.

“I see very few who succeed with a pure DIY approach,” he says. “They often start there, setting up basic tools like email platforms, cloud storage, or password managers. It feels manageable at the beginning and helps keep costs down.

“But as soon as compliance or security comes into the picture, things change quickly. Most internal teams cannot keep up with constant updates in regulations or the latest cyber threats. Missed patches, poor backup routines, or weak access controls can cost far more than what was saved upfront."

That is why Ahmed suggests SMBs heed this piece of advice: “The question should not be ‘DIY or partner?’ but ‘what mix works best for your stage of growth?’”

More than four-in-ten US small businesses have experienced a cyber attack, but they're not necessarily going the right way about avoiding one in the future.

A survey by cybersecurity platform Guardz found that 80% of respondents believe the need for cybersecurity in their industries has increased over the past year, with 43% of all US-based SMBs having already experienced a cyber attack.

Just over six-in-ten said they're expecting greater overall cyber risks in the year to come.

However, 52% of SMBs still rely on an untrained internal staff member or the business owners themselves to manage critical security functions, without support from professionals.

Only 34% of SMB owners have a formal incident response or continuity plan developed with a cybersecurity professional, and 27% lack cyber insurance. In one-third of cases, the business owner personally handles alerts and incident resolution.

Another 13% of SMBs rely on untrained employees to handle alerts.

“In 2025, SMBs are confronting the reality that cyber threats are no longer distant possibilities, but daily risks with the potential to disrupt or even destroy a business,” said Dor Eisner, CEO and co-founder of Guardz.

The threats facing SMBs

SMBs cited phishing, ransomware, and employee mistakes as the most common threats. For 45%, employee negligence was their biggest cybersecurity concern, particularly in the education sector.

While 43% of SMBs report they experienced a cyber attack in the past five years, 27% said it had happened in the past 12 months.

On a more positive note, 64% of business owners reported recovering quickly, marking a sign of improvement in recent years, the study noted. Just 3% said they faced severe, lasting damage.

Still work to be done

The study from Guardz warned there’s still plenty of work to be done in terms of bolstering security capabilities, however.

Although 58% of SMBs use network firewalls, 52% employ email spam filters, and 41% have endpoint protection, 26% don't conduct regular penetration tests or security assessments.

Nearly half (42%) of SMBs are also worried about outdated technologies, with healthcare businesses the most concerned.

Half of SMBs reported increasing their cybersecurity budgets, with 17% significantly increasing their spend – but not too much, with 16% allocating less than $50 per user per year.

Nearly a third, meanwhile, don’t know exactly how much they spend on cybersecurity at all.

SMBs are turning to partners

As threats mount, SMBs are increasingly looking to external partners for help. Those working with a managed service provider (MSP) cited a fear of cyber attacks and a sense of responsibility to customers and stakeholders as their main reasons.

Researchers also found 80% of SMBs with a formal incident response plan in place were able to avoid major damage during an attack.

”This research confirms that businesses increasingly recognize the value of experienced service partners. Those that try to manage risk on their own lack the expertise, resources, and tools needed to stay resilient," said Eisner.

"The data shows that organizations with strong preparation, grounded in clear processes and trusted partners, are far better positioned to avoid disruption and maintain continuity.”

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Small and medium-sized businesses (SMBs) across the UK are struggling to get cybersecurity strategy plans up and running, according to new research.

Analysis from Kaspersky shows more than two-thirds (67%) of SMBs lack "fully actionable" cybersecurity strategies. This means that while many have developed theoretical plans for how to tackle growing security threats, real-world implementation is falling flat.

These shortcomings are leaving a concerning number of businesses at higher risk of attacks amidst an escalating cyber threat landscape, the company warned.

"Cybersecurity can't remain a theoretical exercise," commented Oscar Suela, Kaspersky general manager, Iberia, UK & Ireland. "The findings show that while many SMBs have well-intentioned strategies, these often stay on paper."

So what's hempering cybersecurity strategy plans? A key factor here lies in a chronic disconnect between executives and IT leaders on the importance of cybersecurity, the study noted.

Nearly one-quarter (22%) of IT leaders said C-suite executives do not fully understand the strategic importance of cybersecurity, which is "slowing progress towards effective, organization-wide protection".

While strategies are falling flat, SMBs are turning to outside expertise to shore up defenses, the study noted. More than one-third (38%) of small businesses are now engaging with external cybersecurity partners.

These partners are helping bridge gaps, enabling IT leaders to build long-term sustainable security strategies.

SMBs are increasingly looking for partners that provide continuous awareness training for staff, particularly in defending against threats such as phishing, while other key focus areas include those with incident response capabilities.

Getting plans off the ground

Despite an increased focus on managed services, IT leaders are still pushing to develop their own internal strategies, the study noted. But for many that's easier said than done.

As a starting point, Kaspersky said that IT leaders should focus primarily on implementing "practical, measurable" security practices that can be easily integrated within daily operations.

Simply put, the study found that starting small and building thereafter is the best approach to building a robust long-term strategy. Investment in cyber awareness training and education for staff is also critical, Kaspersky noted.

Finally, emphasizing the importance of cybersecurity to leadership is among the most crucial aspects of any strategy during its embryonic stages. Suela said that creating alignment between IT and leaders is vital.

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Small businesses are worried they won't be able to give an accurate report on their carbon footprint, and that's largely down to tech partners and vendors failing to give clear data.

That's according to a survey of 1,200 business decision makers by Sapio on behalf of Wasabi, which found that two-thirds of SMBs believe they can provide accurate information about the emissions of their tech stack, versus three-quarters of larger companies.

Such information is increasingly important not just for a company's own sustainability goals, but to help meet incoming regulations, notably the UK's Sustainability Disclosure Requirements, which are expected to begin enforcement next year.

While that is expected to initially focus on larger companies, the report noted that the vast majority of British businesses are in the SMB range, and fewer than half believe they have reliable figures when it comes to public cloud contributions to carbon footprints.

"SMEs are the unsung heroes of sustainability; quietly, but powerfully driving progress toward broader environmental goals," said Kevin Dunn, Vice President and General Manager of EMEA at Wasabi.

"To keep that momentum going, they need real support from their technology partners.”

Dunn added that the environmental impact of digital infrastructure is “hidden in a black box”, and this trend is harming smaller businesses.

“Without clear, trustworthy emissions data from tech providers, SMEs are flying blind, and that puts them at real risk,” he said. “With the right transparency and backing, these businesses can become an even greater force for sustainable change than they already are."

Small businesses need scope 3 assistance

Emissions tracked by companies are divided into three categories: Scope 1, which refers to assets directly owned by a business, such as buildings; Scope 2, which includes indirect emissions from energy used for work; and Scope 3, which refers to emissions in the supply chain or by providers, such as cloud vendors.

Last week, Google issued its latest emissions report, showing cuts to Scope 1 and Scope 2 emissions, but an increase of 22% in Scope 3 - largely due to ongoing AI infrastructure investments.

The Wasabi report noted that Scope 3 emissions make up as much as three-quarters of a company's total carbon footprint, highlighting the importance of gathering data on those emissions from partners and suppliers.

Half of small businesses told Wasabi their technology partners and vendors weren't "giving them a clear or reliable picture," while 29% said the high number of vendors they work with was "muddying the waters".

Because of that, 47% of firms said they need their technology providers to do more when it comes to sharing emissions data. Moreover, they need to ensure it's trustworthy and accurate, as this was a concern raised by 49% of respondents.

Poor data is hampering progress

Four-in-ten SMBs and large businesses surveyed said they struggled to make informed decisions because of poor data, impairing future tech investment.

While 57% of the small businesses surveyed said they felt confident in the accuracy of their emissions data for on-premises and private cloud technologies, the figure fell to 44% when it came to public cloud.

Despite such challenges, two-thirds of small firms said they believe they can still provide accurate data about their emissions with regards to technology infrastructure.

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Kaseya has announced the appointment of Rania Succar as its new CEO as the vendor looks to accelerate growth for its IT and security management platform.

A seasoned industry leader, Succar arrives with a track record of driving business growth and driving customer-focused innovation, most recently at financial technology specialist Intuit. She has also previously worked for Google, McKinsey, and Merrill Lynch.

In her new role as CEO, Kaseya said Succar will leverage her experience to lead the company’s next phase of innovation, platform depth, and customer-centric growth.

“It’s a privilege to join Kaseya and contribute to a mission that deeply resonates with me,” Succar said in an announcement. “Kaseya plays a vital role—alongside its MSP partners in more than 170 countries — in helping small and mid-sized businesses thrive in an increasingly complex digital landscape.

“I look forward to working hand in hand with our MSP partners to drive even greater outcomes for SMBs and to build on Kaseya’s strong foundation. The opportunity ahead is immense.”

During Succar’s nine year tenure at Intuit, she served as head of QuickBooks Money, where her teams helped deliver improved financial outcomes for businesses, including faster payments, easier access to capital, and smarter cash flow forecasting.

Under her leadership, the platform saw significant growth in payments volume and expanded access to capital for small businesses.

She also served as head of Inuit’s MailChimp business, where she is credited with driving revenue for small businesses through the introduction of advanced AI and SMS capabilities, expanding international reach, as well as leading the platform’s integration into the Intuit ecosystem.

Kaseya targets continued growth with new CEO

For Kaseya, Succar’s appointment follows a period of prolonged growth, with the company now serving 50,000 MSPs and internal IT customers that in turn support “hundreds of thousands” of SMBs through its IT and security management platform.

“We’re very proud of the scale and impact Kaseya has achieved—becoming a critical platform for Managed Service Providers (MSPs) supporting small and mid-sized businesses navigating increasingly complex IT and security demands,” commented Mike Triplett, chairman of the board at Kaseya and managing director at Insight Partners.

Succar moves into the role in the wake of Fred Voccola’s departure, with the latter having served as chief executive since 2015. In the search for a new CEO, Triplett said Kaseya sought a leader with the “vision and capability” to elevate its platform into one of the most essential tools for MSPs and the wider SMB ecosystem.

“Rania’s bold leadership and track record in building and scaling innovative, customer-centric businesses for the SMB market make her an ideal leader to guide Kaseya into its next chapter and potential IPO,” he added.

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More than half of UK small businesses increased their cybersecurity spending last year, with 8% saying the increase was significant.

Unsurprisingly, it was the IT and communications industry that recorded the highest increase in spending, with 10% of firms making a sizable investment alongside 52% who reported a “slight” increase.

Other sectors reporting significantly increased cybersecurity spending included health and social care, and the transport and logistics industry.

Notably, only two-in-ten firms told Bionic that they'd experienced a cyber attack during 2024, at odds with official figures.

"In contrast to our research, the UK government statistics show 50% of businesses reported some kind of cyber attack in 2024, with the most common being basic phishing attacks," said the Bionic’s Laura Court-Jones.

"This could indicate there is a lack of awareness around the types of cyber attacks small businesses could face. Something as simple as a malicious link in a phishing email could easily go missed by many."

The spending increase comes amid a period of heightened threats for small businesses across the country. Repeated warnings over the risks faced by SMBs have been issued by security agencies and industry providers alike over the last 18 months.

Neglecting cybersecurity can cost small businesses dear, research shows. Earlier this year, analysis from Vodafone Business found that inadequate security measures mean that UK firms are losing a combined £3.4 billion a year.

A single attack costs a small business an average of £3,398, rising to £5,001 for businesses with 50 or more employees; and more than a quarter of SMBs said a single attack could put them out of business.

The top threats for small businesses recorded by Vodafone were phishing, ransomware, and Distributed Denial of Service (DDoS) attacks.

SMB AI investment brings new cybersecurity challenges

The study from Bionic also found small businesses are keen on ramping up investment in generative AI tools. A quarter of the business owners told the firm they were very likely to start using AI in their business this year, with fewer than one-in-five saying they were not at all likely to do so.

This increased focus on AI adoption among SMBs is creating additional cybersecurity and data protection challenges, however.

A quarter said they were worried about inaccuracy, with businesses fearing that AI tools might generate unreliable results.

More than two-in-ten were worried about gaps in the knowledge of their workers, while a similar number were concerned about the lack of regulation surrounding AI, saying they were waiting for clearer guidelines before fully committing to using AI.

"Privacy and security could also be an issue, as handling customer data through AI could increase the risk of breaches or misuse. Some business owners may fear that AI could reduce the personal touch that sets their business apart, especially in customer service," said Les Roberts, senior content manager at Bionic.

"There may even be a simple resistance to change - adopting new technologies can be intimidating, particularly if the current processes are working well enough. These factors combined can make small business owners hesitant to embrace AI despite its potential benefits."

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Sage has added AI-driven insights, automation, and improved connectivity to its Sage 50 accountancy and payroll product in a bid to drive SMB efficiency.

The sixth of the company's products to integrate Sage Copilot, the new version of Sage 50 is now being rolled out to early adopters. Customers will be able to sign in using their Sage account, formerly Sage ID.

The aim is to help small and medium businesses (SMBs) work faster, improve cash flow, and stay protected from cyber threats. Users can now search for reports using natural language prompts and quickly generate cash flow, transaction, and sales summaries.

Purchase transactions can be automated to reduce errors, thanks to AI-powered data extraction and classification that reduces the need for manual data entry and potential mistakes, the company said.

Meanwhile, AI-powered fraud detection, two-factor authentication (2FA), and protection against automated attacks are designed to help businesses stay secure.

"Sage 50 has been the backbone of small business accounting for decades, and these new enhancements ensure it will remain a trusted tool for years to come," said Neal Watkins, EVP of accounting and HR at Sage.

"We know many of our customers rely on it, and we’re committed to making it even better by integrating AI and automation to save them time, reduce manual work, and improve cash flow. It’s safe to say Sage 50 is going from strength to strength and will continue to support SMBs for years to come."

Sage eyes long-term AI gains

Sage has more than two million SMB customers. It has already integrated Copilot into some of its other products, with 40,000 customers in the UK.

Last year, it added AI and machine learning to Intacct, its cloud-based accounting and enterprise resource planning (ERP) solution, cutting the amount of time spent on accounts payable (AP) data entry.

According to the company’s latest Small Business, Big Opportunity report, 85% of SMBs say that technology is critical to their success, with priorities including security and seamless access to improve efficiency.

"As we grow, we are always looking for ways to work more efficiently and make life a bit easier," said David Harvey, co-founder of Sage customer Seabass Vinyl.

"We’re really excited about what Sage Copilot can do, especially in saving time on the admin that takes us away from bigger priorities. Having those proactive insights will be a huge help as we scale, giving us more headspace to focus on our artists and the business."

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Cyber security provider ESET has launched a managed detection and response (MDR) bundle, designed to simplify the sales process and help boost the profits of its partners.

Available immediately, the firm said the new offering will enable partners to quote faster, close deals more efficiently, and protect profitability with greater confidence.

As part of the move, all core MDR services and products have been packaged into a single stock-keeping unit (SKU) to make it easier for partners to position, price, and sell.

ESET said it has also introduced improved commercials to help partners deliver greater value and increase their profitability, with a more competitive pricing structure that sees the average buying prices reduced by up to 34%.

Additionally, partners can also leverage increased margin protection for enhanced commercial security – a move the company said will ensure opportunities are "safeguarded from start to finish".

ESET said the move reinforces its commitment to ensuring security delivery is both accessible and profitable – especially for MSPs serving SMBs.

"This new MDR bundle is a direct response to our partners' need for simplicity and stronger commercial outcomes," commented Matt Knell, ESET's UK country manager. "It's now easier than ever to deliver our core MDR solutions with compelling pricing and robust profit protection."

Built on a combination of AI capabilities and human expertise, ESET's range of cloud-first cybersecurity products and services are designed to help secure organizations and their critical infrastructure across endpoints, cloud, mobile, and beyond.

The release of the firm's new MDR bundle builds on its strong recent momentum in the MSP space and follows upgrades to its management platform, a heightened focus on simplified integration, as well as increased market development funds (MDF) designed to help partners scale.

Last month, the company announced a host of updates, including the addition of ransomware remediation to the ESET PROTECT platform, which it said offers next-generation ransomware rollback and remediation features to help prevent ransomware encryption from causing long-term business disruption.

Other upgrades included a new ESET Cloud Security module updated with anti-spoofing and homoglyph protection, as well as expanded availability of its AI Advisor tool to EDR/XDR customers.

In the modern digital age, small and medium-sized businesses (SMBs) are prioritizing cybersecurity and data protection to enhance their digital agility, according to research. Despite being stretched thin with daily operations, these businesses recognize the growing importance of cybersecurity, especially as they integrate advanced technologies like AI. However, navigating the complexities of cybersecurity remains a challenge.

