Erick and Rich discuss what Anthropic’s Mythos Preview model and Project Glasswing initiative portend for the future of security in managed services as well as how to turn your service desk into a powerful extension of your sales organization. Then, live from the Channel Partners Conference & Expo in Las Vegas, they’re joined by Robert DeMarzo of conference host Informa for an insider’s take on in-person events in the age of AI as well as Peter Kujawa of ConnectWise for a conversation about the latest MSP benchmark data. And finally, one last thing: Why a pro soccer club in Dusseldorf replaced Coach Beginning with Coach End.

Discussed in this episode:

By Richard Stiennon: Mythos Preview Is a Break-Glass Moment

From beginning to end: Soccer team switches two coaches with opposite names

Some guests on this podcast are clients of Channel Mastered. Compensation plays no part in their appearance or the content of the discussion unless the episode they appear on is a “bonus episode” explicitly labeled as sponsored.

 

Transcript:

26-4-15 MSP Chat Episode 120 audio export_1

RIch: [00:00:00] Think your client’s cloud data is fully protected. Think again. Microsoft 365 and Google Workspace leave critical gaps, ransomware, accidental deletion, insider threats, and no guarantee of full recovery. Join MSP Chat co-host Erick Simpson on Thursday, April 23rd to learn how to turn SaaS backup into a must-have security layer and a powerful revenue driver.

You’ll discover how to position backup is non-negotiable, overcome objections and standardized protection across your client base. Plus, see how top MSPs are boosting recurring revenue, improving retention, and reducing risk with SaaS backup. Register now at bitly slash secure. Backup. That’s BIT.ly slash [00:01:00] secure SaaS backup.

All one word. And now on to the show. And 3, 2, 1, Blast off Ladies and gentlemen. Welcome to another episode of the MSP Chat podcast. Your weekly visit with two talking heads, talking with you about the services, strategies, and success tips you need to make it big and manage services. My name is Rich Freeman.

I’m Chief Analyst at Channel Mastered, the organization responsible for this show. I’m joined by your other co-host, our CEO and chief strategist at Channel mastered. His name is Erick Simpson. Erick, I only mean this semi facetiously. Where are we?

Erick: Until yesterday, rich, both of us were in Las Vegas at Channel Partners Expo together, but today we’re not together.

I’m still here in Las Vegas, Nevada. And where are you?

RIch: And for folks who are watching on video, we are clearly both in hotel rooms and for everyone else, if you’re wondering about audio quality, video [00:02:00] quality of this episode, we’re both dealing with Hotel wifi. I am in Fort Lauderdale, Florida. I flew from Las Vegas out here to Florida yesterday to attend the Enable Empower Conference.

I, it’s a three day show. I’m only getting one day here. But lots of big interviews coming up. After we record here,

Erick: yes, you’re getting your miles in Rich. You’re beating me this month by one trip, I think.

RIch: So rather than just show you our hotel rooms, we’ve got some interviews coming up that we recorded at the show.

One with Bobby DeMarzo who is the Empress. He runs the program over there. Events for the channel Partners conference in the MSP Summit in the fall. Another with Peter Kujawa of ConnectWise. He’s gonna get into their latest MSP benchmarking data with us and some of its implications that’s coming up later on the show for now.

Let’s look at our story of the week, Erick, and the, the launching point for this is the recent announcement philanthropic of mythos [00:03:00] preview this new model that they’ve introduced and selectively. Opened up to a little bit over 40 companies through Project Glass Wing and they basically told us about that, that it has already found major vulnerabilities in every operating system, every browser out there right now including programs that have withstood the test of vulnerability scanning time like open BSD and ff mpec.

So we know, we’ve known for a little while now, this is an extreme, extremely dangerous tool. I think a lot of the conversation about this though has been academic. Erick, I, and some of it’s even concerned, is this real or marketing hype? I really don’t think this is marketing hype.

And in fact, what I wanna do here. Is bring it home a little bit for us and for the folks in our audience. And so I’m gonna share one quick bit of good news and three quick bits of bad news. With respect to Mythos preview, that the good news is even when this model and models like [00:04:00] it, because we know OpenAI is not that far behind with models along the same lines, even when these do become available to more than just security researchers, you are not going to be inundated with thousands of new Stevie overnight.

Now I will say I’ll come back to this in a moment, that the key point here is just that, the the attackers are not going to take advantage of these models immediately for the most depressing reason possible. The oldest old school phishing lures they’ve been using for years and years continue to be effective.

Cyber experts tell me all the time they’re not, the attackers aren’t using ai. They’re not even using older, less powerful models ’cause they don’t need to. The stuff they’ve been doing before continues to work and that will remain true. That’s the only good news I’ve got for you. The bad news is that there are going to be nation state actors activists think like cyber anarchists.

There are going to be people very eager to break into systems they’ve never been able to break into before, to destruct [00:05:00] the operations of the the US government to bring down the global financial system. Eventually they’re going to have access to tools that will potentially allow them to do that.

And so we are going to see escalation in the threat environment. And that brings us to more bad news here, which is. Ultimately, at some point in time, there is a vulnerability tsunami headed to all of us. In fact Microsoft’s latest patch Tuesday had 163 CVEs and it, this is according to folks who track this kind of thing, the second biggest number ever in the history of Patch Tuesday.

It is probably just the first few splashes and drops of that tsunami I’m talking about as these more capable tools come out, whether it’s mythos, whether it’s what Open a OpenAI has in the works whether it’s whatever comes after those, we are going to see tools out there that are incredibly capable of finding vulnerabilities that have been impossible to find in the past.

And. [00:06:00] When that happens theoretically if they’re not prepared and if the cyber industry hasn’t responded appropriately, the MFPs in our audience are gonna be spending half their day on patch management and the other half of the day on incident response. It’s that bad eventually, folks, if nothing else changes around that.

And that’s a problem because right now there, there are obviously no shortage of vulnerability management solutions out there right now. They’re not ready for this. They’re not ready for the tsunami that is coming. And we know this because they haven’t caught the vulnerabilities that these new models are beginning to catch right now.

And I will link in the show notes to a really good blog post that was written last week by Richard Stein and a cybersecurity expert, one of my go-tos for many years. And he was just pondering the implications of this and. It reminded him of a long time ago when blacklist antivirus software was basically the state of the art.

And that worked for a while. And then I’m quoting [00:07:00] from his blog here he says, quote, this feels like 2010 virus signatures had exploded from a handful a week to a thousand a day, to 30,000 to 60,000 per day. The AV vendors were pushing signature updates six times a day. The model broke and the industry collapsed.

The vulnerability management model that we know today is on its way to breaking that. This model is not going to work very much longer. Thanks to a advances in ai. Now. At some point, I think, I hope that what we’re gonna see is a new category of vulnerability management solution. I’m thinking of it as vulnerability detection and response.

These are gonna be products that use the capabilities of these new AI models to find the same vulnerabilities that threat actors are searching for out there. And then they’re going to have the ability to. Again, probably using AI automatically patch and remediate and [00:08:00] resolve because it the load of of of vulnerability resolution jobs for human to, it’ll just be impossible.

So AI socks, certainly MSPs, they’re gonna need software that can not just find vulnerabilities as well as these new models, but fix them very quickly. I suspect this stuff is coming. If it’s not that then the cybersecurity industry, just as it figured out what to do when blacklist antivirus didn’t work anymore and we got zero trust and whitelist and.

The industry I trust, we’ll figure out something to do, but it’s gonna be a little while before that new model emerges. And, in, in the meantime, everybody’s gotta figure out what to do. And the best advice I’m seeing basically is the oldest advice, which is cyber hygiene. All the cyber hygiene basics.

If you are an MSP, you must make two FA mandatory everywhere it can be put into place. This is not gonna be a conversation point for you anymore. This must be something that you do. [00:09:00] Only other thing that I would suggest you do is start investigating a little bit. Right now the Project glasswing is open only to a very small number of companies, but Open AI is quietly doing similar sort of things.

