Episode 78: The Holy Triangle

Read the Transcript

Speaking just after this week’s ConnectWise IT Nation Secure event, Erick and Rich discuss the simplified new ConnectWise Pro subscription plan and best practices for optimizing your client agreements before an exit. Then they’re joined by John Pagliuca, president and CEO of N-able, and Mike Adler, N-able’s chief technology and product officer, for a discussion about why N-able believes MSPs should invest in XDR and MDR solutions rather than SIEM systems of the kind recently introduced by ConnectWise and Kaseya. And finally, one last thing: A woman in Australia who did 7,079 pull-ups in 24 hours.

Discussed in this episode:

ConnectWise Launches PSA Powered by Asio and ConnectWise Pro at IT Nation Secure 2025

Australian woman completes 7,079 pull-ups in 24 hours

 

Transcript:

Rich: [00:00:00] And 3, 2, 1. Bow blast off. Ladies and gentlemen, welcome 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’m chief analyst at channel master of the organization responsible for this program.

I am joined this week as I am every week by your other co-host, our chief strategist at Channel Master Erick Simpson.

Erick: Erick, how

Rich: you doing?

Erick: I’m catching my breath, rich. I’m catching my breath. How about you?

Rich: Yeah. So folks who are watching us on YouTube will see the usual virtual backdrop behind the two of us indicating that we are coming to you from [00:01:00] our home offices which is true.

But that’s a different place for each of us to be this week we’ve spent the bulk of the week at the ConnectWise IT Nation Secure Event in Orlando. We both flew home late last night. And here we are catching our breath. There was a lot going on at the show and and we are ready to podcast about it.

Erick: Let’s rock and roll, rich. Let’s deliver like we always do.

Rich: Alright there was actually quite a bit of news from ConnectWise at the show more than they normally release during an IT nation secure event. But I’m gonna zero in on one particular announcement. They made. And I’ll set it up a little bit back and at the the IT Nation Connect event.

Last November there was a press conference with Manny Revelo, the CEO of the company. This was his very first IT Nation event. First question asked of him basically was what, if anything, do you plan to do at ConnectWise in response to Kaseya 365? Kaseya 365, as we know, is the series of packaged offerings [00:02:00] for MSPs sold at radically disruptive very low prices.

And a number of other different sort of attributes. But the thing that really jumps out at people about Kaseya 365 is the pricing. So the question to Revelo is basically, what are you gonna do on your pricing? In response to that, the answer was, we’ve got something coming. Towards the end of Q1.

It took a little bit longer, as these things always do. We are towards the end of Q2 as we record this, but it did come this week during IT Nation Secure. It is a new offering called ConnectWise Pro. And basically it is a bundle of core business operations products from ConnectWise for MSP, so R-M-M-P-S-A CPQ remote access, RPA.

Most of or all these products are running on the A ZO platform. A ZO comes with built in documentation security dashboard, a backup dashboard, so a whole bunch of stuff from ConnectWise. Sold [00:03:00] at one price, one monthly subscription price. And it’s up to you. You can either price it based per device or price it based per end user.

Now, my initial thinking when I first encountered ConnectWise Pro was this is the response to Kaseya 365. There’s not very much I can tell you about the specific prices for ConnectWise Pro right now, that those are going to be announced mid-July. And I asked everyone I interviewed at IT Nation Secure.

What’s the pricing gonna look like? Nobody wanted to talk about it yet. They didn’t wanna steal their own thunder. But the vibe I got basically is if you use. All of these different products and purchase them separately from ConnectWise. Now you will save some money by going with ConnectWise Pro, but it will not be an enormous amount.

The strategy here is not to match Kase 365 and save people enormous amounts of money. The strategy here is to reduce friction that keeps people from getting onto the A ZL platform and [00:04:00] to improve. MSP satisfaction with ConnectWise and improve the scalability and growth capacity of ConnectWise itself by getting this big, messy issue out of the way ConnectWise in the past.

And still, if ConnectWise Pro is optional. So you may or may not choose to take advantage of this. ConnectWise sells products today. In I think the number is like eight different ways, per device, per end user, per technician, per terabyte and so on. It’s very difficult for an MSP to wrap their arms around all of that to figure out what their.

Paying what they’re going to pay to budget. This has been a source of dissatisfaction among among MSPs for a while, and that’s principally what this is about. It’s, let’s make it easier for simpler, and this was a word that came up a lot in my ConnectWise interviews. Let’s simplify this so that it is easier to do business with us so that we can scale our business and grow our business at ConnectWise by helping the MSPs grow their business.

That’s what ConnectWise [00:05:00] Pro principally is about. Now the offering I described to you is a core offering of business operations kinds of tools. ConnectWise obviously has security tools. They have they have a bunch of other things. Are not included in ConnectWise Pro. There will be. We didn’t get very many we got pretty much no detail about this so far, but there will be optional add-ons or bolt-ons to that core ConnectWise Pro offering if you choose to use their security solutions.

M-D-R-E-D-R the new solution they announced this week. You’ll have the addition the option to tack that on as well, on a per user or per end device pricing basis. This is the big move on pricing and packaging from ConnectWise design to make life easier for MSPs and to reduce a or lower a barrier to a strong relationship and an expanding relationship with MSPs.

Erick: It’s interesting, rich, that there’s two different. Kind of core [00:06:00] strategies, between to say and ConnectWise sharing. I think you’ve done a really good job of illustrating that. When I hear how you’ve expressed their construction of this to say, these are the core services and this is why we’re doing it this way.

The, and the intention is basically to make it easier for MSPs to consume and build their clients for it in a much more Ms p friendly way than trying to keep up with, consumption components and things like that. That, that certainly sounds like great news to me. And then when you’re talking a little bit about the way that they’re gonna modularize or bundle other packages of services, it reminds me of, the cable packages of yesteryear, right?

