October 18, 2024

Episode 46: The Bear in the Neighborhood

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Erick and Rich discuss new data from TD SYNNEX suggesting that while AI may be where the growth is in managed services security’s still where the money is, as well as how MSPs can use SLAs and KPIs to drive clients toward bigger, more expensive service bundles. Then they’re joined by Dave Russell, SVP of enterprise strategy at data protection heavyweight Veeam, for an insightful look at the blurring lines between backup and security, and what they mean for the channel. And finally, one last thing: how an apartment dweller in Sacramento discovered he’d been inadvertently paying his neighbor’s electric bill…for 18 years.

Discussed in this episode:

TD SYNNEX Report: Channel Partners Seek Balance Between Accelerating AI Innovation and Core Technologies

2024 Gartner Magic Quadrant for Enterprise Backup and Recovery Software Solutions

California man accidentally pays neighbor’s power bill for years

 

Transcript:

Rich: [00:00:00] And three, two, one, blast off, ladies and gentlemen. Welcome to another episode of the MSP chat podcast, your weekly visit with two talking heads, talking with you about the services, strategies, and success tips you need. To make it big and manage services. My name is Rich Freeman. I am a cohost of this program.

I am also the chief content officer and channel analyst at Channel Mastered, the organization responsible for this show. I am joined by Channel Mastered’s chief strategist, my friend of many years, your other cohost, Erick Simpson. Erick. How you doing? I’m doing good,

Erick: Rich. It’s cooling down. It’s October.

I I, a few degrees cooler here in Southern California than it has been from the record highs we’ve had during the summer. About in your neck of the woods.

Rich: Yeah, similar story here where, you know the heat. Has kicked in for the first time in many months just recently not a bunch, but it’s cooling off and up at night that The thermostat’s getting triggered.

So yeah, we’re definitely we’re not officially in fall yet, right? Or are we I would I don’t think

Erick: so I think we got a couple more weeks as we record this but yeah, and you’re in seattle. Typically a Little cooler typically than here and much wetter In many cases.

Rich: Speaking of cool and hot, let’s dive into our story of the week here.

And as we’re recording this, Erick just hours ago, TD Synax published its annual direction of technology report. And if you’re a statistic geek like me, this is great stuff to, to pour through. There’s a lot of interesting data in there, but there’s one particular pattern. That emerges from some of the figures in this report, but I want to highlight and it’s one of these things, Erick, where, it looks like one thing.

If you close your left eye, it looks like something else. If you close your right eye, because from one standpoint, what in this data I’m about to run through with you is that the money today for the people in our audience is in security. So for all of the talk about AI and the importance of AI, the growing importance of AI The real money, the place where MSPs and other channel partners who do business with TD Cynics are seeing growth, making their money is insecurity and it’s by a pretty comfortable margin with the other eye, you close the other eye, look at, look the other way and you can begin to see the growth in AI.

And then the thing that’s not in this report that I would be really interested to know, and maybe I’ll get a chance to talk about it with PD Cynics later in the year, is do they see a point at which there’s a crossover there and maybe AI starts to to get out in front of security. But right now they, they ask people, what are your top revenue producers your top solutions.

And security came in number one by a relatively comfortable margin. AI came in number eight Erick, and so it’s behind servers and networking and storage, hybrid cloud, endpoint devices, so all of this traditional infrastructure stuff continues to outsell, outperform AI. There was another question in here where they asked the partners who participated in this study, what are your top three revenue drivers?

32 percent said security. 26 percent said networking, 19 percent said devices, 15%, less than half of the folks who cited security, said AI. On the other hand, 84 percent of the people who responded to this survey said that they have received requests for generative A. I. Proofs of concept from their customer.

44 percent of the people participating in this study offer a plan to offer. AI services or solutions. That’s up from 34% a year ago at this time. And this was interesting to me. 23 percent of the people in the survey said that they did not close any AI or AI related deals last year, but only 6 percent expect that to be true in the coming year, pretty much everybody is assuming they will be doing at least some.

AI business in 2025. So you’re seeing a lot of growth in AI, but if you want to know where to focus your attention, focus your resources to maximize revenue and growth today that it has been and remains security.

Erick: Rich the the intersection of security and AI and everything else that we’re using.

In our daily lives, in our business lives MSPs, platforms, integrating AI to help automate and filter [00:05:00] through noise and surface, key data points and things like that. It’s almost as if we’re just now, and I’m basing this on the statistics and the research that you just shared that TV Cinex produced.

We’re almost now at that point where we’re beginning to see the opportunity for monetization here. And we’ve had multiple guests on the program, rich here recently. Talking about how they are monetizing AI for their clients. And a lot of it sounds very similar to, developing this higher strategic level of service that allows MSPs to become much more valuable and sticky to their clients because they’re helping them leverage the massive amounts of unstructured data.

