MSP Chat Episode 06: A View from the Top at WatchGuard
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In this episode, Erick and Rich explain why now’s the time to get in on fast-growing demand for environmental, social, and governance (ESG) services and explore proven techniques for reducing platform and vendor sprawl. Then they’re joined by Prakash Panjwani, CEO of WatchGuard Technologies, for a wide-ranging conversation about how shifting threats and work arrangements have changed what both MSPs and their clients need from security products, services, and vendors.
And finally, one last thing about how an emergency alert test foiled an Amish man’s clever scheme to hide a forbidden cell phone.
Discussed in this episode:
Amish men carrying forbidden cell phones outed by national emergency alert test
[00:00:00] 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 to you. About the strategies, rather services and success tips. You need to make it big in managed services. My name is Rich Freeman. I am tongue tied.
I’m also the chief content officer at channel master, the organization responsible for this podcast. I am with you this week as I am every week by your other co host, our chief strategy officer at channel mastered Erick Simpson, Erick, how goes it? It goes fantastic. Rich, how are you doing? Other than tongue tied.
I am doing great. Let’s give you an opportunity to loosen up that tongue a little bit and dive into the top story, an awesome spotlight interview, and maybe a little humor. Absolutely. And about that spotlight interview, do stick around folks because our guest this week, and we’re really excited about it, is Prakash Panjwani.
He is the CEO of WatchGuard, and we’re going to have a very interesting conversation with him about that company and its strategy, but also what that strategy says about the larger Opportunity for MSPs and security right now, so stick around. That is coming up, but right now, let us dive into the story of the week.
And Erick, this is something that I’m going to be writing about in Channelholic, which is my blog. In fact I’m working on that. Today, as we record this we’ve spoken with folks in the audience on recent episodes of the podcast a little bit about new or emerging opportunities for MSPs, and I want to talk about one that has been on my mind a little bit based on some things that I’ve seen heard just within the last week or two.
First of all, I got a press release from IDC, the analyst organization They said that global spending on environmental, social, and governance business services, so environmental, social, governance, ESG, and I’m going to be focusing in here specifically on the environmental piece of that, that the social is diversity, equity, and inclusion, governance is about how you run the business, but let’s zero in here on the environmental sustainability piece of ESG, global spending On ESG business services is going to grow at a 14.
9 percent compound annual growth rate from 37. 7 billion this year to nearly 65 billion in 2027, turning ESG into, according to IDC, quote, one of the fastest growing spaces in the business world. End quote. I also got, just last week, I got some data from TD Cinex. They have this big interesting research study they just put out.
And there’s some ESG data in there. And it says that a third of IT providers in North America right now are providing ESG reporting and accreditation services. That number actually surprised me a little bit. This is not a market in its infancy, one out of three IT providers in North America already doing at least some ESG.
Now, with that said, 55 percent, I had a conversation with a couple of different analysts at Canalys this week, Rachel Brindley and I’m looking for her name here, Elsa Nightingale very interesting conversation with them. Canalys has done some research on this as well, and in North America, 55 percent of the channel partners they surveyed aren’t tracking sustainability KPIs, but that means 45 percent are, so again, another indication, this is not something no one is doing yet, and in fact, if you’re not doing it or thinking about doing it yet, you might even be just A little bit late, and it is something that you need to be thinking about.
There are more and more state level regulations here in the US that require this kind of thing. This is relatively new to me, but in the European Union, the Corporate Sustainability Reporting Directive, begins going into effect and being enforced in January of 2024. It’s a European Union regulation about ESG, but it’s a little bit like GDPR.
Erick, this is going to have implications for businesses in the U. S. That have operations or do some business in the EU. So this will probably over time affect some of your clients. So where is the opportunity for MSPs in our audience around ESG? The obvious one, the most familiar one is around what’s sometimes called the circular economy or hardware recycling.
There is [00:05:00] recent data I’ve seen indicating that SMBs dump One third of the hardware that they’re replacing in any given refresh cycle into a landfill somewhere. All of the hardware that you help your SMB clients replace should be refurbished, recycled, and there are all sorts of programs, Ingram Micro, TD Cinex just announced.
A program along these lines of its own Dell HP Cisco a year and a half ago announced a program. I just recently found out that, 740 Cisco partners have gotten certified to participate in that program. So there are all sorts of resources out there that will take that hardware off of your customer’s hands for you, do it at their expense.
It’s not going to cost you or the customer anything, and you can actually recover some of the value. Of that hardware, if you’re 3 to 5 years into the life cycle of that asset, it might still have 20 percent of its original purchase price left in value. And you and or your customer can take advantage of that.
But there is also an emerging. Services opportunity, Erick, and it’s in that kind of energy area. 35 percent this is according to Canalys, 35 percent of channel partners worldwide are doing some kind of channel assessment service or excuse me, energy assessment service for their customers right now, where they go in, they look at the power consumption, say, of servers.