This presents an opportunity for channel companies to transform cybersecurity from a perceived burden into a competitive advantage. By promoting 'security-first' strategies, channel companies can enhance their product security and empower SMBs with the knowledge to strengthen their resilience in the digital economy.

Fostering trusted relationships

Cybersecurity can be complex, and SMBs are increasingly seeking tech solutions and expert advice to navigate these challenges. This presents a significant growth opportunity for technology providers and resellers who can assist with all aspects of managing cyber risks, from design and integration to ongoing maintenance and support.

By acting as trusted advisors, taking an active role in promoting solutions which are safe by default, advising on best practices, and shifting the burden of security onto bigger and better-resourced tech vendors, channel companies can mitigate risks while building trust and fostering stronger relationships.

Focusing on fundamentals

Very often cyber incidents and breaches occur because the ‘basics’ have been overlooked. These seemingly simple but important steps significantly lower risks but despite this, many SMBs still struggle to implement them effectively. By helping put the basics in place, channel companies can provide huge value to their customers.

For example, many SMBs do not have the knowledge or experience to conduct effective third-party assessments and select vendors who meet their security needs. Channel partners can demonstrate how they take security seriously and reduce this burden by helping customers better understand their unique cybersecurity risks and recommending vendors who meet their needs.

Additionally, many cybersecurity vulnerabilities occur through poor implementation or integration of systems into a customer’s environment. Conversely, it is always more efficient to get security in place at the point of deployment for new tech, rather than retrofit it later. For example, ensuring that the right security patching process is in place for new software, or that user access has been integrated into a customer’s existing single sign-on solution with multi-factor authentication (MFA) enabled by default.

In the event of a cyber attack, channel companies play a crucial role in ensuring that customers can recover their data and systems by implementing and testing appropriate data backups and recovery tools to ensure they function correctly.

By acting as a trusted intermediary who truly understands their customers’ security needs and guiding them to the solutions and practices that are right for their business, channel companies can create a competitive advantage and foster enduring relationships with their customers.

Leveraging cloud solutions

Cybersecurity can be a heavy lift for SMBs and they’re unlikely to have the capacity or expertise to continually monitor security logs, identify anomalies or potential attacks and respond to them. Channel companies can assist customers in adopting a highly effective cyber security approach by prioritizing a cloud-first strategy.

Modern cloud services offer significant economies of scale and enhanced security capabilities that are otherwise out of reach for SMBs. By leveraging the cloud, customers can outsource many cybersecurity tasks, such as patching and security updates, security monitoring, and data backups.

Cloud represents the fastest and most efficient way to shift the burden of cybersecurity away from the SMBs. Most software as a service (SaaS) products already benefit from the 24/7 security from reputable hyperscale cloud providers like AWS, Microsoft Azure, or Google. who invest heavily in security, with some of the largest and most skilled security teams working for them.

Channel companies can help to deploy these solutions in the most secure way possible, ensuring they are configured properly from the outset and helping SMBs make the most of the security features available to them. In the cloud ‘shared security model’ this could mean SMBs just need to ensure they are managing user accounts and permissions with the rest taken care of by their vendors.

Providing tailored training

Another area where channel companies can add value for customers is cyber security training and awareness – research shows it tops the list of consulting services SMBs want from their technology providers.

Fortunately, channel companies are uniquely positioned at the intersection of their customers' needs and the technology they provide, to offer actionable guidance for a range of different roles and use cases.

Cybersecurity training and awareness can cover a wide range of topics. This includes technical training for IT administrators, general training for employees on recognizing phishing emails and other common threats, and specialized training for leaders on crisis management and cybersecurity risk management.

Alongside this, customers can be trained to securely implement and manage software solutions. Channel companies can leverage the deep insights they have on their customers to signpost, identify, or develop training materials which will work best in their customers’ organisations and working cultures.

Transforming challenges into opportunities

Cybersecurity remains a significant challenge for SMBs striving to enhance their digital agility while adopting new technologies. Although these businesses understand the need for improved security measures, they often lack the time, expertise, and resources to focus on cybersecurity.

Channel companies can bridge this gap by evolving from tech resellers to trusted advisors. By demystifying cybersecurity and making it accessible, they can enable SMBs to take ownership of their security, fostering stronger, more reliable relationships, and enhancing resilience in the digital economy.

Ransomware is constantly in the headlines, as one of the biggest cyber threats businesses face and a part of many high-profile breaches. Particular attention is given to attacks against big companies hit by ransomware, but recent analysis found ransomware groups targeting small businesses once again.

Ransomware gangs such as LockBit, Cl0p, and Black Cat are slowing down attacks against “big game” targets and focusing their attention on small and medium businesses (SMBs), according to recent analysis from Trend Micro.

Firms with up to 200 employees accounted for the majority (575) of attacks using LockBit’s ransomware across the first half of 2023, according to the security vendor’s report.

As they grapple with tight budgets and a lack of security awareness, smaller businesses are increasingly vulnerable to cyber attacks. Yet ransomware is a growing threat that’s not going to go away, so what can SMBs do about it?

The weaknesses that enable small business ransomware attacks 

SMBs’ security budgets tend to be much smaller, making them less protected from cyber attacks compared to their larger counterparts. This can leave them failing to take basic cyber security measures such as using strong passwords, implementing two-factor authentication (2FA), and patching systems. 

Common weaknesses include outdated software and systems and a lack of a robust backup strategy, says Ken Barth, CEO of Catalogic Software. “Cyber resilience – which involves the ability to maintain business continuity in the face of threats – is often lacking in SMBs.” 

At the same time, many SMBs still think they’re too small to be targeted and fail to prioritize spending and board focus time on cyber security, says Matt Aldridge, principal solutions consultant at OpenText Cybersecurity. “This leaves them under-prepared and under-resourced when it comes to defending against attacks, making them the perfect target for malicious adversaries.”

Then there’s the human element. “Staff within smaller businesses may lack training and awareness of cyber threats, making them more vulnerable to phishing attempts and social engineering tactics,” says Jack Horlock, principal associate at CyXcel.

Adding to the threat, SMBs are likely to be dealing with remote or hybrid workers accessing the business network or cloud services via personal devices, says Aldridge. 

As a backdrop to this, ransomware is continuing to evolve. Approximately 29 new ransomware groups have emerged in 2023 and different types of ransomware such as ransomware-as-a-service – which sees off-the-shelf ransomware solutions available to buy on the dark web – lower the barrier to entry for all adversaries. “The RaaS model lowers the entry barrier for cyber criminals, while collaboration among larger extortion cartels amplifies the scale and impact of attacks,” says Barth.

Groups targeting SMBs are often financially motivated because there’s a smaller reward from an SMB but they’re more likely to pay. Attackers may also want the specific data that the SMB processes, says Jim Perkins, security consultant at AMR Cybersecurity.

RaaS can also target specific sectors, regardless of the business size. “Some companies may be targeted due to their work and clientele,” says Perkins. 

For example, he continues, cyber security companies hold a lot of sensitive information about the defenses of several other firms. Or RaaS could be targeted against a company that provides a specific service to another larger business in a supply chain attack. 

Laurie Iacono, associate managing director, cyber risk at Kroll describes how there has been a heightened focus on third-party organizations. “Smaller enterprises often rely on widely available platforms for crucial business functions, such as file sharing apps, accounting, and payroll. However, as demonstrated by the MOVEit vulnerability, the repercussions of these attacks can have a widespread and enduring impact.”

The most successful ransomware group targeting all businesses is LockBit – and it attacks firms of all sizes, says Mark Stockley, senior threat researcher at Malwarebytes. “LockBit has been used to attack everything from a five-person law firm to Continental, a global company with 200,000 employees. The sobering reality for SMBs is, they are facing the same adversaries as multinational companies.”

Avoiding and mitigating small business ransomware attacks

It’s clear ransomware attacks are a growing threat to smaller firms. With this in mind, SMBs need to ensure they have “excellent IT hygiene”, up-to-date software and operating systems, and comprehensive technical defenses in place, Aldridge adds. “Additionally, they need to have a strong understanding of what needs protecting and the risks their systems and data are exposed to, so they can prioritize accordingly.”

He also advises making sure critical data is backed up and ensuring 2FA processes and strong password policies are in place.

Iacono outlines the importance of implementing password complexity rules to avoid using weak or common passwords, as well as refraining from reusing credentials. In addition, employees who can spot phishing email giveaways and grasp the ramifications of falling for one are more likely to report suspicious communications promptly, he says.

A balanced approach SMBs should consider adopting is the "trust but verify" method, says Horlock. “For instance, when dealing with situations like business email compromise, it's acceptable to trust someone. But having a rapid and well-defined verification process, such as sending a quick text message alongside an email, can add a layer of security.”

Robust defenses are critical, but it is also essential to plan carefully how to respond when things go wrong – during and immediately following an attack, says Aldridge. “SMBs often struggle in this area due to conflicting priorities and limited resources.  If you lose sensitive data, who would you need to inform and how would you do this?”

However, companies should never negotiate or pay the ransom, says Aldridge. “The danger with paying the ransom is there’s no guarantee you’ll recover the encrypted files. By paying up, you are only fueling the ransomware economy – and there is nothing to stop your organization from being targeted again in future cyber attacks.”

If ransomware payments are deemed absolutely necessary, remember that ransomware groups expect to negotiate, says Stockley. “Use a professional negotiator if you can. If you can't, as distasteful as it may be, take your time, avoid getting angry, and try to gain their trust and empathy.”

Small to medium-sized businesses (SMBs) face an uphill battle when it comes to managing cyber security. 

While smaller firms must fend off the same increasingly sophisticated and aggressive cyber threats as their larger peers, they do so with very limited access to resources and expertise. This can easily lead to smaller businesses feeling isolated, as they are tasked with battling a swift and relentless enemy with little support. 

Against this backdrop, technology providers and partners which specialize in the field of cyber security are becoming a critical lifeline for these businesses. As revealed in recent research from BlackFog, an increasing number of SMBs are recognizing the invaluable support provided by partners. 

In fact, 69% of the respondents reported they were more likely to seek advice on cyber security solutions from their partners now compared to the previous year.

This growing reliance underscores a significant shift in the cyber security field for SMBs, with the channel playing an increasingly pivotal role. 

Here, we will delve deeper into the unique challenges SMBs are grappling with, the indispensable role of channel partners and how partners can best identify and engage with businesses to bolster their cyber security efforts.

The hostile threat landscape for SMBs

The scale and complexity of cyber attacks targeting SMBs are escalating at an alarming rate. There has long been a trend of treating smaller firms as stepping stones to attack the larger businesses in their supply chains. 

Increasingly though, it seems SMBs are no longer collateral damage in cyber warfare; they are direct targets. 

According to BlackFog's survey, over two-thirds of SMBs reported that they had been victims of a successful cyber attack in the last year, underlining the gravity of the situation.

What's more troubling is that these attacks are not isolated incidents. Of the SMBs that experienced a successful cyber attack, a staggering 87% reported two or more separate incidents. 

The typical SMB has not simply had the misfortune of being hit by an opportunist criminal but has more likely been specifically struck by threat actors targeting a particular profile. 

These cyber attacks have serious repercussions for businesses beyond just operational disruption. A startling 40% of the businesses surveyed reported a loss of customer data following an attack, and a third even faced customer attrition as a direct result. 

SMBs will usually feel the impact to their customer base far more keenly than larger firms that can weather losses. 

So how can a trusted channel partner can make a difference in helping SMBs survive this hostile landscape? 

The vital role of the channel for SMBs

SMBs have several decisions to make ahead when choosing the right provider. There is a clear and growing need for SMBs to work with specialist providers that can alleviate the burden of managing security.  

In fact, at the beginning of this year, Analysys Mason projected spending on cyber security solutions for SMBS will increase from $69 billion in 2022 to $77 billion in 2023.

This combined with the ongoing skills shortage, means that MSPs and - increasingly the round-the clock SOC services provided by an MSSP – will be increasingly in demand.  

Key to the success of the MSSP is delivering a robust, comprehensive portfolio and full-service offering, that is flexible and can be tailored to the specific needs of the client and their budget. 

Underpinning this with the latest advice on new technologies that can help businesses to explore and deploy the latest and most innovative security solutions. 

This is important in a fast-changing threat landscape as threat actors continually adapt their tactics.  And whilst there are encouraging signs that, broadly, partners are meeting the security needs of clients, there is still some work to do, with just 39% of respondents stating that their providers fully understood all of their challenges.  

Only by taking the needed time and asking all the right questions can proper guidance be provided, enabling organizations to focus on their core business capabilities rather than getting bogged down attempting to keep up with cyber threats.

A shining light for beleaguered SMBs

Channel partners can be more than just service providers – they have the potential to be a real lifeline for SMBs' digital security. This impact extends beyond safeguarding sensitive data; they bolster SMBs’ overall business resilience, fostering trust with customers and stakeholders alike.

An SMB's perfect IT partner is one that profoundly understands the business and offers a comprehensive, multilayered strategy for cyber security. The partner must be able to adjust to the fluid cyber security ecosystem and take initiative by sharing industry knowledge and insights. 

By fully assuming these roles and obligations, SMBs can make judicious choices about their IT partners, constructing a resilient security framework that ensures sustained value protection against the most persistent threat actors.

For the enterprises involved in our study, ransomware ranks as a top concern, primarily because cyber attackers often perceive smaller firms as more vulnerable, and more likely to agree to pay any ransom demands. 

Therefore, a purely defensive stance is no longer adequate; organizations need to take proactive measures that safeguard them from exploitative tactics like data exfiltration.

Partners also need to exhibit both agility and flexibility when it comes to meeting security needs while receiving the best ROI. 

Companies should know that their IT providers are adapting their services and enhancing their offerings in step with changes in the threat landscape when threats like double and triple extortion ransomware attacks are now commonplace. 

With the right partner, an SMB doesn’t have to face these battles alone, they have an ally who understands the intricacies of their business and who is dedicated to safeguarding their network, assets and data. 

This frees up business leaders to focus on growth, innovation and customer engagement, secure in the knowledge that their cyber defense is robust. 

There is nothing more frustrating than being let down by things outside your control. But in business, as in life, being able to manage things you can’t control is essential. 

The goal of 99.9% uptime is far from a given, as cloud providers are not infallible and outages occur. There are several likely reasons for a cloud outage, and factors such as unforeseen power availability issues, software flaws, and ransomware attacks play a role.

Any business must acknowledge the reality of cloud outages. These might be just a few hours in length, or they could last for a few days. No business wants to simply “get through” an outage no matter its duration. Instead, leaders aim to minimize as much damage and downtime as possible and prevent their clients and customers from experiencing any inconvenience as a result. 

For that to happen, especially among small and medium-sized businesses (SMBs) with limited resources, planning and preparation are key.

Plan for cloud outages

The first step towards putting mitigations in place is understanding the problem. In terms of cloud, this means knowing the answer to key questions concerning your on-premises and cloud infrastructure.

Thomas King, CTO at internet exchange operator DE-CIX, tells ITPro that businesses need to account for all eventualities.

“What outages could occur? How critical is the data or the workload involved? How negative will the impact of each of these types of outages be? What countermeasures should be taken?” asks King.

It is important to categorize potential outages by the systems they will affect, from those internal and customer-facing to regional and international systems that may span an organization’s entire environment. With the number of remote-working employees today, the potential for communication outages between teams or entire offices should also be considered. Mapping all of this might be complex, but without the map, you can’t come up with meaningful mitigations.

It is also important to understand which parts of your work are business-critical, as these will need to be kept functional as a priority. Can you put in place on-premise workarounds, or do you need to have expensive but potentially business-saving redundancy arrangements that will allow a secondary system to kick in if your cloud fails?

“The most critical resources, such as enterprise resource planning (ERP) and cloud databases, should be deployed in an active-active configuration across different cloud service providers to ensure the greatest possible availability,” says King.

“Further resources such as the webshop front-end can be set up in an active-passive deployment so that they can be spawned on a separate cloud service provider when needed.”

Taking services offline

For some activities, it will be sufficient to put in place manual processes rather than maintain a separate online system. Business continuity planning can go into granular detail over which processes could go offline and provide clarity over which of these are mission-critical. This information is imperative if you get into an ‘all hands to the pump’ situation. 

Jaco Vermeulen, CTO at BML Group reminded ITPro that when offline processes are put in place it is vitally important to “include recovery operations to ensure those offline/manual functions are efficiently and accurately updated in cloud systems.” This cloud updating will need to be scheduled at speed. It is not going to help the business once the cloud is back running at a hundred percent efficiency if people can’t find recent records because they are still in the manual system.

Bring your workforce with you

It is one thing to know which key processes will need to change during a cloud outage and to prioritize these in order of importance as part of a contingency plan. It is quite another thing to know who will be doing the hands-on work to deliver the processes and for those people to feel competent and confident. 

