Three technology issues El Paso business leaders should be watching in late 2026
Technology planning in El Paso is being shaped by several changes at once: new Microsoft authentication requirements, continued growth around defense and advanced manufacturing, and increasing use of AI across business systems.
For most organizations, none of these developments require a dramatic overhaul. They do, however, create a few practical issues worth addressing before 2027.
1. Microsoft Is Phasing Out SMS and Voice MFA
Microsoft has begun moving users away from text-message and voice-call authentication in Microsoft Entra ID.
As of September 1, 2026, Microsoft is automatically enabling passkeys for eligible users and prompting some users who rely on SMS or voice authentication to register stronger methods. Microsoft-provided SMS and voice authentication are scheduled to be retired on February 1, 2027.
For businesses using Microsoft 365, the main work is identifying who will be affected before the deadline gets close.
A few things are worth checking now:
Which employees still use text messages or phone calls for MFA?
Are passkeys or another approved authentication method already available?
Are there shared devices, field employees, or unusual workflows that could complicate the change?
Have employees been told what to expect when Microsoft begins prompting them?
This is mostly a planning issue. Organizations that address it this fall should have time to make the change without creating unnecessary disruption for employees.
2. Defense and Advanced Manufacturing Growth Will Put More Attention on Cybersecurity
El Paso continues to invest in advanced manufacturing and defense-related economic development.
In February 2026, the City adopted an Advanced Manufacturing Incentive Policy and opened applications for its Advanced Manufacturing District at El Paso International Airport. The effort is aimed at aerospace, defense, and advanced manufacturing businesses.
That creates opportunity for local manufacturers and suppliers, but companies pursuing defense-related work may also run into security requirements that are more demanding than those found in a typical commercial environment.
CMMC has also changed during 2026. The Department of Defense suspended the planned Phase II rollout that had been scheduled for November, while Phase I self-assessment requirements remain in effect.
The delay does not remove the underlying responsibility to protect Federal Contract Information or Controlled Unclassified Information when those requirements apply.
For a local business hoping to move into defense work, it would be useful to know:
whether the company handles FCI or CUI;
which systems and employees have access to that information;
whether required security controls are documented;
and whether the organization could complete its required assessment with confidence.
Those questions are easier to answer before a contract opportunity appears than while a proposal is already underway.
3. AI Is Starting to Affect the Technology Environment, Not Just Individual Software
AI adoption is becoming visible in El Paso at a much larger scale than initially anticipated.
The planned Meta data center campus in Northeast El Paso represents a massive technological shift, with its infrastructure investment dramatically expanding far beyond the original $1.5 billion announcement. Through a massive partnership with BlackRock to scale the site’s compute capacity up to a 1-gigawatt footprint, the total investment is now projected to exceed $10 billion.
This massive growth prompted El Paso to adopt its first Data Center Policy Framework in July 2026 to address resource and economic impacts. Meanwhile, local businesses face smaller-scale AI integration challenges—such as unauthorized tool usage, security vulnerabilities, and fragmented workflows—requiring basic governance and approved usage guidelines.
Employees may already be using ChatGPT, Copilot, Gemini, AI features inside existing software, or other tools without a formal company policy.
That can create fairly mundane problems:
company information being entered into tools that have not been approved;
overlapping AI subscriptions;
employees using different tools for the same task;
unclear ownership over AI settings and permissions;
and new integrations gaining access to Microsoft 365 or other company data.
A business does not need a complicated AI program to deal with this. It does need some basic rules around which tools are approved, what information employees can share, and who is responsible for managing access.
What Should El Paso Businesses Review Before 2027?
A useful year-end technology review does not have to be complicated.
I would start with five items:
Which employees still depend on SMS or voice MFA?
When were backups last tested through an actual recovery?
Where is sensitive, regulated, or contract-controlled information stored?
Which AI tools are employees already using with company information?
What technology expenses or replacements are likely during the next 12 to 18 months?
If some of those answers are unclear, that is a reasonable place to start planning for 2027.
El Paso's Technology Environment Is Getting More Complex
El Paso's growth in manufacturing, defense, infrastructure, and technology investment is bringing more attention to issues that used to sit almost entirely with the IT department.
Security requirements can affect whether a company qualifies for certain work. Microsoft changes can affect every employee in the organization. AI tools can spread across a business before anyone has formally decided how they should be used.
For leadership teams, the practical work is still fairly straightforward: understand what systems the organization depends on, know where the biggest risks are, and have a reasonable plan for what needs attention next.
That is usually more useful than chasing every new technology that appears.
Disclaimer
The information contained in this communication is intended for limited use for informational purposes only. It is not considered professional advice, and instead, is general information that may or may not apply to specific situations. Each case is unique and should be evaluated on its own by a professional qualified to provide advice specifically intended to protect your individual situation. Kosh is not liable for improper use of this information.
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