Where you got your core package of channels. But then if you want the movie pack. You can add that if you want the sports package, you can add that, right? So here I’m thinking, oh, okay, the cybersecurity or the compliance or whatever that is. [00:07:00] So it does make it easier, I think, for ConnectWise partners to simplify, to bill to measure margin because now they can bill it as they want to bill it and not worry about things like maybe another extra invoice to make up for some consumption and things like that.

I’m a fan of that. And I think that just from a usability perspective and from a building company equity in an MSP practice perspective, like you said, when I know what my costs are going to be over the next 12, 24, 36 months and what my, how I can increase my ebitda, lower my costs over time, I.

That’s good news. As business owners, begin to consider their exit at some point in the future, right? So now they can target EBITDA growth and get away from the, the peaks and valleys of inconsistent revenue or inconsistent, inefficiencies and things like that.

So it’s almost the same conversation, rich, [00:08:00] that we have with end customers when we say, oh, we’re gonna deliver these flat fee managed IT services for you so that you can forecast and budget for your costs and expenses and not have any surprises. So a lot of interesting takeaways,

Rich: The that cable analogy is a good one and I think it gets to something that, they didn’t use the word flexibility a lot with me in the interviews, but I, they are clearly trying to balance standardization with flexibility. That thinking is, R-M-M-P-S-A, et cetera, that stuff everybody is pretty much gonna need and we’re gonna make it easier or easy period for you to buy and pay for that.

Some of this other stuff in, in, in security and other areas where ConnectWise plays a lot of people will do that, but not everybody. And, giving you the ability to decide which of those additional modules you tack onto that core offering, that pretty much everyone is going to [00:09:00] want is clearly part of, what they’re doing to keep customer satisfaction or partner satisfaction high here.

Allow people to tailor take advantage of the standardization of simplification, but tailor it a little bit to their specific requirements.

Erick: Yeah, and I think, it also allows a little bit simpler conversations with MSBs and their clients to say, oh we’re going to we’re going to subscribe you to our next, our cybersecurity bundle.

Now, knowing what that cost to them and adding that on as a separate sell or whatever else the movie pack or the sports package is, right? So there’s a clear way to in one fell swoop, upgrade your existing revenue streams with multiple clients, in a short period of time, and then deploy the standard package of solutions to them.

Rich: Erick, you you mentioned exit values briefly there, and we’ve spoken a little bit about m and a and [00:10:00] factoring that into how you run the business in recent episodes of the show. And we’re gonna revisit that a little bit I believe in your tip of the week in the context of client agreements, right?

Erick: From the perspective of building, company equity and value in an organization, there’s a long checklist of things that a potential buyer is going to assess during during their due diligence process. Rich and I just wanna focus on one component because it’s typically the first thing that I look for when I’m consulting with clients and doing some m and a work with MSPs and with by, on both of buying the sell side is.

The thing that has probably the most initial value after some of the table stakes, things like EBITDA and, people and things like that are going to be a, an assessment and a review of the customer agreements that an [00:11:00] MSP is using to govern the business relationship between themselves and their customers.

What is it that we are contracted to deliver in our statement of work? Let’s call it our, our managed IT services package or bundle of services. However you design that is the agreement written to align with a buyer’s expectations and with m and a, I’ll call them best practices for MSP businesses in general.

So what I’m looking at here, rich, are gonna be just a couple of, initial things that are the most important. Number one, is everybody on the same agreement. Is everybody on an agreement and is probably the first one. Let me back up. And is everybody on the same agreement? Are there termination clauses and [00:12:00] renewal terms in the agreement that protects the MSP business and the buyer who is going to acquire the MSP business?

IE. How difficult is it for a client to basically just cancel for convenience, right? There should be some kind of clause in it that says, Hey, if we’re doing our job and we’re meeting expectations, you’re going to owe us the contract value of this agreement. Now if we, breach the agreement and your master services agreement should contain these clauses, which is separate than these sales rich, but basically governs the business relationship between each other.

If you’re unsatisfied, you give us 30 days to remedy the situation, right? And if we don’t, then there could be some repercussions, but we want some standardized language. In all these agreements. We wanna make sure that there are renewal terms. I like the automatic renewal for a successive three year term, right?

They just continually activates that gives the buyer some sense of, [00:13:00] okay, ’cause I think today’s statistics show us rich, that a typical MSP customer renews their agreements at least three times over a period of that relationship. So think about this when you’re writing your agreements MSPs don’t make them one year agreements certainly don’t make them month to month agreements.

There’s the only, the value to that is one month of revenue. That’s it. So three year agreements. Three renewals, that’s a nice relationship and allows you to go deep and wide with those clients, build more profit over time as you settle down the noise and become more strategic to these clients.

The second point, rich, is to have clause that allows easy transferability of the agreement and the client relationship to the buyer. Folks, you can, do some searches online and find some of these clauses that allow you to have language in your agreement that allows the buyer you to a transfer that agreement and the client relationship when an exchange of more than, let’s say 50%, [00:14:00] 51% of the company occurs.

So just make that simple. That’s just something a buyer wants. We, they don’t wanna have to run around and sign new agreements with 200 customers who now may be spooked and may not wanna move forward because they don’t know this person. And I already covered the third one, that month to month agreement.

It’s not really an agreement, it’s a handshake. If if you blink, you might lose a client because of all kinds of different things, and again, then Rich, you don’t have that guarantee of an agreement that, that has value, that you can, enforce if you’re doing your job right, and the client decides they wanna go with someone else.

Okay, then there’s some terms in there that, that allow you to exit that agreement, but you’re gonna owe us some percentage of that contract value.

Rich: It, I may be wrong, but I think this whole issue of agreements is one that a lot of MSPs don’t think about all that much in the context of m and a and exits and so on.

And as you were talking about that, it reminded me Erick back when I was [00:15:00] at channel Pro a few years back I did a I hosted a webinar once upon a time with Joanna Moff who works atva these days. She was a very successful MSP in Chicago. She sold her business to Antia.