They have a program called Trusted Access to Cyber, which works very similar to Glasswing up until about yesterday. That has only been available to a very small invite only list of people. They have just opened that up a little bit. There’s now an application process whereby if you prove to open ai, you are a legitimate white hat security researcher.

You can get access, early access to forthcoming models and scope them out for the danger they might pose to you and your customers. Folks who qualify for that program at the highest level get access to chat GPT 5.4 Cyber, which is the just announced, forthcoming. Mythos preview like model that open AI is working on.

So that is something to consider. The other thing to look at, if you develop code [00:10:00] using AI as a program from open AI called codex Security, which will help you scope out vulnerabilities in code using these very advanced capabilities more effectively. But we know there’s a lot of trouble coming, Erick, I trust there are answers to that trouble coming as well.

In the meantime the MSPs, our audience are just gonna have to be really diligent about the basics because I’m not sure what other alternative they have

Erick: or the customers they serve, or, the governments and the the grid, the electrical companies, the, all, everything that runs the planet.

The tsunami is coming. And it’s great that you offered our audience Rich, some tips that they can, take action on now, apply for early access to Chad GPTs program. Yeah, two fa on everything. I gotta get on that. I’ve got a couple of, a few, three or four applications that I still haven’t [00:11:00] deployed that on myself, so I’m definitely gonna get on it.

And what’s, what was really interesting as I started researching a little bit more and more about glasswing and what they’ve discovered was just how quickly and the volume of vulnerabilities that it discovered in these operating systems where there have been applications and solutions that have been relied on as being the best to do that same thing, and it just blew ’em all away.

So this is. I’ll use the term sobering, but, parts of my body clench up when I think about, what, how bad it can be if the, if the industry, if the cybersecurity folks, if MSPs do not take action and don’t take no foreign answer when their customers say this is just gonna make me take, five seconds longer to log into stuff.

I don’t wanna use two FA or, I don’t wanna enhance my cybersecurity posture. Are you kidding me? [00:12:00] So I’m looking forward to getting feedback from everybody that watches or listens to this episode. Comment below in, if you’re watching on YouTube, and let us know what you think and let us know what you’re thinking about doing and if you’re going to take action and be one of these frontier firms that separates you from your competitors.

Because as rich, the early adopters and the first movers that are adopting this. Are typically the ones that are gonna clean up the mess left behind by those that don’t.

RIch: Yeah. And I’ll just reiterate before we move on. This is not an interesting topic of academic interest to you. If you are an MSP, this is a warning of imminent danger to your business and especially your client’s business.

And so you really need to be thinking about preparing for researching what comes next. There’s not a lot you can do right now, but that will change over time. And the sooner you get in the habit of staying out in front of this stuff the better and the better for your [00:13:00] service desk. ’cause the last thing you want, like I said, is to be spending half your day on patch management and the other half on incident response.

But there are other better, more beneficial things you can be doing with your service desk, Erick, which takes us to your tip of the week.

Erick: Thank you, rich. I just had a thought before we transition to the tip of the week. It’s for the trekker or Trekkies in the audience, this is when, the captain says red alert.

That’s I’m hearing the red alert siren from the enterprise in my head on this. Anyway, back to the tip of the week. It’s all about sales, but it’s all about service desk. How can both be true, rich? When, I speak a lot about the effect that happens once we sign up a new client.

They, we go through a, a sales process. It may take, a few weeks to a few months, depending upon how large. The opportunity is maybe longer, but they’re relying completely on the experience that [00:14:00] we are delivering during that sales process. They’re revealing our website, our marketing materials, everything that a buyer has to make a decision on.

Excludes receiving any type of deliverable or service from us. So when you sign a new client, MSPs and MSPs, they’re relying on what they have experienced during that sales process. You’ve made them feel comfortable. You’ve answered all their questions, you’ve addressed their concerns. You’ve given them a, an onboarding roadmap, and you’ve given them a playbook about how the service is gonna change their business for the better.

It’s gonna allow them to be more productive and efficient and profitable, and they can sleep better at night. All those things, are what makes the decision for someone to sign on as a new client for you. After that’s done and you turn that over, that relationship over to your technical team, [00:15:00] the onboarding team, and then the ongoing service delivery unit, which is comprised typically of your service desk, maybe your soc, your noc, onsite support technicians and things like that.

The sales sentiment or the satisfaction sentiment and the number of hours that are being delivered to that client from a sales perspective shifts to the service delivery team. Now, many times they’re not aware of this, but your service delivery team now becomes your substitute sales team, and so I wanted to talk about three things that will help.

Every client interaction with your service delivery team, its members, the processes, reinforce the client satisfaction and prolong the lifetime of that client relationship because at the end of the day, they’re gonna be talking to your, level one, level two and high level technicians [00:16:00] a lot more than we’ll be talking to any of your sales team moving forward.

So we’ve got to make sure that the entire service delivery organization understands that they’re not there just for support. They are your most consistent client touchpoint. So great service drives retention, referrals and growth expansion, expanding and case studies. You name it. When you’re satisfying and delighting your clients, there’s probably nothing that your A clients wouldn’t do for you.

So you know who I’m talking about, right? I experienced this myself. My a clients were always as concerned with my business as an MSP, as I was concerned with their business. There was a great collaboration from a strategic perspective, that we wanted each other to succeed. Tip number one, rich review tickets, not just for the typical things that we review.

How long did it take? What did it cost us? [00:17:00] But review them for client experience, for client sentiment. How long did the ticket take? Interview your technicians. So if you’re having your weekly standup meetings and say, Hey, talk about a, any scenarios where a client was, particularly delighted or the opposite.

We want to know when there’s dissatisfaction so we can take action quickly. Look beyond that resolution time and look for, was the communication clear? Are the notes that when the client gets that ticket closure? What, read what they get doesn’t make sense. Should you adjust that? Should you templatize some of that?

Now with AI coming into strengthen some of our PSAs solutions, rich, it makes it, I think it’ll make it easier to deliver better communications, at least from, assessing what the issue was and delivering a consistent experience from a ticket closure perspective. At least in, in the ticket closure email.

But you’ve also need to train your technicians to communicate [00:18:00] value. That’s tip number two. So this is, and this is tough for technicians and engineers because, they’re all about process checklists, things like that. It’s typically the sales team’s job to be the people persons that maintain those relationships.

But we still should put our technicians through some soft skills training. I would say look, some low level just. Sales training online, if you can get it, and then just work with them. Listen to their calls, give them guidance coach and train them to be the best representative. The ambassadors of the value that you bring to every client in relationship.

And sometimes Rich, in my experience, it wasn’t the business owner that was upset with us. That caused some, potentially having us to save the account. It was a user that was vocal enough or, had a status enough in the organization that brought it to the business owner’s attention.

And then that started, this, [00:19:00] save the account kind of motion for us. So we’ve got to treat every individual with respect and com and communicate the value and make sure that they feel satisfied at the end of every engagement with our technicians. And then the third tip rich is I would say capture one client success story a week.

And this is where you get those standup meetings and get your technicians to share like a big win. And then the client was super, super happy. And guess what? Those are the great opportunities for you to reach out after the fact and ask for referrals and ask for, Hey, could we get you a testimonial?

Could we do a case study? So just things to think about when you think that the sale has been closed, the sale has never been closed, right? The sales process and the client satisfaction process continues. It just shifts to your technical team, and then it continues through whoever’s conducting your your strategic business reviews and things like that.

So just remember, we’re reinforcing the value [00:20:00] of our service at every in, with every client interaction, no matter who’s conducting it.

RIch: So Erick, that is great advice and the reason why I know this is great advice is because I’ve already written about products that they’re mostly in the pipeline or very young.