In the server closet or in the data center, if they have one it might be power consumption by the PCs. If they’re using those, what are you consuming now? What would you be consuming if you upgraded that kind of helps people understand where they’re going to save money. And it also helps them reach their ESG targets.
There is also ongoing monitoring and management. Of energy consumption by these partners. In addition to managing their IT infrastructure, you can help them make sure, and there’s software that does this kind of thing. You can keep an eye on, are the lights on? Should they be on?
It’s overnight. Nobody’s in the office. All sorts of different functions like that, where you can actually go to them and show you for XP. Additional dollars per month. I can save you y dollars on energy consumption and help you towards your ESG goals. And then also this ties in really neatly to the cloud computing story because desktop as a service Windows 3 65 Azure virtual desktop.
This is actually a very environmentally sustainable and responsible technology compared to on Prem server servers. And You can use that as one of the ways that you sell a desktop as a service solution to your entries or customers. And this is something that’s going to be a selling point for them, along with all the other things that make that kind of a service worth buying into as well for them.
Something to have on your radar. If you’re an MSP Erick if you’re not thinking about ESG, if you’re not talking to your customers about their ESG plans, here’s something that you can do now while there is still time to get into this opportunity. Cement your position as a trusted advisor to that customer.
And potentially. Make a little extra money along the way. Yeah I really have been watching this for a little bit now, rich, and yes, it certainly seems that the EU is a little bit further ahead than the US is in this area. In fact, there’s. Different factions that are, completely bought in and then there are different factions that are like, why should we take a look at it?
I like to look at this as being on the right side of history. What can we do to save energy? What can we do to stop, cluttering up our landfills? What can we do to promote just being good stewards of the environment and in qualifying our clients and raising their awareness? Of the importance of this.
And I’m not saying, we, we start a movement and all that, but it’s certainly a way to qualify prospects differently and to show a different strategic perspective to existing clients. When you tie that back into, energy savings, we’re doing it for the right reasons, but what are the true benefits to get a client to say, Okay, yes, I should probably replace this equipment because it is consuming so much more power, energy, cooling, et cetera.
And it’s probably not running as efficiently and productively as new equipment would. And oh, by the way, I can get a little bit of a benefit from, entering into this program that you’re guiding, right? And it does help with the conversation. Like you said, of moving more towards the cloud.
Like how many do we still need those 16 servers in the closet? I don’t know if we do [00:10:00] anymore. Having those conversations really distinguishes the value. Of the relationship between the MSP and their client to become much more strategic in nature. And, all of these organizations and distributors and vendors that you mentioned rich and many more have calculators available.
For partners to go in and do these assessments and these analyses very easily. And then to apply whatever, what the trade in value would be if you entered into our recycling program and all this other stuff. So you can actually have, and some of them I’ve seen produce a very nice proposal and a report and make it easy for you to get that client to say, yes, let’s go ahead and do that, right?
Hey, it’s getting toward the end of the year. Wouldn’t you rather invest in replacing some of this stuff rather than, giving it away to Uncle Sam. What really struck me though, Rich on top of all of this and what I’ve been watching is compound annual growth rate that you mentioned, what was it again?
14 point something percent. It is 14. 9%. 14. 9%. And. I may be off on this, but I believe that is a higher CAGR than managed services right now. The growth for managed services. I could be wrong on that. I hope I don’t have those numbers flipped, but it seems to me that, that’s an impressive CAGR number.
So it proves that there is opportunity. Here and it again is another distinguishing factor that can help you grow your relationship with your clients in a much more strategic and long term fashion when you’re bringing these types of conversations. To the conference room table during your QB ours.
Yeah. Yeah. And about that compound annual growth rate. I’m pretty sure it is higher than the managed services equivalent. I think it’s higher than the cyber security equivalent. This is why IDC says this is. The fastest growing business space out there right now. One or two other quick notes before we move on.
First of all, excellent point about the calculators that are out there right now. These energy assessment services, energy monitoring and management services. The bar to entry there is actually not that high. Don’t be intimidated by the fact that I’m not an energy partner. You can actually get in there relatively quickly.
Another thing to know that the canalis analyst told me about is banks increasingly are checking when they’re assessing. Someone for a loan, they’re looking to see, do you have an ESG program in place? Because if you don’t, you could be subject to regulatory fines and that makes you a bigger risk. So interest rates sometimes are higher for companies that aren’t thinking about this.
Here’s another bit of strategic advice that you can share with your clients. And then last but not least, we’re talking about this, and rightly in terms of the end user and what you’re doing for your client. But think about ESG goals and programs in terms of your business as well, if you are an MSP, because the Canalys analyst also said to me, private equity companies are getting more and more reluctant to acquire businesses that don’t have an ESG program in place.
Now you may have no plans to sell to private equity ever, in which case you don’t need to worry about that, but if you want to have the option. of potentially selling to private equity as part of your exit plan. Keep in mind, if you’re not taking ESG seriously in your own house, this could be an obstacle for you down the road.