If you will need to redeploy people into entirely new contingency roles, make sure that these people are aware of their responsibilities and that they have the required skills. If they don't, upskilling will be necessary. The last thing you want is to be running around in the first few hours of a cloud outage getting people in the right place and checking that they can do the tasks asked of them.

Manual workflows and record-keeping can make a solid backup for the cloud in the event of an outage, with hard copies still useful despite moves by many to a paperless office. If you are going to use paper systems to replace some cloud ones, it’s important to have the right forms and other materials to hand so there’s no mad rush for the printer when an outage occurs.

Work out what might be needed for a couple of hours of outage, and be sure teams can self-serve to replenish stocks. When using people to replace cloud processes the key is to plan, prepare, and run drills. Getting all this in place as part of a business continuity planning exercise might feel cumbersome and time-consuming. Some might see it as diverting energy away from day-to-day tasks. But without a worst-case scenario plan, leaders are simply biding their time until their ordinary processes are upended.

A final step is to remember that both technical and paper-based contingencies are easily ruined by changes that happen as part of everyday business evolution. Digital transformation, or replacing legacy technology with new systems, are beneficial changes that can nonetheless introduce new variables to a long-standing cloud outage contingency plan.

“All executive management and leaders are responsible for business continuity and plans need to be reviewed, whenever there is an operational change or change in systems/IT landscape,” says Vermeulen.

“Any such change can become a punch in the face to plans if not properly checked.”

Small and medium-sized businesses (SMBs) in the UK are ramping up technology investment despite challenging macroeconomic conditions, according to Barclays. 

A study from the financial services giant found that 64% of London-based SMBs are allocating over half of their annual revenue to technology investment. 

Nearly half (43%) of firms polled said they were taking these decisions in an effort to future proof their company, enhance productivity, and weather current economic difficulties. 

This trend is reflected across the country, Barclays said, with 45% of firms nationwide seeking to modernize their tech stack and streamline operations. 

Key areas highlighted by SMBs included a surge in spending for data analytics and artificial intelligence (AI) tools. 

Many firms are now considering integrating analytics and AI tools within their daily operations, viewing them as a means to “counter rising costs and climbing interest rates by increasing productivity”. 

UK retailers specifically have grown bullish on tech investment and adoption of emerging technologies, with 66% stating they are “open to embracing new technology”. 

Almost a fifth (18%) of SMBs in the retail sector said they have invested in data analytics while 12% revealed they have made investments in AI and machine learning. 

Nearly half (41%) revealed they have also established dedicated technology teams in a bid to explore and implement new tools. 

A leading factor in this, Barclays noted, was that firms are being forced to contend with evolving consumer spending trends. 

“Retailers are turning to technology to keep up with the demands of high-street shoppers, with recent Barclays research finding that seven out of 10 consumers use the internet to inform how they shop and make savings,” Barclays said. 

“Future proof” investments

Josh Boer, director at tech consultancy VeUP said the research highlights a promising trend that small businesses are eager to invest in emerging technologies, despite well-documented budgetary constraints. 

“It’s encouraging to see SMBs put tech investment at the very heart of their business strategy, particularly against the backdrop of stubborn inflation and soaring interest rates,” he said. 

“By prioritizing investment in tech, the next generation of SMBs can grow rapidly, creating jobs and boosting the value of UK PLC.”

Colin O’Flaherty, head of SME at Barclaycard Payments, echoed Boer’s comments, noting that SMBs in the retail sector are exemplifying this current tech investment approach. 

“Retail SMBs in particular have displayed a remarkable agility in adapting to evolving consumer behaviors by adopting emerging technologies – setting the stage for a brighter year ahead,” O’Flaherty said.

Tech spending during strained macroeconomic conditions has been a quandary for businesses of all sizes over the past year. Faced with the choice between cutting back on spending or accelerating investment, many businesses have chosen the latter option. 

This proactive spending approach has been highlighted by analysts as a way for businesses to take short-term financial hits with an eye on delivering longer term benefits. 

Earlier this year, Gartner predicted an increase in IT spending across 2023 in spite of troubling economic conditions and claims of a looming recession. 

Speaking to ITPro at the time, John-David Lovelock, distinguished VP analyst at Gartner said that some IT leaders view challenging conditions as a prime opportunity to build “new, more resilient revenue streams” and differentiate themselves from competitors. 

Lovelock warned that those who adopt a more conservative approach to tech spending could risk falling behind industry counterparts and encountering greater long-term challenges. 

“The split between the companies that will invest heavily in IT and those that don’t is going to be higher this year than ever,” he said. “

The polarization in the market between the ‘IT buyers’ and the ‘IT hesistants’ is going to get wider than we’ve seen in an awfully long time.”

A shift in the UK’s approach to data protection is underway, with the finished product potentially representing a huge benefit for small and medium-sized businesses (SMBs). 

The changes come in the form of the Data Protection and Digital Information (DPDI) Bill, which experts say would significantly alter existing data protection law when it comes into law next year.

This draft update to the existing UK data protection framework – currently based on the EU’s General Data Protection Regulation (GDPR) and  Data Protection Act (DPA) 2018 – aims to remove “red tape” associated with current laws. With lawmakers still devising the DPDI Bill, however, there's a lot to be determined, but the regulations could significantly lighten the load by making it easier and less costly to comply with. 

How will the DPDI Bill differ from GDPR and the DPA 2018?

As law firm Pinsent Masons notes, the proposals in the latest update are similar to those contained in the original DPIDI Bill introduced into parliament in July 2022. Among the changes, the paper introduces a more business-friendly approach, says Sarah Pearce, partner at Hunton Andrews Kurth. For example, it introduces a new basis for processing personal data for “recognized legitimate interests”, she says.

This could make things easier because it wouldn’t require a so-called Legitimate Interests Assessment (LIA) – a light-touch risk assessment thought to be good practice under the current laws. Instead, organizations would simply have to demonstrate the data they’re processing is necessary for the relevant purpose, says Pearce.

It also introduces several exemptions from the much-hated cookie consent requirement for situations that pose a low risk to user privacy. At the same time, the Bill proposes to remove the obligation on controllers and processors not established in the UK to appoint a local representative. This is an example of administrative “red tape” being removed under the Bill, says Pearce.

Meanwhile, the role of data protection officer (DPO) currently required will be replaced by a “senior responsible individual”.  “A senior responsible individual is only required when an organization processing personal data is a public body or is conducting high-risk processing, and they must be part of your senior management,” Pearce explains.

What are the benefits and drawbacks of the proposed regulations?

The proposed regulation offers multiple advantages. SMBs are expected to see proportionally higher reductions in compliance costs than their larger businesses, for example, says Sarah Williamson, partner and head of the commercial and technology team at Boyes Turner. “This is because they will generally have lower levels of data use prior to the reforms – although it does depend upon the nature of the business.”

She says the greatest compliance cost savings will be felt in the professional, scientific, and technological sectors. “This is due to the fact that the reforms are focused on removing barriers to data use for research purposes and artificial intelligence.”

Yet there are proposals that, in practice, could cause difficulties. Williamson cites the example of the removal of the need to have a DPO. “Given the requirement under the EU GDPR for a DPO to be independent, there are questions [as to] whether, for businesses caught by both UK and EU GDPR, the same person could perform both roles. There’s also uncertainty as to whether an external consultant could still fulfill this role.”

The removal of a one-size-fits-all approach to data protection could in some ways be a boon for SMBs. But in its current form, the bill “risks being incredibly confusing and more onerous than the standardized approach”, says Jamie Akhtar, CEO and co-founder of CyberSmart. “Without further guidance and clarity, we risk placing the onus on SMBs to figure out data protection requirements themselves, something that’s simply not feasible for many small businesses.”

At the same time, the regulation could cause issues for firms that operate in both the EU and UK. Alongside aiming to reduce regulatory “red tape”, the Bill’s other objectives are to ensure that data protection and privacy are securely protected and that the UK maintains its EU “data adequacy” status. Yet some commentators feel the government has forgotten that the priority of data protection law is to protect consumers, rather than help businesses, says Williamson. 

“Some businesses fear that because of the reforms, the EU may reassess and withdraw the adequacy decision, causing major disruption to firms operating and trading internationally who rely on a free flow of data between the UK and the EU.”

How can SMBs prepare for the DPDI Bill?

There is good news for SMBs: if you’re already GDPR-compliant, there shouldn’t be too much to do. You will automatically comply with the proposed legislation, says Lauren Wills-Dixon, solicitor and data privacy expert at law firm Gordons. 

Of course, there could be an impact on organizations operating in both the UK and the EU, says Wills-Dixon. “These will be dual regulated by the UK regime and the EU GDPR which could add some complications and complexities to their privacy and governance frameworks.”

SMBs must keep international data protection in mind when handling governance, risk and compliance concerns as businesses, says Jan Stappers, EU GRC specialist at compliance software firm NAVEX. “No matter the size, firms must generate, process, or collect data in order to operate,” he says.

Taking this into account, he thinks a “solid program” is “a good investment that will pay dividends as it helps foster business growth”.

There’s time to spare and the draft regulation’s text may change. The exact timing before it becomes law is uncertain, but the Bill is expected to become an Act by roughly March 2024. “There will be a third reading before it progresses through the House of Lords, so organizations should not rush to make any changes until legal obligations are clear and finalized,” Wills-Dixon says.

In the meantime, Wills-Dixon thinks it is useful for senior management teams to “note and consider things such as how changes to the DPO function and lighter record-keeping requirements would affect their organization’s structure and their current allocation of roles and responsibilities”. 

Many routinely assert that small and medium-sized businesses (SMBs) are less likely to be targeted than their larger counterparts, but this is far from the case. SMBs have limited resources versus their larger counterparts, which can make cyber security a challenge.

But robust security is possible if these companies take a handful of simple steps to avoid the common cyber security pitfalls and ensure they’re resilient if a cyber attack does land. 

1. Plan for the worst-case scenario

It’s true to say cyber attacks are a matter of when rather than if – regardless of the size of your business. One of the biggest traps for SMBs is fixating solely on preventing cyber attacks, says Haris Pylarinos, founder and CEO of security skills company Hack The Box. This can leave firms reeling when a cyber assault does eventually get past your defenses. 

He advises ensuring your business doesn’t have any weak spots through methods such as vulnerability assessments and penetration testing, as well as making sure you have an incident response plan in place.

When a cyber attack happens, one of the biggest pitfalls SMBs face is a lack of preparation, says Jack Peters, customer solutions architect at M247. He cites data from AAG showing that less than a fifth of UK businesses have a formal incident response plan in place. “It’s essential that businesses create, implement and maintain a strategy for how they will handle a cyber attack, as this will allow everyone to correctly identify any weaknesses and vulnerabilities within the IT framework,” he advises.

The plan needs to be implemented before an incident occurs, he says, highlighting that a pre-emptive approach “will be beneficial in the long-term”. 

According to Pylarinos, SMBs should focus on key areas: preparation, detection and analysis, as well as containment, recovery, and post-incident analysis. 

It’s also important the incident response plan is easy to understand. Although the specifics may vary depending on the size of the organization and industry, Peters advises using the five-step cyber security framework developed by the National Institute of Standards and Technology (NIST). “This is a great model to follow.”

2. Get the basics right

As a foundation for all things security, SMBs should ensure they are getting the basics right. As part of this, it’s key to update your devices regularly. Many smaller businesses suffer irreparable damage after falling victim to a cyber attack that could have been prevented if they’d taken the time to update systems. 

One way to ensure you are protected is to update your devices automatically, advises Elliott Wilkes, CTO at consultancy and managed service provider Advanced Cyber Defence Systems. This should include all devices that access company data such as computers, smartphones, servers, virtual machines (VMs), and Internet of Things (IoT) devices, he says. “It sounds simple, but you’d be surprised at how many ransomware events have taken place over the past few years using well-known vulnerabilities that have been fixed, but the organization didn’t deploy the patch.” 

While it might seem obvious, ensuring all devices have an antivirus system and that team members use strong passwords including random words, numbers, and symbols can “provide a first line of defense”, says David Clarke, head of security at IT consultancy Quostar. 

Craig Jones, VP of security operations at security firm Ontinue advises creating and implementing policies around secure internet use and handling sensitive data. “This includes avoiding suspicious emails or links, not sharing passwords, and not using unsecured Wi-Fi networks for work-related tasks. Don’t assume everyone knows the basics – even simple mistakes can lead to significant breaches.” 

3. Use technology like MFA wisely

Technology isn’t everything, but it can help boost security when resources are limited. Cheap and easy to use, one of the best additions to your security strategy is multi-factor authentication (MFA). Adding this extra layer of defense will help avoid your business being caught out by weak passwords and it also reduces the margin for human error.

Wilkes advises enabling MFA on all accounts where possible, using an app such as Google or Microsoft Authenticator. “If you only have the option to use SMS, that’s ok too – but try to use an app if you can. These store temporary codes that you enter along with your password to login to a website or application.”

For super-robust defenses, especially if your business operates in a high-risk industry vertical, you could consider a physical token to secure your accounts, such as a Yubico YubiKey. “These provide authentication that is much more resistant to phishing emails, which is an increasingly common way criminals gain access to an organization’s systems and data,” says Wilkes.

Additionally, if it’s feasible within your budget, SMBs should consider security information and event management platforms (SIEMs) which feature vulnerability assessments and cyber threat intelligence technology, says Clarke. “Regular cyber security assessments can be critical to protecting firms by helping them identify weaknesses and potential entry points into their networks.”

4. Invest time and effort into cyber security training

It’s often said that employees are a firm’s weakest link, and many cyber attacks are successful due to a simple mistake made by a member of staff. A costly blind spot for any business, particularly SMBs, is failing to invest in cyber security training, says Pylarinos. “With cyber threats on the rise and growing in sophistication, training your staff to combat the latest risks is crucial.”

As part of this, SMBs should ensure they are encouraging cyber awareness among all employees, says Pylarinos. This is often overlooked: In 2022, the UK Government found only one in five businesses (17%) provided awareness sessions for those not directly involved in cyber security. 

This is despite the fact that the majority of breaches (83%) were a result of phishing – seeing employees mistakenly clicking on malicious links or downloading malware-ridden documents. “By consistently training employees of all levels on the basics of cyber awareness, SMBs can spot phishing or social engineering lures and thwart cyber threats across their organization,” says Pylarinos.

Employee training can be performed in a number of ways, using educational platforms and exercises. Experts also agree it should be done regularly to ensure you are up to date with the latest threats.

Lewis West, head of cyber security at recruitment firm Hamilton Barnes, advises SMBs to be focused on building a “strong security culture” and increasing awareness across the entire team. “Training employees to become more aware of security and adversaries’ methods is an effective way to reduce the number of successful cyber attacks.”

SMBs across the UK can now access new tools aimed at reviewing their cyber security processes following the launch of two new services from the National Cyber Security Centre (NCSC).

The cyber security centre has unveiled two new toolkits that it said are designed to “help millions of small businesses stay secure online and protect their livelihoods”.

The ‘Cyber Action Plan’ and ‘Check your Cyber Security’ tools are both free-to-use online, and form part of the centre’s long-running Cyber Aware campaign. The scheme aims to raise cyber security awareness for small businesses, microbusinesses, and sole traders.

According to the NCSC, the Cyber Action Plan allows users to “answer a few simple questions to get a free personalised action plan" which outlines how organisations can protect against cyber attacks and emerging threats.

Meanwhile, the Check Your Cyber Security service is a more comprehensive tool which allows users to perform free online tests to identify common vulnerabilities in public-facing IT systems.

“All checks are remote, without the need to install software and use the same kind of publicly available information as cyber criminals use to find easy targets,” the NCSC said.

This includes an IP address and website assessment tool which allows SMBs to check if their infrastructure is resilient to common attack methods that could lead to data theft.

In addition, a web browser checker assesses whether web browsers are out of date and therefore vulnerable to exploitation by threat actors.

According to the NCSC website, an email security tool will be made publicly available in due course. This will allow small businesses to check if email domains have “good practice protections in place” to mitigate growing email and phishing-based attacks.

UK SMBs facing increased threats

Commenting on the launch of the services, Lindy Cameron, CEO at the NCSC, said both tools will enable businesses to fine-tune their cyber practices amid a period of escalating threats.

Figures from the government’s last Cyber Breaches Survey revealed that 38% of the UK’s 5.5 million SMBs suffered a cyber incident last year.

“Small businesses are the backbone of the UK, but we know that cyber criminals continue to view them as targets,” she said.

“That’s why the NCSC has created the Cyber Action Plan and Check Your Cyber Security to help them boost their online defences in a matter of minutes. I strongly encourage all small businesses to use these tools today to keep the cyber criminals out and their operations on track.”