That their business is creating and collecting and storing somehow and making the most out of that, providing business insights. And we talked about, business process optimization and things like that. It’s striking to me, rich as a recovering MSP as an XMSP myself. How similar the evolution of introducing new ideas, new service offerings, like managed services, like cybersecurity, like cloud, like AI.

Now take the same path. It, it takes the MSPs first off to introduce it and to discover ways to deliver and monetize it. That adds a tremendous amount of value to their client relationships. It’s almost there’s. A a framework where we throw stuff into the top of the funnel, we figure it out in the middle and then out the bottom we deliver services that are valuable to our clients.

But also provide us another means to grow not only top line revenue, but also MRR.

Rich: So on the topic of services here’s a little bit more data from the TD Senate report that feeds right into what you’re talking about. On AI specifically they asked people, what. Kinds of AI solutions do you plan to offer in the next year?

And 52 percent said generative AI. I assume that’s Microsoft co pilot kind of licensing and stuff like that. But 48%, only slightly less said AI services. So there are a lot of partners out there who see the opportunity around AI in the services realm, in terms of things like you were talking about, getting the data assembled and clean and securing it and using it for BPO, all of that kind of stuff we’ve been talking about on the show.

And then more broadly beyond AI they were asking people who responded to the survey, what kinds of changes in your portfolio, in terms of what you offer to your clients, do you expect to see over the course of the next three years, 61 percent of the people in the survey said they expect to see more software resell, which is interesting that this was the number one item on the list.

I assume a lot of that is software as a service, but then you look at the next three things on the list here, and it’s selling professional services. Selling managed services, reselling packaged services. So software resale, there’s going to be more of that going on out there, but a lot of upside expected within the T Cenex channel in services.

Erick: Yeah, and in those top services, I wonder if the report reflects what the sentiment of the respondents is around hardware resale, I’m curious to see this, if we look at the scales of what’s happening, right? And I’m, those of you that are listening can’t see, but I’m holding up My hands representing two scales where we’re starting to see more movement towards SAS, cloud, cybersecurity, these services that are delivered remotely, application management, office productivity applications et cetera.

Co pilot. And the decrease in the hardware resale. So I’m wondering whether there’s a, is there a tipping point, are we looking to identify whether or not the more that we migrate clients to these cloud based applications, these software as a service applications, the less potential for selling hardware is there.

Is being evidenced in the responses here. Any idea from that?

Rich: You ask and I deliver my friend because I have that data for you. Courtesy of TD Cinex. So they ask people to quantify portfolio changes what you’re delivering the customers over the course of the next three years. I’ll just compare hardware [00:10:00] resale.

To selling managed services. So 58 percent of the partners surveyed said they expect to do more managed services. 37 percent said about the same, just 5 percent said they expect to do less managed services over the course of the next three years. Hardware resale. 42 percent said more. So remember 58 on managed services, more 42 on hardware, 44%.

Said about the same and 14%, which is just under three times as many on the, as on the managed services side said they expect to be doing less. So you can definitely see a pronounced tilt in the direction of managed services in this case versus hardware resale.

Erick: Those are great statistics, Rich.

And I would argue that the more mature the industry becomes around managed services, the more mature the MSPs become. They’re definitely aware that the multiple of revenue when they get ready to sell their organizations or at an exit point or whatever, the multiple applied to every dollar of managed services is by far higher than software resell or hardware resell.

And things of that nature, so I’ll bet you that’s keying into some of this some of this behavior and this forecasting.

Rich: We’re spending some time here talking about metrics. Let’s talk some more about metric. It’s time for your tip of the week, Erick. And it concerns two especially important metrics for MSPs, which is to say their SLAs and their KPIs.

Absolutely,

Erick: Rich. And, it’s interesting, we talk a lot in the industry about, the value of having a very robust standardized service level agreements, not, customized SLA’s for every client that comes along, we’re trying to standardize on our portfolio of services, or our bundles of services, and then the SLA’s that we apply.

And when I do pricing exercises and SLA building exercises with MSPs, Rich, one of the value propositions that allows us to charge more for a higher level or tier of services is not simply what’s in that tier bundle of services. For example, I like three options. I like good, better, best.

And that’s, Kind of a more mature, more consultative way of selling and having the opportunity to upsell services along the way to clients so you can easily shift when you have good, better, best a client’s services based upon economic conditions or their business upturns or downturns.

There’s always a, an a, a better opportunity to upgrade a client’s entire. bundle of services rather than a point product or solution. Like when we’re making, we’re, when we’re customizing these agreements with clients, the upsell typically is, a point product or solution or an application upgrade or something else like that.

But when we have good, better, best, each of these has each higher priced bundle or tier of services. With a better SLA allows us more value in each of these. So each higher value bundle of services always has more quantitative value than its predecessor, not more qualitative value. I should say not quantitative.

