Bonus Post: Five Updates from the Canalys Forum and DattoCon
The wonderful thing about being on the road at conferences as much as I have lately is that I get to catch up face to face with a lot of vendors. The less wonderful thing about being on the road at conferences as much as I have lately is that after I catch up face to face with all those vendors, I have to turn those interesting conversations into articles for you here at Channelholic in addition to covering the conferences themselves.
It takes a while, which is why I’m only now getting around to writing up what I learned from these five interviews during the Canalys Forum two weeks ago and DattoCon last week.
D&H is cashing in on security now, AI soon
I trust the folks at D&H will pardon me for starting an update on their investments in the security market by quoting recent data from a competitor.
Yet while AI might be the hottest topic in technology right now, the third annual Direction of Technology report from TD SYNNEX shows that security remains the hottest market. Per the chart below, respondents to the poll of over 1,000 MSPs, integrators, and others called security their top solution by sales for the second year in a row. AI jumped way up from 17th place on that list in 2023 to 8th this year but is still well behind traditional product categories like servers, networking, and storage.
The view from D&H is pretty similar. “When you look at the margin profile and the margin opportunity on the security side, that’s where the money is right now,” says Marty Bauerlein (pictured), the distributor’s chief commercial officer, who spoke with Channelholic at the Canalys Forum.
Credit headlines like this, to cite a recent example, for some of why that’s true. Boards that once regarded cybersecurity as bits and bytes stuff for the IT team are now paying close attention to the issue, giving MSPs and solution providers a new opening to land well-paid consultative client engagements.
“You’re going in and you’re having very strategic conversations. You’re able to assess their software, their infrastructure, and change the conversations a bit from the normal IT conversations you’ve been having the last five, six years,” Bauerlein says.
That trend is profiting D&H as well as its partners. The company’s “Modern Security” business is on track to record 63% growth in the fiscal year that began May 1st. Not surprisingly, it’s assigned a dedicated team of resources and introduced an ongoing series of “SuccessPath to Security” webinars to help sustain that momentum.
“Where we’re adding a lot of value to our MSPs right now is helping them transition to MSSPs,” Bauerlein says.
Not that it’s neglecting AI in the process. The Go Big AI program the company introduced in February continues to educate partners on building and delivering AI solutions. Per an earlier conversation with fellow D&H exec Peter DiMarco, education is a big piece of what D&H believes MSPs need right now to begin offering AI services in earnest. And not just MSPs who serve SMBs. According to Bauerlein, partners with sophisticated skills building proof-of-concept solutions for large customers are still climbing the AI learning curve too.
“60% of the time the POCs are failing,” he says. “That’s very costly.”
It’s also perfectly normal for POCs to fail, especially when newer technologies are involved. “That happens in any IT environment,” Bauerlein says. “But if the failure rate is above 40%, the word’s going to get out quickly, and we’ve got to get that failure rate down on these large deployments.”
Two other missing ingredients are delaying mainstream AI deployments in the channel at the moment as well, Bauerlein adds:
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Offerings for partners without the know-how to build AI solutions from scratch. “The solution provider community is waiting for repeatable solutions to come out,” Bauerlein says.
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A bit more confidence in the economy. Businesses will invest in AI solutions immediately, but only if there’s a clear route to ROI. “You’re not going to see CFOs jump on this right away unless you have a compelling two- to three-year payback, because you have to upgrade a lot of your data center,” Bauerlein says. “You’re paying a lot of money from a services standpoint to deploy this.”
Make no mistake though, Bauerlein continues, the contracts are coming, especially for partners that go to market with ecosystem partners instead of solo.
“You’re going to see co-selling with channel partners, co-selling with the vendor community, and the folks that figure that out quickly are going to be able to monetize this,” Bauerlein predicts.
AI on the edge at Schneider Electric
Some of that co-selling is likely to involve power quality vendor Schneider Electric, which sees a wave of AI-related edge infrastructure deployments coming.
“I don’t know what the timing is, but everybody’s saying 16 to 18 months,” observes Gordon Lord (pictured), the vendor’s vice president of U.S. channels. The result, he continues, will be thousands of new mini-data centers with a lot of mission-critical compute, storage, and networking gear consuming a lot of power and generating a lot of heat.
“You may not see four or five racks,” Lord says. “You may see one, two racks at the edge, but they’re going to be dense. So it’s not only going to be how do you get power to it, but also how do you cool it, and are we going to be able to go manage that?”
The jury’s still out, he adds, on how many companies responsible for those edge data centers will be SMBs. “I think it will be a little bit more in the mid-market than SMB, but I think we’re going to have to wait and see,” Lord says. “Being transparent, I think we still don’t know what AI is going to mean to an SMB customer. Is that going to be on premise or is AI going to be maybe more in the cloud?”