Martin McTague, National Chair of the Federation of Small Businesses (FSB) welcomed the move as a positive step to support SMB security across the UK and equip them with the “right tools and tailor-made guidance” to tackle growing threats.

“A fifth of small businesses see cyber crime as the most impactful crime in terms of both cost and disruption to their operations,” he said.

“We’re glad to see our recommendations to raise small firms’ awareness on cyber security has been taken forward in NCSC’s Cyber Aware campaign.”

The UK government's changes to R&D tax relief credits have been met with a mixed reception following the Spring Statement on Wednesday.

Delivering the statement in the House of Commons, Chancellor Jeremy Hunt revealed the government's plans to roll out an ‘enhanced’ tax relief package for SMBs across the country.

Under the plans, businesses that currently spend 40% or more of their total expenditure on R&D will be able to claim a credit worth £27 on every £100 spent.

Hunt insisted that the tax relief package amounts to more than £1.8 billion in support for SMBs across the UK and will help some 20,000 firms access vital support.

However, while the announcement has been welcomed by some, critics note that this only equates to a “partial climbdown” of widely criticised cuts unveiled during the Autumn Statement in November last year.

Jay Bhatti, R&D tax relief specialist at MHA, told IT Pro that the new tax credit for SMBs doesn’t “fully reverse the damage” caused by the Autumn Statement, which brought in a reduction of the tax relief rate from 130% to 86%.

Research from Coadec suggested that startups were expected to lose up to £100,000 on average as a result of the Autumn Statement's proposals.

Dom Hallas, executive director at Coadec, said the 'enhanced' package represents “some progress, but it’s still not great”.

“R&D tax credits will be worse than they were before Autumn,” he said, “but better than they were before today’s new ‘enhanced’ credit for R&D-intensive firms who spend over 40% on R&D.”

Hallas added that based on initial calculations, most SMB founders will now get back around 18.5 pence on qualifying R&D relief while only the most R&D-intensive firms will receive the full 27p on the pound highlighted in the Spring Statement.

Bhatti said that the recent 'partial climbdown' will disappoint a significant number of SMBs currently operating across the UK, and negatively impact startups with high loss rates.

“We need to remember that the Autumn Statement in 2022 saw a blanket reduction in the SMB tax relief scheme. This involved the enhancement rate shifting from 130% to 86% from 1 April 2023 and limited the rate at which the cash credits could be generated by surrendering losses,” he said.

“Startups with high losses were especially affected by this. A high loss-making startup undertaking highly risky and cutting-edge technological development saw its cash credit on R&D spend go down from 33p to 19p per £1 of R&D spend.”

He said that there is now a pervasive “sense of disbelief” among SMBs over the government’s handling of the tax credits fiasco.

“The government continues to talk about innovation-driven growth, and yet specifically discriminated against R&D intensive startups. The Spring Budget does partially represent a climbdown, but not a complete one."

Spring Statement prioritises large enterprise

Anne Glover, CEO at Amadeus Capital Partners, told IT Pro that while the tax relief changes should be welcomed, the announcement could create lingering concerns over an apparent prioritisation of support for larger enterprises.

“I welcome the Chancellor’s announcement outlining a targeted R&D tax credit, as well as substantive investments in the UK’s AI and quantum computing sector,” she said.

“However, the government’s decision overall to prioritise incentives for larger companies over SMBs still brings some risk of undermining the next generation of companies that we hope will become the tech giants of the future.”

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UK startup founders tell IT Pro they have lingering concerns about the future of industry support as Tech Nation’s closure date approaches. The industry champion confirmed last month it will close its doors on 31 March after a vital government funding package was awarded to Barclays Eagle Labs.

The decision to award the £12 million Digital Growth grant to Eagle Labs sparked consternation across the UK startup scene, with some voicing concerns over the future of the tech visa scheme and the organisation’s range of growth programmes.

The Financial Times (FT) reported in February that Tech Nation had been forced into a ‘fire sale’ of intellectual property. This included programmes led by the organisation, with around 30 organisations believed to have placed bids, including Founders Forum, a networking group established by British entrepreneur, Brent Hoberman, co-founder of lastminute.com

Tech Nation runs a number of growth schemes aimed at supporting founders and startups spanning several areas. To date, hundreds of startups have passed through the Future Fifty, Applied AI, Cyber, FinTech, Rising Stars, and Upscale programmes, for instance.

A key factor in the popularity of these schemes, founders tell IT Pro, was they offered valuable support for startups and founders to fine tune their product offerings, broaden horizons, and enable them to engage with a broad pool of like-minded founders and startups operating across the country.

A sad day for UK startup support

Jim Wilkinson, CEO of Zuto, a North West-based startup which participated in the Future Fifty 11.0 cohort describes Tech Nation as having been a “key part” of the UK technology ecosystem for nearly a decade, and one that’s provided vital support for startups and scale-ups.

“Tech Nation over the years has supported a huge number of innovative tech businesses across the UK and helped contribute to the thriving ecosystem we now have,” he says. “The UK is full of SMBs and, particularly in the North West, we have a strong culture of supporting startups, which Tech Nation was a key champion of.”

The Future Fifty 11.0 cohort, unveiled in September last year, features 13 high-growth potential businesses. Zuto was one of two firms from the North West selected to take part in the scheme.

Wilkinson (pictured) says Tech Nation was a key champion of sustaining a strong culture of support for startups in the North West

“I, and Zuto, feel a personal loss too, as our experience and opportunity is sadly going to be cut short. Tech Nation provided support, training and networking among many other things to bring together like-minded businesses to help make things happen," he adds.

Rob Straathof, CEO and co-founder of Liberis, an embedded finance company that was part of the Future Fifty 9.0 cohort, also tells IT Pro that Tech Nation’s loss will be felt across the UK industry due to the crucial role it played in championing UK tech.

“As a member of Tech Nation’s Future Fifty 9.0 cohort, we have benefited greatly from its network, their insights into helping startups growing into scale-ups, and the connections with other founders and CEOs who can provide information mentorship and guidance, as well as their continuous battle to put FinTech on the radar of the government,” he says.

“Tech Nation previously had the ability to push for simple but effective solutions such as the Visa for tech workers, helping to expand companies abroad with advice and practical guides, as well as support with local PR, marketing, and legal and compliance.”

Regional startups could suffer

Damian Fairbrother Jones, COO at AeroCloud, another North West-based startup that took part in the Rising Stars 3.0 programme, believes the closure of Tech Nation will hamper startups operating outside of London and the South East.

“For us, Tech Nation plays an important role in championing and recognising tech ecosystems outside of London,” he says.

Fairbrother Jones (pictured) feels Tach Nation's loss will hamper startups and SMBs outside of London

“Pulling the plug on Tech Nation will leave a significant gap in the venture capital ecosystem. As a big corporate, it will be hard for Barclays to replicate the ‘insider’ feel that Tech Nation created and the way in which it provides practical resources and approaches.”

Rich Arundel, co-founder and chief evangelist at Currencycloud, echoes Fairbrother Jones’ comments, suggesting the government’s decision to overlook Tech Nation sends a poor message and appears to contradict recent government posturing around support for the tech industry and turning Britain into the ‘next Silicon Valley’.

“Tech Nation was a signal that the government was committed to supporting the ambition and idealism of UK startups in the early 2010s. Questions around the impartiality of Barclays Eagle Labs aside, I think pulling the plug on Tech Nation has gone down so badly because it sends the opposite signal. Tech Nation’s effectiveness, its London-centricity, and its suitability for a now mature UK tech ecosystem were all debatable,” he says.

“But many entrepreneurs feel we need more startup networks, more support, and more investment – not less. Was there not a case for visionary reform? The Chancellor has recently been making overtures to the UK’s entrepreneurial community, pledging to turn the country into the next Silicon Valley. Now, he’ll face an uphill battle to win back their trust.”

It’s unfair to write off Eagle Labs

Although Tech Nation’s closure has justifiably raised concerns among UK startup founders, the situation might not be as dire as some suggest.

Amanda Brock, CEO of OpenUK, said at the time of Tech Nation’s announcement that the shift to Eagle Labs could mark a positive change for how startups are supported across the UK, noting businesses will still be able to access tailored advice and support.

“That’s a shift in model which I think will make a big difference and can only be perceived as positive,” she said. “Their existing programmes and mentoring opportunities will be expanded to a broader group and also will add further services including an accelerator and scale-up programme. This should really support startups at scale and contribute to the overall ecosystem where a rising tide lifts all boats.”

Eagle Labs represented better value for money, according to the government

Brock added that the new model will “build on the services” Tech Nation has traditionally provided and likely create a more localised framework for regional business support.

“I believe that this will be a step forward, with a free offering to startups which has been missing,” she continued. “Barclays offers a breadth of access across the Regions due to its existing growth programmes across the UK in 50 locations and these span Scotland, Cardiff and Belfast as well as a strong Regional presence. I understand that this will double and that their goal is for 80% of the startups being supported to be outside London.”

Despite concerns over the future of UK startup support, a pervasive mood of optimism still remains among founders. In recent weeks, Eagle Labs has been vocal about future plans and is engaging closely with industry stakeholders to ensure the hand-over benefits businesses.

Last month, David Hamilton, head of implementation at Barclays Eagle Labs, told UKTN the incubator has been portrayed as ‘bogeyman’ following the Digital Growth Grant funding announcement. Hamilton insists Eagle Labs was committed to continuing support for UK startups. The organisation also recently announced it will match the £12 million grant with £24 million of its own funding, and plans to launch additional programmes in the year ahead.

State-sponsored threat actors are increasingly shifting their focus towards SMBs and smaller enterprises, according to new research.

While large enterprises, public services, and critical national infrastructure have traditionally been key targets for state-sponsored threat actors, SonicWall’s 2023 Cyber Threat Report predicted that groups will ‘diversify’ their tactics in 2023 to target SMBs and a “broader set of victims”.

SonicWall CEO Bob VanKirk said the increased targeting of SMBs and small enterprises represents an alarming shift among threat actors.

“The past year reinforced the need for cyber security in every industry and every facet of business, as threat actors targeted anything and everything, from education to retail to finance,” he said.

“While organisations face an increasing number of real-world obstacles with macroeconomic pressures and continued geopolitical strife, threat actors are shifting attack strategies at an alarming rate.”

Cyber threats against small businesses have been rising steadily in recent years amidst an increasingly perilous global threat landscape.

Brian Martin, Head of Product and Innovation at Integrity360 said SMBs are an attractive target for threat actors because they “typically have less security focus and budget available, hence a less mature cyber security programme in place”.

“This means they are easier to breach, due to lack of security awareness and training, unpatched or out-of-date systems and infrastructure, and weak or missing protective controls in place to protect their data and their infrastructure,” he added.

Research from Close Brothers last year found that nearly half of UK-based SMBs suffered a cyber attack, with more than half (54%) suffering a financial loss.

A recent study from Vodafone highlighted this growing risk for small businesses, noting that more than half (54%) experienced “some form” of cyber attack across 2022, marking a significant increase from 2020.

Almost one in five of SMBs polled by the company said that a cyber attack would cost their business up to £4,200 on average, highlighting the potentially devastating impact on smaller firms during a period fraught with economic uncertainty.

Yet despite the financial and reputational damage faced by small businesses subject to cyber attacks, Vodafone’s research found that nearly one-fifth (18%) of businesses polled said their business was not protected by cyber security software.

In addition, 5% said they did not know if they had protection at all while only 28% were aware of the UK government’s Cyber Essentials scheme, which provides vital security advice and tips for businesses.

Evolving cyber crime landscape

The shift towards targeting SMBs coincides with a 21% decline in the overall volume of ransomware attacks, a frequent go-to method for threat actors in recent years, the report also revealed.

SonicWall's findings echo those of other cyber security vendors, which have mostly agreed in their respective threat reports that ransomware detections dropped during the last year.

Global malware attacks increased by 2% last year using more than 400,000 unique variants, marking the first increase in this attack method since 2018.

IoT malware and cryptojacking methods also jumped by 87% and 43% respectively as threat actors have “embraced slower and more stealthy approaches to achieve financially motivated cyber attacks”.

“In addition to cyber attacks becoming more sophisticated and covert, threat actors are showing clear preferences for certain techniques, with notable shifts towards weak IoT devices, cryptojacking, and potentially soft targets like schools and hospitals,” the report added.

Research into the exploitation of Log4Shell, the vulnerability in the widely used Apache log4j Java logger discovered in December 2021, showed that more than 1 billion attempts were made to exploit the vulnerability across the world in 2022.

When first discovered, the vulnerability was thought to be one of the most dangerous in years. In the months following, fears were largely allayed as the rate of successful exploitation was much lower than previously feared, in part due to effective patches released quickly.

Some of the largest online banks in the UK have been found to have "worrying" security vulnerabilities in their products, leaving the UK businesses they service, and their customers, at risk of cyber attacks.

TSB and Virgin Money, both of which offer business current accounts for SMBs across the country, were found to have serious security issues that could put customers at risk, researchers said.

Researchers at Red Maple Technologies, working on behalf of Which?, raised “several concerns” over TSB security practices in particular, revealing that the bank still asks “basic security questions” to recover login details.

In addition, Red Maple said it found a potentially vulnerable subdomain and two outdated web applications. which could place customers at risk. However, the bank confirmed that the vulnerable subdomain will be removed.

“[TSB] also lost points for using SMS-based security, not sending alerts when sensitive account changes were made and including phone numbers in new-payee notifications,” researchers said.

A spokesperson for TSB told the consumer group that it is continuing to invest in online and mobile banking services and work with “globally-leading tech firms to deliver both security and accessibility” to customers.

“TSB also tracks well across the industry on fraud prevention,” the spokesperson added.

The researchers examined the cyber defences of 13 current account providers to rate their online and mobile banking security.

Virgin Money received the lowest score for online and app banking, according to Red Maple's analysis.

The security firm found six outdated web applications, an exposed IP address, and a subdomain using an outdated version of TLS.

Of the six outdated web apps, three contained minor security vulnerabilities, researchers revealed.

Small business security concerns

Red Maple’s research on banking security comes amidst a period rife with escalating security risks for small businesses across the UK.

Research from Close Brothers last year found that around half of UK-based SMBs have suffered a cyber attack, with 54% suffering a financial loss.

Ransomware attacks were highlighted as the most common attack method among SMBs, followed by phishing attacks.

Among those that suffered a cyber attack, the study found that two-thirds have been subjected to increased incidents in the weeks and months following.

Jasson Casey, CTO at Beyond Identity, said the research from Red Maple is concerning, and highlights vulnerabilities which are frequently targeted by threat actors.

“It’s worrying to see this latest report from Which? which has marked banks down on multiple security measures, including failing to block weak passwords, sending one-time passcodes and sensitive data via SMS,” he said.

“It’s about time these organisations woke up and fixed their major vulnerabilities. Threat actors are constantly taking advantage of outdated security measures that make it easy, and inexpensive to breach systems.”

More broadly, the financial services sector has also been subjected to growing threats in recent years. Recent research from Imperva found that the volume of cyber threats directed towards the financial services and insurance industry (FSI) has grown rapidly over the course of 2022.

Imperva’s research found that across 2022, more than a quarter of all cyber attacks (28%) hit FSI businesses, double that of the next most-targeted sector.

Top-rated banks for security

Red Maple research noted that a number of leading UK banks boast robust security measures and safety for users.

Starling, which provides one of the UK’s most popular business current accounts, was ranked top for security.

The rapidly-growing challenger bank was followed closely by HSBC, NatWest, and Lloyds – all of which had strong security measures to protect customers.

Despite turbulent economic conditions bringing uncertainty to many corners of the business world, there is already a wealth of data that indicates small and medium-sized businesses (SMBs) are willing to spend big on security in 2023.

The figures are strong and tell an important story. Data taken from the Datto SMB Cybersecurity for MSPs Report, which considers the views of 2,913 IT decision-makers, shows that 42% of SMBs are prepared to increase their spending on security this year. Additionally, a further 40% plan to maintain their security spend, which typically comprises a large portion of any business’ annual IT budget. Nearly a third of businesses dedicate more than 20% to keeping attackers at bay.

Cyber attacks have, for some time, been widely considered the most significant threat to business continuity. They remain at record highs and for cyber criminals, no target is too small. What’s more, SMBs by their very nature are the most likely to lack the skills and experience needed to fend off and ultimately recover from a business-crippling attack.

MSPs have a huge role to play in securing the safety of SMBs around the world and with smaller organisations set to invest heavily into security this year, there is plenty of business out there ready to be snapped up.

The security needs of SMBs are myriad; MSPs are relied upon to provide best-in-class support when it comes to purchasing and implementing various technologies. These can include identity and access management (IAM), endpoint security, business continuity and disaster recovery (BCDR), phishing protection and more. The learnings on offer in the Datto SMB Cybersecurity for MSPs Report can help any MSP understand the current needs of potential clients and pitch their services in the most effective way possible.