So not 50 licenses of M three 65 and bundle a and a hundred and bundle B. That’s not how it works. It’s everything that’s in bundle A plus these additional things you can only get in bundle B and the same thing with bundles. Good, better, best. Think of the cable. Packages of your of yester your that’s a term rich, right?

You can only get hbo and stars if you get this package, if you want it, A la carte is going to cost you a lot and msps that are mature don’t like all the carting things So taking an sla and not having a you know A different sla for every client having a specific sla for maybe three bundles of services Makes it easier and more efficient to measure performance You To make it easier on the technicians and dispatcher to know exactly what’s covered and what needs to be billed for, right?

Instead of having to track and do this kind of invoicing somersaults every month trying to figure out should we charge for that or not? Was that, something else? And then the extra point that I want to make is how tying the SLA to a KPI helps align client’s expectation much better and allows us to sell a little bit more effectively.

If a client doesn’t need an emergency response for four hours for a priority one issue, then maybe they don’t need it. Are [00:15:00] better SLA or if they don’t need a two hour response time for a priority one issue Then maybe they don’t need our best SLA so we can get them into kind of the entry level more cost effective service that allows us over time to upsell them And like I said rich to the next level of service.

So now we’re taking 25 or 50 or 100 users and upgrading them For that extra 10, 15, 20, 25 per user into that next bundle and so on. So again, when we get to have our QBRs with clients, we can dictate or understand where they’re going and how they’re growing and we can let them know, look, we need to move you into our next bundle or tier of services.

Here’s our response times, our SLA response times. And then here’s our performance metrics that we’re going to abide by. And this will allow us to continue growing with that organization over time. Makes it a lot easier to track performance when we’re tying the SLAs to KPIs and then measure that performance and then regularly reviewing our SLAs internally and having these discussions with clients to make sure that what, they signed up for 18 months ago is still good, or do we need to bump them up?

Just gives us a lot more opportunity to be a more strategic, consultative with our clients and reach and maintain. Our profit margins when we’re bundling and pricing things and delivering services in this manner that can be measured,

Rich: This is interesting to me, Erick, because obviously as somebody, I’m not a recovering MSP, but man, I’ve been writing about managed services forever.

And so I’m, Very familiar with the good, better, best model of of bundling and and with the aspect of that, where, better is going to have more services than good. Best is going to have more services than better. This idea of scaling SLA’s up. With each step is not something I hear about as often.

And it’s interesting because it gives the the client one more reason to go best versus better. And it, it doesn’t feel like something that you’re withholding from, you’ve got to buy my top package. In order to get my best SLA, it’s flexibility for the end user, but if you don’t need that kind of SLA or some of the services in my best package, maybe better is right for you.

So it’s, it, there’s an interesting business growth driving opportunity in that. How common is that in your experience among MSPs? Let’s just limit the discussion to MSPs. who do good, better, best bundling. How often do they scale up SLAs with those bundles?

Erick: Rich, that’s a tough question to answer in general, but here’s what I would say about it ever since, I have been training and coaching MSPs after we sold our practice in 2007, we had launched MSP university and, trained tens of thousands of IT providers on these best practices.

That’s how we would teach them on how to bundle and price and making that unique differentiator again, not just what’s in the bundle, but the better response time. And that is what typically. Has that little bit of extra influence on a client that says oh, yeah I want first class seats for that trip to new york or i’m okay in comfort plus or maybe i’m just coach for this trip, right?

so like you said rich it gives the client the flexibility and Because it’s standardized and being measured and enforced at the service delivery level. We know we’re not over delivering services and eroding our profit margins. And we’re charging for what needs to be charged for. And again, when you have these options, you can go back to your clients, even, if they’ve signed a three year agreement, you can come in 18 months later and just say, Hey, sound, it feels like we need to talk about.

Upgrading you to our next bundle or package of services because we’re seeing this and this or if you’re tying Cybersecurity to these bundles as well. That’s another great driver. So think of it that way rich So anything that you can add that provides a tremendous amount of value in each of these bundles allows you then to express that value in very concrete terms to clients who may have You know not who may not be thinking about it in As a strategic and a consultative manner and our job as the msbs is to create long lasting relations a longer We keep our clients on that client.

Lifetime value is another driver towards valuation at the time of exit.

Rich: Okay. More good reasons to take a look at your bundles today. MSPs, assuming you have them and you really should. But think a little bit about the role of SLAs [00:20:00] in the structuring of those bundles. We are about to take a break here and then get into our interview segment for this episode of the show.

And I’m super excited, Erick. We’re going to be joined by Dave Russell. He is the senior vice president of enterprise strategy at Veeam. Veeam is well known in the channel as a a backup. And data protection of vendor as a lot of folks in our audience know, data protection backup, they’ve long been the last line of defense in a security stack, but to an increasing degree in recent years we’re really watching the lines between.

