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MSPs Doubling Down On Cyber Offerings And Internal Security, But Talent Is A Constraint: Panel

Managed services providers at The Channel Company’s NexGen+ 2021 conference shared their approaches to the cybersecurity challenge and opportunity, while also discussing major growth opportunities such as cloud.

Managed services providers say the massive opportunity around cybersecurity is only accelerating, with more customers than ever ready to take security seriously, a panel of MSP executives said Monday.

MSPs are also pushing to increase their own internal security standards and practices as cyber attacks targeting service providers continue to proliferate, the panelists said during NexGen+ 2021, hosted by CRN parent The Channel Company in Anaheim, Calif.

During the panel, moderated by The Channel Company CEO Blaine Raddon (pictured left), the three MSP executives pointed to security as a continued focal point for their businesses looking ahead. The panel was held just after Microsoft disclosed that the SolarWinds hackers have targeted more than 140 IT resellers and service providers and compromised as many as 14 since May in a new effort.

[Related: Futurist Kevin Surace On AI, IoT And Cloud: Solution Providers Have To Embrace The ‘Big Disruption’]

“The business owners that we’re talking to, they’re just taking this a little more seriously now—especially because of security and what’s going on around the world,” said panelist Paul Vedder (pictured second from left), co-founder and managing director of VXIT, a West Palm Beach, Fla.-based MSP.

At Technology Integration Group, security is the biggest driver of growth right now in terms of specific customer needs, said panelist Victor Gallego, senior vice president of field sales at the San Diego-based MSP.

“There’s a big emphasis now on security. So that’s really getting your foot in the door from a conversation perspective,” said Gallego (pictured second from right).

The panelists also mentioned a growing focus on gaining more maturity around internal security for their own businesses.

“We are spending a lot of time in making sure that we’re mature from a security standpoint,” said panelist Lou Ardolino, vice president of client services at TBNG Consulting, an MSP based in Milford, Conn.

TBNG is also focused on “road-mapping customer success, right from the get-go, with it being security-focused,” Ardolino (pictured right) said.

“We are putting together a true scan and analysis of the customer’s entire infrastructure from a security perspective,” he said. “And then we build from there. Because eventually it’s all going to tie into the infrastructure, servers, end users. So as soon as we start onboarding with the customer, we are road-mapping their success from a security perspective—which we’re finding very successful so far.”

However, the panelists mentioned that the shortage of available talent is a major constraint to their growth efforts.

“People are jumping ship to make more money—maybe [even just for] a couple $1,000 more. Recruiting talent has been really difficult for the last six months,” Gallego said. “It’s like the restaurant business [where] they’re open certain hours because they can’t get workers. We’re running into that right now, just with recruiting the right talent.”

During the panel, Raddon also shared new research on the state of managed services from The Channel Company’s IPED Consulting group.

The findings include that 70 percent of MSPs expect continued growth of managed services due to the pandemic, while the top delivery model looking ahead is partner-managed only—where the customer or vendor owns the equipment. Forty-three percent of MSPs said that they expect the fastest growth in the next 12 to 18 months in the partner-managed only delivery model, while 29 percent expect partner-owned and managed to grow fastest and 28 percent the fastest growth in resale.

Vedder said that his company is all-in on having an exclusively partner-managed delivery model.

“There are vendors that we can rely on. They’re good at what they do. We’re good at managing all that,” he said. “And we don’t, and have never, and would never ever own our own data center—because I actually want to sleep at night. So that’s just something that we were not ever interested in getting into.”

In terms of key investment focus areas looking ahead, MSPs ranked talent, marketing and operational maturity among the biggest areas for investment, according to the IPED Consulting findings.

For talent, technical talent is the biggest need, followed by sales or support staff, according to the research.

In terms of vendors, the five most important suppliers to growth of the MSP business, ranked in order, are Microsoft Azure, AWS, Cisco, Dell Technologies and Google Cloud, according to the findings from MSPs.

Datto Autotask, which ranked at No. 7 on the list, is another vendor that has been critical during the pandemic, Ardolino said. The professional services automation platform “has saved us with our customers significantly over the past year,” he said.

MSP executives who attended the NexGen session told CRN that the panel discussion resonates with what they’re seeing in their own businesses, particularly when it comes to the importance of security.

“The biggest priority right now for us is security. It’s going to continue to be for the next 12 to 24 months,” said Tanaz Choudhury, president of Houston-based TanChes Global Management, in an interview with CRN. “What’s challenging is obviously finding talent right now—and then keeping it.”

So while the next two years are going to be critical for MSPs in terms of how to maneuver the security environment, “the challenge to achieve that is going to be having the right people on your team,” Choudhury said.

Bacem Moussa, partner at Cambridge, Mass.-based TSP, told CRN that small MSPs face particular challenges when it comes to providing security to their customers.

“You need to provide it, but it’s hard for an MSP to provide all of it. And so it’s a bigger challenge than for example migrating people to the cloud, or installing a new ERP system,” Moussa said. “We need a reliable partner to do it. We need other players to help us really ramp up our game, in terms of providing the types of cybersecurity that people need.”

Marc Menzies, president and CTO of Ronkonkoma, N.Y.-based Overview Technology Solutions, told CRN that the discussion around MSPs improving their maturity around operations and security is encouraging, amid the rise of supply chain attacks.

“I like the conversation going towards maturity levels,” Menzies said. “It speaks to me that this is where I am, and this is where I eventually hope to be—that I’m not necessarily directly planning for.”

Ultimately with security, “things need to start at home” for MSPs, he said. “We need to secure our houses first and make sure everything is good there.”

During the panel session, Raddon said one thing is clear from the research and from the discussions at NexGen: the idea that many in the channel don’t know how to sell or deliver complex solutions is “absolutely a myth.”

“Everything we see in the research is that the managed services practice is the heartbeat of what you guys do,” Raddon said.

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