The big MSP opportunity

Less than a third (31%) of SMBs report being entirely satisfied with the tools they rely on to protect against attacks. The latest figures show that SMBs are in need of confidence - confidence to navigate the web safely, and confidence that even if their staff fall for a particularly sophisticated phishing attack, no harm will come to that business’ clients.

Phishing attacks are the number one reason why SMBs have encountered security failings, according to the Datto SMB Cybersecurity for MSPs Report. More than a third (37%) said they fell for an attack that ultimately led to wider issues and 72% expect to fall prey to an attack in the next year. Malicious websites, problems with weak passwords, and cyber security training formed some of the other top issues affecting SMBs today.

With all of these threat vectors impacting businesses regularly, it means there are now plenty of opportunities to demonstrate to customers the necessity of having cyber security solutions that work. MSPs need to be able to guide customers along their journey, plug their security gaps, and show them the solutions that can be relied upon when the worst-case scenario eventually strikes.

However, SMBs need more than products and solutions to their problems. They need a partner they can trust, one that can deliver a truly reliable service as well as training that delivers value. For example, Datto’s data shows that SMBs are fully aware that cyber security is a numbers game and that attackers will eventually succeed in breaching their systems. They need an MSP that can ensure the impact is minimal and their disaster recovery (DR) plan is robust.

Auditing a potential customer’s DR plan provides an opportunity for an MSP to demonstrate its expertise, identifying weak points that can be addressed. Nothing shows customers their MSP understands their business’ security posture more than one that can fix issues that haven’t yet been exploited. Luckily, SMBs usually have such a plan in place, but those that don’t will need support throughout the entire journey, as well as product recommendations too. Plus, given the average cost of downtime now being set at $126,000 per incident, SMBs must understand they can’t afford to skimp where it matters.

Only half of SMBs have the resources to manage their day-to-day security needs entirely in-house, according to the latest figures. Businesses that don’t have the capacity to recruit experienced security staff need a knowledgeable MSP with up-to-date expertise on the latest threats - powered by best-in-class tools - by their side.

Reasons to be fearful

It’s no secret that the cyber security landscape becomes more perilous every year. Cyber criminals perpetually lead the cat-and-mouse game by continuing to evolve tactics when defenders become wise to their act. The evolution takes a different form with each passing month, and the latest trend to be conscious of is attacks on cloud environments. Research from Netskope recently revealed that cloud-delivered malware attacks tripled over the course of 2022, so SMBs are increasingly looking to take their security skywards.

According to the Datto SMB Cybersecurity for MSPs Report, a significant chunk of SMBs are planning to make serious investments in the cloud over the next 12 months. Here lies a huge opportunity for MSPs to flaunt their expertise and to recommend tailored solutions their customers can trust to keep them protected. Almost half of SMBs are either considering new network security solutions (47%) or cloud security tools (45%) as ways to shore up their organisations’ defences. More than a quarter are also weighing up cloud purchases around email and endpoint security, plus BCDR too.

With so many choices between the numerous vendors all claiming to offer the best protection, SMBs - now more than ever - need a reliable partner to help them decide what tools are going to be right for their organisation.

Indeed, the threat landscape looks markedly different than what it did two, three - even just one year ago. Phishing is still the go-to tool in a hacker’s bag of tricks, but ransomware is also evolving and ever-present. Various groups often target indiscriminately - it’s not just the biggest fish that get hooked anymore. Children’s hospitals, schools, and charities are all, unfortunately, fair game to the lowest criminals out there. Hackers don’t care about who gets hit, just whether they can pay.

Having effective tools in place that allow organisations to restore their data from backups is the key to surviving a ransomware attack in 2023. Datto’s figures show that 60% of IT decision-makers expect to succumb to ransomware in the next 12 months and most (70%) said the impact will either be ‘significant’ or ‘severe’.

Simply put, having trustworthy cyber security defences, implemented and managed by genuine experts, is imperative for SMBs in 2023 if they want to continue to thrive. The shortage of in-house expertise often leads to businesses looking for outside help and MSPs, armed with the right tools and service quality, can be the guiding light that helps their customers stay competitive and grow. Even through economic uncertainty.

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Since the pandemic, cyber criminals have benefitted from businesses overlooking essential security measures as a result of accelerated digital transformation efforts to continue trading. These criminals have targeted smaller and mid-sized organisations in particular as they don't have the budget or readiness to invest in cutting edge security tools.

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Small businesses are in an unprecedented position to hire talent that in normal circumstances would be scooped up by big tech, according to recruiting giant Randstad.

The ongoing cost of living crisis has caused alarm for almost all sectors of the economy, and tech companies are among the many facing a downturn. But Randstad, in an assessment of the market landscape, argues that employers in small and medium-sized businesses (SMBs) should use this period to their advantage.

So far in 2022, 37,000 tech workers in the United States have lost their job, and some of the largest tech firms in the world including Microsoft and Nvidia have recently announced hiring slowdowns. In August, Google asked its employees to come up with ideas for improving productivity, dubbed a ‘Simplicity Sprint’, and stated that the move was the result of mismatch between employee numbers and output.

The UK has also had its fair share of disruption, with 100 layoffs recorded at health app developer Bablyon, 150 layoffs at digital assets trading firm Blockchain, and a further 200 layoffs at events firm Pollen. However, online retailer Cazoo was one of the worst hit, with 750 redundancies announced in June.

As the bigger firms look to cut back, many smaller businesses and startups are considering ways to survive a recession, and strategic hiring while the market is down could prove crucial to long-term gains. Well-placed investment now might give small businesses the freeboard they need to not just continue to exist beyond the crisis, but come out of it in a better position than before. Randstad, the world's largest recruitment and HR service provider, maintains that while the large firms suffer losses, small firms could reap the rewards by growing their skilled workforce.

“For the last decade, tech companies have hired tens of thousands of workers,” stated Adrian Smith, senior director of operations at Randstad.

“But in the post-pandemic economic crunch, technology companies worldwide are announcing hiring slowdowns, freezes and, in some cases, layoffs. And, of course, when America sneezes, the rest of the world catches a cold. We’ve seen 2,000 redundancies in London since the start of the year and there will be more to come.

"Now, smaller tech employers have a once-in-a-generation opportunity to hoover up top talent that would normally be inhaled by the big tech giants. For too long, a technology skills shortage has been a risk to business and economic growth; and there remains a strong economic need for more skills for digital transformation projects.”

Last year, the UK government charted a 50% rise in overall tech job vacancies in the UK, at 160,887 in November 2021. Tech job openings make up 12% of all UK job vacancies, and a recent MuleSoft report emphasised that IT leaders are finding it harder than ever to hire tech workers.

Randstad’s assessment of the landscape also recommends that SMBs looking to attract desirable candidates should first improve their internal skills, with schemes such as standardised training in high-demand skills like data analytics. Smith also suggested that SMBs “could try accessing a wider talent pool by considering contractors. This is potentially a useful ‘try-before-you buy’ strategy.”

Virtual CIOs are one example of this strategy, in which companies hire contractors as remote or temporary CIOs in order to facilitate digital transformation and productivity needs. Some have also argued that the skills shortage that UK firms are experiencing can be addressed by a stronger focus on the tech sector in the education system, and that the government is currently not doing enough to encourage tech training earlier in life.

“In the long-term, as a country, we must invest more in education as well as research and innovation. We also need to make a job in tech more appealing to women - it’s a male dominated environment and can be intimidating for young women without many female mentors,” Smith acknowledged.

New research has shown that more than half of global organisations have had their supply chains impacted by potentially unsecured SMBs falling victim to ransomware attacks.

Security firm Trend Micro’s report showed that 52% of supply chains have been affected by the threat and the vast majority of those surveyed (90%) feel that either their partners and customers or both, are making them a “more attractive target” for attacks.

The same proportion of organisations that were affected by ransomware attacks in their supply chains (52%) also said that said supply chains are “very significantly” or “significantly” propped up by SMBs that may be prone to exercising less secure cyber practices.

Despite this, Trend Micro observed that organisations are reluctant to work with their partners to improve security throughout the supply chain.

“We found that 52% of global organisations have had a supply chain organisation hit by ransomware, potentially putting their own systems at risk of compromise”, said Bharat Mistry, technical director at Trend Micro.

“But many aren’t taking steps to improve partner cyber security,” he added. “The first step towards mitigating these risks must be enhanced visibility into and control over the expanding digital attack surface.”

Only 47% of organisations share information about ransomware attacks with partners or suppliers and this figure falls even lower to 25% when it comes to general threat information, the survey results showed.

This led to around one in six (15%) IT leaders reporting that they couldn’t be sure if their partner or supplier had ever suffered a ransomware attack.

Ransomware has topped the list of cyber security threats to businesses for around five years but according to Trend Micro, on average 31% of organisations still don’t feel adequately protected against the threat.

The data from other metrics were largely similar across the regions but the confidence in an organisation’s cyber security posture, looking at the data on a region-by-region basis, varied substantially.

Hong Kong was the region with the most confidence in its organisations’ cyber security resilience. An average of the 102 respondents from the region showed just 18% were unconvinced about their security posture, despite it reporting the greatest proportion of organisations by region that experienced a ransomware attack in the last three years (83%).

Other regions were more aware of the situation, such as Norway and 58% of its 105 surveyed organisations reported a lack of confidence in their cyber security resiliency.

This was a more accurate reflection given the 75% of organisations reporting at least one ransomware attack in the past three years - a figure that placed it on the upper end of average compared to other nations.

Trend Micro said that “there is no silver bullet when it comes to reducing ransomware risk in the supply chain”, but there are several important steps that businesses aren’t currently taking.

“The key is first to gain a comprehensive understanding of the supply chain itself and corresponding data flows so that high-risk suppliers can be identified,” it said.

“They should be regularly audited where possible against industry baseline standards. And similar checks should be enforced before onboarding new suppliers.”

Implementing security controls such as least-privilege policies for all devices and services, enabling multi-factor authentication (MFA), scanning open source components for security flaws before building into CI/CD pipelines, and performing regular back-ups, among others, can all go a long way in becoming more cyber resilient.

Avast has announced a new solution to help small businesses combat rising ransomware attacks.

Dubbed Ransomware Shield, the new solution provides an additional layer of protection, ensuring uninterrupted access to data and systems in the event of a cyber attack. Additionally, the tool’s proactive protection limits unauthorized access, bolstering security, and privacy.

Ransomware Shield is available as part of Avast Essential, Premium, and Ultimate Business Security packages for Windows devices and macOS. In tandem with Avast's existing cyber solutions, including Web Shield, File Shield and Behavior Shield, Ransomware Shield helps businesses employ multi-layered protection to thwart threat actors' illicit activities.

Enabled by default, the solution also offers users the ability to customize the list of protected files and folders under “policy” in Avast Business Hub.

"Small businesses are facing a growing threat from ransomware, with cybercriminals increasingly targeting smaller organizations to encrypt crucial business data and disrupt operations. The results can be devastating for small businesses that lack the financial and technical resources to rebound from such attacks,” explained Filip Hlinka, VP of product at Avast.

Hlinka added: “Avast's antivirus has always offered consumers and business users powerful protection against cyberthreats including ransomware, and Ransomware Shield offers a purpose-built, additional layer of protection which helps to secure businesses' most crucial files against these highly damaging attacks."

Earlier this month, NortonLifeLock's $8.6bn acquisition of Avast was provisionally approved by the UK's Competition and Markets Authority (CMA), following an investigation that ruled out unfair competition concerns.

Financial services firm Square is to offer its UK sellers ‘buy now pay later’ (BNPL) capability across their platforms.

Sellers will be able to offer customers BNPL online through a Clearpay integration at the checkout, while any in-person Square checkouts will also support Clearpay options, including Square Point of Sale, Square for Retail and Square for Restaurants.

The move makes the UK the only market in which all Square platforms offer BNPL solutions.

Clearpay, known as Afterpay outside the UK and EU, was acquired by Square in 2021 for approximately $29 billion. Square registered a 180% global increase in new customers using Afterpay through Square sellers between February and March, and US businesses that offered it as a BNPL service saw increases such as a 17% increase in clothing sales.

The integration means Customers can complete payments in four interest-free instalments over a six week period, while sellers receive the full amount up-front. Clearpay integration will also be available for developers within the Square Web Payments SDK, offering businesses the option to maintain Square and Clearpay payments easily.

Clearpay will also be available as a payment method for sellers who utilise Square’s Virtual Terminal dashboard, through which customers can be sent Pay Links via text message.

Square offers businesses hardware and software to facilitate card payments, with dedicated Square Readers and Stands, or even through a simple iOS or Android app. As its customer base is primarily made up of businesses that did not formerly have card payment capabilities, 96% of Square Sellers are small and medium-sized businesses (SMBs), according to market insight firm Enlyft.

BNPL payments accounted for almost £13 billion of UK e-commerce spending in 2021, and could exceed £16 billion in 2022, according to US fintech giant FIS. In the UK, BNPL is expected to account for 12% of UK e-commerce spending by 2025, and is currently the fastest growing online payment method.

Rich Bayer, UK country manager at Clearpay, identified “young and engaged shoppers who want BNPL as their preferred payment method” as a key market that the integration opens up to Square Sellers.

With the worsening cost of living crisis and rising inflation, SMBs are increasingly look for ways to offset costs for their customers, as even smaller purchases begin to be weighed up against the price tag of essential items.

“We’re thrilled to be integrating Clearpay both in-store and online in the UK,” stated Alyssa Henry, head of Square. "The integration across platforms furthers our goal to give sellers of all sizes omnichannel tools that help them to grow by meeting consumer shopping habits, whatever and wherever they are.

“Clearpay provides our ecosystem with a new tool beyond an alternative payment method; it enables an omnichannel commerce solution that can offer true value to our sellers.”

Lenovo has announced a new iteration of its “Evolve Small” initiative to support small businesses across North America.

Originally launched in July 2021, the campaign assists small businesses owned by Black, Indigenous, and People of Color (BIPOC) in recovering losses caused by COVID-19. The Evolve Small program included $1 million in grant funding, technological resources, community support, and business mentorship across the US and Canada.

Lenovo is now fortifying Evolve Small to bring the spotlight on minority and women-led businesses.

“Small businesses continue to face tremendous challenges,” said Gerald Youngblood, chief marketing officer at Lenovo North America.

“Lenovo recognizes the pivotal role these businesses play in the vitality of their local economies, and the needs they fill in the communities they serve. Through Evolve Small we can amplify our contributions to small businesses by providing the level of support they need to not just stay afloat – but ultimately thrive,” added Youngblood.

Underscoring enhancements to its initiative, Lenovo affirmed continued grants, technology upgrades, and mentorship opportunities to small businesses in partnership with Microsoft and AMD, in addition to custom marketing materials and mentorship from a celebrity partner and Lenovo Evolve Small Ambassadors for select small businesses in the US and Canada.

The firm has also announced its collaboration with entrepreneurship and community building non-profit Goodie Nation to offer additional grants to small businesses.

“We are excited to work with Lenovo and the Evolve Small initiative," said Joey Womack, CEO and founder of Goodie Nation.

"At Goodie Nation, we are committed to helping diverse founders close the relationship gap that often exists for minority and women entrepreneurs for gaining access to capital, mentorship, sales acceleration and community."

Medium-sized businesses face additional challenges in modernising their data centre storage infrastructure because they lack the resources of larger organisations. Additionally, the market dynamics mean an increasingly competitive landscape, so for them sourcing durable, scalable, and secure IT assets is essential.

This report gives advice on how mid-market organisations can improve the security and reliability of their storage infrastructure, and why refreshing and retiring older infrastructures should be factored into their IT security strategies.

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The events of recent years have caused an increase in technology investments, as organisations embrace digital transformation in order to maintain performance. For small and medium-sized businesses (SMBs), there’s a further need to ensure they’re getting the most out of these digital assets when budgets are tight.

This eBook discusses the growing need for modern storage solutions, and how organisations that refresh their storage hardware can continue to meet business performance needs, while cost-effectively driving growth.

Download this whitepaper to discover Dell EMC’s portfolio of storage solutions, offering optimisation and flexibility as your business needs change, with payment options to suit.

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Technology is considered a key way we can address environmental and social challenges. Over the last ten years, tech innovation in this area – known as impact technology – has been supported by growing investment.

Between 2011 and 2021, funding for impact tech companies that support UN sustainable development goals rose from £59 million to £2.8 billion, but there has been some concern regarding a downward trend in the proportion of early-stage funding available for tech startups in general.