Now, Erick one way to rein in that energy consumption and pursue your ESG goals is to reduce infrastructure sprawl. Your tip of the week, which we’re moving on to right now, has to do with sprawl. That’s right, Rich. And it’s one of the biggest challenges that MSPs that we work with have to deal with is just the, and I’m going to call it, how to reduce platform and vendor sprawl, in this day and age, rich it’s tough enough to compete head to head or, new client business.
And what MSPs tend to do is continue to add more and more value to their service portfolio, to their value proposition, in order to win that business against their competitors. And what that typically means, Rich, is they’re adding more services, a heightened level of cybersecurity platforms better and more more efficient platforms for monitoring, adding more services and spending more [00:15:00] labor time trying to become more strategic with QBRs.
And as that solution stack grows, we tend to have a lot of this, what I call platform or vendor sprawl, and it’s really the enemy of an efficient service delivery unit. When you’ve got teams of people that are having to deliver service via multiple different. dashboards and multiple different platforms that they’re working in.
And in many cases, Rich, we are not really good as an MSP community at truing up our rates as often as we should to keep up with the increasing cost of these platforms. So we’ve got a bunch of things against us as MSPs, and I’m going to speak for. My MSP brethren and sistren, if that is a word as a, I like to joke and say a recovering MSP myself, but the challenge has always been to add something more valuable that we feel will either increase our efficiency, reduce our platform or vendor sprawl.
And maybe it costs us a little bit more. But in the long run, it makes more sense because it’s better integrated with our platforms. It does better reporting. Maybe it helps us with billing and invoicing, right? All of these things, but at an added cost. And we tend to see these investments incorrectly as a quote unquote, cost of doing business.
So the tip of the week here is how do we address this? Number one, let’s try to reduce as much of that sprawl as possible. Let’s look and review our stack. Let’s look and review our, the numerous vendor relationships that we have as, as service providers and see if there’s a way to consolidate or reduce that, and that may mean rich looking at other vendors and other strategic partners that have better integrated.
Services or solutions. So maybe instead of paying five different vendors for five different components or more of our total stack, can we get that down to one vendor that has all of these five things that are already better integrated, and then maybe even better integrated into our core platforms, our PSAs and our RMM solutions.
And making it easier for our team to have closer to a single pane of glass ability to deliver service and the ability to automate a lot of the service that we have to perform manual labor. So maybe we love a particular platform and because of what it does, but it creates a lot of additional manual labor where maybe a.
A different solution with automation and we’re on this show, we’re talking about AI and machine learning a lot recently, right? Cause that’s the buzz. Are those newer solutions able to replace some of that mundane day to day repetitive work? And do self healing on tickets, right? We’re talking about bots and things like that allow users to almost, take care of some of the simple, noisy type of tickets.
We get password resets and things like that from an automated fashion to help them do those kinds of things. So how do we look at our stack today? And all of the different vendors and platforms that we have, and how do we compare it against something that is better consolidated, better integrated lowers or reduces that sprawl and then allows us to without raising our rates yet.
That’s the next step. To become more efficient, thereby more profitable. And then we can have conversations. The second step of this is to get the clients that aren’t paying us what a new client would, if we sign them tomorrow, how do we get them to true up? So now that we’re actually more profitable from legacy existing agreements, that may not be quite as highly profitable as a new agreement would be tomorrow and become more efficient and profitable this way.
And then the next step is. To go out and get our rates up so that we can grow that gross profit margin that may be Of interest to private equity firms and other folks looking to acquire msps And roll them up as rich the activity level or acquisitions and roll ups in our industry right now is if it’s not at an all time high it’s certainly close to it.
The all time high would have been right before the pandemic. Yeah, this actually dovetails perfectly with the conversation we’ll be having in just a few minutes with Prakash Panjwani of WatchGuard because one of the things I want to get into with him is their unified security platform, [00:20:00] their strategy for basically expanding the portfolio of products so that they can do more of those security functions for you and help you consolidate security around fewer vendors.
They’re not the only vendor. With this kind of a strategy Trend Micro, Acronis, Sophos, we could name a bunch of others, and that is being driven by the desire by, the need by MSPs to reduce that vendor sprawl for all the reasons that you talked about there. And it reminds me. Back in the day when I was executive editor at Channel Pro, I did a story about the qualities that the fastest growing MSPs had in common.
And one of them was standardization, both in terms of like workflows. We do things one way and everybody does it that way every time. But also in, in terms of vendor relationships and platforms, it’s not always possible to say I’m only going to have one BDR vendor, for example. But if you can you’re gonna be much more profitable and you’re gonna set yourself up for more rapid growth.