Schneider has “software-led” partner offerings to assist with managing the power portions of the solutions that do land on prem, in SMB and above. “The lifecycle of the UPS typically is about 10 years,” Lord says, and they typically require a battery replacement at least once during that span. A new assessment and oversight app coming soon will help partners inventory a client’s UPS fleet and identify which devices are candidates for a new cell.
“It’ll be vendor agnostic,” Lord says, “so we’ll be able to go look across the network to see what UPSs you have in your environment, not just specific to Schneider.”
To help MSPs collect recurring revenue as well one-time payments, Schneider is continuing to invest in its managed power offerings, which equip partners to monitor and manage locally-deployed UPS hardware. “That’s a point that partners are missing out on today and an easy snap into the managed service offer that they currently have today,” Lord says, noting that Schneider products integrate with solutions from ConnectWise.
Lenovo goes granular with partners
Some of the hardware out on the AI edge protected by Schneider’s UPS units are sure to be PCs, servers, and storage arrays from Lenovo. The tech industry giant unveiled new laptops, software, and cooling solutions just last month in connection with its evolving Smarter AI for All vision.
Precisely a week later, moreover, it followed that up with the introduction of Lenovo 360 for AI, a new “partner journey” for members of its Lenovo 360 Global Partner Framework offering training, sales enablement, marketing, and communications tools along with access to forums, advisory boards, and events and tiered reward programs and financing options. That journey was one of five in all aimed at adding an element of granularity to a partner program that prioritized uniformity when Lenovo introduced it about three years ago.
“We had eight different partner programs at the time and a lot of incentives out in the market that weren’t necessarily coordinated between each theater,” recalls Jeff Taylor (pictured), Lenovo’s worldwide channel strategy leader. Most of the company’s effort since then has sought to replace that complexity with a common set of requirements and benefits.
Now it’s ready to begin building parts of the program around specific market opportunities (like AI and data management to begin), specific vertical industries (like education), and specific partner types (like MSPs and global system integrators). The MSP journey is available to partners in select geographies now, with the others following in April.
According to Taylor, the new resources reflect the diversity of Lenovo’s roughly 66,000 active partners. “We don’t feel like the channel world out there, the ecosystem that exists today, is a homogenous group,” he says.
It’s also not interested in reselling products so much as delivering solutions increasingly, Taylor adds, and wants help in that pursuit from vendors. “One of the things that they’re looking for is less around technology and more how you enable us from an outcome or business outcomes perspective,” he says, noting that the previously introduced Lenovo Solutions Hub is how the company meets that need.
At present, the Solutions Hub provides guidance on some 60 solutions in all. Expect additions for AI to arrive in the future. Lenovo is as excited about the AI PC in particular as HP is.
“There’s this evolution that’s going to happen to turn our LLMs, large language models, into large action models, or LAMs, and that’s where the killer apps are going to start to come together,” Taylor says. “I think we’re right on the precipice of that.”
Blackpoint Cyber’s enabling partners to go truly, truly elite
Like Lenovo, and just about everyone else even remotely connected to IT, Blackpoint Cyber has AI on its mind too. It’s thinking about a different precipice though. Increasingly autonomous, AI-powered RMM systems, like those from Kaseya and Atera, are becoming increasingly popular with MSPs hungry for the productivity-boosting benefits they provide. But guess what happens when those systems are breached, asks Jon Murchison (pictured left), Blackpoint’s CEO.
“It’s really bad,” he says. “It’s a very big risk to a company’s operation.”
Murchison believes Blackpoint has an edge over other security vendors in mitigating that risk because its software combines endpoint security with identity security. EDR solutions usually catch traditional hacking tools, he notes, so attackers are “hiding in plain sight” instead by using legitimate management and remote control tools to compromise devices.
“We’re able to catch that,” Murchison says. “If you can see what a privileged identity is doing live, with all the threat detection, looking at the metadata, it’s a really simple decision tree. It’s either legit IT or malicious co-opting of privileged identity.”
Beyond a shared interest in AI, another way Blackpoint resembles Lenovo is that it too has new resources for partners. In fact, as of last week it now has a full-scale partner program for the first time. According to Mike Estep (pictured center), who became the vendor’s vice president of communities last December, it’s designed to give the most active, engaged members of the company’s channel greater return on that investment.
“We wanted to reward our current partners as well as those that are our large partners, and benefit those partners who are trying to grow up through our ecosystem,” he says.
In particular, Estep adds, Blackpoint wanted to give its best partners a more direct, personal connection to the company.
“One of the things Jon has really focused on, and one of the things that really drew me to Blackpoint, was it’s all about relationships,” Estep says. The new partner program, accordingly, gives members closer relationships with a wider range of people each time they step up through its four levels. Top tier partners, for example, get a dedicated SOC concierge.
“You can always talk to our SOC, but having that single throat to choke, for lack of a better term, really helps,” Murchison says.
