2023 Showed an Industry on the Cusp of Revolution

The year 2023 was one defined by change. Some economic headwinds faded, inventories equalized, and businesses adjusted to – for lack of a better term – a “normal,” post-pandemic world. There were plenty of big trends, from operationalizing new AI advances to the needs of small- and medium-sized businesses to a growing need for cybersecurity as a service. We saw many key developments that show an industry on the cusp of revolution. 

AI Is here to stay

Without a doubt, the largest technological trend of 2023 was generative AI. Since taking not only our industry, but popular culture, by storm late last year, the hype around how businesses can harness AI hasn’t faded. In fact, the popular AI option ChatGPT was the fastest growing consumer app in history – it reached 100 million monthly active users just two months after launch. For comparison, it took TikTok and Instagram nine months and 30 months, respectively, to reach that milestone. 

AI hasn’t yet upended the office technology business to quite the extent it has popular culture, but it’s inevitable. The industry is still in the early stages of figuring out how to exploit this latest tool while making sure any challenges to integration are prudently taken into consideration. IT and software solution providers were able to start offering ChatGPT integrations early in 2023, and more recently offering proprietary AI tools custom tailored to enterprise needs and those of small- or medium-sized businesses. Every business wants to be more efficient, and generative AI has the potential to deliver efficiencies across every department and role. Whether it’s helping draft emails or purchase agreements to free up salespeople to focus on selling, supporting customer service teams to improve client satisfaction, or helping manage tickets and workflows, the office technology industry is still only scratching the surface of AI. 

As threats evolve, so does cybersecurity

It’s important to remember customers and potential customers aren’t looking only for services and products to purchase; they’re also looking for expertise and guidance. Nowhere is more relevant than when it comes to cybersecurity. AI tools bring their own security needs, and clients will look to providers to understand what data they should and shouldn’t share. This guidance isn’t only to prevent the leaking of proprietary data but to ensure compliance with cybersecurity insurance policies. Cybersecurity has also become even more imperative in light of regulatory changes by the US government. One of the key changes was a desire to shift the burden of liability to businesses that fail to properly secure their data. For office technology providers, making sure that both you and your clients are taking all the necessary cybersecurity precautions is now only that much more important.

Regulatory changes are not the only shifts we’re seeing in cybersecurity and cyberthreats. As I wrote earlier this year, multifactor authentication – once the gold standard of cybersecurity – is increasingly vulnerable to new threat vectors. In its place, passwordless authentication will become the standard for businesses over the next few years. AI, too, will add another layer of complexity to the cat and mouse game between businesses and malicious actors. On one hand, AI will make social engineering attacks such as spear phishing easier; on the other hand, generative AI can help businesses automate and improve their defenses.

The shift toward cybersecurity as a service

Like many other industries, the cybersecurity industry is increasingly shifting from the traditional cybersecurity as a product to cybersecurity as a service (CSaaS). To put it very simply, the days of a small business buying an antimalware program, having an IT provider install a firewall on every computer, and then being set for cybersecurity are over. It’s less that cybersecurity threats have changed and more that they change so rapidly. Businesses can no longer settle for one-size-fits-all security solutions and are looking more and more to their IT vendors for not only products and software solutions, but expertise. Companies want to know they are secure from cyberthreats because they have experts on hand to continually maintain and strengthen their defenses against malicious actors. 

Businesses want integrated managed IT solutions

Businesses wanting integrated products and solutions isn’t new, but this year brought continued evolutions to these integrations. Many businesses have made a point in recent years to transition from unmanaged environments and toward a managed print service provider that brings different business departments under the same, more cost-efficient provider umbrella. Many businesses are trying to replicate this integration as they move toward the cloud. There’s tremendous demand as business owners realize that moving to the cloud is an opportunity to bring all their software needs together with one managed IT provider. A unified cloud platform also offers better scalability as clients grow and need more support.

For example, a company may have a distinct customer relationship management program, customer support platform, and myriad other software solutions it relies on to run day-to-day operations. This fragmentation can not only cost more money but make it more difficult for departments to talk to each other. Unifying all these critical tools and platforms under a unified API only saves businesses vendor costs due to bundling and ensures internal operations are streamlined. Working with just one managed IT service can also improve cybersecurity for businesses by reducing the risk that vulnerabilities can be overlooked because multiple providers are in charge of different software products. And at the end of the day, it’s a win-win: clients want simplicity and a provider they know and can rely on, and providers benefit from the recurring revenue and opportunity to move upmarket and bundle. 

Internet of Things security is finally catching up

Just like our homes have gotten smarter in the last decade, so have offices and businesses across the country. The Internet of Things (IoT) has expanded to every facet of business, from thermostats and office security to printers and a whole host of devices. Yet, it remains a bit of a Wild West in terms of security. There aren’t comprehensive regulations in place to establish universal standards for cybersecurity; device security can widely range from manufacturer to manufacturer – even product to product – creating a patchwork of security measures vulnerable to malicious actors. And given the set-it-and-forget-it nature of IoT, manufacturers are frequently slow to address vulnerabilities. 

The result? IoT malware attacks skyrocketed 400% in 2023, according to a study last month from cloud security company Zscaler. Frequently targeted industries such as manufacturing saw as much as a near tenfold increase in attacks since 2022, with the US being among the most targeted regions. Regulators and manufacturers have taken notice, with the Federal Communications Commission recently proposing a US Cyber Trust Mark. The proposal would establish minimum cybersecurity standards for IoT device manufacturers and provide an easily identifiable seal for those that make the grade. Major manufacturers such as Amazon, LG, and Logitech have already tossed their weight behind the US Cyber Trust Mark, making it very likely this proposal will become reality next year. In the short term, this shift will set off a scramble from businesses to update and bring their IoT portfolios up to new cybersecurity standards. In the long term, this regulatory shift will only be the first step in the increased focus on improving IoT cybersecurity to safeguard enterprise customers. 

Catching the update wave

It’s been almost four years since the start of the pandemic, which means a lot of businesses will be assessing and updating pandemic-era purchases. 2023 was an interesting year for the office technology industry. We saw lots of signs of recovery and fading economic headwinds, as well as growing trends such as AI and cybersecurity as a service that will rapidly grow in the coming years. If 2024 is a boom year for the industry, it will be because of the foundations we saw being set out in 2023. 

John Schweizer is Vice President — Channels and Business Development, Connectwise. John has had tenured runs in key executive positions at office equipment giants like Alco Standard-IKON, Ricoh and most recently as the CEO of a Xerox owned company. He also had principal ownership in a dealership in San Diego. John currently serves as a member of the advisory board for the cybersecurity firm Fhoosh.