So there’s just a lot of payoff to looking for that opportunity to reduce sprawl, consolidate, standardize when you can do that. And the best run, fastest growing MSPs I know about make that a priority. With that, we are going to take a quick break, folks. When we come back on the other side, we will be joined by Prakash Bhanjwani of WatchGuard, their CEO, to talk a little bit about some of the moves they’ve made recently and to get his CEO level perspective on the state of the cybersecurity market out there right now, so stick around, we are going to be right
and welcome back to part two of the MSP chat podcast. This is our spotlight interview segment. And we are. Really pleased this week to be joined by the CEO of WatchGuard, Prakash Panjwani, for a conversation about what’s going on out there in the SMB security market. Huge market, huge opportunity, and a lot of change all the time.
Prakash, welcome to the show. I really appreciate you making some time for us. For folks who are not familiar with you, or as hard as it is to believe not familiar with WatchGuard tell folks a little bit about both. Yeah. Thank you, Rich. And nice to talk to both you and Erick here. So yeah, I think that’s great.
So I guess just first of all I’ve been with the company for almost eight and a half years now at WatchGuard as CEO of the company which turns out to be, I think almost one third of the company’s tenure, which is awesome. And I think, if you’re not familiar with WatchGuard, I think It’s the best we think of the company is embodied in our mission statement.
We actually call it our hedgehog. It’s a reference to good to great book and it’s, we used it when I joined here to come up with a very clear mission and if it doesn’t pass the mission, we don’t do it. And it’s really around making enterprise grade security accessible to all organizations.
But Rich, you mentioned SMB the focus, the mid market, right where it’s not been accessible in the past. But also through a network of MSPs or IT solution providers. And if you step back, that’s three state, three different components of admission statement. Security has to be enterprise grade and made accessible.
Secondly, to all organizations, So we call it democratization of security, right? It’s how do you bring it to everybody in the right way, but also through MSPs are probably the only company that has an MSP in the mission statement directly, right? And we are very proud of that.
And the reason is because we don’t think we can reach that mid market, without the MSPs to begin with. And so when I combine all those three things together it’s, That’s what WatchGuard stands for, is we’re at the intersection of those three things in a way. And everything we do is bring those security solutions through the MSPs to the market.
And it’s been a fun ride, right? We have almost, gosh, in my eight years, we have tripled in size and top line. Employees, however you look at it, right? It’s been a very fun ride to pay to realize that. And I think it’s also a fulfilling mission because it is such a focused mission, right? We’re not distracted by the acquired four or five companies, but everything is centered around.
That mission statement and if it doesn’t fit, we just don’t do it and that just brings a lot of discipline to the company as well and just unifies the employee base around that as well. Yeah, you folks were known primarily for firewalls for a long time. The product line has expanded a lot.
In the last four or five years in particular and in fact there was what sort of inspired me to reach out to you folks and schedule this interview was an acquisition announcement that you guys made not too long ago, which I think is really a nice setup for a broader discussion of what’s happening in security right now.
Four MSPs and four SMBs. So just to set that up and kick things off a little bit, tell folks who [00:25:00] Cyglass is and why you you acquired them. Yeah. So I think so just continuing from the company a little bit, I think I’ll tell you how Cyglass fits in and how it fits into strategy.
We’ve been working on for several years. So when we set that mission statement, I talked about when I joined here, one of the things we got are backed by some amazing investors and they said, look, You stay focused on the mission, but let’s expand the portfolio, right? Because to make security accessible, like, how do we actually do it?
So we went about really creating what we call now unified security platform. And to us, it was very important that the sum of the parts be, better than the parts themselves. And when you think about that strategy, it was around, Hey, we got to have network, which we already did. We got to cover Endpoint, which we got there through an acquisition a few years ago of Panda.
And we had to cover Identity, which we also started small acquisition, but made into a strong solution now as well. So those three pillars had to be in the platform for us to even say that we are a unified security platform company. And the beauty of that strategy is once you get the platform, it’s like, you’re addicted now, right?
You’re in, and there’s always more to do, right? There’s always the next thing. that you want to add value around. So when we got the platform together, we released ThreadSync, which is our XDR layer, which is a very critical piece of why some of the parts are better than the parts themselves, right? Which is, as a platform vendor, you’re able to take network events, endpoint events, and now we’re even adding authentication events.
You’ve also switched to limitary, and you can actually act on it across all those points. You can take action on the network side, you can take action on the endpoint side, right? And truly the detection response capabilities truly come through. So as we got deeper and deeper into XDR, one of the things we realized that we didn’t have is NDR, right?
Which is the network detection and response capabilities. And it’s really around, at a very high level. It’s a use case that started and once again, like anything else, the high end enterprise, because it’s around, hey, we don’t see a lot of the traffic. And even when you have the best firewalls, even best configured firewalls, You’re missing out on east west traffic.
You’re missing out on cloud traffic that’s coming into the network as well, from switches and everywhere else. And NDR started that as a technology around how do you actually detect and respond to network anomalies. The challenge was, once again, nothing that really appealed to the mid market directly.