Security and backup kind of come down and it really all is one stack and that has implications for MSPs in terms of how they build and deliver their stack in terms of how vendors like Veeam deliver services to MSPs. So Dave is a great guy to talk about that with he is going to have a conversation on that very topic with us in just a few moments when we come back from the break.

So stick around, we will We’ll be right back.

All right. Welcome to part two of this episode of the MSP chat podcast or spotlight interview segment. And we are pleased to be joined this week by the senior vice president of enterprise strategy at Veeam. He is Dave Russell. He is sitting in a room full of very cool electric guitars that we were just discussing with him off the air.

Dave, welcome to the show.

Dave: Yeah. Great to be here. Thank you.

Rich: I’m going to assume roughly a hundred percent of the people in our audience are familiar with Veeam, but they may not be familiar with you. So just to kick things off, tell folks a little bit about yourself, your role at Veeam and where you got all those guitars.

Dave: Ah, yeah. Yeah. So I’m probably the, one of the least interesting people you’ll meet 35 years and back up now. Probably another 35 or so to go. So this is really all I’ve ever done. I’m an SVP or head of strategy at Veeam. So look at what kind of products we should be taking to market. And then certainly look at what are the market dynamics and, you can say you’ve been a backup for a while or a long while, but what that means actually shifts over time.

So that’s a big part of what I look at. And, thankfully, computers, data centers, they got to keep us indoors and cool and guitars like that too.

Rich: Alright, the last time you and I spoke was not that long ago. This was just after Gartner issued its most regent recent magic quadrant for the BDR space.

There were some interesting insights in there that we got a chance to discuss. One thing in particular that Gartner said was something that I remember discussing with you and it said 15% of businesses. Consider backing up SAS data, a spending priority now. But they also said that by 2028, that number will rise from 15 percent to 75%.

So for the MSPs in our audience who are serving SMBs for the most part what is the state. Of SAS backup right now, is it where it needs to be for end users? What kind of a growth opportunity is it still?

Dave: Yeah, Rich, I think you almost have to decompose when we think about certain words at SAS in this case, because some SAS applications are further along or more mature than others.

And I’d point to Microsoft 365 is a great poster child, arguably example of that. In other cases, I’d say we’re still evangelizing as an industry, the need to protect those platforms that they’re not self protecting or that the provider is going to make sure that the infrastructure is whole and available that their applications available, but not necessarily do anything to make sure your data is consistent and or available.

So I think that’s one of the reasons. Why the Gartner number gave us such a spread, meaning relatively small, 15 percent growing dramatically. The good news is there’s still a great deal of opportunity. We probably tend to think in the MSP community about Microsoft 365 SAS backup the most when it comes to SAS platforms or apps to protect.

But that’s still an under penetrated area, which is great news, right? That’s greenfield opportunity, but a recognized need. And I think the good news from Gartner and what they’re suggesting in their numbers is that there’s more and more applications that are now coming under consideration to protect.

If you’re going to bet your business on it, then you ought to protect it.

Erick: Hey, Dave, I remember, back in the enterprise days and later on as one of the first MSPs that, you know, and this is pre 2000, in the enterprise for me. So I’m dating myself. Backup has always been perceived as this.

Last line of defense, no matter what bad things happen, we have backup to rely on [00:25:00] and backup has matured dramatically over the last 30, 35 years that, I’ve been in the channel. So today it feels like the lines between that core backup sensibility and security have been blurred now where we see MSPs thinking You know, backup, is cyber security.

Cyber security is backup. Are you seeing that the same way? What are your thoughts and then what’s driving it? And is that a good thing?

Dave: Yeah almost go in reverse order if that’s okay. Meaning I absolutely think it’s a positive, it’s a, it is a good thing in other words, in my opinion.

And let me tell you why. And you’re absolutely right. If you take it pre 2000, pre this millennium, as my dog bunkers down for me getting into a soliloquy, he’s probably fearing, The change that you describe, right? That’s happened over the last, let’s call a quarter of a century.

What would get that were in part technological changes. The speed of backup, whether that’s disk using data reduction, cloud based activities, et cetera. What that meant is it now backup could be. Be a more of a first class citizen in things like disaster recovery. In other words, you didn’t have to call someone on telephone, say, I want you to go get the car or the pickup truck.

Load up physical tapes, drive 100 miles, bring them to my data center, and then I go through the whole process on my end, bring them in, load up the tapes, et cetera, right? That took a long period of time. Not making an anti tape statement, by the way, just mentioning that thanks to other kinds of technologies, be it disk based, be it data reduction, be it cloud, et cetera, all of a sudden that access that backup could provide to your data changed things.

And part of what’s changed now is the landscape of why we actually invoke a recovery. And I’ll share with you a very quick story. I was in Hong Kong at a beam partner event, and I was supposed to give a two hour conversation on going through ransomware trends. And I said, look, before I get into the next hour and 59 minutes, I’m going to give you one minute.