Research by Tech Nation and Google for Startups found, in 2011, seed and pre-seed venture capital investment made up over 15% of the total investment mix in UK tech. By 2021, however, this dropped to just 4.8% due to a downward trend over the course of the previous four years.

“If these firms are to grow into the scaling engines of the UK economy, the supply of capital that sustains their early growth must be prioritised,” warns George Windsor, research and data director at Tech Nation. If funding isn’t sustained, the UK runs the risk of stifling future stars on the global tech stage.

Tech startups face drop in early-stage funding

Alongside a reduction in the proportion of startup funding, the research also found an ever-larger proportion of funding is being allocated to later-stage companies. This is because they present less risk to investors, particularly during times of economic uncertainty following Brexit, COVID-19 and now the Russian invasion of Ukraine combined with the UK cost of living crisis.

“The recent stock market recession and high inflation affects early-stage investments because venture capitalists have more concerns regarding future returns, which are less realistic now,” says Yana Mashukova, founder of fitness app Buttn.

Entrepreneurs caution that if things don’t change, the UK pipeline of innovative tech companies could be curtailed, leading to a period of silence in terms of the launch of product and services and growth.

Windsor, meanwhile, points to the UK potentially losing its sense of identity and the renown it’s achieved over recent years. “It’s likely to find itself in limbo between fast moving smaller economies like Sweden, Switzerland and Estonia and the might of India, China and the US,” he says.

Is now the time for entrepreneurs to panic?

Tash Grossman, co-founder and CEO of tech startup Slip, thinks a lot of entrepreneurs may delay pursuing their ideas because of the recent negative conversations around funding and growth. Delaying the launch of new startups, however, is a bad idea, she adds.

“I’ve seen a lot of posts recently on all the great startups that were born in the last recession – Uber, Airbnb, Square, et cetera – so there’s no reason to stop,” she advises.

Investors can, indeed, become more keen to find the ‘next big thing’ in times of uncertainty or crashes. The financial crisis, for example, also gave birth to the idea of cryptocurrency and blockchain-powered systems and platforms, which eventually entered mainstream thinking. Now, there are countless startups and ventures pursuing such technologies.

Furthermore, in absolute terms, investment in tech startups is actually still at an all-time high, with the UK currently fourth in the world for tech investment, having achieved a record year in 2021. Alexej Pikovsky, a former investment banker-turned-CEO of Alphagreen Group, points out that the relative decline in early-stage funding can be explained by a different breed of investors joining the venture capital world.

“Pension funds, asset managers and hedge funds have never invested in early-stage or late-stage private deals. Yet, for the last two years they’ve begun to participate as early as in seed-stage rounds – their capital just hasn’t reached early-stage investing yet.”

Startup investment: Reasons to be cheerful

There’s clearly room for optimism in the UK tech startup market, and data provider Preqin predicts the overall size of the private capital industry will grow from over $10 trillion, last year, to almost $18 trillion by 2026. Investment bank Goldman Sachs, on the other hand, forecasts this could even grow to as much as $30 trillion.

Plus, 2022 has started off very positively in terms of tech startup funding. This June, Dealroom and Tech Nation produced a report that showed the UK ranking second for global startup funding, after a record first quarter in which UK startups raised more investment than India and China, behind only the US.

“We must just be mindful of supporting early-stage tech startups with high potential to ensure this strong trajectory of growth and innovation continues,” Windsor notes.

Many experts predict the tech investment market will remain strong in the year ahead, although valuations could start to drop if market sentiment weakens due to macroeconomic trends such as inflation and higher interest rates.

“If stagflation becomes entrenched we may see more private investors forced to support their existing portfolios,” says Helen Oldham, founding board director at NorthInvest. “However, as long as the UK tax benefits exist in early-stage investment, we believe there will be an appetite.”

There may be a lot of uncertainty in today’s world, but the general consensus is this shouldn’t stop tech entrepreneurs from pushing forward with their business ideas.

It’s important to remember “the UK has the strongest venture and growth capital funding ecosystem in Europe,” says Mark Howard, joint head of technology, media and telecommunications at law firm Charles Russell Speechlys. This is “supported by tax approved investment schemes such as EIS and SEIS, and the VCT market. We also have the AIM market – Europe’s largest growth company public market.”

Where should early-stage startups start looking?

The key advice from both investors and entrepreneurs is that tech startup founders should be proactive and continuously build out their networks.

Marta Krumpinska, head of Google for Startups, recommends they always look for opportunities to meet other founders – even if from a completely different sector – as everyone who’s started their own business has experience to learn from. Tech entrepreneur Indy Gregg, founder and CEO of Wedo, meanwhile, advises shopping far and wide for the right investor for your startup, saying there are investors “literally everywhere”.

“There are some really great networks online like the UK Angel Investment Network and Connectd where you can search and be matched with angel investors. There are a lot of family offices and early-stage venture capitalists out there as well – and there’s always the crowdfunding approach. This can be costly, but also helps drive users.

“Startups can also consider alternative funding approaches such as NFTs, initial coin offerings, startup lending platforms and grants.

“Another way of raising investment is to share some equity with key team players,” she continues. “There are pros and cons to raising capital – you’re giving up a piece of your company in return for either money or human capital. Human capital is what you need to attract in order to achieve goals and be ready for scale. It’s rare to find a startup founder who’s built an empire on their own.”

Cyber security is a critical business issue for companies of all sizes, not just for organisations with a household name, whose brand can take a serious knock if a security breach were to happen. In fact, it’s the smaller-sized businesses that cyber attackers know are the most vulnerable, and unfortunately, the damage can do more than just harm a small business’ reputation; it can put it out of business altogether.

In the 2022 Data Breach Investigations Report by Verizon, 46% of all cyber security breaches in 2021 impacted organisations with a workforce of less than 1,000, with 61% of SMBs the target of an attack - most of which had no cyber protection. Ransomware was shown to be the most common form of attack, resulting in loss of sensitive data, and just over half those affected actually paid the ransom - something that smaller companies with smaller budgets cannot afford to do.

It’s understandable; small businesses "have less time and fewer resources to focus on cyber security, which often takes a back-seat to sales-related activity," Hemant Kumar, CEO and co-founder at Enpass, says. Yet, they also "often have larger companies as customers, making the potential gain greater and the consequences of a breach more severe". It's not all that surprising that cyber security takes a back seat when you consider solutions are often seen as "expensive and overcomplicated" according to Pete Bowers, COO at norm.. "But whilst enterprise-level solutions can come with enterprise-level price tags," Bowers continues, "there are some simple free and inexpensive measures that small business owners would be wise to implement."

It is worth remembering, however, that there’s no such thing as being 100% secure. However, if you have measures and resources in place to know how to act once an attack has hit, and how to quickly recover from it, you’ve covered the crucial aspects of minimising its impact. It’s all about knowing where the cyber security holes are in your organisation, and how to “plug” them.

1. Identity and authentication

Identity is “probably the first issue that small businesses struggle with concerning security", according to Tom Bridge, principal product manager at JumpCloud. This is the question of who's using a device and how you can prove it, and for big enterprises “there’s a whole industry out there addressing identity and security using strong authentication and single sign-on (SSO)".

For smaller businesses, however, there’s a catch: “These technologies often build on Microsoft Active Directory, and that is not aimed at small businesses." Most still neglect to cover the specific variations or distinctions that an SMB requires, however utilising a cloud-based directory service - Directory-as-a-Service (DaaS) for user identity management could enable single sign for SMB owners.

One solution for smaller organisations is to utilise the power of password management, multi-factor authentication (MFA), and the principle of least privilege (PoLP) - a security concept that enables users to only have specific access to data or applications for certain tasks - to plug your identity and authentication security gaps. A simple password policy just won’t do, with password reuse rife, and many people opting for one of the most common passwords out of convenience, including consecutive digits and the first six letters of a standard English keyboard.

The simple fix is enforcing strong, unique passwords for all business-critical applications and accounts. “Random password generators are a great option for guaranteed one-time use, with password managers helping users to stay on top of these," recommends John Goodacre, challenge director of the UK Research and Innovation’s ‘Digital Security by Design’ and professor of computer architectures at Manchester University.

Any identity management policy should also include a robust MFA process wherever that’s achievable. Lee Wrall, director at managed services provider (MSP) Everything Tech, says recent Microsoft research revealed 99.9% of the cyber attacks customers that approached them may have prevented attacks if MFA was activated. "If a vendor doesn’t support it," Wrall says, "it’s time to look for another." Truth be told, it's not difficult to find vendors that appreciate the value of MFA as a selling point. "The technology of MFA has been used in the banking industry for a long time," Adam Seamons, information security manager at GRC International Group says, "and it’s now in many mainstream products such as Microsoft Office 365, Google Workspace and Apple iWork. Enabling MFA isn’t a silver bullet for account compromise, but it can go a long way to make things harder for attackers."

That brings us to the final line of defence when it comes to identity security: PoLP. "If everyone in your company can make system changes and access important data, then all it takes is one account to become compromised by malware or a cyber criminal and it’s all over," Seamons concludes.

“Unavoidably, in the small business world, employees often have to wear multiple hats and work across a range of roles and systems, so you may need to weigh security against convenience, but putting your thumb on the security side of the scale is rarely a bad move.

2. Patch management

For Jamie Akhtar, CEO and co-founder of CyberSmart, the security hole that most urgently needs addressing in most small businesses is patching.

"Over time, even the best software develops vulnerabilities, suffers a breach, or simply becomes outdated," he says. “The trouble is, patching is only as effective as the number of customers who regularly update their operating systems and software." And that can be hard to manage for the smaller business.

Patch management tools can help to centralise the process, but the real key is getting into a routine of patching. As Ken Galvin, senior product manager at Quest, says: "Misconfigured, outdated and unpatched software are three primary vulnerabilities that hackers attempt to exploit." Being able to automate the process is particularly beneficial for smaller businesses without an IT team. "Look for tools with built-in vulnerability scanning which can find susceptible devices and tell you how to remediate issues," he recommends.

3. Email and phishing

It might seem odd to think of email, something so central to most every business, as a security hole, but it is. "A business email system is an open front door that accepts virtually any message sent to a valid email address," Galvin explains. Even once you sweep out dangerous attachments, phishing attacks are as prevalent as ever – and they’re a threat that it’s almost impossible for you to manage.

"Much of your success in thwarting these attempts will be controlled by your employees," notes Galvin. Sure, security training and email filtering, plus antivirus software, all help mitigate the fundamentals. But for better protection, he recommends "gaining better visibility and control of the devices that access your network, through tools such as unified endpoint management software". That can be a big ask, and a big spend, for a small business. However, these points of entry to your platforms and services present a huge opportunity for attackers, so investing into their protection is of utmost value.

If your staff do fall victim to a phishing attack, remember that how you respond after the fact can still have an impact on the overall threat environment i.e. immediately changing passwords and reporting the incident. “If a small business does fall victim to a phishing attack, it's always important to report it to Action Fraud,” advises Goodacre – “and remember not to punish staff, as it discourages them from reporting future incidents.”

4. Remote desktop

Use of the Remote Desktop Protocol (RDP) - enabling users to connect remotely to a Windows PC or server on a local network - and other remote-access tools has skyrocketed in the past few years, as businesses have increasingly adopted a hybrid model. It can be a risk, though: "With this window into your business environment," Galvin says, "if hackers manage to find open ports by using penetration testing software like Cobalt Strike, a brute force password hack on those open ports to gain access to could be implemented, resulting in a complete IT system control takeover."

Ioan Peters, regional managing director for EMEA cyber risk at Kroll, recommends your remote desktop should only be accessible via a virtual private network (VPN) or a virtual desktop solution, to minimise the chances of an attacker finding a way in – and, so far as possible, to establish distance between business-critical resources and employee’s personal systems.

5. The cloud

"In 2022, your small business is only as secure as your weakest cloud service provider," says Tim Mackey, principal security strategist at the Synopsys Cybersecurity Research Centre. In fact, protecting sensitive data from being pulled out of the infrastructure by unauthorised users is one of the most critical challenges for a business of any size. With companies increasingly reliant on cloud-based platforms like Google Workspace and Microsoft Office 365 to enable their employees, this is a cyber crack threatening to turn into a full-blown security sinkhole.

"A small business might not have an in-house security team," says Burak Agca, a senior engineer at cyber security firm Lookout, "but data protection can be aligned with secure IT practices concerning how users access the infrastructure and the data within it." Lee Wrall recommends you seriously consider investing in a managed service provider: “The longer you ‘wing’ your IT on your own, the more you’ll be at risk," he warns. “Small businesses should get used to paying someone to allow them to sleep at night from the very early days in their business; most providers have a scaling price model to bring them within your budgetary reach."

6. Untrusted applications

Small businesses often don’t have the resources to put everything through a deep security review, and that can lead to dangerous software being let loose on your company network. "This primarily applies to mobile apps," Agca says, "especially since users could unknowingly download apps laced with malicious loaders that pull malware down to the device after installation."

Although it may be hard to enforce in the age of bring your own device (BYOD), security software is a must for every smartphone and tablet that’s used in a small business setting, ensuring that there’s sufficient protection and that all device types comply with policies and procedures. "Proactive malware protection is critical to ensuring your employees and data are protected from threat actors," Agca says.

This advice is especially pertinent since many small businesses have very little, if any, visibility into what vulnerable assets actually exist in their infrastructure. Satya Gupta, founder and chief technology officer (CTO) at Virsec, reminds us that supply chain attacks, which can result in compromised or malware-laden software getting deployed, are also to be considered here. "These attacks are increasing in volume lately and allow the attacker to inject malicious code in the business without having to exploit a vulnerability or leverage stolen credentials," Gupta says. A good application control solution can help mitigate this.

This article was first published on 29/07/22, and has since been updated.

McAfee and Visa are offering Visa Classic Business card holders in the UK 50% off a one-year subscription to McAfee Total Protection.

Visa partners in the UK will be able to offer the deal to its business card holders thanks to an expanded partnership between them, the two companies said today. Visa Classic Business card holders can get up to 50% off the retail price of McAfee’s security product, including a one-year subscription to McAfee Total Protection for five or 10 devices.

The partners added that they’re offering the deal as many small business owners aren’t always able to adequately protect themselves and their customers from the increase in online risks, due to a lack of resources from a budgetary and staffing perspective. The companies underlined that over half of the data breaches in 2021 involved small businesses, according to the Verizon Business 2021 Data Breach Investigations Report.

“With increasingly complicated global issues such as the ongoing impacts of the COVID-19 pandemic and difficulties stemming from the global supply chain, small businesses are increasingly reliant on their digital infrastructure, and it’s never been more important to ensure the proper protections have been implemented,” said Pedro Gutierrez, SVP global consumer sales & operations at McAfee. “We are proud to partner with Visa to offer solutions to their Visa Business card holders and look forward to helping these organisations stay secure so they can focus on what matters most to their business.”

The two companies have partnered in the past to offer similar deals. In July last year, the pair launched McAfee Security for Visa card holders in the US which offered savings of up to 40% with a 24-month package and up to 60% with a 12-month offer.

Similarly, the Royal Bank of Scotland (RBS) is offering Malwarebytes Premium to its customers free of charge until at least May 2024. It partnered with the cyber security company to make its premium product, normally valued at £49.99, available for free to protect up to 10 devices.

The UK government is opening up its Help to Grow: Digital scheme to businesses with at least one employee.

Previously, SMBs needed at least five people on their payroll to qualify for the initiative. Still, the change has opened it up to 760,000 more companies - 1.24 million in total - according to the government.

Help to Grow: Digital was launched alongside Help to Grow: Management in 2020 and they were aimed at smaller companies and startups that needed help with digital transformations or for those looking to learn more about scaling up. The Digital scheme offers discounts of up to £5,000 for government-approved software - mainly CRM and e-commerce products.

Approved software includes e-commerce companies Shopwired, Gob2b, Kentico and EKM, while CRM products are available from Zymplify, Livepoint Software Solutions and Gold-Vision CRM. These are all UK-based businesses and there are also digital accounting products available from Sage, Intuit and Crunch.

The scheme is open to all sectors and industries, though each company will need to have been registered in the UK with Companies House or at least be a registered society on the Financial Conduct Authorities Mutuals Register. The minimum number of employees is down to just one, but this needs to be someone who is not the owner and the maximum is 249 employees. Firms must also have been actively trading for over 12 months and have an incorporation date longer than 365 days before their application.

Each eligible business will receive one discount towards the purchase of just one approved software product worth up to £5,000, which doesn't include VAT. And, this must also be the first time they have purchased the approved software.

The government also plans to increase the number of approved software available in the coming months.

Meta CEO Mark Zuckerberg has announced new free cloud-based API services for WhatsApp, as the company looks to drive business adoption of the messaging platform.

The new developer offering is essentially a cloud-based version of the company’s WhatsApp Business API for the enterprise, first introduced back in August 2018.