Very little deployment in there for NDR. And what attracted us to Cyclast, and we started this conversation almost two years ago with them, was Is you meet them. And very first thing they said is we want to make it accessible to big market. That’s what we’ve been focused on. And as we got deeper into diligence, we realized that they were actually the embodiment of what we believe in, which is to make it accessible has to be cost.
Neutral to the cost effective for the MSP to deploy and I think, of course, it’s licensing, but also the deployment and ongoing management of the solution. And these guys did an amazing job of kind of getting that there by just the way they deployed. It’s all cloud based. It’s tenant based, which is how we do our XDR as well.
So the architecture of the fit was great. So that’s the first reason, which is just bring NDR into the portfolio and there was a great fit, but it also opens our door for the next step and evolution of the company, which is even though we have great XDR built around watch our platform. The next step is open XDR, right?
Which is the ability to actually ingest. Traffic or data or telemetry from other places as well. And that’s what these guys do already today, right? Because they were a standalone NDR provider. So they have built their tech architecture to ingest all kinds of other firewalls, switches, data from all the different places.
So that just truly enriches our XDR offering in the future as well. So the first step is NDR. Next step, take our XDR engine and kind of make it more open XDR around it. And then. After that, adding more managed services and MDR type capabilities around that as well. So very rich roadmap kind of based on their core technology, but what really got us going ultimately was just through diligence.
They just proved it, that they just fit our mission so well. I appreciate the call out to the hedgehog and Jim Collins’s book, good to great Prakash. So I appreciate that. Yeah. You mentioned the open XDR. Philosophy where you’re ingesting all of this data. And, one of the attributes of Cyglass’s solution you called out in your announcement was its use of AI and machine learning.
And, this is the buzz. This is where we see a lot of news. We see a lot of folks incorporating AI and machine learning into their solutions. How do you expect these technologies, specifically AI and machine learning, to change the landscape of security moving forward? Great question, Erick.
I think, so it’s definitely a double edged sword, right? I think [00:30:00] It’s hard not to acknowledge that kind of AI has made hacking more accessible, right? And I feel like there’s two obvious things you see. One is spear phishing, right? Anybody can write a more sophisticated phishing email than ever before just because of the tools available to them through ChatGP and other type of AI tools.
The other thing we’re also seeing, although I don’t see a huge impact just yet or even in the future, is just, People using things like in co pilot to write malware and distributing it much faster than they ever did. So there’s definitely a higher risk in the market that I think just AI brings to the market.
But I still think that the positive use of, if I could call it that in techniques that we use, I think ultimately outweigh the potential damage as well, in my opinion. And to me, NDR is just, or what’s high glass is a great example of it. ThreadSync, what XDR is a great example of it. And machine learning, as has been around for a while.
So I think it’s something that we’ve used and based on known things. It’s even the predictive AI techniques that now begin to use to me that are really attractive that ultimately it’s about reducing time to respond. So you’re, it’s how fast you can detect. And how they quickly can you respond based on those things and part of to be just careful around is the more predictive things you use is you do have to be careful about false positives and things.
Those things, right? So you do have to have the right kind of, for lack of a better term, ML around your AI, in my opinion, right? That you are responding in the right way to two different things. So I think it just speeds up both detection response capabilities over time significantly. Okay. And I do think ultimately will outweigh some of the other risks that the industry will see from it.
Yeah. I appreciate that double edged sword perspective because, we all realize and the idea of, do no harm, use, use our forces for good with great great power comes great responsibility. So just to give you a good example of it one of our, we’re part of Vector Capitals, their lead investor.
And they’ve an AI task force. They’re looking at, their portfolio companies, how they’re using AI, it was a great example. One of the portfolio companies run a small experiment of using co pilot for their, for coding. And what they found was. And it makes sense when they told us this, but initially it didn’t make sense to me.
It was not intuitive. Is that it made their good developers or more, more experienced developers, let’s call them, right? Better. It had more impact on them than it did on their less experienced and junior developers. And the reason is it goes back to sophistication, right? Yes, it can produce malware, but will it be that good?
If it’s not sophisticated, no. But if you are a sophisticated developer, you actually know what the guards are. Like, you are able to get there faster, but you also know what the pitfalls are. Right? And you’re able to just recover quickly and actually use it more effectively. So I do think, that’s why I said speed is where I think this ultimately comes in for.
For a lot of security companies. Yeah, I agree. And, you, you also mentioned not only in your announcement, but, during our conversation here that the emphasis that MSPs want security solutions that are not reliant on costly hardware. We’ve been in the channel for a long time.
We’ve seen the days of. Making 50, 60, 70 percent margins on gear go away, as we move toward the cloud, as we move toward. Hybrid workforce support and things like that. So tell us more about that trend of MSPs moving away from costly hardware and, your perspective on what’s really driving some of that other than the obvious.