And she was good enough to come on a webinar with me, talk about that whole process, help people understand what to anticipate. And I remember, it is a long, scary, stressful process. She was right at the finish line, and I remember her telling me that an issue, there was an issue.

She didn’t get into the details. In an agreement, one agreement with one client. It just happened to be one of her biggest clients. And whatever this issue was, it had implications for whether or not that this very big client could like, get out of the agreement after a sale. And with enormous time pressure, they had to figure it out.

And some of this kind of stuff will come up in due diligence and a potential buyer, if there is a problem with your agreements that, it, it might not be a last minute kind of thing like that. And yet in other situations a lack of [00:16:00] consistency, a lack of thoughtfulness in terms of how consistent or how your or agreements are structured and so on, it could really have an effect.

On whether or not a deal happens and how much you sell your business for if the deal does happen. So there, that, look, there are a ton of things to think about in the context of selling your business, but agreements is among those and all the stuff you’re talking about there is going to reduce the likelihood of headaches and hangups and issues that cost you money and sleep.

Erick: Yeah. And on the costing you money part rich, some, in, in many cases, some of these aren’t, in extreme case outliers, that could be a deal breaker for a buyer to just say, yeah, no, I’m gonna walk away. I’m not interested in that. But in, in other cases let’s put the, let’s switch roles.

Now, let’s say that you’re an MSP that wants to grow through acquisition and you are now looking at other companies and doing the due diligence and all that your job is to get the best deal because. That’s really what you’re trying to do. [00:17:00] You’re trying to bring on an organization that with your, you know expertise, you can, you

John: know,

Erick: grow that organization, add that top line, realize the benefits of re eliminating shared services and all that, right?

And grow. So if you’re looking at an organization that has some issues with their agreements, that would allow you then to negotiate your offer price down, right? We’re looking for anything that is, is going to create more work or more risk as a buyer, and then we’re going to adjust our offer accordingly.

So the more risk, the lower the offer, the more work, the lower the offer, other things can happen there that can reduce that cost. So I. Today’s tip is basically let’s make sure that your agreements are all standardized. Everybody is trued up here, new agreements. You don’t wanna have to run around the 90 days before the close and try to get clients to [00:18:00] sign a new agreement I’ve been involved in or in situations like that, rich, in my experience.

And that is not extra stress you wanna have. So think ahead, build that baseline, and then you’re prepared whenever it is that you decide to exit. Or you can also use all these agreements to go get financing from banks, larger foreign accounts with your vendors. There’s value in, in those agreements, especially if there are longer term agreements.

Rich: So an important thing to think about regardless of where you are in terms or in relation to an exit that is never too early to start getting your agreements lined up to to maximize your sale price. Now if you were paying very close attention earlier on in this episode, you may have heard me very briefly reference the fact that ConnectWise introduced a new SIM solution during IT Nation Secure this week.

About a month ago, Kaseya introduced a new SIM solution as well. We had someone from Mike Lia, from Kaseya on the show with us to talk about that as well. [00:19:00] Shortly after that product came out, and I wrote about it in my blog channel Holic, the folks at Enable reached out to me and essentially asked for equal time because they’re not big believers in SIM solutions for MSPs.

They’re big believers in XDR. And I have learned it’s not just enable. If it feels this way you and I met with Dore Eisner, the CEO of guards, a security company at IT Nation Secure. He had some very dismissive things to say about the wisdom for MSPs of using a SIM solution. It turns out, this is new information to me.

There are very strong pro and con feelings about SIM solutions out there. And so we are going to be joined after a brief break here by John Palka, the president and CEO of Enable, and Mike Adler, the Chief Technology and Product Officer. And they’re going to lay out for you their views on the relative merits, pros and cons, strengths and weaknesses of XDR versus sim.

We’re also gonna speak at length with them about AI and agentic AI and automation. It’s a very interesting conversation [00:20:00] all coming your way. Moments from now. Stick around folks. We. We’ll be right back

and welcome back to part two of this episode of the MSP Chat podcast, our spotlight interview segment where we are pleased to be joined by not one, but two senior executives at one of the best known names in managed services Enable. They are John Powell Yuka and Mike Adler. John is the president and CEO of the company.

Mike is the Chief Technology and product officer. Guys, welcome to the show.

John: Thanks, Robert. Rich,

Rich: I’m gonna guess most folks in our audience are familiar with you both actually, but for those few folks who are not, I’ll give you each a chance to introduce yourself. So John, we’ll start with you.

Mike: Sure. As Rich mentioned, John Palka, the CEO here at Enable.

I’ve been with the company for over over 12 years, so it’s been a journey and looking forward to talking with you guys and

John: Mike. Yeah, and for those who don’t know me Mike Ather been with the company [00:21:00] for four years leading all of our technology and product efforts, and excited to be spend some time with you today.

Rich: So Mike you and I have just spoken very recently in fact about a number of different topics, some of which will come up later in the conversation here. But there is one in particular that we talked about the last time you and I got together that you had some very strong thoughts about, I didn’t get a chance to write about that part of our conversation in Channel Holic.

My blog and the topic so folks know was SIM Solutions versus XDR solutions. And it came up because Kaseya had just launched SIM solution. So here I am yesterday morning as we’re recording this, literally at the ConnectWise event Erick and I are attending this week. And by golly, they launched the SIM solution too.

And I thought, you know what? I’ve got to get back to this topic. ’cause people have very, it’s not just you, Mike, people have very strong opinions. About the merits of XDR versus sim. Give folks your take and the enable take on which of those [00:22:00] technologies and MSP needs and why.

John: Yeah. And I’ve had a long history I just, in my, in previous lives working through cybersecurity at the enterprise, at the media enterprise, large enterprise, small enterprise level, and it, it really, if at all times, especially in small and medium enterprise, it’s really about security outcome, right?

How do you get the best protection? How do you get the best detection? How do you get the best response at the lowest and easiest to operate? And I think a lot of times when I look at some of these announcements around sims and I’m thinking, how is a small enterprise supposed to build a SIM and all the processes into a SIM and be able to drive that out?