Now, WhatsApp Cloud API is aiming to drive adoption of the platform among smaller businesses around the world, with an attractive integration time of just minutes rather than weeks.

Speaking at Meta’s Conversations event this week, Zuckerberg said this will enable businesses to connect with more potential customers in a way that is convenient for them.

“The best business experiences meet people where they are,” he said in his keynote speech. “Already, more than 1 billion users connect with a business account across our messaging services every week. They’re reaching out for help, to find products and services and to buy anything from big-ticket items to everyday goods.”

Meta added that businesses will only be able to message people through the platform if they have requested to be contacted – meaning users won’t need to worry about unsolicited communications.

There will also be a new optional premium service which will offer additional paid features for businesses. Still in development, these further capabilities will include the ability to manage up to 10 devices, as well as customized click-to-chat links that can be integrated into external company websites.

Ultimately, companies leveraging the WhatsApp Cloud API can build on top of WhatsApp’s foundations to provide a customised experience suited to customers, avoiding large server expenses in the process.

“Any business or developer can easily access our service, build directly on top of WhatsApp to customize their experience and speed up their response time to customers by using our secure WhatsApp Cloud API hosted by Meta,” Zuckerberg said.

“And this is an important step to help more businesses connect with people and help more people message the businesses that they want to support—big and small.”

BT is set to invest close to £100 million over the next three years in its Division X business unit, which develops 5G, edge computing, IoT, cloud, and AI-based solutions for enterprise customers.

These products and services largely cater for the manufacturing, health, port operations, transport, and logistics sectors.

These include a 5G-powered robotic arm, which could lower the risk of injuries in high-risk industries such as mining, as well as a Connected Healthcare Backpack equipped with a digital stethoscope and video technology that will allow first responders to treat patients in remote locations while staying connected to hospital-based experts.

The investment is part of the newly-unveiled Charter that aims to benefit the UK telco’s 1.2 million business and public sector customers.

Apart from investing in innovative technologies, the Charter will also see BT launch new cyber defence and assessment tools, including the Safe Security cyber health check tool, which is available to larger UK corporate and public sector customers starting today.

BT also aims to shorten the time required for installing or repairing ethernet connections, and launch the UK’s first service that will increase broadband speeds for thousands of small businesses currently dependent on copper lines by combining 4G and fixed line speeds.

Small businesses will also benefit from a new partnership network launched by BT and the Federation of Small Businesses (FSB) that will provide customers with exclusive offers across areas including broadband, mobile, digital marketing, and connected devices.

Moreover, the Charter will also see BT welcome an additional 350,000 small businesses to its free digital skills programme by the end of March 2023, as well as launch a new suite of smart business tools that build on BT’s Digital Marketing Hub launched in October 2021.

BT Group Enterprise CEO Rob Shuter said that the Charter had been created based on customer feedback and “reflects the priorities that our 1.2m business and public customers expect to see from BT”.

“[We] based our Charter on four key promises – that we’ll lead the way in innovation; we’ll be trusted experts in our fields; we’ll be easier to do business with; and we’ll continue to put purpose at the heart of our business,” he told attendees of the launch event at BT’s One Braham headquarters.

This automatically-generated transcript is taken from the IT Pro Podcast episode ‘Solving SMB challenges through tech'. To listen to the full episode, click here. We apologise for any errors.

Hugh Armitage

Hi, I'm Hugh Armitage.

Adam Shepherd

And I'm Adam Shepherd.

Hugh

And you're listening to the IT Pro Podcast. This week we're taking a look at small businesses.

Adam

The life of a small business is full of challenges. But it's fair to say that the last several years have been more challenging than most, from Brexit to the pandemic SMBs have been forced to deal with a number of radical changes to the market as a whole, as well as the tools and processes they rely on to do business.

Hugh

This week, we're looking at how these changes have affected small businesses in the UK, and how technology has helped them to respond. We're joined by Aaron Harris, CTO of UK based cloud financial software platform Sage, to find out more about how its customers have reacted to the disruptions of the last several years, and how they can future proof their business to weather similar challenges to come.

Adam

Aaron, good to have you with us.

Aaron Harris

Great to be here. Thanks for inviting me.

Adam

So Sage has a strong focus on small business; to kick off with, can you tell us a little bit about how the UK SMB landscape has changed over the last three years?

Aaron

Yeah, and I think you you said it, the last three years have been seen accelerating change. I know this word is probably overused. But unprecedented. is a good word for it. Perfect storm might might be a good word for it. You know, the way, the way I talk about this, essentially, is that that technology was accelerating change for small businesses anyway. And COVID brought about an additional level of acceleration beyond what was already happening. So you know, there's a number of changes I think that we can talk about. The first one and obviously, the one where we're quite focused is just the acceleration of digital transformation. With with with COVID, businesses quickly had to to realise that if they couldn't use their business applications from home, if they weren't able to take orders from their customers digitally, if they weren't able to interact with their banks digitally, right, it became difficult to impossible for them to, you know, to to operate successfully and efficiently as a business. So So digital transformation for sure is, is you know, the biggest I think change that we see. But there's there's quite a bit more to it. The COVID also drove quite a change in the way we we hire retain, recruit, make happy work, colleagues, employees. There's a there's a huge labour shortage right now. And it's not quite clear how when, when all of this settles, what the the normal mode of work is going to be? How much of it's in-office, how much of it is work from home? How much do we expect our employees to work locally to the office versus how much do we allow them to work remotely? So we've got we've got digital transformation, we've got, you know, a tightening and sort of hard to predict labour market. And on top of that, we've got inflation, which, you know, nobody's got a crystal ball to say, you know, when when will inflation start to level? Is it still going up? Is it still going down? How does that affect my business? You know, should I raise my prices? So the punchline for all of that is that small businesses are expecting technology providers like Sage, to help them right to make sense of this and to to navigate through these times. So we saw, for example, that 44% of SMBs in the UK, expect to invest more in technology over the next 12 months than they have previously. So clearly, small businesses see technology as a big part of the solution to all this change.

Hugh

So Aaron, you've outlined some of these sort of key issues that we're dealing with, but um, can you dive a bit deeper into the consequences of, of those for SMEs?

Aaron

Sure, I guess it's it's helpful to start with digital transformation. And digital transformation is one of those, I think, very overused terms. It caught on, you know, six or seven years ago, people didn't really pay a lot of attention to what it really meant. And I think the big misunderstanding is that digital transformation is not simply moving from analogue technology to digital technology. It's not simply being able to move your technology from on premise to the cloud. It's it's really rethinking your your business model. It's, it's rethinking the key workflows of your business, as I mentioned, how do customers discover and buy my products? You know, how do I most effectively purchase from my suppliers? And how do I manage a supply chain, that that relies on digital workflows versus analogue workflows. So one of the big consequences, therefore, is the need to really rethink the business models that small and medium sized businesses operate against, and not just automate today's tasks, but actually, you know, automate complete, completely new digital workflows, right, that that reflect this more digital world. There's another element to this that we think is quite important, which is that as business processes become increasingly digital, it's quite disruptive to the work of humans. I use the word human there very specifically, because it's kind of the opposite of artificial intelligence, which is one of the technologies that's really enabling this transformation of workflows. And so there has to be this level of trust between, you know, small business owners, finance teams, accounting teams, that as they transition more and more of their work to technology, that technology is going to do the work in the right way. That where AI is being used to make decisions, it's making the right decisions. But it also means that we can use technology to support humans and what they're good at right? Things that AI will never be good at; leveraging human relationships, making decisions that require an understanding of a complex set of circumstances. They're having empathy and understanding the bigger picture that that decision is, may have beyond just the financial results of the business. So getting this psychology, right, this trust, if you will, between humans and technology, as as we accelerate this digital transformation is really, really important.

Adam

Yeah, that's a really good point, Aaron, and one of I think the most challenging aspects for small businesses is grappling with a lot of this new technology and trying to apply it to their business in a way that makes sense for them without having to essentially reinvent how they how they work on a kind of operational level, particularly, I think, for small businesses that don't necessarily have a huge amount of technical proficiency or expertise in the business already, that can sometimes be a challenge. So what are the kind of some of the main factors that can allow businesses to take advantage of these technologies without having to enormously invest in advanced kind of development operations or hiring a bunch more IT personnel?

Aaron

That's a great question. And actually, you know, I think the the burden the responsibility is on us, right? It's, it's on the providers of this technology. There's a there's an evolution that we're watching here, as we as we progress from computing era to computing era. If you remember the progression from the on premise, client, server, PC, desktop computing era to to the cloud. Part of the big transformation, there was that small and medium sized businesses no longer needed to worry about installing the software, setting up the servers, configuring the servers, managing the upgrade processes, so much of the responsibility that would have been the responsibility of these small and medium businesses, is handed over to the to the technology company, which which you know, requires a level of trust, for sure. We're moving into to another era that I think is marked by this this acceleration of digital transformation. That's that's changing business models. And we need to see that same progression. That progression, where less and less of the responsibility for managing the tech is the responsibility of the customer. And more and more of the responsibility lies with the vendor. Part of what makes this era of computing, I think, really different. Goes back to one of our principles at Sage for how we create technology leadership, and it's going to sound a bit ironic coming from a CTO. But the first principle of our strategy to become a technology to be a technology leader is that user experience, customer journey, is now more important than technology. Right? So in other words, the decision making process has to tie exactly to what are the needs? What's the journey? What's the experience of ultimately, the end customer and the users? If you get that right, technology will naturally follow. If you do it exceptionally well, the technology sort of recedes into the background.

Hugh

So Aaron, we've talked about these challenges that SMBs are facing, and how well equipped are UK small and medium businesses to meet them?

Aaron

Well, I think one of the things that really proved out during the COVID pandemic was that small businesses are remarkably resilient. It's, there's, there's a special entrepreneurial spirit that lives within small and medium businesses, especially small businesses, where they're, you know, there's always an entrepreneur who started this business, who is betting more than just their livelihood on this business, right, it becomes sort of essential to their, their personal outcomes in life, we've learned that small businesses are incredibly resilient. That's not to say that they're indestructible. You know, there's, there's much we have to do to protect small businesses. And we've seen support come from governments, right, we've seen advances in technology. So we can't just leave them on their own to survive. But I would say that small businesses are incredibly resilient and adaptable. I think that the pandemic changed some of our of our values, I think, and how we build business. Prior to the pandemic, this idea of, you know, lean manufacturing, lean supply chains, you know, never having any inventory on hand was was, you know, key to the way you build a profitable business. Well, now as we as we move into an era, it's not just COVID that's causing uncertainty, there's there's a lot of factors in the world, driving uncertainty, resilience becomes a really important objective in the way we design our businesses and design our workflows. And as I said, small businesses are well equipped. Governments play a role. So I think this is also really important. In this era of digital transformation, much of that digital transformation will be derived from AI, which which requires data inputs. So data flows in, you train machine learning models, that then automates human decision making, but also data just in a standardised way. So one of the things that has really impaired small businesses in the UK is their inability to access the credit markets. Right. So we know that small businesses are a bit disadvantaged versus larger businesses, because they don't have the same maturity of processes, they don't have the same maturity of being able to create a set of data that helps a creditor to make a credit decision. So governments have a lot that they can contribute to help small businesses to thrive. In this era, it's it's not just providing government support. It's not just programmes like like help to grow. It's also driving standards like open banking, open finance. And as much as the the, you know, the citizens of the United Kingdom probably are not thrilled about making tax digital. One of the things making tax digital does is it drives an accelerated digital transformation of these finance processes. And it creates a standard of uniformity. That allows for quicker decision making. So I've gotten a bit into, you know, our small businesses equipped, yes, but the answer is they are. But technology providers like Sage and and governments can't just rely on the fact that these companies are really, really resilient.

Hugh

Do you think government policies going in the right direction in general?

Aaron

I think so. It's it's a bit of a mixed bag. So governments often don't get it right the first time. Their intentions are almost always good. What I'm starting to see is is that governments are learning and pivoting a bit in their efforts. So where governments help is in driving that standardisation, where they help is in supporting small businesses and their efforts to to digitally transform. So in general, governments are helping. One of the things that is I can't see the future yet on is that the geopolitics in the world are actually not driving globalisation, they're driving more local, local approaches to data, local approaches to privacy, to sort of the digital processes. And a big challenge in the future that may offset some of the progress that governments like the UK Government are making is unfortunately, the sort of de globalisation, right, the idea that governments want to control where data resides. Governments have different regulations around data ownership rights, and data privacy rights, governments will have different thoughts and requirements around the approach to digitising processes like invoicing and filing taxes. So mixed bag, but I think generally as governments drive standardisation, as they support digital transformation, they are moving things in the right direction.

Adam

So Aaron, you mentioned earlier the importance of being able to access credit for SMBs and to easily access the kind of information that they need to get that credit. How much has the growing need for digital transformation affected SMBs' investment roadmaps, if you're like, how much extra investments are they having to make in their technology stack compared to what it would have been, say, three to five years ago?

Aaron

Yeah, that's a great question. And I'm going to get I'm gonna get on one of my favourite soap boxes to answer that question. So going back to this progression of technology from the desktop era, to the cloud era, now to the digital era, you know, more and more of the responsibility for managing the technology shifted to to the vendor. What's also happening in this progression is changing business models. So we know that with software as a service, which was the dominant approach to to selling software in the cloud era, we went from perpetual licence as a business model to subscriptions. As a business model, it had, among other things, a nice impact on democratising the access to technology, it meant that company like Salesforce, for example, and even - I should, I should use Sage in these example - Sage, right, in the in the creation of these cloud native SaaS products, when you go to a subscription model, the the way you monetize the value shifts such that you can expand access, right, it's less expensive for small business to pay because they have fewer licences. They require fewer licences, it's more expensive for larger companies, because they need more licences. Well, now what's happening with the digitization of finance and accounting workflows, is we're starting to see activity based pricing or consumption based pricing, becoming a very popular way to to support commercial business models. So it's not just as a small business that I only need, you know, one licence or two licences, because I only have one person in finance, I don't need licences anymore as a way to pay for the value I receive, I pay for value as I use the software. So as I transact over digital networks, as I make payments, as I file my taxes, and so this sliding scale of how customers pay for technology becomes even closer to the growth and the scale of the business. This is something that we've got a lot of work to do, not just with with sage, but other technology providers to enabling this sort of a business model. But But that's what's going to enable even the smallest businesses to access solutions that a couple decades ago, only the largest corporations could access. And I would also I guess, go back to what I said before, that in this era of digital transformation, technology follows design. So if we're designing the software to be easy to implement, not only for medium and large businesses, but for small businesses, you also take away a lot of that upfront risk and cost associated with the implementation of the software. So it's all about this evolution of business model. It's all about this evolution of of experience design and customer journey design.

Hugh

What other technologies can help SMBs overcome these challenges?

Aaron

Well, I've mentioned AI, and I can talk about AI all day long. So you know, we can have a great conversation about AI. The technology that that we are really investing in right now is what we call the digital network. So the the idea behind the digital network is that as business workflows digitally transform, it means that software must be designed now not only for the business that sort of executes those workflows, but also for all of the participants in the workflow. So if I have a workflow associated with the way that I pay my suppliers, it's not sufficient to design the software just for me as as the buyer of those services, it's got to span the relationship between me and my supplier. Same thing with customers, right? So if the way I invoice is digital, how does my customer access their invoice digitally? How do they pay that invoice digitally? So the idea of the digital network is that it creates a global map of all of these business relationships. And that enables us to create digital services that digitise the workflows that span those relationships. What it also does is it enables us to sort of aggregate the data that's flowing across the business ecosystem, to enable us to do much more powerful machine learning. So the example is, you know, we know that it's actually pretty high proportion, I think it's over one full percent of the invoices that run through one of our products in the UK, are from Amazon business; it's a staggering amount. So if if we were to build an AI capability for our customers, that spots potential fraud, so imagine somebody fakes an Amazon invoice, changes the remittance information and manages to get that to a small business; if I'm constrained to learn only from the interactions with Amazon for that one business, my models aren't going to be very smart, right? Models are only as smart as the data they used to train them. So a network allows us to aggregate all these data flows, to do much more intelligent to create much more intelligent AI capabilities. And you can apply it across all kinds of things, you can apply it to, to, you know, predicting fulfilment times, across suppliers. Now, I want to be very, very clear here, that all of this depends on our having a trusted relationship with our customers. We recognise fundamentally that we don't own the data, our customers own the data. And so long as they trust us to leverage that data in a way that helps them to be more successful, we're going to maintain that trust, right, as long as we're clear on the principles that we operate by, will maintain that trust. But it's an incredibly powerful concept. Once you create these networks for both data and connectivity. These networks also support things like blockchain, they that's a more conducive way of doing crypto transactions, one of the things that we're really excited about is the opportunity to create smart transactions or smart contracts sorry, on a network so that you know when an invoice is issued by a customer, as soon as that the the order is fulfilled, the payment is automatically executed. The accounting treatment of all of these activities are automatically created. So this network architecture becomes the foundation to unlock AI ML, to unlock blockchain related capabilities, to unlock crypto and smart contracts. So that's, you can hopefully you can tell from the way that I'm talking that I'm quite passionate about this. This is the next big evolution, getting all of this connected into networks is what's going to unlock the next generation of innovation.