Yeah, I think, yeah, the number one is scalability and then there’s cost, right? I think to me, To us, it’s the early architectural challenge which we experienced when we took the strategy on, which is how do we, we’re singularly focused on selling for MSP. So how do you take that on and scale a new service very quick?
And I’ll give you the best example is we acquired a company called, it’s a division of a company at that time called Hexis back in 2016. That was the first. Acquisition after I joined here and that is our threat sink. That’s our XDR layer and what they had built amazing technology, by the way, it’s still, it is a foundation of what everything we do in our platform, but they built it for some very big government agencies and they had a seven new appliance just to run the analysis, right?
Of everything they were incorporating. All the telemetry was going there. We love the technology. We looked at that as there is zero chance any of our partners would ever deploy this, right? It just. impossible. But what we saw was they could deploy hundreds and thousands of users on this, right? So what we did was the very first thing, because everything we do is based on Washington Cloud, which is our architecture, which is where the MSPs live.
That’s our platform. [00:35:00] And it’s built natively in cloud, multi tier, multi tenant. So what we did is we took the whole engine and put it in cloud. What allows us to do is scale so quickly, right? We could You know, you have essentially a tenant, with an MSP, which is a higher layer in our cloud below that are your end users, which are your tenants, and they can deploy the solution so quickly across, everything the cost of deployments goes down dramatically.
We price that into our service, right? So we are the, we’re hosting it, right? For lack of a better term there. And to us, that’s exactly what we saw with SiteGlass. That’s what they did on their own just for this one service. But that also meant we could easily, we could quickly get it into watcher cloud because it’s very similar architecture and similar approach.
While some of their competitors in the NDR space still have a hardware appliance requirement where they’re not only using it for collection of data, but actually to process all the telemetry as well on it, right? None of that happens here. It’s all done in the cloud. So to me, it’s just, but I think, of course, I think in terms of obviously.
Cost of ownership overall, but also for an MST, when I think about it is, their technicians are in high demand, right? And when I talk to our partners, they have a handful of technicians. They want to focus on new customers and new deployments. They don’t want to deal with the rest of the headaches, right around.
And so if they can deploy once and deploy it across multiple users, it just saves them so much money, right? So to us, that is probably the biggest driver for anything we do in the platform has to be cloud based. Just because it scales much faster and we’re able to take the cost and distribute it as well, across everybody.
And so just. It’s the best way to, I think, deploy some of these solutions in the XDR land, for sure. Syglass is the latest addition to the unified security platform you were talking about before. And that, that platform gets to another theme that I feel like I’m seeing out in the market.
right now. MSPs are building these multi layer security stacks with a lot of different elements to them. A lot of the leading names and security like watch guard or so folks or a cronus or trend micro. They’re all building these sort of end to end tightly integrated product families that consolidate a lot of these functions and enable people to roll out and manage them in a unified kind of way.
To what extent do you folks feel like that’s what MSPs want and need right now is to consolidate the stack around fewer. Security vendors, fewer security suppliers, and to the extent that’s going on out there and MSPs want that, what, why, what’s driving that? Yeah, I think it’s interesting.
It’s the biggest trend is around. lack of people, right? And I think to me, it’s the most underlying challenge that everybody faces in the security world, that there’s just not enough cyber security professionals. So that’s why I feel like the end users are outsourcing to MSPs. And that’s why the MSPs I think are the best channel to the market, right?
But then the MSPs are having the same issue. They don’t have enough people. So I feel like ultimately it gets down to, if you had an endpoint product, you had a network security product, you had an authentication solution, you had a password manager, you had all these things. And if you were trying to stitch it together, that just takes so much cost to end people.
To bring it together. I think that’s why the platform strategies are winning. I do think there’s a, the vendors are coming at platform from different angles, right? We are very much security focused. It’s that, there’s that mission around bringing in price, great security, making it accessible.
That’s what drives us. Other vendors are coming from network and security consolidation into a platform, right? So I do think everybody is attacking it from different perspectives, but everybody’s on the right track, I feel like, because ultimately, this general belief that the more things you integrate into a single platform, Saves MSP a significant amount of cost of deployment and ultimately out to the end user.
And I think that’s really, I think the trend will continue as to how many of these platform vendors ultimately are out there. Time will tell, right? And that’s why I think everybody’s picking their focus for where they want to be and how they differentiate in the market. But I do think the platform versus so called best of breed, I think it’s here to stay.
I don’t think that’s going to be reversible. But from a security perspective, also creates a lot of opportunities to consolidate things, right? Which, to be fair, had been very fragmented for a long time, right? So I think it’s created a momentum towards consolidation. We definitely have been the forefront of it with these four or five acquisitions now, but I do think it creates that momentum in the market to, Ultimately to help the MSPs deliver security more efficiently to their end users.
Erick and I have steered you towards themes or trends that we’re observing in the market right now around AI and hardware related issues, the rise of unified platforms and so on. But I want to give you a chance to [00:40:00] tell us about other trends or themes that you’re seeing out in the market right now.