And if you looked at what happened in large enterprise over the last, I don’t know, five to seven years. Sim became the legacy term because oh, I’m collecting logs and I’m dealing with compliance and I’m making sure that I’m ingesting log data and then doing some detection on it. And that’s great and that, but the [00:23:00] model sort of matured very much into this, multifaceted ingest mechanism.

Can I get ingest not just from logs, from my firewalls and from my applications, but can I actually get endpoint data, the actual endpoint information and integrate that directly into what’s happening? Can I get network data and can I go directly ingest that and make threat detection progress and make better detection and remediation concepts through that?

And that’s even expanded since over the last couple years. Can I get attack surface management data? Can I get other monitoring data? And so when we think about Sims and the ingestion of logs and, event management security. Information and event management, it feels like a very legacy term for the outcome that more, most small and medium enterprises need, which is really just extreme.

And that’s my view of the X word detection and response, right? The ability to get information from all over their environment and do the best job of detecting, responding and [00:24:00] remediating threats before an attacker ever has an opportunity to do anything in an organization.

Erick: John and Mike ConnectWise says that any size of MSP is potentially a candidate for a SIM solution, but attempts to be more of the mature MSPs that want and use a sim.

From what we’re seeing, is there a SIM solution that’s the right choice for MS for every MS. P or are there specific types of MSPs that should be looking to adopt a SIM solution and utilize it for their clients?

Mike: Yeah. I’ll start. And Mike, I’d love you to add on, Mike hit the nail on the head.

It’s really about the outcome that that the customer wants. When we’re talking to a lot of these MSPs they’re looking for help separating the signal from the noise and they can spend their time building and tuning a sim. Then they’ll need a, a, a soar or some type of orchestration layer, but then they need a lot of help in, in automating how their teams are going to actually take that into action for us.

We looked [00:25:00] at that as a bunch of piece mail, frankly and in an efficient way for any MSP, frankly, larger or small to run their business. You know what’s implied in the sim is that an MSP should be standing up some type of soc. Or have dedicated resources that are looking at this 24 by seven.

I, I personally don’t think that’s the best use of an MSP resources. We know, whether they be IT professionals or even more so security professionals. Labor is hard to come by, hard to scale, hard to retain, and what we believe it to be, a better path for the MSP is to leverage. The technology and more of a complete bundle that they can go and really get the outcome that they want.

The outcome that they want is understanding what a threat is, but more importantly, to remediate that threat. That’s why frankly, we acquired a lumen. We acquired a lumen because it’s all of these bits in one box, so to speak, right? It has the sim, it has the orchestration layer. There’s a lot of automation with a sock, and what it does is it provides.

What, where the threat might be for the [00:26:00] MSP or their end customer, but even more importantly, guys, and we’re missing a lot of the verbs. I think the verbs are wrong. It’s all about remediation and big r and just being, having a sim and understanding the threat. That’s part of the equation. But the full equation is the response in the remediation, and that’s what the a Lumen solution does.

So for me, it’s almost like we’re missing, we’re missing the landscape as to what the MSP really needs. They need help with the response, the remediation, and that’s why we believe the A lumen technology is the right one. It actually goes out and remediates what might’ve taken hours. Okay, you have a sim, you need to diagnose it.

Now you need to provide a proper response. What the Illumina technology does in 16 minutes less, we’re actually providing the response, isolating a potential, anomalous type of behavior and shutting that down. Therefore, the MSP can now go on and run their business. That’s for me is the difference.

It’s moving the agenda to the right so that we actually have a more proactive response as opposed to just sifting through a whole bunch of different solutions that may or may not be too cu cumbersome for an MSP to configure [00:27:00]

John: and the reality, I think. But John, I think you know Erick, yes, every MSP is going to need to provide some type of security solution to their customers because we’re seeing compliance, we’re seeing regulatory, but frankly, we’re just seeing the need and expectation from even the smallest customers saying, Hey.

And Mrs. MSP, can you help me be protected? And so as the MSP, they’re gonna need to be able to lean in. And so yes, we have an offering that we can do it all for you. You can use our XDR technology, we’ll provide you the MDR service on top of it, and you don’t have to build anything. We can do it in your name and we’ll take it on a hundred percent.

Or there could be organizations that are gonna build slightly more mature offerings and they may want to use our XDR technology as a software product and our MDR service to provide holiday coverage or weekend coverage, or 24 by seven coverage outside of business hours. Or they can use our XDR solution and use only our level two MDR services where they’re doing a lot of the day-to-day pieces, [00:28:00] or we’re doing the level one stuff and they’re doing the level two.

And so what we actually see in the XCR and MDR markets is that. Flexibility and offering allows, our technology stack and others to actually satisfy the need at all ends of the MSP spectrum. But I do agree that all MSPs will need to offer these services. They’re just gonna do it at different levels of scale and different levels of complexity.

And we want, we chose a technology and we have brought to market a series of offerings that let them differentiate based on what they think their customers need and the ser the parts of the service that they want to do themselves and the parts that they’re gonna need some help with. And that all just gives a tremendous amount of flexibility.

But at the core answer, yes, everyone needs this type of service and offering in their portfolio. It’s just how are you going to be able to reach it given your particular business model as an NSP, the types of customers that you service?

Mike: Yeah. IRI Rich you and I have been speaking with each other for years now and and I’m sure in one of those [00:29:00] conversations I refer to what I call the holy triangle for any managed service provider.

And there’s three legs of that triangle of course, ’cause it’s a triangle. And for me an MSP that’s in that upper decile in the industry are the ones that are leveraging all three pieces. So it’s automating, it’s standardizing, and it’s augmenting and what Mike was just outlining is leveraging all of that, right?

So you want a piece of technology that’s a solution, that’s an outcome base that’s driving more from an automation point of view whether it’s leveraging, AI or agentic ai or just a bunch of automation so that your team does not have to go sift through a bunch of the bits. There’s the standardization element of it, and then there’s the augmentation part, and the best MSPs are finding that right balance and, that’s, that, that’s why we want to, we don’t believe, we believe that it’s more, this, more of a whole solution that’s more outcome-based as opposed to just a piece of the puzzle.