This is not stuff that people in the audience are necessarily gonna be able to go out and just install end of problem. But there are AI native software developers for MSPs, creating systems that will listen to every interaction between a technician and a customer, listening for customer sentiment, listening for cross sell, upsell opportunities, et cetera, doing all the things you were just talking about doing.

And there would be no market for these products and no one would be wasting time creating them, if not for the fact that they know this is not stuff that a lot of MSPs are doing and a lot of technicians are doing. So clearly this is stuff. That people in our audience here need to be thinking more about and getting better at.

And the two big [00:21:00] words obviously are awareness and training, awareness, making sure that the service desk team understands they are business development representatives and then training, training them to fulfill that role in an effective way. And to do it with confidence because like you said, as soon as they find out they are an extended part of the sales organization, it’s gonna make them uncomfortable, give them the right training, the right tools, et cetera.

And they can do just fine. Plenty of MSPs can prove that. But re really good ad advice. And something for any MSP who hasn’t been thinking about this already, to start thinking about. Now with that folks, Erick and I are gonna take a quick break. When we come back on the other side, we are going to be joined by the great Robert, as in Bobby DeMarzo from the Channel Partners Conference and Expo where Erick still is and where I was yesterday and the day before that.

He’s gonna visit with us briefly to talk a little bit from an insider’s perspective on the [00:22:00] in-person conference experience and demand for in-person conferences by MSPs. For all the talk about virtual and mobile everything and ai, everything. There has never been more demand for in-person events.

And if there’s anyone who can help explain why and how the industry is adapting to the new era of it, it’s Bobby. We will be joined immediately after that conversation with Bobby by Peter Kujawa of ConnectWise for another very informative conversation about the latest MSP benchmarking data from Connect Wise’s service leadership organization.

It is all coming your way right after the break. Stick around. We’ll be right back

and welcome back to the MSP Chat podcast

with one of our several podcast interview segments for you here. Live from the Channel Partners Conference in Expo in Las Vegas, Nevada. We are joined by the senior Director of [00:23:00] channel events and Informa, our host for this show. His name is Robert DeMars, or Robert.

Bobby, welcome to the show.

Thanks for having me, boys. Thank you. Good to see you, Bobby. Thank you. Thanks for your support, gents.

Erick: Always.

RIch: So I know the answer to these questions here, but for folks in our audience who don’t tell ’em a little bit about yourself and about your role at Informa.

Yeah, I’ll keep it simple.

So I spearhead content and strategy for all of the informa channel events as well as the MSP Summit series. On top of that, I also oversee the MSP 5 0 1, hopefully you all know from Rich’s promotion of it, how important that is, as well as our digital platforms and some other innovative things.

Rich and I go back a long way as digital journalists, as business writers, and I know the gentleman to my left from long time. And on the content side of events. So basically my role is to bring leading edge content to ma to any channel partner you want managed service provider, it service provider agents, what we call technology advisors.

So that’s my role. I sit in the middle of that. [00:24:00]

So speaking of leading edge content, we’re talking right now just a few hours before the kickoff, the general session here at the event.

Yeah.

Where you brought out onto stage your let’s say guest of honor here for the show. Jim Siders.

Yeah.

The CEO of Shield Technology Partners.

One of the most interesting. New entrances to the managed services market within the last year. A company that is an object of an intense curiosity in the channel right now. An obvious question. Why bring him to the show? And then what was most interesting to you from that conversation you had with him on stage?

Yeah, I think having Jim Siders who as switched from Palantir to SHIELD technology right, is all of a sudden somebody’s at this hot, we’ll call it. AI mysterious company, and in terms of everything they do to the managed service provider community, we couldn’t resist, but reach out and find out what’s going on.

Plus the fact that the company got an amazing investment, right through Thrive, through open ai that opens up hundreds of millions of [00:25:00] dollars of potential investment in managed services. When we reached out, I gotta say his team was really interested in being here, being at the vortex and the center of Managed services.

I think that’s what Jim wanted. He really, he, his debut was here, by the way. He hadn’t been on any other big stage, so we worked with his team. He was I think, very comfortable being here and talking what? Impressed me the most was his mindset. You are interviewing Jim and Rich and Erick.

You guys interview a lot of people and host a lot of people. I think Jim’s point of view about, this sort of forward thinking and the role AI plays in your managed services business, how you change your mindset from what you sell to what the customer wants. I think turn the whole audience on its head.

Okay, I’ve got to look at my business differently if I’m gonna survive. And the other part of it is Shield’s looking to make acquisitions right? Even though they’re leveraging open AI and they’re leveraging, obviously the capital resources that they haven’t, they’re hiring a lot of great people.

He’s looking up to either align or purchase a lot of other leading [00:26:00] edge managed services. I think those are the two things that stood out. Absolutely thrilled to have Jim. And then before that was an MSP five on one panel kickoff, the MSP Summit, part of the Channel Partners conference. It’s great

Erick: Bobby.

There’s a ton of people here. Yeah, with all the talk about AI and virtual and webinars and all the ways that the channel gets its information. Like people still love in person events. Yeah. In fact, we’re seeing the market more events than ever.

RIch: It’s true

Erick: in person. Why do you think that is?

What’s the attraction? What do people get from an in-person event channel Partners Expo and MSB summit that they can’t really get virtually?

RIch: Yeah. In a word that it’s relationships, right? Certainly you can use tools and AI to replace some of your processes. You can’t replace face-to-face meetings, shaking hands on deals, meeting new people, understand where you’re gonna take your business.

Meeting potential acquisition partners. People [00:27:00] you wanna buy. I wrote a column about live events in the AI era a while ago. I tried to keep up with this guy here on what he posts on LinkedIn. It’s really hard. I do my best. And of course, Jay McMains the best. But what I tried to capture was that live events are more important than ever.

And here’s a word for your viewers trust. What can I really trust? Right in, when I’m consuming information, right? Whether no matter what AI tool you’re using, what AI agent you’re using, I can trust looking you in the eye saying, Bob, we’re gonna work together. I can trust looking a partner in the eye and saying, okay, we’re going to, we’re gonna cut this deal.

You are gonna take my solution on, gonna take it to your customers. That’s why live events are so important. I think you’re gonna see and I’ve worked for a company that really is the leader and the largest in live events. So we’re looking at all our events and there’s a lot of really happy people that are running live events in, in, in our organization, channel’s.

Just one of them.

Erick: Yeah.

RIch: Yeah, I

Erick: think you’re absolutely right.

RIch: Yeah.

So

that’s a great question

That article that you wrote is actually about something that I [00:28:00] wanted to ask you about because people still want in person, they still want events. Yeah. But as somebody who plans events, you must be evolving the model content for the age of ai.

What,

yeah,

what are those changes you’re

making? Yeah, I think operationally a lot, right? Because people want access to the attendees before they want deeper profiles. They wanna be able to set up meetings, they want to use AI tools to guide them through the agenda. So I think the live events, Richie asked a great question and so is my friend Erick here, like, how is ai, what’s the role of live events going forward?

And then how is AI changing the event experience? Faster content on the main stage, right? You gotta be able to deliver crisp, fast messages, deeper dive content throughout, right? You want to, you’ve got attention spans that you’re trying to hold, and then you gotta dial in the right content and you can’t misstep today, right?

People that run live events have to realize you have one bad event, it could be over for your business. You really gotta be on with each event. The other thing that I think we’re experienced in terms of an evolution [00:29:00] is being able to touch your attendees year round, almost minute by minute. I couldn’t do that as effectively, we’ll say, pre AI as I can today.

I could use a lot of tools to do a lot of communications and a lot of outreach faster today than ever before. That’s what’s, that’s what’s changing the most hope. That answers the question. Yeah.

Erick: Bob, you touched a little bit on the interaction, the deal making, the meetings, we’re all doing a lot of that here.