We’re going to talk a lot about cyber, a lot about ransomware, but everything that we’re used to worrying about going wrong in the data center statistically actually still happens, right? Servers fail, configuration errors still happen, and I kid you not, as I flew back from Hong Kong, I landed at San Francisco, our SFO.

And the CrowdStrike issue had unfolded not even 48 hours later. And I was like confused. I didn’t know what was going on. I thought I had a tight connection to get back home to Denver. I was trying to zip through passport control and then when I finally did and got out into the open area, I thought an earthquake had hit.

There are people handing out water, the screens, meaning, the flight boards, they’re gone, they’re blank, literally talk about a blue screen, and that was a great example of, to this point in time, as we record this, the largest IT outage in history was not cyber related, despite the fact that we talk a lot about cyber, and justifiably but there was a great example Of thanks to technological changes, how backup and recovery could get people organizations back online extremely rapidly.

And at being, we were doing that and talking to customers around the world all weekend long that because that happened on a Friday and Friday night, Saturday, Sunday, etcetera. That was that process of resilience and getting back up. And going was unfolding so long within a way of making a hopefully a concrete example of there’s a reason why protection and backup and recovery can be flexed for multiple use cases and why exactly what you said.

I think it’s a good thing. I think it’s a great thing. And what it means. is that we can leverage our backups for more than just scenarios that we would have saved 25 30 years ago.

Rich: You just used a word that I actually wanted to get into a little bit with you. Resilience. Because as these lines between security and backup blur and more and more you’re seeing, security vendors and backup vendors integrating and aligning with one another or security vendors, adding backup as those lines blur this word.

Resilience is showing up a lot. And on the security side, they’ll sometimes call it cyber resilience. You folks prefer to call it data resilience to just talk a little bit about what, how do you guys define data resilience And why is that an important concept and important focus area both for the end users and for MSP serving end users?

Dave: Yeah, you’re right. Rich. We tried to come up with the term not necessarily to be different, but [00:30:00] to have an umbrella in term that would be inclusive of many things. And we. One with data resilience, in part because it encompasses cyber resilience, disaster recovery, kinds of scenarios, mistakes, configuration errors, in other words, anything that might cause an organization to invoke a recovery or to need to get into other methods of getting their data back, getting their applications up and running.

So data resilience, we think of. It’s just the process of ensuring continuity of operations. And where we intercept that is from a data perspective, meaning we’re not going to help you with your physical data center per se. But in terms of having access to good known, clean copies of your data, doing that rapidly.

Regardless of the source of outage, it could be a networking error. It could be something like, say, CrowdStrike. It could be a cyber attack. It could be a hurricane where, as we are recording this now, there’s multiple hurricanes. And I think it’s only 10 days that are threatening Florida and the United States and other parts of the world.

So all that Is still happening. And unlike, say, a hurricane where you’ve got early warning indicators that, the weather pattern can shift and the hurricane could miss your geographic location. But some of the other things we described that doesn’t telegraph. It just happens. You wake up and, your screens are blue or you wake up and you find out you’ve been a victim of some kind of infiltration that unleashed overnight.

So for us, data resilience is just trying to look at what can we do to make sure we can get the important data back to you very rapidly, no matter what the incident that led up to that outage was.

Erick: Dave, you made a very interesting about a CrowdStrike incident, not really being a terrorist attack, but just a failure that required recovery from backup and some other things.

Now when MSPs are thinking about cybersecurity and data backup, to what extent Should they include those in the same conversation? Is it make it, does that make it easier for them to sell these enhanced data protection services to their clients? Then how does that parallel into, if that is true, their choice of vendors?

To package up and clue it into their portfolio of services to the clients.

Dave: Yeah, I actually very much think it is true, right? That budget frees up due to things like cyber in part, because of just the level of visibility, not because I’ll assert the level of frequency, meaning like probabilistically what could happen, but the board, Of any corporation understand cyber threats, they understand having to pay the ransom and potentially have to populate a bitcoin wallet.

They understand looking at the newspaper online or whatever it may be and hearing about on a fairly regular basis organizations, maybe even organizations just like theirs. That have been attacked. And so this is a conversation that allows an MSP to potentially go after either additional budget. And or additional levels of awareness, even though I’ll argue not just because of something like, say, crowd strike, but seasonal weather patterns, failures that just happen from, infrastructure or configuration updates that go awry for a variety of reasons.

All that still happens and needs to be protected for. But that doesn’t necessarily have the same sort of shock value, awareness, value funding. That’s top of mind, as does, say, a cyber event. So I don’t think it’s actually just Chasing the fad of the moment because you can utilize now going back to your part about what vendor you can utilize the same solution, the same things that you deploy to recover from them, protect yourselves from a whole variety of incidents.

And that’s really that notion of leverage. If you can go and deploy, The product set that’s going to help you from hurricane to cyber attack to configuration issue to unfortunately someone deleted a file. If that’s your file and it’s the end of quarter, that may be a disaster in your mind. It happens to be a very localized one, but that still happens with frequency as well.