I.

Rich: On the topic of automation and agentic ai a Tara, just a couple of weeks ago as we recorded this officially released autopilot, [00:30:00] which is their agentic fully autonomous help desk solution. It is apparently capable of diagnosing, triaging, resolving, documenting something like 40% of level one tickets that the companies that are using it right now.

We had somebody from the company on the show recently to talk about that when I was last attending one of your conferences. John, we spoke a little bit about fully ti you know, you guys are believers in AI like everyone else, but you were a little bit concerned about the idea of a fully autonomous agent going out there and handling tickets for MSPs.

What’s the thinking at enable now and maybe going forward about ag agentic AI and its role in the au automation piece of the triangle?

Mike: Sure I could start. And Mike please add on. So a couple things. You’re right. I would say we’re on the forefront here both from, from the generative ai, but also agent ai.

AI is, we have AI on the business and AI in the business here at Enable Our teams leverage AI to to make sure that the code that we build is [00:31:00] safe. Our sales and marketing teams use AI to make sure that we’re as efficient as possible so we can spend more of our time with our partners as opposed to on the keyboard.

And then, and as far as the products our Cove offering is leverage leverages ai. We’re leveraging AI with our ems, and of course our at Lumen XDR platform leverages AI to the point where. And at Lumen, about 70% of all incidents are handled autonomously, right? And so we’re able to leverage rules leverage agent ai, and provide a response to the customer to really accelerate that response time from when we detect something to when we can respond.

And so we leverage it on the response, we leverage it on the detection. So we’re very much leveraging ai, and as I mentioned that’s up to about 70% within our confines. We published a SOC report that folks should take a look at that actually talks about the level of autonomy that we find.

We also know Rich, that the bad guys and the threat actors are also leveraging AI in a bunch of different ways. So you need to fire, fight, fire [00:32:00] with fire. And so we’re definitely all in and look, so where does that end go? I think it’s like every other slope, right? Where we believe that we can get certain workflows and certain streams.

To be completely autonomous and to have a hundred percent level of autonomy on certain workflows and certain type of and certain type of bits that we’re looking at. But we, by and large, I don’t know if you’re ever gonna get to a completely a hundred percent, you’re still gonna need humans in the loop to provide some oversight.

And to make sure on some of the, on some of the new areas and maybe more complex bits that we’re using some judgment. So I think it’ll continue to slope up. But I’m not sure you’re ever gonna get to be a completely autonomous spot as far as where the IT ops and SecOps blend where we’re seeing folks in the SP land.

That L one where layer is a great spot that we can automate, but that doesn’t mean people go away. That just means folks can now go from if they’re, an L one type of technician, now they can spend time more on the L two. And if you’re an L two technician, you can spend more of your time on L three.

Look when we talk to MSPs across the [00:33:00] globe, regardless of the size, regardless of the geo. One of the top three issues that an MSP has had since I’ve been in the industry has been labor, right? When you ask an MSP, are you, would you like to grow more? Inevitably the answer is yes. And when you ask them what is the challenge as to why they do not wanna grow more, it’s hey, look I’m not gonna overshoot.

Add 10 customers if I don’t have the staff to do so Well, by leveraging ai, by leveraging automation, guess what? You’re getting more utilization. When I speak to folks in the industry, I look at AI as a complete tailwind. It will allow managed service providers to go and add more customers at an efficiency rate, have their employees do less mundane tasks so they can drive a little bit more of the human engagement, talking with their customers as opposed to doing some things behind the screen.

We’re leveraging it on the business, we’re leveraging it in the business. And I do believe that pushing more autonomy will allow the whole managed service provider industry to actually grow because they no, they no longer have that governor [00:34:00] of labor holding back their growth plans.

John: I do think Rich, I think and you’re seeing this in, with a lot of listen generative AI areas are really starting to make their way into business and helping folks be more, efficient and writing communications and communicating. We all know like a ticket comes in, how do I classify the ticket? And a lot of folks using general, a AI to tear up the language, help classify it, help look up responses, help write a response, and I think there’s just great opportunity for making technicians more efficient so they don’t have to spend the minutes.

And those minutes add up, by the way, in an MSP of writing communications and tickets and what happened, collecting evidence and doing all the tracking that they naturally have to do. And then we have agent ai, which is that action bias being created now and again, it’s the same thing.

So what are the series of actions? What are the series of scripts that used to be a technician’s job to run, write a script, run the script da. Now you can marry generative ai, the capability of running a script with agent ai, the ability to actually [00:35:00] perform the action and simplify that whole stream so that again, the technician says, here’s the action I need to perform.

And as opposed to going to a library or writing a script, da. No, I’m just gonna ask that agentic AI to perform this action, it can use generative AI to create the script, make sure it’s secure, get the right credentials, run it, get the action and review exactly what ha what has happened. And so we’re starting to see this move from, technician automation to ag agentic AI combined with generative AI to largely make technicians a lot more efficient.

That’s a great thing. It’s all about technician efficient efficiency, as John talked about, that makes the MSP able to grow makes labor your business able to grow without having to have increased labor costs. And so I think there’s just, tremendous amount of, of opportunity here for these kinds of technologies.

And we’re on the very early days. Of figuring those pieces out. And just like we did with MSPs, did, how many years? It was years, right? 3, 4, 5 years before MSPs get really good at even just trusting automation, like automatic patch policies and [00:36:00] automating data collection. And they used to have people who would review all the data collection just to make sure.

I think we’ll go through a lot of the same cycles. People will get comfortable, there’ll be some mistakes, there’ll be to use the AI friendly team. There’ll be some halluc hallucinations, right? And there’ll be some mistakes and people are gonna have to be okay with that. And very quickly though, we’ll get from 97, 95% effective, 97% effective, 99% effective.

