Trace3 CEO: We Are In ‘A Great Position To Be A Leader In AI Consultancy’

‘Trace3 is in a great position to be a leader in that whole AI consultancy world. Underneath that is this whole topic of data and how to get data ready to leverage some of these machine learning models that are coming out,’ says Trace3 CEO Rich Fennessy.

To differentiate businesses in an AI-driven world, Trace3 is helping their clients harness the power of their data, and it starts with data consulting.

“Trace3 is in a great position to be a leader in that whole AI consultancy world,” Rich Fennessy, CEO of Irvine, Calif.-based solutions provider Trace3, told CRN. “Underneath that is this whole topic of data and how to get data ready to go leverage some of these machine learning models that are coming out.”

To further its approach, Trace3 acquired Minnetonka, Minn.-based Tail Wind Informatics earlier this month to bolster its client services in data strategy consulting.

Tail Wind joins Trace3’s growing data and analytics business and helps services customers in data strategy, data architecture, data platforming, data analytics, machine learning and automation.

“We see the topics of data, plus security, plus cloud, kind of converging,” Fennessy said. “The reality is a typical enterprise customer, but also a midmarket customer, in the past they may have thought of those topics vertically. The reality is they are integrating together.” He added that customers now must think about their data strategy including where to keep their data and how to secure it.

“By acquiring Tail Wind we just brought a bunch of smart technical people around data analytics,” he said. “This will allow us to have more conversations and feed into this overall AI strategy that we’ll drive across the company because at the end of the day, we're trying to be a leader in this whole AI consultancy world.”

Fennessy spoke with CRN about how Trace3’s data consultancy business will fuel customer growth in an AI-led world and how data analytics is just “the tip of the spear.”

How are you educating customers on securing their data?

The biggest chunk of Trace3’s business today is security, it’s about a billion-dollar business. Today we help our customers build a security strategy, implement that strategy and then monitor that strategy. What Tail Wind now allows us to do is structure, build and manage data to facilitate a more secure environment. Data is a big word but do you have it sitting in the right framework? Are you managing with a modern data stack of tools? Migrations and more modern tools are a great opportunity to clean up your data and look at security through a fresh set of eyes. That's what Tail Wind does. We do that today but now with combined forces we will be able to do that with a lot more resources and do it for a lot more of our customers.

Where do you see Trace3 when it comes to data analytics and data consulting in the next 18 to 24 months?

I see that as a growing part of the business, and the reality is it’s the tip of the spear. We think about our business being a services-first company. We believe the first set of conversations that we should be having with our clients is about their data. What is your most important data? How are you leveraging data today? How are you turning data into an asset that can help you fuel growth in the company?

We believe in data and analytics as a topic. It merges together with security and cloud and is at the heart of this whole AI topic. This is going to be a growing part of our business going forward and it feeds the rest of our business. That's how we get in the door with our clients. Not many solution providers like Trace3 are out there having that level of conversation of where is AI going and how is AI going to go enable new business models. Trace3 is in a great position to be a leader in that whole AI consultancy world. Underneath that is this whole topic of data and how to get data ready to leverage some of these machine learning models that are coming out.

What threats do you think AI poses to the IT environment?

First and foremost, I don't think you can build an AI strategy if you're using smart machine learning that is tapping into bad data. You’ve got to have good data, otherwise you're going to get bad outcomes that don't mean anything. The reality is data is a critical aspect of it.

There's this whole topic of how to manage the privacy of my data to make sure that my intellectual property isn't going out to some third-party model that is perhaps used against me or used to minimize my competitive advantage. Data privacy becomes a big topic, which is part of the whole data and analytics world. When you start talking about AI, the first conversation is what data we can leverage in this AI strategy and then how do I go protect the privacy of that data.

What is the 2024 roadmap in terms of data consulting for Trace3?

Our theme for 2023 was convergence and in 2024 convergence continues. The big topic and the best example of convergence is this whole AI topic, and you really have to have a converged strategy to realize it. If you look at IDC and Gartner data, they're all projecting a bump in terms of IT spend in 24 versus 23. When you peel back the onion in terms of where they see that growth, it’s AI. They're saying that AI is a strategy that large companies and medium-sized companies need to embrace to maintain competitive advantage. To do that, in many cases, you’ve got to make some investments in your infrastructure. You need some processing power to process all this data so you must invest in some new tools to help you harness the data and build data analytics models.

How are you working with your vendors, or what do you want more from your vendors, in terms of AI tools?

[Microsoft] Copilot is an example of a new tool that we're very excited about. We're going to bring in several 100 licenses so we can start to learn the tool ourselves. Some of our customers have already contracted with us to help them figure out how to use the tool. We think it's going to be a game changer so we're out there getting resources inside the companies buying licenses to that tool so we can help our clients be some of the first adopters of it. We're excited about a lot of the partners in this space. From an AI technology perspective we're tracking, through our innovation team, over 300 different AI companies, a lot of them being startups. We’ve spent a lot of time looking at emerging tech players who are coming up and doing some really cool stuff to help companies deploy differentiated AI strategies.

When it comes to AI and data analytics, what is the biggest ask from your customers?

Quite honestly, there's a lot of education. A lot of it is, what is the art of the possible? A lot of our consulting engagements are around this topic. We start off with a pure play of what's possible? What would it take for me to get from point A to point B? That typically leads into a tools discussion of let's evaluate our current environment in terms of how to manage our data today. Are the tools equipped to do what we need to do in the future? If not, what tools should we migrate to? We have a lot of tooling discussions with customers around how to move to a modernized data stack with the best technology and the best tools. I don't want to be in a world where all of a sudden the tools I use are holding me back from doing some of the cool things that I want to do.

Part of the conversation gets into tooling and how to move to a more modernized data set which gets into profiling the data. What is the most important data I have? Is it secure? Part of it is also doing some inventory and going into the management layer of how do I go manage my data? That’s what we're seeing in some of the most initial conversations coming out of AI. What's the art of the possible? What's the health of my data today? What's the health of my data tooling today? And what do I do to make sure that where I am today doesn't hold me back from the art of the possible.