So I think it. [00:35:00] Is something, meaning cyber, a conversation that’s a different kind of an entree point than what we may have had in the past. Back when I was a gardener analyst for 13 years, I saw people and organizations, I used the phrase, they kicked the can down the road. And they did that, year after year where years later, they all of a sudden were in a much less recoverable state than they were initially.

Wow. Yeah.

Rich: So on the topic of vendors and to make this a slightly more Veeam specific conversation for a moment, because I do think it maybe speaks to a larger industry trend, you folks have had an alliance an integration alliance in place that With Sophos for about a year now, you announced another one with Palo Alto maybe two weeks ago as we’re recording this as well.

In, in the context of security and backup coming together of MSPs positioning those as one thing to their clients called data resilience. Talk a little bit about the logic behind those agreements and then what’s maybe significant about them, beneficial about them for for MSPs.

Dave: Yeah, absolutely. So at a high level, kind of logic of agreement. I liken it to the same notion of choice that beams always try to go to market with when it comes to what kind of infrastructure or what cloud. It’s really up to the customer or the partner in this case, the MSP partner, meaning we’re not going to dictate here’s the server vendor, or here’s the storage vendor or storage type that we’re going to work with.

No, it’s whatever makes the most sense. Then obviously what makes the most sense is a business. Decision that could change over time, as can the backing cloud, for example, one hyperscaler could be preferable today. That story could be different tomorrow. I don’t want to get us down a rat hole, unless we want to.

But, certainly we see that this year with hypervisors right there. There are many organizations or I’ll assert probably almost every organizations had to think about what are we going to do? With our hypervisor preference and same is true from a service provider perspective, whether that’s supporting different hypervisors or the infrastructure solutions that you build out.

Yourself. So the reason that we’ve got a number of different partnerships and literally several more on the horizon of being announced is we want to offer choice, want to not dictate, oh, to get the value out of a combined solution. You’ve got to now be reliant upon the prescription or formula that a specific vendor wants to put onto you.

We really want to make it, Hey, whatever the business, it could be an MSP is decided here are our preferred partners. Great. How can we go leverage the investments that you’ve already made, the training, the skillset that you’ve already got. And then. If we think, just put in an example, how does this actually come together to offer more value?

Nobody should be saying, hey, go invest in backup and turn off all of your security solutions because they must have had some kind of an escape if you’ve actually suffered ransomware. That is absolutely not the takeaway. The takeaway is actually the opposite in my mind, that it’s just showing how difficult the attack vectors are now.

The fact that it takes detection in multiple ways, multiple points in the data life cycle to try to capture everything that can be infiltrated or that can go wrong in a production environment, security vendors, some of the alliances that you mentioned, rich, they literally have milliseconds to try to triage.

Is this a known bad activity known good or is it suspect? Thanks. In the backup stream, we can go and apply more resource, whether that’s CPU, sometimes that’s memory RAM, to be able to say, okay, for just a little bit more time, can we do a deeper level of inspection, apply things like entropy techniques to understand did something radically shift In the last backup and what we’re seeing come through to us now in this backup in the production environment such that we might be able to alert on something that evaded other detection means.

So I liken it a bit to neighborhood watch. If you think about the production security tools and you think about backup coming downstream. I happen to live on a cul de sac. I literally have a retired neighbor who will call up all the time to say, Hey, I think I saw something at the beginning of our cul de sac.

And I happen to live close to the woods. And I can say I haven’t seen the [00:40:00] bear walk through here. But we can cross pollinate with the data sources that we each have to try to make something maybe safer. And, where that really comes to play are the analogy holds better.

Unfortunately, it’s fire season, where I live in Colorado and, that notion of detection and reducing the detection time matters. That’s how I’d liken it to how security vendors and backup solutions can play as well. We’re each having the ability to signal to the other. Here’s what I have noticed with my detection capabilities.

How does that compare to what you’ve observed? Thank you. Or, how does the current behavior compare to what you believe and what I believe should be the state of norm versus what we’re seeing or experiencing today?

Erick: Dave, I love the bear and the neighborhood analogy, right? And the neighborhood watch analogy.

That’s that’s very interesting. So. In our podcasts, it feels like we are contractually obligated to talk about AI in every episode. So here’s my AI question for you, Dave, from where you’re sitting. What are AI’s implications as as it relates to data resilience requirements for three different groups, end users for the platforms that the vendors are using, and then for the MSPs that have to get ahead of this before their customers start coming in?

Risking their own data in ways that aren’t optimal in using AI.

Dave: Yeah. And, I’m going to weasel out, meaning I’ll conflate AI and machine learning into one I’ll conjoin a little bit. Our marketing department likes to say everything’s AI. And then on the engineering side, we’re like it’s really more machine learning or, is entropy really AI and we get into sort of meta conversations, but at the end of the day, exactly what you said, Erick, like, how do you provide customer value or value?