And then we’ll all feel really good about it. And then we’ll be moving on to the next challenge.

Erick: So John, you touched on the bad actors are using AI for nefarious purposes. Mike, you just touched in on the MSPs reticence to take on risk, right? MSPs are very risk averse. So what kind of guidance or advice would you give MSPs and maybe their customers regarding the security component of adopting an AI [00:37:00] solution, the governance and things like that?

What would you share with them as a way to think about overcoming or addressing risk as they move forward into this new kind of evolution where MSPs absolutely see the value of reducing their cost of labor and getting rid of doing monotonous, repetitive things by humans contributing to mistakes, but then having that looming, concern about security.

And then the second part of my question. It is a little humorous. Is it just gonna end up being AI against the ai in the future? And just their AI battling ouris and trying to, penetrate networks and our is, being the white knights trying to prevent it. So it’s just an AI battle at the end of the day.

Mike: I’ll let Mike talk about the AI battling, battling the ai. Look, you know what, Erick? I’ll challenge a little bit. I’m not sure. MSPs are are change adverse. There’s a wide range of MSPs and I [00:38:00] think some of them frankly, are on the forefront of change.

But like any good business owner, any good, practitioner, whether it be cyber hygiene, it’s like what my dad always taught me back in the days when we were working in construction. It’s, you wanna measure twice, cut once, right? You wanna make sure that you understand how your employees are leveraging the tools, where that data is going.

I think it’s super important that MSPs understand how their employees are using their data, set a policy and some governance around how their employees are using the data, and then educate their customers as to where they’re pushing their data. It’s all about the data and where that data is heading.

My, my advice to MSPs that I’ve talked about, at our keynotes and some other events is, either be. Either disrupt or be disrupted. And I think as it relates to cybersecurity and the confluence of si of cybersecurity and ai, that’s the mindset that needs to, to MSPs need to take.

How do I monetize the use of ai? How do I make sure my teams are more efficient? How do I drive efficiencies both at my own internal teams, but then at the [00:39:00] customer site. And frankly, we’re seeing MSPs jumping in and understanding it. So I think it follows a wide range. But there is a wide range.

And so if you’re sitting here watching this podcast saying, AI’s the enemy, or, AI is something that I’m not letting my team use or I’m not talking to my customers about ai, trust me, when I tell you, you are more in the to be disrupted category. And so there’s a wide range. Where do you fall?

With your practice in, in that range. And so the MSPs that are more on their toes as opposed to their heels, they’re the ones talking to their customers about the proper use. Look at the end of the day, the verbs in this industry have stayed the same. It’s, I’ve talked about the automation, the standardization, the augmentation, and we talked about monitoring and management and security and resiliency.

These are the same, which evolved is the nouns, right? It was the server in the closet now, and then it’s SaaS, and now it’s, okay, where’s all this data? And these large language models being pushed, the nouns have evolved. The old [00:40:00] nouns don’t go away. There’s just new nouns that are being applied on top of it.

So the world is much more challenging. For these MSPs and they need to embrace it. But yeah, we know that the threat actors are leveraging ai. I do think you need to fight fire with fire. I do think ultimately there’ll always be the need for the humans to, to play into it.

Folks always ask me, Hey, with all this automation, does the need of an MSP go away? And I said, look, as long as there’s, as long as there’s a delta, as long as there’s a gap between a, where the threat actors are using the best and brightest, or b, just where the bleeding edge technology is, and then where, you know that CPA or that law firm or that dentist office or that regional hospital, what their knowledge is that gap.

That’s where the MSP, that’s the value for the MSP is to help these small, medium enterprises, these mid market companies. Adjust to these new nouns as they keep driving their business forward. Because those practices, those businesses, they want to leverage the technology. They don’t wanna ma, they don’t wanna become masters of the technology or own the technology.

So I believe it’s [00:41:00] tried and true. I think this will be a tremendous tailwind for the industry. And Mike, I’ll let you decide if there’s gonna be PA

John: or not. Look, I’m like Erick, you asked that in, in, in a little bit as humor and so I don’t wanna take this to a dark place. It’s actually already happened five years ago.

We were seeing academic capture, the flag security events where it was AI versus ai, defense and offense at the same time. Driven by ai. By ai. And these capture the flag events as opposed to watching teams of. Security people in an arena, in a cyber arena? No, we were just watching stacks of computers in capture the flag events on monitors as the computers both were building defenses and attacking other organizations.

So like from an academic perspective, this has unfortunately been happening for five years that I at least am aware of it. And so when you think about that, how fast does it get to us? The reality is and does that future materialize? It’s one thing to play with things in academic labs, it’s something else to have it practically happening in the real [00:42:00] world.

But I, I think John’s point, actually is exactly right, which is, so where’s the knowledge bar and where’s the practical application that a small and medium sized business can actually understand the technology, manage the technology deploy the technology. And that’s where that gap gets filled.

And that’s where I think, from an AI perspective, I. We all have to be aware the state of the art, the nation states. Yeah. There, there’s some really interesting stuff happening in the world that like, we probably are better off not really trying to think about ’cause it can lead us to a pretty dark place.

But I, we also just have to all have responsibility for recognizing that’s where we’re headed. That doesn’t mean people go away, but it means that we all have to be adopting technology and finding these solutions and helping organizations adopt these solutions so that they stay protected so that they could continue to move on in their business.

Because just enable where John talks about, we use, technology in the business and on the business. Every business uses technology in the business and on the business. And an [00:43:00] MSP is there to make sure that business right is productive in using that technology. That’s the service they’re providing.

I think most importantly is how do they do that securely? Because if their technology is disrupted, there’s almost no business today that if their business, if their technology is disrupted, that their business isn’t disrupted.

Mike: Yeah. And

John: that’s what the MSP really does,

Mike: and that’s why folks like the business resiliency is the key.

That’s the outcome. All these mid-market companies, all these small medium enterprises really drive, frankly, all the Fortune 1000 companies drive. I think. I think there’s a recognition that whether it be a threat actor or smash and grab type of threat actor, people can get into your environment.