AI is really, taking the channel by storm, but so is m and a. We’ve already seen a lot of programming about ai, about m and a so far from the main stage today, there’s more programming the next few days ever. How are you in integrating and including the m and a conversation and what are you looking for specifically?

When you’re putting speakers and programming together to be impactful for the MSPs and for the folks that are, interested in acquiring ’em.

RIch: Yeah. Let me give you a real example. So we just for our MS Summit which is in the full in Orlando and you guys [00:30:00] will be there 28th through the 30th we’re just, the MSPs will come and the MSP 5 0 1 will be there.

We put out a call for speakers. Call for speakers typically gets, hundreds of responses and you look through it and there’s a lot of vendors in there that wanna pitch their goods. Okay, great. We love our vendors, we love our sponsors, but our attendees really want that vendor neutral platform, neutral content.

What we saw this time around was a lot of content around ai. A lot of vendor neutral content on what it means. And then probably fewer entries, but much more quality.

Higher quality. So I, I think that’s part of, part of what you’re asking. The other piece of it is you’ve gotta weave the m and a piece into your overall content.

You can’t just have a track on m and a. There’s so many private equity and now venture fund, venture capital organizations that are doing their own events. Come and talk about your valuation, come and talk, how to sell your company. So we’ve gotta weave it throughout the event and then provide networking platforms where people could talk about their business comfortably, pull somebody off on the sidelines and say, [00:31:00] Hey, could we work together?

Is there a deal in the making? And then obviously you got what you know, rich is coined the mega MSPs. If you’ve got the mega MSPs here and define that any way you want, I define them as companies that are private equity backed, that have a big bank role, whether it’s vc, whether it’s private equity.

If you get those companies here. Tho that’s gonna organically happen, that m and a, you definitely have to sprinkle m and a content, but it’s going to happen throughout the event. No, ma, no matter what. And I think that’s the nice part. It doesn’t have to be in everybody’s face because there’s so many events where you could go, when you get that m and a content, you just have to make it a part of the fabric of your event and it’ll get delivered.

And that’s why people are coming, right? As much as they wanna talk about who’s my latest strategic partner in terms of a vendor, they wanna talk about? Who’s my latest strategic partner in terms of, maybe it’s a technology advisor and an agent, maybe it’s another MSP, maybe it’s a specialized partner.

Erick and I both have opinions on this matter. We would love to hear your opinion about it from an attendee point of view. What, just give us a few quick thoughts on getting the most [00:32:00] out of an event like this.

Yeah, from an attendee, boy, I’ll tell you, you know what’s interesting? If you study the changing habits of attendees, we do this three onsite and three formula.

So at three months before the event, you’ve gotta have your agenda. Ready to go locked down. It’s clear, it’s crisp. Sessions are written, not with a lot of Bs, but what’s going to be delivered, right? That’s number one. So they’re scanning that agenda prior. They’re setting their meetings, looking at the content they want to go to on site.

You’re capturing in real time, and you guys see what we could do to steer them to certain things. And then the other part of the three, I guess it’s 3 1 3, the other part of the three is three months after the event, they’re looking at what was the coverage? What was on that agenda? Who was that keynote speaker?

And then they’re going back and saying, I remember what Rich said. I remember what Erick said. I’ve gotta follow up with them. The backdrop to that is on LinkedIn and our communities and our digital platforms we’re pushing out content that said, Hey, don’t forget what Jim Cider said at Shield, or Don’t forget what this panel said, or Don’t forget what this speaker did.

So we’re [00:33:00] bringing that to the forefront. But I think that to get the most outta the event, study the agenda. You are closer than people have incredible contact with our team. To get advice, right? They can leverage our advisory boards, right? And then just dial into what you want. Pick and choose what you want to go to.

And I think the attendees of today’s live events are more discerning than ever. They really are. They even let you know what they’re thinking, keep those keynotes short, keep the deep dives right on point. Give us our educational breakout so we can continue to move throughout the event. So there’s a tremendous change.

I think the next three to five years, there’s gonna be a massive change in the live events business. In terms of how attendees view any, engage in I would say work and event, particularly in channel.

Erick: Yeah. We’re seeing some of that now a little bit, right?

Yeah.

Erick: Now, you touched on this a minute ago, Bobby.

What’s in store for attendees and sponsors in at the fall conference?

RIch: Yeah, pretty easy question. I look at that event. You can’t [00:34:00] get. Your arms around the MSS P 5 0 1, anywhere else like that to me is still the centerpiece of the ms. We’ll say the four M MSS P Summit and MSP summit’s part of a series of events.

It’s here in the spring and it’s in the fall. That five oh one’s the best of the best. People wanna know what makes them tick. How did you grow? What are you doing with ai? What vendors are you working with? Who are you not working with? We heard rich bring up on today’s keynote session, some of the squeeze on profitability.

And the net income that MSPs are working their way through that event in the fall will focus on that. How do you, maybe you wanna sacrifice profit to reinvest in the business? And come out of that a stronger organization. So that event is MSP 5 0 1. That event is designed for anybody that has a managed services practice that wants to grow it.

If you look at Jay’s numbers, what is Jay saying? 10, 11% growth in the managed services business, 600 billion. It’s on its way to a trillion dollar business. If anybody wants to know what’s going on in the managed services business, I’d recommend they come to the Fall summit. They’ll hear [00:35:00] from you guys.

They hear from a lot of speakers that specifically addressed managed services, growth and opportunities. It’s in Orlando at the low specific, so 20th through the 30th of September. Off to see you there.

What’s the URL?

The URL is the msp summit.com.

Happy tomorrow though from Informa, taking some time out from a very busy schedule.

The show here. We really appreciate it.

Thank you guys. These guys are the best. Love the love being here with them.

Okay, Erick, I are gonna take a quick break. We’ll be back for a little more of the show. Stick around

and run back part two of this episode of the MSP Chat podcast, our spotlight interview segment where we are very pleased with be joined by Peter Kaja and CanWise. He is the EVP and GM of IT Nation, evolve and Service Leadership there. Peter, welcome to the show.

Peter Kujawa: Thank you. Nice to see you guys again.

Good to see you

Erick: again, Peter.

RIch: I’ve known you for a long while here. Here’s something about [00:36:00] me that you probably didn’t know before. I have complete mastery of time and space, which is why even though I was physically attending a conference in Chicago at the time, I was telepathically attending the IT Nation EMEA event that you folks did recently, and therefore got to hear some of the research figures you shared from the stage.

Any particular, you you shared that historically speaking in aggregate revenue growth for MSPs tends to be about 12%. Yep. According to your latest numbers, in aggregate it’s 15.7%, which sounds very good. But that’s the good news. The bad news you shared is that 65% of partners are actually growing slower than that 15.7%.

Only about 20% are growing faster. How different is it from a historical standpoint to have two thirds of MSBs sort of trailing the average right now? And what sort of accounts for that 65 20 split writing halls?

Peter Kujawa: [00:37:00] First off, congratulations on the ability to Mastered time in space. That would seem like a fairly useful skillset one that I could use most days.

Second, the growth statistic that you cited is Europe specific. If we look at it more broadly, and the, you’re correct the historical managed service growth rate for MSPs, so not their total revenue growth, but their managed service specific revenue growth has averaged about 12% plus or minus 2%.

And what we saw was heading into COVID that was slowing down a little bit, and then when COVID hit, it was off to the races. And so our high watermark was I think in around Q4 of 22, maybe Q1 of 23, and it was 25.3%. And that’s a four quarter over four quarter growth rate. But as fast as that went up, it came back down and bottomed out about a about five [00:38:00] quarters ago at about eight and a half percent.

And we’re back up now and we’re back up now if you pull private equity outta the sample. So you’re just really trying to get an idea what’s going on with organic growth. We’re back at 11%. It’s been ratcheting up quarter over quarter since it hit that low watermark. And so the, a couple of things with that growth number one is.