At different parts of the chain there. So from an end user perspective, one of the ways I can be applied. There’s a bad joke that you probably heard in some shape or form and backup and recovery. It’s really hard to restore data that you haven’t backed up. And so part of AI is understanding what’s changed or what’s in the environment now that has business value that isn’t getting protected.

So it’s completely unprotected. There’s another area of under protected. So earlier in May at one of our events called meme on, we demonstrated on stage utilizing a I with Microsoft. around M365 data to be able to show here are users or user data that’s not getting protected at all. And there’s a variety of reasons why that could happen.

Merger and acquisition, onboarding, new kinds of customers. If you’re an MSP, a project just signaled new kinds of data to be stood up, etc. So part of the notion around AI is just making sure you’re not surprised. And you can get the right data being handled with the right kind of policy or resiliency from an MSP perspective.

It can sound mundane, but there’s a I in terms of. How can you help an administrator reduce the time to making a good decision either because they were alerted sooner of a problem, or they were given a better recommendation. And actually about five and a half years ago, Beam started shipping machine learning in our monitoring and analytics tool to say, Hey, we’ve mined our Hadoop cluster on our customer support.

And what we see is a trend. That could lead to an outage. It could be as something so simple as you’re about to run out of backup space. In some cases, it’s no, you’re running a specific kind of storage array, and there’s a microcode problem that we’ve actually traced. We can proactively alert you to not only the problem, but the resolution, or we call it remediated actions.

So could the, someone like yourself, an expert, could they do that themselves manually just because they’ve got so much resident knowledge in their mind? Yes, absolutely, probably could. We want to reduce the burden on the heroics. I feel like every MSP, they say we’ve got Sally or we’ve got Sam, right?

They’re do great things. They’re like Superman, Superwoman or what have you. The problem is we don’t want to have to bet the business on the heroics on a continual basis of one individual, right? We want to make [00:45:00] this more automated, repeatable, in other words, save your super people for tasks where it’s really required.

Not have the everyday activity. You require this kind of knowledge, this kind of, activities and heroics, and then if we think about, from an application perspective, the applications increasingly getting more intelligence, could an application say, this is the most important part of the database, and I want to signal that both to the MSP or to the protection provider or, to a security vendor up and down that.

Whole data path so we can understand, have greater visibility and make better choices. And that, in my mind, is what AI really comes down to. It’s not so much doing things that never couldn’t have been done before, but reducing the burden on the cycles and expertise and the timeframe that might have been required in the past.

Can we shorten that cycle?

Rich: Okay, so we have officially checked off the AI checkbox for this episode in a very interesting and informative fashion. So thank you for that, Dave. Thank you for the entire conversation. Actually, I, I backup is one of those segments of the market that is mature that I think it’s easy for people.

To think there maybe isn’t a lot more to say about it, but we’ve, I think, just established in the last half hour. So that’s not true. So for folks in the audience who would like to maybe pick up the conversation, learn more about you, get in touch with you, learn more about Veeam, where should they go?

Dave: Yeah, certainly Veeam. com, V E A M. com. Website’s a great way to do that. I’m active on social media, backup Dave on LinkedIn, backup Dave on Twitter. As examples but we’re also doing a lot of industry activities. In tabletop exercises around cyber preparedness and data resiliency, so there’s a lot of ways to engage with us.

A lot of ways in the partner community as well that we expose ourselves and solicit feedback. Frankly, we want to make sure we’re always designing the right solutions, meeting the challenges today and tomorrow. That the MSP community is facing.

Rich: Okay. Dave Russell from Veeam, thank you again for joining us on the show.

Folks, Erick and I are going to take a quick break right now. When we come back on the other side, we’re going to share a few final thoughts about this very interesting conversation with Dave. Have a little fun, wrap up the show, stick around. We Are gonna be right back Hey

and welcome back part three of this episode of the show big thanks again to dave russell from veen for joining us, for that conversation a lot of things to think about and talk about Erick, but you know for me what I was Chewing over as we were talking there is just again and I brought this up at various points you did as well just those the coming together of security and backup basically, and, I was thinking in the back of my mind to ConnectWise buying Accient recently, and some of the logic behind that deal was ConnectWise is very strong in security.

They had some backup, but they really needed to round out that product line. And now they have all that. In house and and they can really weave that all together tightly. It’s just part of this larger story in the industry right now where vendors are seeing, security experts are seeing, analysts are seeing, and I think MSPs probably are increasingly seeing.

It doesn’t make all that much sense to talk about BDR and backup and security as being Different things that they all need to be tightly related to one another and reinforcing of one another. And and Dave had some really interesting thoughts on how the backup piece of that in particular can really contribute to the security piece because it goes beyond just restoring data that has been encrypted.