And so it’s more important as to the controls, both the locks in the camera, so to speak, so that if the, if you do have an intruder that how quickly can you detect, how quickly can you respond? How quickly can you recover, right? And that’s why our strategy really here enable. Is to have three best in class offerings, our UEM technology, our a Lumen XDR [00:44:00] technology, but also our cove recovery technology to provide the cyber resiliency platform because it’s all about resiliency.

A lot of the times when we’re talking a lot about cyber and the threat actors, but it can also be, it also can also be a natural disaster, right? Or a friendly fire by an employee who just might have deleted a bunch of your data. And so it’s really all about business resiliency.

That’s what the small, medium business owner is looking for. That’s what MSP should be talking about, and they need to talk about the complete bit. When an MSP is talking about business resiliency and compliance, that’s when you’ll get, the attention of the end customer. That’s when you’ll differentiate yourself from the market, not talking about, speeds and feeds, or one endpoint security offering versus another.

It’s really about the outcome. And that outcome needs to start and stop with complete business resiliency.

Rich: I, I wanna ask about something that both of you have touched on a little bit in, in what you’ve been saying about AI so far here. So I write about ai which is not easy because it changes every week and, sometimes every day [00:45:00] within a given week, but all I’m doing is writing about it. Like I don’t have to make business decisions with potentially long-term consequences based on this constantly changing field. You at enable do, as you were saying, the MSPs and our audience do as well. How do you think at enable, how would you advise the MSPs and our audience to think about balancing the risks of moving too fast versus moving too slow in ai?

How do you strike the correct balance there?

Mike: Are you writing about AI or are you having Claude write for you? Because if you’re writing it, I’d say get on. So we’ll talk about that later. But so look guys I actually look we’ve all been in the industry for quite some time.

We’ve all been in tech for quite some time. It’s a lot of similarities to some of the other technology waves. And it’s all about, it’s all about technology. It’s all about people, and it’s all about process. That, that really doesn’t, that really doesn’t change. My advice to my team is [00:46:00] you need to embrace the technology, understand, again, where’s the data, what are the right controls?

What are the roles and responsibilities? If you’re leveraging this tool, can now your whole enterprise gain access to that data? Where is that data going? And just understand it. So you need to be thoughtful. You need to understand what the right processes are.

Make sure that internally, before you’re using the technology, you have an understanding vet, vet the vendor, make sure you understand what level of compliance and controls that, that they have. It’s not too different from a SaaS offering when it’s like that. Understand, as Mike mentioned, that there’s gonna be some hallucinations and this is gonna continue to evolve, but people do need to embrace it.

It’s the next evolution. But a, I’d say a quantum step up on the evolution scale for, from automation and what I’ve always been telling folks, you, if you’re not using ai, it’s not that AI will replace you, but the person that to your left or to your right, that’s leveraging ai, that will be the person that will replace you.

And so I, I think that’s understood. And if you’re a business leader at an MSP or a mid market company, you should be having that [00:47:00] conversation. And how are we gonna move that agenda forward? Every function should be doing it. And by the way, guys, it’s not just about, oh, this will help me reduce, 15, 20%.

Of the folks in your teams, but it might make those people much better. I’ll give you an example for sales. We all know if you’re running a sales organization, they spend a lot of their time pre preparing for a customer conversation or then taking the actions for customer concentration conversation, updating their forecast, updating their manager.

Well, a lot of those tasks, those administrative tasks can be automated, right? So that allows your team, your sales team, your support team, your customer success teams. To spend more times with humans that are your customers and driving a much more richer experience. That’s how we should be leveraging ai.

People think it’s like reducing the human exposure it actually should be so that we can get rid of a lot of the administrative bits so that we can have more of a richer experience with humans, whether they be our customers or one another to drive the agenda forward. I, but [00:48:00] I do think it’s for all dimensions, whether it’s finance, whether it’s sales, marketing support in dev, it should be an advancement that you can hope, drive some of the the richer experiences to make your, all of our businesses better.

Erick: So team, there’s been a lot of talk and economic around economic uncertainty in the markets and recession fears leading to. Analysts such as IDC kind of trimming their IT spending forecast as a result. So what are you guys seeing in the managed services market so far?

Mike: Yeah, so look you know what, where we continue.

If you think about the offerings that we have, I’ll go back to that cyber resiliency play. We see a tremendous amount of demand still for across the entire portfolio. MSPs continue to drive the business forward. A lot of times folks ask, Hey, John, the MSPs are servicing the small medium enterprise.

Are they more susceptible [00:49:00] to any types of downturns? I actually think it, it’s quite the opposite. MSPs are very much resilient. They’re servicing small, medium enterprise. But don’t confuse small with weak is what I always say. These are the small medium enterprise. These are the global heartbeat of the economy.

These are, again, your CPAs your law firms, your hospitals, your regional hospitals, your logistics companies and so they’re very much recession resilient. As a result the MSP demand remains quite strong. We’re seeing the need for cyber resilience in, in, in our demand for our offerings at all time high.

Same thing with our data protection offering. And of course, you need monitoring and management as the core base. We’re seeing continued strong demand. What I would hear as anecdotes is that sometimes there might be a slow down in new projects for midmarket companies or for small medium enterprises.

And so I hear those anecdotes, Erick. Those aren’t really manifesting, I would say, themselves in our pipeline. But it makes sense. At the end of the day, the global economy, we’re all connected, but by and large, the managed service provider [00:50:00] industry has proven to be very resilient.

You go back to the COVID days, you go back to some of the geopolitical unrest. And now with some of this tariff and trade kind of uncertainty what’s been tried and true is the resiliency of the managed service provider industry.

Rich: Guys always a pleasure to speak with each of you individually.

I almost never get to speak with the book once, so that was even better. Thank you very much for joining us on the show. For anyone in the audience who would like to get in touch with you learn more about enable Add, lumen Cove, et cetera, where should they go?