Adam

So we've we've talked a fair amount about some of the technologies that are being implemented, kind of, if you like behind the scenes, in terms of some of the services that SMBs are using, kind of in the course of their day to day business. But what about the technologies that are being if you'd like more proactively deployed in terms of some of the things that SMBs will be looking to expand into as they grow? Particularly when you're starting with a kind of very, very small operation, as you start to scale, what are the first things that should be on a small businesses shopping list in terms of really maximising the benefit that they can get out of their investment in technology?

Aaron

So again, great question. Traditionally, as a small business grows, there's only a handful of events, or milestones that trigger that small business to make their first investment in technology. One is simply their ability to accurately and efficiently invoice their customers. Another event would be if if you have a heavy dependence on supply chain or on subcontractors or consultants, your ability to manage those relationships and to, again, accurately and efficiently pay your suppliers. It could be that you have compliance requirements that you've experienced before, you've scaled to the point where you need technology to automate your supplier relationships and your customer relationships. But it tends to be one of these events that triggers that sort of first investment in technology. I think there are a few new areas in in this digital, you know, this era of digital transformation. One of those is, you know, digital go to market capabilities. So how do I market, sell and get paid for my services is going to be, you know, I think for many companies a very early milestone that they reach, because, you know, starting a brick and mortar store, starting a brick and mortar business is just you know, it's going to be less and less pervasive in the future. And I think we're starting to see some more disruption in the space that may trigger small businesses to adopt technology sooner. And I want to sort of caveat this by saying we're in the extreme high point of the hype cycle here. But the metaverse, you know, there, there will be small businesses who decide that actually a storefront that exists in a Metaverse because I know who my customers are. My product is more more conducive to being sold in the metaverse or it creates, you know, a unique experience in the metaverse. Small businesses may choose to adopt technology simply so that they can create a storefront in the metaverse.

Adam

I just want to pick up on that because that's something that that we've heard a lot about, as you mentioned, there's a lot of hype around the metaverse at the moment. Do you think that the metaverse is going to be something that, you know, a significant proportion of small businesses are going to be able to extract value from?

Aaron

So I don't have a crystal ball. It's hard to say how this is going to play out. But But one thing I do have a lot of conviction. And this I know I keep going back to this but but it's sort of you know, it gets back to the disruption that each progression of technology era introduces. With, you know, the advent of the cloud, we create a completely new ways to buy and sell products with the Internet. Right. Amazon exists because of the disruption of the cloud and it became a new commercial model, and a new way to buy things. I believe that there will equally be as much disruption in the way we buy and sell products and services with the metaverse. You know, it's sort of this blending of the physical and the digital world where you've got the ability to do the transaction with all the benefits of digital workflows. But you also get the benefit some of the benefits of of the physical nature of having a much richer interaction with the products that you're evaluating, much richer interactions with with the store that's behind the products where you can converse in the metaverse so I believe, very firmly that we will see markets emerge in the metaverse that are as disruptive as the markets that emerged in the cloud. What I can't see yet is how it's going to emerge. Will will Facebook, you know succeed in in their vision to be the metaverse company? Will there be multiple metaverses? Will be there some other Metaverse that wins? It's hard to say yet. So I'm not suggesting that small businesses need to get on their horse and get out there and spend lots of money. What I'm suggesting is that it's coming and as we start to see how it starts to shake out, I think it'll become an important event in a small businesses growth. Deciding now's the time to start, you know, a digital sales approach, digital customer interactions, digital support, digital services through the metaverse.

Hugh

How can small businesses best prepare themselves to handle future disruptions?

Aaron

So I think it goes back to this this notion that we're shifting our business models away from you know, lean efficient, maximise every penny of profits to workflows that are more agile, if you will, more more adaptable; workflows that are that are more resilient to change. I think small businesses are going to have to embrace this idea that there's multiple channels for small businesses to sell their products now. And they've got to have the ability to quickly pivot between them as circumstances changes. Small businesses need to embrace that the workforce is changing. You know, gig workers are going to be a huge part of this economy. So being able to adapt the jobs, the tasks within our business, to line up with the right style of worker, whether it's a full time salaried employee, all the way to to a gig worker that has is very it's variable. It's more agile. I think that's that's really important. And I'm not just saying this, because I'm, I'm representing Sage. But implementing technologies is going to be super critical. Let me give you an example on this whole work workforce concept. I didn't mention this as part of the answer. It's not just that the labour market is tighter now. It's that the it's very difficult to predict because it's not just businesses that are sort of in this this era of instability. It's humankind, right. So when we when we set out to use AI to build some capabilities for our HR customers, our human resources customers, we thought that what small businesses would want was AI that would predict when an employee would churn. And I think that's really representative of the era that we're leaving, where you had very stable workforces. And you know, what you needed to do is to be able to plan appropriately. What we learned was that actually small businesses wanted AI to help them with their short term staffing. Could could we use AI to predict absenteeism among their staff? Can we use AI to predict availability of staff, as we have to dynamically adjust schedules and capacity on a on a very short cycle? So adopting technology, you know, like what we've built with AI that predicts absenteeism will be pretty critical, I think, to enabling agile businesses that that ultimately are going to succeed in this this era of digital transformation.

Adam

Well, on that note, I'm afraid we're going to have to leave this week's discussion there, but I'd like to thank Sage's CTO, Aaron Harris for joining us.

Aaron

Thanks for having me, it was a real pleasure to talk with you both.

Hugh

You can find links to all the topics we've spoken about today in the show notes and even more on our website at itpro.co.uk.

Adam

You can also follow us on social media as well as subscribe to our daily newsletter.

Hugh

Don't forget to subscribe to the IT Pro Podcast wherever you find podcasts. And if you're enjoying the show, leave us a rating and review.

Adam

We'll be back next week with more analysis from the world of it but until then, goodbye!

Hugh

Bye.

Running a small business has always been a demanding task, but recent circumstances - from the coronavirus pandemic to the advent of Brexit - have come together to make it more challenging than ever before. An increasing number of SMBs, however, are turning to technologies such as cloud and AI to help address these issues.

This week, we’re joined by Aaron Harris, CTO for UK-based cloud financial software firm Sage, to talk about the state of the UK’s small-business market, the role technology plays in keeping it as resilient as possible, and how SMBs can make the most effective use of their IT.

Highlights

“There has to be this level of trust between small business owners, finance teams, accounting teams, that as they transition more and more of their work to technology, that technology is going to do the work in the right way. That where AI is being used to make decisions, it's making the right decisions.”

“The technology that we are really investing in right now is what we call the digital network. So the idea behind the digital network is that as business workflows digitally transform, it means that software must be designed now not only for the business that executes those workflows, but also for all of the participants in the workflow.”

“Small businesses are expecting technology providers like Sage to help them to make sense of this and to navigate through these times. So we saw, for example, that 44% of SMBs in the UK expect to invest more in technology over the next 12 months than they have previously. So clearly, small businesses see technology as a big part of the solution to all this change.”

Read the full transcript here.

Footnotes

• Five reasons why digital transformation is essential for business growth
• Are we hurtling towards digital transformation burnout?
• The key pillars of a digital transformation strategy
• Even cutting-edge firms need digital transformation
• What are digital workflow solutions?
• How AI can help – and hinder – the supply chain crisis
• What is ethical AI?
• What does it take to launch a successful Fintech startup?
• The metaverse is a waste of time, effort and processing power
• Into the metaverse: Everything we learned from our virtual tour

Subscribe

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Almost 30% of small and midsize businesses (SMBs) cancelled their cyber insurance policies in 2021 due to cost cutting.

The price of cyber insurance is likely to still be too high for UK SMBs, according to a survey from GlobalData released on Friday. 38% of these businesses think it is unlikely they will be targeted in a cyber attack while 29% cancelled their policies in 2021.

The data and analytics company carried out the survey between August and September last year, where it explored SMB behaviours, purchasing preferences, and attitudes across commercial insurance products. Every company included in the survey had fewer than 250 employees, with 2,001 businesses surveyed in 2021.

GlobalData noted that as risk of attack increases, so will the premiums. It said that given that cutting costs is one of the leading causes of policy cancellation, this will be a significant obstacle.

The firm added that the Ukraine-Russia war has only heightened potential cyber security risks. It pointed to the UK’s National Cyber Security Centre (NCSC) advising all organisations in the country to bolster their cyber security in March 2022, specifically due to the increased risk from the war.

“Even if UK SMBs do become more concerned about their business being targeted by cybercriminals, they are unlikely to be willing to pay even higher premiums to protect themselves,” said Ben Carey-Evans, senior insurance analyst at GlobalData. “It is a difficult product for insurers to price, as unlike other products, they cannot look to limit risk—any SMB could be hit with a cyber attack at any time, and the costs can be significant.”

This is the biggest challenge for NCSC as SMBs are more vulnerable as they don’t take cyber hygiene seriously, said Muttukrishnan Rajarajan, professor of Security Engineering and director of the Institute for Cyber Security at City University of London. This, in turn, makes them the most vulnerable targets for a cyber attack.

Rajarajan has been teaching cyber security essentials for CEOs and CTOs as part of a programme at the university. He found that most of the individuals from the companies he taught didn’t take cyber security seriously and didn’t know about cyber insurance.

“Interestingly, a few came back to me after a few months of my lessons and said they have been attacked and need help! So I have seen first-hand the impact of these SMBs without any cyber security protection,” he explained.

A good cyber insurance policy should offer training to employees that specifically targets areas of risk within a business, said Steve Arlin, VP of the Americas, UK and APAC at ProLion.

“It can cover loss in income from a data breach and it can cover the cost of investigation work following a GDPR breach as well. While the cost of cyber insurance has certainly risen in recent years to keep pace with developments in cybercrime, it is definitely worthwhile.”

“This is a disturbing statistic as it illustrates that arguably businesses – faced with rising costs – are looking at saving money where they think it won’t matter,” he added. “This is short sighted in the extreme.”

Small businesses were warned in December 2021 to prepare for a potential surge in ransomware attacks in 2022 as cyber criminals turn to campaigns that are less likely to draw coordinated action from law enforcement. A report found that cyber criminals were adapting to increased pressure from police agencies that launched several successful operations to dismantle criminal networks.

Microsoft has now made the stand-alone version of Microsoft Defender for Business available.

Defender for Business brings enterprise-grade endpoint security to SMBs, including endpoint detection and response capabilities to protect against ransomware and other threats, the tech giant said yesterday while announcing the general availability (GA) of the product.

SMBs can look forward to multi-layered protection, detection, and response to protect and remediate known and unknown threats. It also comes with built-in policies to get customers up and running quickly. Its automated investigation and remediation capabilities help automate the type of work managed by dedicated SecOps teams by continuously detecting and automatically remediating various threats.

Defender for Business is also included in Microsoft 365 Business Premium, the company’s comprehensive security and productivity offering for businesses with up to 300 employees. Alternatively, customers can choose to buy it stand-alone for $3 per user, per month. The company added that additional support for servers is planned for later in the calendar year with an add-on solution.

“Microsoft believes in security for all,” said Vasu Jakkal, CVP of security, compliance, and identity at Microsoft. “We are proud to further deliver on that vision today. With the GA of Defender for Business, SMBs will get greater protection with simplified security to help them better protect, detect, and respond to threats.”

Microsoft added that Defender for Business and Microsoft 365 Business Premium gives partners new opportunities to help secure customers at scale with value-add managed services. Both integrate with Microsoft 365 Lighthouse, which was made generally available on 1 March 2022, so cloud service providers can view security incidents across tenants in a unified portal.

The tech giant also underlined that in April 2022 it surveyed over 150 small and medium businesses to understand their security needs. It found that over 70% of SMBs think cyber threats are becoming more of a business risk, especially as nearly one in four reported experiencing a security breach in the past year.

Despite facing similar risks as enterprises, SMBs often lack access to the right resources and tools, including security staff, added Microsoft. Many still rely on traditional antivirus for their security. Although 80% of SMBs stated they have some form of antivirus solution, 93% continue to have concerns about increasing and evolving cyberattacks.

Microsoft has launched a new free service to help small organisations understand their technology needs and their best options when it comes to devices and software.

The tech giant’s Business Consultation service allows small organisations in the UK to book a one-on-one appointment to connect online with a product expert through video, chat, or audio call. The expert will listen to their needs, answer their questions, and provide personalised solutions. Alternatively, they can also have an in-person consultation at the Microsoft Experience Centre in London without having to book an appointment.

After finding the Microsoft product for the organisation, the tech giant also hopes to help it through every step of the setup and deployment process.

Microsoft is introducing this as it found that businesses with one to 25 employees need help with reaching new audiences, taking their business online, basic IT needs, and upskilling, according to research from the tech giant and the Boston Consulting Group. The study revealed that around 40% of businesses with one to 25 employees cite challenges in selecting digital solutions. 73% of them prefer human assistance when choosing products and value post-purchase support.

The company has also partnered with InSignLanguage to provide British Sign Language interpreters for the consultations in Microsoft Teams, while captions can also be used during the conversation.

“We recognise that organisations across the UK may need more personalised support as we emerge from the COVID-19 pandemic and ways of working change,” said Joy Attuh, senior hub manager at Microsoft UK. “The free Business Consultation service can help with digital transformation plans by deploying cloud-based technology tools and services such as Microsoft 365 and Dynamics to empower employees and unlock growth. Microsoft will be there every step of the way to answer questions and guide customers to find the solutions they need.”

Consultations are available to businesses between 9am and 6pm, Monday to Friday. They last up to an hour but follow-up calls can be booked.

This comes after Microsoft launched a standalone tier of Microsoft Teams aimed at small businesses in December 2021. Teams Essentials offers unlimited group meetings for up to 30 hours and can support up to 300 participants for £3 per user, per month. Each user will also have 10GB of cloud storage. It’s being offered as a standalone service with no need for users to subscribe to an Office 365 bundle.

The need for collaboration tools has increased with workforces becoming more remote, and investment in cloud solutions is growing steadily. The commitment to this is even greater for SMBs who’ve had to rethink their digital transformation and adopt Software-as-a-Service (SaaS).

This adoption means MSPs have a responsibility to guide their clients on the best SaaS solutions in order to be successful.

Download this asset to learn more about data protection responsibilities, multi-layered approaches, and the right secure solutions for your clients.

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Microsoft 365 was a lifeline for many MSPs making the switch to remote work during the pandemic, but by moving to cloud-hosted systems, companies underestimated the security requirements that would take them beyond Microsoft 365’s capabilities.

Being just as vulnerable to attacks as local data, careful configuration of Microsoft 365 email filtering is essential, along with keeping employees’ browser software updated, as downtime can be costly.

Download this resource for strategies and ways to reduce ransomware risk and protect Microsoft 365 from threats.

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Apple has announced that its Business Essentials service is now available to small businesses across the United States.

Previously launched in beta, Apple Business Essentials addresses all the aspects of device life cycle management — from the initial setup to consistent upgrades — while also providing data backup, steadfast security, and priority support.

The complete solution begins with streamlined employee onboarding, according to Apple. Groups of apps can be delivered to employees or teams, as can settings, such as Wi-Fi passwords and VPN configurations, which can be pushed automatically using the Collections feature.

A dedicated iCloud work account allows for secure document and file storage, backup, and collaboration. Additionally, Apple’s User Enrollment feature ensures employees’ personal information is kept private and separated from work data through cryptography.

Apple Business Essentials also comes with flexible subscription plans that can be customized across an organization, with up to 2TB of secure iCloud storage, starting at $2.99 per month following a free trial period of two months. Users of Apple Business Essentials’ beta version can also sign up for the free trial.

Apple has also announced prioritized support for Business Essentials. AppleCare+ for Business Essentials, available as an add-on, includes 24/7 phone support, IT administrator and employee training, and up to two device repairs per plan each year.

“Employees simply sign in to their work account on their iPhone, iPad, or Mac using a Managed Apple ID. Once they sign in, they will have access to everything they need to be productive, including the new Apple Business Essentials app, where they can download work apps available to them,” explained Apple.

“Managed Apple IDs can be created by federating with Microsoft Azure Active Directory and, coming later this spring, with Google Workspace identity services, allowing employees to log in to their device with a single business username and password.”