I stress to the MSPs that look, it doesn’t feel like it did a few years ago because it’s not it’s, we’re in a different time, but we’re in a more normal sustainable time. If you look historically at 11%, we’re right in that range. Second of all, MSPs now are actually more profitable than they were at those times of peak growth.

That growth came at a price and that was wage inflation. So a lot of what we saw in growth numbers was based on price increases that were driven by MSPs having a gun to their head because of wage inflation. So there was a downside to that. The third, though, your point that your [00:39:00] original question about.

Those that are lagging, that growth rate, the same thing holds true in the rest of the world as what we talked about in the AMEA data. And that is about 56 or 58% of MSPs are growing slower than that 11%. And about 22% or so of MSPs are growing 0% or less. So what’s happening is you have a cohort of MSPs that are growing faster than 20% organic and they’re pulling up that average a bit.

And then you got a whole bunch of MSPs that are growing less than zero or less than 5%. And there’s, it’s not that they’re not adding new customers, they probably are, but churn is best in class. Churn is about five to five and a half percent per year. Bottom quartile is about 11%. So if I’m churning if I’m churning 11% of my revenue every year, and I want to grow at that 11% average, I gotta be [00:40:00] bringing in 22% revenue growth.

It’s pretty tough to do. So there’s a lot of underlying things with the data, but definitely sales and marketing is a great area of opportunity for MSPs. A, understanding what they’re investing and making sure that they’re investing enough in sales and marketing, but b, doing it in a way that’s really generating tangible results and not just throwing good money after bad.

Erick: Yeah. Peter, during your keynote at emea, you did mention this wage inflation pressure in emea.

How big of an issue is it there, and in comparison, how big is it here and what’s driving it?

Peter Kujawa: Well, Europe’s wage inflation. We just came out with our annual compensation report service leadership in March.

And so that data’s fresh. It’s from October, November. What we’ve seen that’s really good news for most of the world is that wage inflation has [00:41:00] come down to it’s improved significantly in North America and in Australia, New Zealand and North America, including US and Canada. In Europe it’s proven more stubborn, so we are still seeing top level increases.

And by top level, the greater than 6% that the stuff that we saw tons of back in 20 21, 20 22 that’s come back to Earth everywhere. But AMEA and amea, it’s still pretty well stuck at that, at the level it’s been that’s tough news and it’s part of the reason that you’re seeing that revenue growth higher because they’re still dealing with the higher wage inflation.

But I would say even to MSPs in the US and Canada and other markets where we’ve seen improvement, wage inflation at a normal pace in our industry is about twice the rate of CPI. So don’t take your foot off the gas on price increases. You need to still be doing them on an annual basis at a high enough level.

And second, the [00:42:00] opportunity and the necessity of automation is just as great today as it was be a couple years ago. Just because things have gotten a little bit better on top level wage inflation doesn’t mean that MSPs don’t have a significant opportunity and challenge ahead of ’em with automation and building greater efficiency into their businesses with ai.

Where’s

RIch: no we’re talking revenue growth principally. We’re looking at it from somewhat longer timeframes. Let’s talk about profitability for a moment because Jay Mc Bay from shared some recent Omnia data on LinkedIn not too long ago. This is like a Q1 2026 snapshot. I think that they did with a few, probably a few hundred channel partners.

So not specifically MSCs, let’s say channel partners, but to their surprise, 51% of the partners that they survey said that their anticipating double digit profitability decreases right now. And this obviously this is not normal. This is much [00:43:00] higher than when they did the same survey a year ago. And so I guess the first question would just be, does this is a similar at all.

So anything you, anything ConnectWise is seeing, hearing from MSP right now in terms of this concern about profitability and

if so what I mean, and even if not, what do you think might be accounting for that Omni itself?

Peter Kujawa: Yeah I think there’s a difference in how they’re gathering their data versus how we gather our data.

And obviously they do a great job on their data collection. I follow Jay’s LinkedIn and enjoy his post a lot their data’s collected based on, in that particular data set. I read with interest, it was based on partner predictions. So you’re talking to a partner and that was done at a time of the year that partners either would’ve just finished their budgets or would be in the process of doing their budgets.

And so what is it that the partner believes is gonna be the case for the next couple of years? That viewpoint is heavily [00:44:00] my opinion on it. Is that viewpoint’s heavily influenced by what, what’s going on in the media, what you’re hearing on CNBC. I watch it every morning and by the end of the week, I’m pretty convinced that I need to go moving my family into a cave and convert all my holdings to gold and get off the grid.

The, it can be pretty depressing. And especially now with all the uncertainty in the last couple years of tariffs and everything that’s going on in, in the economy at a macro level worldwide. So we’ve had years where we collect budget data and our data that we, and I’m talking about revenue growth that’s coming all out of service, leadership’s benchmarking data, which is all partner actual income statement data.

We’re looking at what they actually did historically. We do have a little bit of forward looking data because partners build their budgets in our system and they’re able to use our dashboards for that. So we get a perspective every year on what are partners thinking things are gonna do versus what [00:45:00] have they done.

But Jay’s data tends to be much more forward looking because it’s interview based and attestation based. But even we’ll see in our data sometimes an incongruity between what the partners are putting in for budgeted growth and what their predicted growth is and what they’re actually doing. There’s a lot of times where you’ll see if there’s a lot of negative sentiment out in the market, you’ll see them predicting a really low year of growth, and they just came off this great year of growth. And then we go back and look at what they did versus what they predicted. And a lot of ’em will have radically outgrown what they predicted they would.

Other, the years, there’s over exuberance in the marketplace. And we saw this a little bit coming out of this COVID growth years that everybody thought this 20 plus percent growth would continue forever, and all of a sudden that changed pretty fast. So there can be a difference between how partners think things have become, are going in the future versus the reality on the ground.

Our prediction service leadership [00:46:00] and at ConnectWise is that the next few years are gonna be an unbelievable profitability opportunity that the MSP model, with the way that model is built. When you layer in AI and you layer in the opportunity for automation of things, especially today, are things that we know can be automated.

Like a lot of level one ticket resolution, which for the average MSP is 70% of their help desk tickets. These start to really open up some great opportunities to leverage that. That revenue to labor relationship. And for MSPs, 80% or so, their cost of goods sold is their people. So even if I can only, if I can get 40, 50% efficiency gains, let’s say I’m my love at ones let’s just assume for sake of discussion that I’m not gonna get anything in the immediate future on my level twos and threes and project engineers and et cetera.

Even if I can just do that on my level ones, I can lower my cost of goods sold enough that I [00:47:00] should be able to take my service gross margin from 50 to maybe 60%. That’s a huge impact on profitability. So the profitability trends, the last few years have been good. But we think the next few years, the opportunity that’s there is gonna be the best we’ve seen as an industry.

It’s, it should be really exciting.

Erick: I wanted to ask you about that, Peter, specifically on how AI. Impacts or effects or allows you to score apparition and maturity differently? Service leadership has long used the operational maturity level for partners to gauge, how successful they can be in their growth and things like that.

Just because an MSP brings AI into the business, I would argue doesn’t, may not impact their operational maturity level. So how do you look?

Peter Kujawa: It may actually expose it even more.

Erick: Okay.

Peter Kujawa: So

Erick: unpack it for me.

Peter Kujawa: Yeah. Sorry to interrupt you. Yeah. [00:48:00] No, please. But the it’s ai, if you are high OML, you are much better positioned to take advantage of the automation that AI will bring along.

And what I mean by that is when we evaluate operational maturity level through service leadership, sleek tool. It asks about 185 questions of the business covering six different areas of the business. So it’s certainly covering their service delivery model, how they’ve structured their service delivery factory and what best practices they’re doing there.

But it also covers things like their financial part of their business. How do they do ar, what are their policies invoicing policies, how are they pricing time and material and project labor. There’s a lot of things that go outside. It even covers. We have a section on security and compliance.