Mike: Yeah, sure. So obviously we have our website, enable.com, but we’re not shy and we’re a pretty flat organization.

Folks can email me at John dot [email protected]. I’m happy to respond. People like me up on LinkedIn. It’s a cool industry. This is a fantastic industry. You’re all driving businesses and you’re right at the intersection of some major tailwinds, but we all know that your job is a very difficult and challenging one, even more so in the technical and economic environment.

And so when people reach out all the time for [00:51:00] business advice or technical advice, and they should feel comfortable to do that, we very much look at our customer base as partners. As they grow, we grow and we’re very proud to be part of this industry. You probably hit interrupt it. Same type

Rich: of thanks so much for the time.

Alright John Powell Yuka, Mike admirer, thanks again for joining us on the show. Folks, Erick and I are going to take a quick break. Now we come back on the other side. We’re gonna share a few final thoughts about this conversation with two of the top leaders at Enable. Have a little fun wrap up the show.

Stick around we. We’ll be right back

and welcome back to part three of this episode of the MSP Chat podcast. Great conversation on a number of different topics there. I’m glad. Just so folks know we were planning to speak on this episode with John. Mike was a last minute edition once ConnectWise made this sim announcement.

I just thought I’ve gotta give this guy a chance [00:52:00] to chime in on that topic. And I actually found I’ve spoken about this topic with each of them separately. Before this for me, was probably the most clarifying. Discussion of that subject with them just in terms of the issue being the outcome and the in, in their view.

And not everyone clearly agrees, but in enable’s point of view in the point of view of guards, which is a security company company that we both met with at the Connect White Show yesterday in the view of others, SIM doesn’t get you to the outcome. Sim adds value in certain ways, but if the outcome is to detect and respond XDR combined with MDR as appropriate in and enables eyes is the is the way to go.

Erick: Yeah. And MSPs will ultimately make their own decisions of what’s in their stack and how they put these things together. I thought it was really interesting hearing John and Mike’s response to this. FUD factor [00:53:00] that, I we see from time to time, the fear, uncertainty and doubt, the risk aversion of MSPs to adopt something.

A as quickly as, the industry and vendors would want us to adopt ai and Rich, you and I go to a lot of shows, we speak to a lot of vendors, and everybody seems to be tacking on AI to their product, right? So it was really interesting to hear the guidance of, what’s necessary to integrate something that has such value from an internal perspective.

And, I was keying in on, John consistently sharing that. Enable is using AI internally as well as in their products, services, and solutions that they’re delivering to end customers through their partner channel. So I think that’s what’s really attractive for MSPs, is the value that it can bring to their organizations.

But then of course, what steps do I take to vet and ensure that I am [00:54:00] not that I’m identifying potential risks as I roll this out internally and with my end customers. So you and I Rich know that a lot of MSPs are trying to figure out how to monetize this. We’ve talked about it on the podcast before.

And we’re always adjusting our timeline, right? We think, oh, maybe it’s an 18 month thing. We were talking, a couple months ago, but now we think it’s gonna be accelerated. We think there’s gonna be massive adoption as long as. We’re the MSPs are mindful about security and just testing before, just rolling it out to all their clients because, it, it is a big change.

And I know John talked about, risk of change and things like that. So we’ve gotta be mindful moving forward. But, we don’t wanna wait too long because then we lose some of that first mover advantage. As we heard in our conversation with Mike and John.

Rich: Yeah, it’s not the AI that’s gonna replace you, it’s the person who is using AI better than you do.

Who is going to, I think it’s, and I’ve heard other people make that kind of [00:55:00] observation. I think it’s a wise one to to keep in mind. Folks, that leaves us with time for just one last thing and I’ll tell you the truth, Erick, I really don’t know how many pull-ups I can do.

I don’t really test myself on that pretty regularly, but I know it is less than a Australian fitness enthusiast recently did. She did 7,079 pull-ups in 24 hours nearly doubling the previous Guinness World Record. 7,007 79 pull ups in 24 hours. When I first came across the story, I was doing the math on it.

I, I should have done that before we went on the air. But if I remember right, that comes out to one pull up every five seconds. For 24 hours, which is quite a feat

Erick: beast mode. Holy cow. Holy cow. Yeah, that’s that’s superhuman. Superhuman incredible. Yeah, I’m gonna have to look that up and just see what this, amazing [00:56:00] fitness person looks like, because, I can just imagine just, just upper body jack strength, but, light enough to do a pull of every five seconds.

I don’t know how that, that works out, but, wow. That is a doubling the previous record. Good honor.

Rich: I’m gonna try, I’m gonna set the bar at five. If I can do five, I’ll just work my way to 7,079 from there. We’ll check in a few months down the road and see how I’m doing. Folks, that is all the time we’ve got for you on this episode of the show.

We thank you so much for joining us. As always we will remind you this is both a video and an audio podcast, which means that if you are watching us on YouTube, but you’re into audio podcasts, go to Google, apple, Spotify, wherever it is, you get your audio podcast, you’re gonna find us there too. If you’re listening to the audio version of the show, you wanna check us out on video, go to YouTube, look up MSP chat.

You’ll find us there as well. Wherever it is you find us, please subscribe, rate, review. It’s gonna help other people find and enjoy the show just like you do. This show is produced by the [00:57:00] great Russ Johns. It is edited by the great Riley Simpson. They are part of the team with us here at Channel Mastered.

They’re already willing and able to help you create a podcast of your own Podcasts, as it happens, are just a tiny. Piece of what we do for our clients at Channel Master. If you wanna learn more about the big picture, go to www.channel master.com. Channel Master has a sister organization called MSP Mastered.

That is Erick working one-to-one with MSPs to help them grow and optimize their business. You can learn more about that venture at www.MSPmastered.com. So once again, we thank you for joining us. We’re gonna be back in a week with more for you. Until then, we will both just remind you that you can’t spell channel.

Without [00:58:00] MSP.