For example, there was some other interesting stuff in there.

Erick: Yeah, I agree, Rich. And, what I was thinking about was. How, MSPs traditionally have thought about backup. Like it’s always there. It’s always been there even before, the need to strengthen our cybersecurity approach with our clients and build out additional solutions and add them to our portfolio, it’s always been thought of as something that we always do something that we require and every one of our agreements.

And, it’s almost, dare I say, rich, it’s almost felt okay, of course, it’s your portfolio is going to include backup. It may not be very sexy or exciting. It may even be seen as a commodity. And I love the way that Dave took that and positioned it in the conversation. When I asked him [00:50:00] about, inflating or integrating backup with cybersecurity in order to, get clients to appreciate the value or even strengthen the value or even make more margin between you and high rich when we’re bundling these services together, the added value that Received around cyber security and compliance, including backup, I think is a very compelling way to position it all as a complete part of a cyber resilience or data resilient solution for clients, even though we’re including it with some of our other services.

So I thought it was very strategic the way Dave said. By including it, it makes it much easier to bundle and present it and get clients to say yes when it’s inclusive of a strengthened or enhanced cybersecurity portfolio of services.

Rich: Now I totally agree and I had that same thought too that this is part of the power of that data resilience terminology basically is it’s, risky for an MSP to start talking about products or even just service components of a bundle with an end user they just want, everything to be up and running and fast and reliable and secure.

But it feels to me like, as an outsider, basically that you can have a strategic conversation. Trusted advisor conversation with your customers about data resilience and what that means and why that’s important and how we as your MSP can provide that to you. And that’s a conversation that’s happening on a different level.

It’s not bits and bytes and products and so on. It’s more about the strategic value that that we’re providing you.

Erick: Yeah, I agree, Rich. And that, that strategic value and that’s, and that differentiation. Is what’s allowing more mature MSPs to standardize their product portfolio and the services that they deliver to their clients and increase their margins over time because it’s delivered in a very consultative manner and provides those customers a peace of mind that allows them to focus on growing their business, knowing that the MSP has got their back on the other side of the fence.

Rich: Okay, very good stuff. And it leaves us with time for just one last thing folks. And this week, our one last thing comes to us from Sacramento, where an apartment dweller there who is also a customer of Pacific Gas and Electric noticed some changes on his electric bill that he couldn’t quite explain.

He contacted PG& E for some input what’s going on. As they dug into it a little bit for him, they discovered. That he was actually being billed for his neighbor’s electricity. There was some sort of mix up in, in how the account got set up or in the meter and where the meter was going. And it’s Oh, we, here’s the explanation for what’s been going on is we’ve actually been billing you for your neighbor’s electricity consumption, which is all very interesting maybe even a little disturbing Erick, but it turns out this had been going on.

For 18 years before they finally recently discovered what was happening over there and according to PG& E, they are working now not just to rectify the situation. I assume they’re going back through 18 years of bills. Just to see what this person may have paid for that he shouldn’t have.

And oh, by the way, that his next door neighbor, free electricity for 18 years didn’t raise a peep surprisingly or not.

Erick: Yeah. Two things about that story, Rich. Almost two decades that he’s been paying his neighbor’s bill. And you mentioned it like the neighbor, he was the nicest neighbor, the best neighbor for 18 years, because he, I don’t know if he knew that the neighbor was paying his bill, but he was getting free electricity.

Holy cow. That would bring a smile to anybody’s face for 18 years. Wouldn’t that Richie?

Rich: Yeah, and a frown to the neighbor who all of a sudden is getting getting bills now. But it was a good 18 years while it lasted. While it lasted, and

Erick: now I’m sure there’s going to be a little bit of a true up.

Yeah.

Rich: Folks, that is all the time we’ve got for you this week on the show. We thank you so much for joining us. Erick and I will be back in a week’s time with another episode for you. Until then, please allow me to remind you this is both a video and a podcast. And an audio podcast which means if you are listening to us right now, but you’d like to check us out on video just go to youtube look up msp chat You’re gonna find us there if you are watching us on youtube, but you’re into audio podcasts You’d like to listen to us that way as well.

Go to wherever it is You get your audio podcasts look up msp chat. You’re gonna find us there too. Almost certainly However, it is you find us, please subscribe rate share Review it helps other people like you find and enjoy the show this show is produced [00:55:00] by the great russ johns. It is edited by the great riley simpson They are part of the team with us here at channel master.

They will be happy to produce a Podcast for you as well. Podcasts needless to say are a tiny slice of what we do at channel master If you really want to understand what we’re about and what we can do for you, please visit www.channel mastered.com channel. Mastered has a sister organization called MSP Mastered.

That is Erick working directly with MSPs to grow and optimize their business. And you can learn more about that at www.mspmaster.com. So once again, we thank you for joining us. We’ll see you in a week. Until then, please, folks, remember you can’t spell channel without MSP.