The new program also supplements the technical and sales education content in the vendor’s previously introduced Blackpoint University with additional business enablement materials.
“There are certain people who only ever want to be a 10-employee company, but that is a really small percentage. Most people want to figure out how to grow,” Estep says. “We wanted the partner program to help that journey.”
Partly, Murchison adds, because not completing that journey could prove risky at a time when an MSP’s competitors are getting bigger, adding capabilities, and landing bigger, more lucrative co-managed IT accounts.
“This market is moving up,” he says. “I think it’s awesome, but the level of sophistication increases quite a bit when you’re dealing with a 1,000-person law firm versus a 10-person dentist office.”
The tools you need change a lot too, Murchison adds. “You jump up into that sort of mid-market, maybe 350 or a couple thousand end users, and the security stacks we see a lot of MSPs using aren’t very effective.”
Largely because they’re too poorly integrated, he adds, which is why Blackpoint (like Acronis, Sophos, WatchGuard, and many others security vendors) is steadily turning what began as a point service for MDR into a tightly connected platform of solutions designed to work together in concert. “When we came out it was just MDR and the endpoint,” Murchison says. “Then we added vulnerability scanning and dark web scanning and MDR for the cloud side and application control.”
Thanks to the $190 million Blackpoint received last year through an investment led by Bain Capital Tech Opportunities, there’s more coming too.
“It’s our strategy to keep going down this platform play hardcore,” Murchison says, adding that a “pretty major announcement” along those lines that he declined to discuss further is currently slated for roughly mid-2025.
If the strategy behind Blackpoint’s platform play sounds familiar, perhaps that’s because you’ve read my earlier coverage of Kaseya and its equally fervent belief in the power of integrated platforms, including in security. Is Murchison worried about MSPs embracing a platform offering integrated security (through solutions like the newly released Kaseya 365 User) alongside integrated everything else?
“I think Kaseya has done a pretty darn good job, frankly, putting this whole puzzle together,” says Murchison. For smaller MSPs serving smaller clients, anyway.
“As you move upmarket, especially larger MSPs, you need truly elite security,” he says. “Truly, truly elite security.”
OpenText Cybersecurity something something
OpenText Cybersecurity would be happy to provide you that, too, but that’s old news. What’s new as of two weeks ago is the vendor’s updated Secure Cloud platform.
“There’s new workflows, there’s new automation, there’s new integration,” says Geoff Bibby (pictured), senior vice president of marketing and strategy for OpenText Cybersecurity. “You see everything all in just one spot.”
As a result, he adds, you also see opportunities to sell more products from OpenText’s security portfolio. “It shows the partner exactly where they have room to grow, and so it can help their share of wallet now in a much more concise, easy to understand way.”
The same goes for OpenText itself. “Let’s just say you consume, on average, 1.4 products from us,” Bibby says. “Obviously, what we want you to do is consume seven, and so now we have what we’ve been waiting for.”
The rollout is a major milestone for OpenText Cybersecurity, a brand introduced last spring that unifies solutions from Carbonite, CloudAlly, Webroot, Zix, and other OpenText acquisitions. Integrating all those offerings in a single platform and moving it to a channel-first sales model took some two and half years of effort.
“We got past that yesterday,” said Bibby during our recent conversation. “It’s just the beginning of continuous improvement now.”
It’s also a step forward in OpenText’s effort to add more MSPs to the roughly 18,000 active partners in its channel. “It’s purpose built for MSPs,” says Bryan Hauptman, the vendor’s senior vice president of SMB cybersecurity for the Americas, of the new Secure Cloud. “The integrations and APIs that you have to your PSA, your RMM provider, they’re all there.”
The news about Secure Cloud somewhat overshadowed other notable OpenText Cybersecurity announcements around the same time, beginning with the rollout of an MDR service based on technology acquired in May from MSSP Novacoast. According to Bibby, the new solution will offer partners that don’t use software from OpenText’s Webroot unit a new tool for protecting end users.
“We’re big boys and we know that it’s a big ecosystem,” he says. “People are going to have CrowdStrike on the endpoint. They’re going to have Defender out there from Microsoft. They’re going to have everything and anything.”
New as well from OpenText, and announced just a day before the Secure Cloud revamp, is an alliance pact with Cork, a cyber warranty provider for MSPs that we’ve written about a number of times here. Near term, the agreement will give partners quick access to cash to fund remediation efforts after a breach. “With that money coming in off of an incident, we can provide them the incident response services that they need right then and there,” Hauptman says.
Integration with Cork that will allow partners to provision warranty coverage from directly inside Secure Cloud is due imminently, Bibby adds. A more ambitious back-end connection with Cork’s MSP management plane currently in development will show partners what OpenText products are deployed and in use at client environments and warn them when any of those systems is disabled.
“If something should happen—say for example, any one of the security services that the MSP puts in gets turned off for some reason—we can alert them to that fact,” Bibby says.