We have sales and marketing best practices, commission payments, incentive pay for non-sales. So it covers a really wide and deep [00:49:00] look at the business. But our experience is that high OML companies are in general the best run businesses. They’re the businesses that are best able to pivot when there’s a challenge that comes along.

If we hit a recession, for example, when we have seen some real recession data hit, those companies are the ones that have great, they continue with great profitability because they pivot the fastest. They’re set up to respond faster. They run their businesses in a different way. Therefore, they’re also the companies that are probably using data the most to manage their businesses.

They probably understand the opportunity to automate better than others. And they they have a more disciplined tech stacks. So they tech stacks work better together, their tools work better together. All of these things provide an opportunity with AI to start to really leverage all of that. So we think high, all ML companies are gonna be the ones that are gonna be the fastest out of the gate.

They’re the ones who are already [00:50:00] seeing some of these improvements with. When we measure some of our KPIs, like service, multiple wages. Which is looking at the relationship between service revenue and service wages, the best in class has been improving for years. Median and bottom quartile bottom quartile has actually been going down over the last five to 10 years.

Even though they have access to the same tools, they have access to the same process, knowledge, everything, right? The best in class just does a much better job of looking at their business and saying, what’s the opportunity that’s out there and how do we drive it? And let’s start making decisions and measuring it, circling back, seeing if it’s working and continuing this kind of process.

So I think you’re gonna see the best in class high OML folks. They’ll be the ones a year from now that they’ll have a lot of we’ll be able to really see in the data how they started to build AI into their business and some of the improvements they’ve been able to make on gross margin and profitability.

Erick: So these will be the frontier firms and ai, [00:51:00] these high OML businesses?

Peter Kujawa: I think so. There. The bottom quartile folks they should, even the bottom quartile, medium folks should be able to see some improvement because the tools are just so robust. What ConnectWise bought with Zo and as, as in the process of building into the platform, will make that such such a readily accessible toolkit for MSPs of all levels to be able to take advantage of.

So even the bottom quartile, median folks should be able to start, see some improvement, but it’s the old axio of before you add a second and third story onto your house, make sure your foundation’s good. And I think the high OML folks, they just have a really solid foundation that’s there and they’ll be in a better position to add and take advantage of that first.

RIch: So when I was exercising my command of time and space one of the things I heard he say in London,

Peter Kujawa: It all comes back to that. It’s I’d bring it back to that too, if I have that.

RIch: You [00:52:00] said at one point in London that AI is not a feature shift,

it’s an industry career jump.

Yes. And I immediately thought about, that the last decade cloud. So I guess part of the question is

just, and was that an industry curve jump to, or is there something about AI that is even bigger than that cloud transition? And if so what does that mean for MSPs? How do they need to be shifting their mindset?

Peter Kujawa: I think it’s bigger. It certainly it, it’ll certainly be looked at in the hindsight is as big. And the reason for, that’s a couple things. Number one is the curve jumps that we talked about. We talked about two curve jumps before this one. The first model was the onsite first MSP model, which lasted till about 2007 or oh eight or so.

But that was the contracts were all built in those days around how fast can I get up somebody on site when you need somebody that we’re gonna be monitoring. And if you have a total network outage, I guarantee I can [00:53:00] get somebody on site within X amount of minutes or hours. If it’s a less severe issue, I’m gonna probably build into that contract, somebody being regularly there, maybe lay every Thursday morning from nine till and I’ll have a body there.

So the model was, it was a, there was an MRR component of it. There was a break fix component to it. There was this staph component to it. It was all combined together, but that was the managed service model back then. Then along comes RMM tools and completely changes the game. And so we’re able to now service customers.

We don’t need as many onsite bodies anymore ’cause we’re not onsite that much now. We need help desk best practices and if, and we need to retool things that way. It’s a different skill set of employee pricing and packaging radically changed my ability to sell to a customer radically changed. So the model hugely changed and that was what we refer to as the remote first model.

We then today are now getting into the automate first [00:54:00] model, which started about a year and a half ago. And that model says it’s not automate only. It’s the automation wherever possible. And I’m gonna use people again. The skill sets are gonna change. I’m gonna use people in a different way. And there’s still gonna be people there, there’s still gonna be engaged at a human to human layer with my customers, but just in a different percentage of interactions and time.

And those people are gonna be just much more efficient and able to service a lot more customers. So within those curve jumps, there’s certainly curve jumps within the curve jumps. So you had cloud, you had the massive shift with cyber that has happened. You’ve had a lot of things that have really influenced the channel.

But the difference with ai, I think it’s analogous to that onsite to remote shift because three, three to five years from now, we’re gonna look back and we’re gonna look at the changes in the staffing models for help desk. We’re gonna look at. This [00:55:00] changing skill sets needed for project engineers.

For example, we’re gonna look at the pricing and packaging and the inclusions and managed service offerings. We’re gonna look at what is it that an account manager’s job is now with and what kind of skill set do they need. Now it’s moving more towards somebody who can have a business discussion and be able to do process analysis and those kind of things, as opposed to somebody who maybe could understand the technical needs of somebody.

I think when you look at the totality of the changes that this is bringing to the managed service space, coupled with it happening at a time with rapid consolidation and the ability of larger MSPs and some of the private equity folks to invest a lot of r and d money and carve out money and teams that are building out the this automation and this new practice in ai.

It’s a really exciting time, but it’s just it’s a massive amount of change going on all at [00:56:00] once.

Erick: Yes. A big curve coming. AI is going to change things for high OML MSPs as well as lower quartile MSPs. Let’s talk a little bit about what these folks that aren’t really high OML MSPs should be leveraging AI for, besides kind of the typical things that we talk about all the time.

Hitter, like service efficiency, say things like that. What, how else should they be leveraging AI to take a look inside their business, to uncover things that they should be fixing? Give us a couple of ideas.

Peter Kujawa: Yeah, I, so it tends to get talked about in a way that’s convoluted, but I hear things talked about that I would split it into two, one.

The internal work that, that the MSP needs to be doing with ai. And I would start with that. A lot of MSPs are mixing that together with the external facing conversations with their customers [00:57:00] and and starting to help their customers with AI and with governance. And I think all these things are great opportunities, but first and foremost, make sure that the cobbler’s kids have really great shoes because you’ve gotta be good at this first.

It’s just like cyber, back to that analogy that when you, if you got into cyber and you went, started to talk to your customers, but you didn’t have a really robust internal facing cyber practice, it would be pretty hard to have those conversations credibly. I think the same thing’s true with a, so a start internally first.

So A, so I can get better at it, but B, so I can improve my gross margin so I can start to get some of these efficiency gains. Because the other thing that will happen over time is price elasticity is gonna kick in. You are gonna see some MSPs that are gonna say, we’ve been able to scale our help desk operation to a point where we are 50% more efficient and staffed appropriately.

We’ve been able to get efficiency gains in project management and in other areas of our business, we can be a little [00:58:00] bit more aggressive on our pricing. Okay. And we would encourage every MSP out there to hold off on that. I don’t think, but there’s always gonna be some MSPs who are gonna, who are gonna be aggressive with that.

And when they do, that’ll start to change pricing in the market. At that point. I need to make my MSP be efficient too. ’cause I need to be competing out there. So my advice to any MSP listening to this is if you’re not where you think you need to be from an OML standpoint, from a profitability standpoint, or what do we mean by that?

I would say, but median profitability from MSPs right now is about 11, 11.5%. If you are below that, you should be figuring out why and what you need to be doing to pull your profitability up join an evolve group, start to benchmark, do the things that really help educate you in where you really need to fix things.