What else from your perspective is happening out there that’s important and worth talking about with respect to SMB and MSP security? Not a great question. I do think, when I think of trends, I really think in terms of, and maybe I’m redefining the word trend here, like persistent trends.
And to me, those become irreversible at some point, right? Because they’re so persistent. That you don’t see any chance of them reversing versus newer trends that are emerging. I think on the persistent to me is what we hit upon earlier. I think the lack of cyber security professionals has reached a point where it’s irreversible for many years to come.
I just don’t see anything that’s going to change that in any time in the near future. And so to me that shortage of talent while security is getting more complex at the same time because of deployments, right? Just. Look at me, I’m, today I’m from home, tomorrow I’m going to be back in the office.
Like we’re all different places, different times. And so the IT manager’s job just keeps getting harder. Trying to control security around it. But then they have less resources to tap into. So I do think that it’s an irreversible trend, which ultimately benefits the MSPs for sure, but it also implies, and I know both of you in the space for a long time, me too, with the gray hair now, I’ve been in this space for a while. I do think it puts a lot of pressure on the partners that we have who are not able to adapt to that trend. And so I do think. Which we can get a little bit deeper as to what that means for them ultimately, and what I see there is what they need to do differently.
On the newer trends, I think we touched upon AI, but I feel like it’s the impact that you were talking about a little bit earlier that it’s almost like used to be. I feel like in the security industry, there was the year of ransomware, the year of, widespread attacks, then the year of supply chain attacks, and now it’s everything all the time.
Because the ransomware attacks are widespread. You’re just looking for a target. You have no idea who you’re going after, but you’re just sending it to everybody and hoping you latch onto people who have, don’t have security around them. Supply chain attacks, obviously targeting vendors in the market to begin with, but more sophisticated attacks, even state sponsored ones that are constantly increasing because of just the geopolitical situation.
So I think it’s just the, what I see now, compared to even two, three years ago, a pre pandemic is just. Volume of things is much higher, right? And it’s not just that you’re dealing with one thing. You’re constantly dealing with all of them, and they’re adding on rather than they’re just cumulative than ever before.
So to me, that’s the newer thing. And I feel like I just feeds into that even more so because it makes those genErick. Attacks even more widespread and easier to do and I do think it creates from an end user perspective, people are getting tired, right? And so I do think it requires the security industry especially people like us, the vendors, our MSP partners, just to be more conscious of that, right?
You can’t just keep throwing the next solution at people because, I’ve, you talk to some end customers and even I’m talking about mid market even, right? They just want to be protected. You’ve reached a point with them. They just don’t care to find out. They don’t want to know anymore. The reason something happened, right?
They just want to be protected, right? And I think that’s why this security industry really has to rally around it and focus on not trying to make things complex for people around here. Endpoint this way, then this would have been detected, right? It’s just tell me what to deploy, manage it for me.
And just take care of things for me So I do think there’s it just even more urgency you could see that in the market now Prakash you’ve done a really good job of sharing kind of the things that we’re trying to protect And customers from as an MSP, and you’ve done a really good job of kind of verbalizing the challenge that MSPs have today, focusing on, addressing vendor sprawl by going into some consolidated.
Solution packages and trying to standardize on their stacks with, less vendors to try to gain that efficiency because of the real challenge that MSPs are facing in the overall tech shortage, but especially in the cyber security labor force shortage. Faced with all of these challenges.
and the need to tech their customers. What advice would you give MSPs in our audience about the best way to build a compelling, profitable SMB security service offering in the midst of these challenges right now? [00:45:00] I think it starts with just one word, standardized. Standardized, right?
Because, and it doesn’t mean about just the vendor. It’s about your offering first, right? Before you even think about the stack you want to choose, it’s, or the vendor you choose, it’s the stack you want to choose. And it’s interesting, like many times you go in, and this is the advice I say to a lot of partners when I have the conversation, you almost, and we’re very blunt with them, right?
I have to, There are partners. You have to tell them if you don’t change, you will be out of business. And so will we, because you’re representing us, right? So there’s an urgency that we try to build around partners to think about what they’re standardizing for and what’s important to them because they can’t do everything.
And so when I, I have a couple of partners, I wouldn’t obviously name them here, but they said over time I don’t want to do the backup and the it services that I used to do, it’s just not. It’s not compelling for me, but I’m going to focus purely on managed security, right?
And they made that deliberate transition. And I appreciate that, right? Not because they couldn’t have done both, right? But they chose to standardize on one offering that they could do really well and make it compelling for their customers, right? And made it allowed us to align with our strategy with them as well.
So when I say standardize, it’s yes, on a vendor stack, ultimately will come as part of it. But I also think. Just a business offering and what they want to lead with. What is their kind of, what is their, for lack of better term, hedgehog, that they’re going after. And so that we can help them, but then they can also be more successful in the market and there are probably, there’s still a market for people who are purely sellers, I truly appreciate that. I don’t think, but then you have to know what that is and focus on that. And, MSPs are gaining market share for a reason. And so if you’re going to make that transition. Truly commit to that transition, right? And make it a strategic priority for yourself, right?
