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McAfee Push To Capture Elite MSPs Expands To U.S., Latin America

McAfee has in three years built a $6 million Canadian MSP business essentially from scratch, and the firm plans to develop rules of engagement and compensation models to make that possible in the U.S.

McAfee has tasked the architect of the company’s Canadian managed service provider push with replicating his success in the United States and Latin America.

The Santa Clara, Calif.-based platform security giant has asked Canadian Channel Director Ned D’Antonio to develop programs, processes and financial models that allow McAfee to cultivate a dedicated cadre of MSPs across the Americas. D’Antonio plans to spend the coming months hammering out rules of engagement and compensation models to make McAfee an appealing option for established MSPs.

“We know we need to go there because that’s where the market is going,” D’Antonio told CRN. “It’s becoming a material and important part of our business.”

[Related: McAfee To Debut New Partner Program Synced With Technology Vision]

D’Antonio has in three years built a $6 million Canadian MSP business for McAfee essentially from scratch, according to Ken McCray, head of channel sales and operations in the Americas. The MSP practice today accounts for more than 10 percent of McAfee’s total Canadian revenue and more than 20 percent of all new business in the region, McCray said.

McAfee pledges to provide MSPs with a high-touch model, working with net new customers to onboard McAfee technology into their SOC (Security Operations Center) and making support staff available to address challenges as they learn the product. McAfee intends to stay close to its MSPs in every part of the sales and account management process from relationships and pricing to programming and support.

MSPs that embrace McAfee can enjoy margins of between 25 percent and 30 percent while building out complementary services such as front-end architecting and assessments, deployment assistance, and ongoing support, according to McCray and D’Antonio. As product sales experience double-digit declines in margins, D’Antonio said partners must develop ancillary services to stay in the black.

“This is going to be a big part of our success in 2020,” McCray said. He said the company plans to expand D’Antonio’s team by 25 percent or 30 percent to replicate its success with MSPs in the U.S.

MSPs have the option of working with McAfee on either a pay-as-you-go or total contract value (TCV) basis, D’Antonio said. Partners that procure on a pay-as-you-go basis will be charged for how much their customers consume in a given month and aren’t required to make a long-term commitment to McAfee, according to D’Antonio.

Solution providers that are willing to make at least a three-year commitment to McAfee receive both a pricing advantage as well as additional benefits, D’Antonio said, and are paid based off the total value of the contract divided by the duration of the deal. McAfee’s largest Canadian partners all procure on a TCV basis to take advantage of the better pricing and additional perks, according to D’Antonio.

MSPs joining McAfee will often start with pay-as-you-go pricing until they are better able to predict how many customers will be entering the fray or dropping off in a typical month, according to D’Antonio. Once MSPs have predictability around their customer base, D’Antonio said the risk of doing TCV declines dramatically.

A successful MSP operation requires more cross-functional relationships within McAfee than typical product resale, McCray said. The vendor’s product, support, sales engineer and enablement teams must all be rowing in the same direction for partners to enjoy a seamless and predictable experience, according to McCray.

Specifically, McCray said the rules of engagement and compensation models must be ironed out to the rep level, and sales engineers need to play an active role in supporting customers.

McAfee has to date excelled with providing consumption-based pricing and multi-tenancy options to MSP partners so that they can scale their systems as their customer base grows without any negative effect, according to Ron Temske, vice president of security and network solutions for New York-based Logicalis, No. 32 on the 2019 CRN Solution Provider 500.

Temske said McAfee made it easy to deliver services such as managed detection and response as part of a monthly fee rather than requiring an upfront purchase. The MSP model has given Logicalis access to a broader set of customers who have no desire to own the security technology and wouldn’t have be willing to make a large purchase from the get-go, according to Temske.

“McAfee has been ahead of some of their competitors in understanding the needs of an MSP from a technological perspective,” Temske told CRN. “They seem to have a greater understanding of the service provider market and requirements.”

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