I love events like this. They’re great sources of knowledge and and I enjoy going to listen to speakers talk about different things in the industry. [00:59:00] But some of the, some speakers are, have better data or better information for MSPs than others, right? Just because something worked for somebody, it doesn’t mean it’s gonna necessarily work for every MSP. Make sure as an MSP that you are, you’re getting really objective information on this. And again, if you join evolve peer groups or start to benchmark that you’re being compared with MSPs on a large scale and it’s really empirical and you’re gonna understand pretty quickly where you’re doing things that need to be fixed, but also where you’re doing things well, that you should be putting your foot on the gas and really don’t change ’em, right?

Keep doing those things and just do some more things. Build AI and automation into your business. So get advice before you start really figuring out where to operate. Make sure that you’re cutting in the right side and pulling the right organs out, right? It’s it’s it’s a do no harm first and make sure that you’re improving things in your business.

But the, this isn’t [01:00:00] something that’s a theoretical that we will be, that we’re talking about today, that. Hopefully it’ll hit in the next 2, 3, 5 years. We’re seeing it. We’re already starting to see some interesting stuff in the data that tells us that there’s partners out there today that are taking advantage of this opportunity.

RIch: You were talking before about the enormous gap between the best in class MSPs and everybody else, basically and the prospect of the vested plasticity peaks. They pulling out ahead you bit more, and we, Erick and I have been talking on the show all year, basically, about how nps that are most aggressive, most intelligent about embracing ai, both internally in terms of how they run the business and in terms of the services they bring to their clients, potentially pulling away from other mps.

And so I guess what I’m trying to do is put these two things together from your respective on the one hand. How might AI enable best in class MSPs [01:01:00] to really pull away from the pack in a even more meaningful kinda way? And how can it potentially help the people who are not best in class today close that gap?

Rapidly, basically more rapidly and get closer to best in class?

Peter Kujawa: Yeah, I think there’s a couple of things. One is when we talk about best in class, just for clarity, we’re talking about profitability. So for us, best in class is the top 25% most profitable MSPs every quarter. We also benchmark VARs.

We have benchmark project shops, app dev, other business models, but we look at each of ’em and say, who are the 25% that. Did the best from a profitability standpoint. Each quarter, we then go in and extrapolate about 80 KPIs out of each, out of those companies and say, on average, what are they doing in these different productivity ratios, gross margin, sales and marketing investment, et cetera.

And so first of all a couple of things that are important to note [01:02:00] on best in class profitability. That’s material to this discussion. Number one is there’s a misconception that it’s tied to size, and that’s a myth. We see in our data set at every size one inch. We did a slide in our annual report last year that showed sub million revenue, one to three, three to six, six to 10, 10 to 15, 15 to 25, 25 to 50, and greater than 50 million in revenue.

And we hear it all the time when I go into the peer group rooms and talk to partners in the group. Typically the bottom quartile folks, they are the bottom quartile of profitability. When we talk to ’em and ask ’em about, when are you gonna fix this? There’s a belief that they have that it’ll be when I get to this next size, that once I get bigger, that’s when I’ll get more profitable.

And whatever that size is, doesn’t matter. It’s whatever size that guy is not yet, right? And so we decided to pull the data and we carved it out into those [01:03:00] tranches. And the data shows that at every size, 22%, roughly 22% to 27% are best in class. And about 22 to 27, 20 8% are bottom quartile. So there’s a little bit of fluctuation.

Sub million is the, has the highest percentage of bottom quartile. It’s a tough time to run an MSB. You lose one customer. You can go from profitable to unprofitable pretty quick. But in every other size range, the opportunity is there. So point number one is is that understand if I’m listening to this, it doesn’t matter what size I am, I can run my business in a way that delivers best in class profitability.

Number two, implementation of AI will be, will come in the same way that implementation of other tools and best practices comes for the MSPs and that is the best in class aren’t necessarily smarter. They’re not necessarily harder working or any of those things. They [01:04:00] just at some point got sick of it.

And they just made a decision at some point that I’m not gonna keep doing mediocrity anymore. I’m not gonna keep doing bottom quartile anymore. I’m

Erick: not gonna take it anymore.

Peter Kujawa: And they’re like, I’m gonna fix the things I need to fix. And so how does AI fit into that? I don’t think you can take bottom quartile or meeting MSP.

And just sprinkle some AI pixie dust in there and have it all of a sudden be top quartile. But I do think the technology presents the opportunity that if I’m running an MSP that’s bottom quartile Armenian and I really wanna leapfrog and take advantage of this technology and get better faster, I can do it that, but I’m gonna still have to put in the work I’m gonna still have to make that commitment to really do the heavy lifting, but it should be able to accelerate that process, and and I should see [01:05:00] gains faster than I might have been able to see ’em before.

Erick: Peter Que launched a new security platform last week, to what extent are platforms, security or otherwise. Connected to operational maturity. Does everything all just always lead back to profitability at the end of the day or are there some other factors that, that these platforms might help partners become more operational?

Peter Kujawa: Profitability’s not a four letter word, so it’s at the end of the day MSPs as an industry don’t make enough money that when you look at a best in class number of, on average 23%, there’s a whole bunch of industries out there that would say 23%, that’s the best. Yeah. What’s the bottom right? And so as an industry for us to be healthy and vibrant, growing and into the [01:06:00] future, it’s important that we improve our profitability as an industry.

It’s one of the reasons we talk about it so much that, it’s okay. MSPs historically have been run by, by technically minded folks who often times would take guilt and making money on a customer and and being too profitable. And look, as a business, as somebody who ran an unprofitable MSPI took over an MSP that was losing a lot of money.

It’s so fun. And so getting your business, getting your MSP to a point where you’re delivering a sufficient ROI on the amount of, not only work that you’re doing, but the risk that you’re taking as a business is important. But back to the platform and the characterized security announcement, I thought that was, that’s, that was a great announcement because it highlighted another opportunity that AI brings in.

We talk about AI all the time in the context of profitability and efficiency gains, and you’ll be able to do more with less, which doesn’t mean you need to lay off your text, it just. If you run [01:07:00] a normal attrition in your level one team, for example, you’re turning over about 23% of your techs a year, just don’t backfill a couple of them as fast, right?

And you’ll get tremendous leverage on your ratios. But the other really exciting thing about this technology and on, on the platforms better enable it to be delivered, is it actually delivers better quality customer results. The customer sentiment improvement that we’ve seen from some of these enhancements has been a huge hidden surprise that we all assume.

I think that, gosh, I hate when I call in that I call into the cable company. I’ve got a scream representative 18 times before I can get to a person and is that what this is gonna be? And it’s not. What we find is. Is that the platform technology and allows AI to be delivered at a easier, in an easier way.

It allows you to do some things that you wouldn’t [01:08:00] otherwise be able to do because you have a common data layer. Your data lake is the same, your customer services layer is shared. So there’s all of these additional things that, that will allow ConnectWise to do that is really unique. And I know building the platform has taken us a long time to do it.

It’s taken longer than we expected, certainly but the original idea was the right idea and it really positioned ConnectWise well for ai and that’s why we’re so excited about the Zoic acquisition. So what you saw with the security team and what you’re gonna see more going forward. Is that the platform will provide a lot of advantages to partners that won’t just make them more efficient.

It will allow them to do things for their partners that they weren’t able to do before, and they’re gonna be able to deliver quality of service back to their customers that they weren’t able to do before. So it’s not an either or that either I build, I built all these efficiency gains into my system, or I maintain a great customer [01:09:00] service posture.

What we’ve seen is that in the announcement last week, so that this allows us to be bold. It’s it’s a huge win for MSPs and customers should really feel that and say, think about it as a simple example. I’m a customer calling in and I don’t like to send to email on my tickets.

Let’s say hypothetically I like to call and get somebody on the phone right away. If I call in. And that tech is pulling up and connect us PSI. And while the customer is explaining the issue, to me it’s documenting the ticket. It’s searching through their entire data like Data Lake and looking at past related issues and looking at other databases on resolution of those issues so that by the time that person explains the issue to the tech, that Level One Tech is able to say, Hey, Erick let’s try this and have ha and be able to resolve that [01:10:00] ticket in a minute, 2, 3, 5 minutes.