To do so Prakash thank you again so much for joining us here. We know it’s it’s busy in the CEO spot at a company like WatchGuard right now. And so we really appreciate you making some time for us for folks in our audience who want to connect with you connect with WatchGuard, learn more about WatchGuard, where should they go?
First of all, I think, obviously. They can, we’re very open community. I love hearing from people directly myself. But I think in general, obviously our websites are the best place to start. They’ll learn a lot of our solutions. I do think, we are the technology behind the partners, right?
So we also make sure that, a lot of things we do is for our partners, so I hope that they’ll find a washcart partner. near where they are geographically, and they’ll hopefully find somebody who can also serve them directly through that approach as well. But they’re welcome to come to our website, WatchGuard.
com, and learn a lot more about the company that way as well. Okay, fantastic. Prakash Panjwani, CEO of WatchGuard. Thank you again very much for joining us on the MSP Chat Podcast. Folks, we’re going to take a break now, and when we come back on the other side, Erick and I are going to share a few thoughts about this very interesting conversation Maybe share a few laughs with you.
Wrap up the show, stick around. We’re going to be right back.
And we’re back with the final segment of the show. This week, what a great conversation. With Prakash from from WatchGuard. I really appreciate his making some time for us and really letting us into his mind a little bit about how he views the market, why he’s steering WatchGuard in the direction he is.
Anything in particular kind of stand out in that conversation you want to call attention to? Yeah. And I, commented during the interview the way that Prakash sees the strategic way that he’s leading Washguard when he called out, the hedgehog theory from good to great.
You know these basic kind of fundamental business strategies that allow everyone to focus on What’s most important so I really appreciated that we don’t often hear rich you know that kind of You know commentary when we’re having these spotlight interviews that someone lets us in to that You know that strategic business growth thought process.
And he just threw it out there as an aside. And it was something that kind of resonated with me and gives you an idea of, the maturity level of the organization as they move forward to try to grow and expand. Fun fact about that interview. WatchGuard is headquartered in Seattle.
That is my hometown. We discovered off the air that I was in my home office. Prakash was in his home office and we were about, depending on how you look at it, two to four blocks away from one, just a few blocks away here in downtown Seattle when we we had this conversation. Small world there.
Speaking of fun facts, we have time for just one last thing and it comes to us from Amish country. [00:50:00] Let me give folks just a quick little backstory. In last week’s episode, you will recall, we had a really great conversation with Antoine Jabara from JumpCloud that we recorded at the DattoCon conference.
As far as folks, that interview went flawlessly. In point of fact, if you think back, you remember that day when everyone’s phone. Made a big bunch of noise all at once because the government was testing the emergency alert system. Gosh darn it, wouldn’t you know, we were about four fifths of the way through that interview with Antoine when that happened to us.
And thanks to the the magic and skill of our editing team here at Channel Master, we were able to clip that out. Yet you never heard any of that when you were listening to the the interview. You know who didn’t get away quite so scot free from that EAS test, Erick. Several friends of Eli Yoder.
Eli Yoder is an ex Amish. He has some buddies who are still part of the Amish community. And Eli is sort of their source for getting cell phones. You’re really not supposed to have a cell phone if you’re in the Amish community. But Eli has been hooking his buddies up and they’ve been like sewing pockets inside their clothing so they can hide and stash the phone and it was a flawless plan.
Until the EAS alert gave them up to their neighbors and man alive, Erick, are they busted. That last we heard after the story broke, there was a possibility they might get shunned. These guys, I really hope that doesn’t happen to them, but it it just goes to show it’s not just us, Erick.
That emergency alert system test, while necessary. What’s a really big pain in the behind technology. It’ll get you every time on it. Rich. It really well. We love our phones, but sometimes not as much. Folks, that is all the time we’ve got for you this week. Thank you so much for joining us on MSP chat.
We’re going to be back again next week with another episode. You can check us out on both video and audio. If you want to find us on video, just look out for the Channel Mastered collection of video on YouTube. You’re going to get all the episodes. Inglorious video there if you are into audio podcasts, go to wherever you get your podcasts, whether that’s Google, Apple, Stitcher, Spotify, you name it, you’re going to find us there too, and when you do, please, in addition to subscribing, if you could take an extra few seconds to rate and review, so other people can find the show a little more easily as well.
It would be really helpful to us. The producer of this program is the great Russ Johns. He is also part of the Channel Master team and available to help you with podcasts, by the way. If you want to learn more about Russ, go to russjohns. com. You want to learn more about Channel Mastered, you’re going to want to go to channelmastered.
com. So once again, we thank you for being with us. We’re going to join you again next week for another episode of MSP Chat. Until then, please folks, remember. You can’t spell channel without M S P.