Something that might’ve taken 10, 15 minutes before that customer now can get off the phone, can get back to work, can get productivity out of their job, and all the things that they’re, depending on the MSP to be able to do. So this technology is really providing, benefits to the customer as well as to the MSP from an automation standpoint.

RIch: Peter we really thank you for making some time for us here at the show. It occurs to me, I introduced you as Senior Vice President and general manager of IT Nation evolve and service leadership that never gave you a chance to explain to anyone our audience, unfamiliar with one of those or the other.

So before we let you go, just tell folks a little bit what does IT nation evolve? What service Leadership?

Peter Kujawa: Yeah. IT Evolve is is the industry’s peer group that was started, this is our 26th year. We celebrated 25 years last year that we’ve helped thousands of MSPs o over the 25 year history of [01:11:00] Evolve.

And we now are peer group communities worldwide and our largest being North America, but we have peer groups for what we call the owner. But it’s really the owner. But it’s the principal, the chief executive officer president of the MSP. So they get together with other on typically presidents and CEOs and owners, and they spend two days together then in their group, tackling all sorts of issues.

And it covers their business. It covers things, the challenges that they’re dealing with, but also their life. And it helps them be better leaders, better, better parents, better husbands, wives and ultimately it helps prepare them for transitioning the business. And so we have those groups. We also have role-based groups, service executives, sales C-F-O-C-O security executive groups, now CISO groups.

So we have a lot of different groups that meet in a similar format, and then they come together on Wednesday as an entire community, and they do a shared community [01:12:00] day where they get to hear world class speakers on these different topics. It’s an incredible program. All the evolved members benchmark with service leadership.

They all know their operational maturity level ’cause they’re all using sleep through service leadership. My advice to any MSP out there, the single most consequential decision I made running an MSP in 11 years was joining a peer group. And taking advantage of that. Service leadership was founded by Paul Dipple 20 years ago to benchmark the IT industry worldwide.

And today, that’s still the number one thing that we do, is we collect data. We have thousands of subscribers worldwide who, whoever quarter put their balance sheet, their income statement and operational data into our system, and they’re able to log in then and see how do they compare to the best in class.

So they know right away, am I charging enough, am I not? Am I overstaffed, am am I paying my people right? And all these different things that really help you analyze and make better decisions in your MSP.

RIch: Okay, fantastic. Once [01:13:00] again, Peter, we thank you very much for joining us here on the show. Very interesting conversation.

I, I will have any conversation driven by data. And you’ve always got amazing Dana for us.

So folks, Erick and I are gonna take

a quick break. Now we come back on the other side. We’ve got more of the show for you. Stick around. We’ll be right back

and welcome back to part three of this episode of the MSP Chat podcast, which, which may or may not be part four technically, Erick, ’cause we had two part twos. I dunno, I’ve lost count here. But our final segment of the show, one last thank you to Peter Kujawa and of course Bobby DeMarzo before that. Two great conversations live from the Channel Partners conference and expo in Las Vegas.

Two quick thoughts about the conversation with Peter in particular. Erick and one I think it’s it’s a useful point he made. If you are in that bottom quartile of MSPs right now, and you’re hoping or thinking [01:14:00] that AI is gonna lift me out of that by making me lots more efficient and and helping me uncover opportunities and so on.

It’ll absolutely help and you should absolutely be investing in that technology to make sure you remain competitive and relevant. But it alone, AI alone is not gonna fix what got you into the bottom quartile to begin with. And so folks need to understand. The whole kind of operational maturity model and be thinking across the business about what it’s going to take to get themselves out of that dangerous bottom quartile.

And then the other thing, and it’s such an obvious point in certain ways, but it was nice to be reminded of it, what Peter was talking a little bit about how these AI service desk tools we’ve been talking about. We tend to talk about AI in two contexts, and one is it’s gonna make your service desk more efficient and it’s gonna save you money and help you be more productive.

And then two, it’s gonna help you deliver AI solutions to your customers and make you more money that way and make you stickier [01:15:00] that way. But the other thing that we’ll do specifically at the service desk is just improve the customer experience and thereby increase customer satisfaction and customer retention.

And this was a point that was actually made, I had a post on my blog channel Hallock recently about treeline, which is the. New venture backed organization that we’ve spoken about on the show before. And they made a point of basically saying they’ve built this amazing, sophisticated AI tool stack, and one of the things it’s gonna do for them, they said, is just make life happier for customers.

You’re not gonna wait as long for service. You’re, you’re gonna be able to get things done much faster. So it’s another good way to think about the ROI on an investment in ai.

Erick: Yeah. And one last thought for me about the Peter conversation specifically was, the thermometer, you can, do all this work as an MSP and implement these tools and things like that, but at the end of the day, it’s [01:16:00] like the temperature that you’re gonna take of the health of your business.

The thermometer is going to be profitability. It all ends with profitability that. What you’re tracking and that’s what you’re trying to improve. So if you’re evaluating, making decisions, mapping them back to how much more profitable will that make the organization. Efficiency should lead to profitability, but sometimes bringing on a big new project can take some time.

We can end up in some, down some rabbit holes or bottlenecks. And sometimes just having that focus on the number, that number of profitability and how quickly we can realize the ROI from the investment helps keep us honest on making decisions and getting things done. I’ve done it in my experiences in MSP Rich, saw something at a show and said, yes, sign us up.

And, four months later we still have not been onboarded or deployed it. Not because the vendor didn’t wanna get us onboarded and deployed is because we [01:17:00] just weren’t on it fast enough. So it makes you think differently.

RIch: All right. Folks, that leaves us with time for just one last thing, and this time it comes to us from Germany Dusseldorf, Germany to be specific, where the local second division soccer club for tuna Dusseldorf has replaced their head coach with a new one.

And ordinarily this might not qualify for this segment of the show, but this particular coaching change was just too good not to share with our MSP chat audience. So the outgoing coach is named Marcus Anfo and a pronunciation in advance for all the terrible, accent mispronunciations. I’m about to do outgoing coaches named Marcus Anfo in Germany.

Apparently it translates as beginning. He has been replaced by Alexander End and yes, end in German is end. The last five games of the season will not be coached by Coach Beginning. They will be coached [01:18:00] by Coach End. And I’m thinking to myself, Erick, if Coach end, what’s your job security situation right now?

You’re good until the end of the season, but there’s gonna be a new season. Aren’t they gonna get rid of you and hire coach beginning back again?

Erick: I think it’s probably true in any sport that how you end a season dictates, if you’re around to begin the next season or not. So good one.

Rich.

RIch: Good luck to Coach. End. Folks, thank you so much for joining us this week on the show. It’s all the time we’ve got for you. We’re gonna be back in another week’s time with another episode for you. Until then, I will simply remind you, as I always do, this is both a video and an audio podcast. So if you’re listening to us right now, but you’d like to check us out on video, go to YouTube, look up MSP chat.

If you are watching us on YouTube, but you’re into audio podcasts, go to wherever you get them. Spotify, Google, apple. You’re gonna find us there and wherever it is you find us. Please subscribe, rate, review. It really will help other people find, discover, and enjoy the [01:19:00] show just like you do. This show is produced by the great Riley Simpson, part of the team with us here at Channel Mastered, where we help vendors build, grow, optimize, thriving MSP channels. You can learn about all the many ways we do that at www.channel Mastered.com. Channel Mastered has a sister organization called MSP Mastered, that’s Erick working with MSPs directly to help them build, grow, and optimize their business. You can learn more about that. www.mspMastered.com. So once again, we thank you for joining us.

We’ll see you in a week. Until then, please remember, as we always encourage you to, you can’t spell channel without [01:20:00] MSP.