Episode 97: Buzzword Soup of the Day

Erick and Rich discuss the MCP protocol’s underappreciated security risks and how to handle clients at financial risk due to the ongoing federal government shutdown. Then they’re joined by Glenn Mathis, CEO of Integris, to discuss a giant MSP’s strategy for using AI internally, selling it to clients, avoiding commoditization, and more. And finally, one last thing: why haunted car washes are the Halloween thrill ride America’s been waiting for.

Discussed in this episode:

Security Risks of Agentic AI: A Model Context Protocol (MCP) Introduction

Securing the Agentic AI Control Plane: Announcing the MCP Security Resource Center

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:

Rich: [00:00:00] And 3, 2, 1 Blastoff. 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, make it big and manage services. My name is Rich Freeman. I’m a chief analyst at Channel Mastered, the organization responsible for the show.

I am joined as I am every week by your other co-host, our CEO and chief strategist at channel mastered Ericks Simpson. Erick, how you doing?

Erick: Doing well, rich. Getting ready for Halloween as we record this spooky episode.

Rich: As it happened, and I don’t think this is the first time I’ve ever done this, but I will be flying back east from my home in Seattle on [00:01:00] Halloween, and I’ll be interested to see who’s in costume, who’s not.

Are they handing out candy on the plane? All that kind of stuff. I vaguely recall flying on Halloween once before and it was not a big show. But we’ll see in just just a few days as we record this.

Erick: I hope you have an uneventful flight. Rich. I know we both have travel coming up next week. A lot of it.

And. Maybe you’ll see some TSA employees that, aren’t even dressed in their normal work

Rich: wear on Friday. You’re right. So I’m looking forward to the prospect of a treat, but there could be a trick at the airport if people don’t show up to staff that TSA area. Yeah.

Fingers crossed. Actually it’s TSA and apparently now the air traffic control towers as well, some of those, right? Yeah. Yeah. So let’s just hope and just so folks know, Erick and I are both going to the Ingram Micro One event next week. We’re gonna go straight from there to ConnectWise IT Nation Connect.

You are going to hear and see some podcast interviews recorded at both those shows [00:02:00] coming up so big week, and let’s just hope the air travel piece of it goes

Erick: smoothly and the same for all the attendees to these wonderful events. So we hope we’ll all see you there.

Rich: Indeed. Indeed. Let’s dive into our story of the week.

And this is a topic that I will actually be writing about in my blog channel, hallock, which you can find at Channel Hallock News. This is going to be the next post. I got to thinking, I saw a story in the news, I think over the summer that involved a security exploit of M-C-P-M-C-P is model context protocol.

This is the much discussed even on this podcast API essentially that’s designed to connect AI to data on the backend in a standardized way to allow AI generally and agent AI specifically do useful things for people. And I saw something about a threat actor taking advantage of a vulnerability of some kind.

An MCPI started wondering how secure. Is [00:03:00] MCP given the dangers that you could imagine it poses if it’s not secure. We’re taking agents that we don’t really see or monitor. They’re doing things autonomously. We’re pointing them at data. Boy, you’d really want M-C-P-M-C-P to be pretty secure in that scenario.

After having that first thought, I came across two things. First of all, an announcement from the Cloud Security Alliance that they have created an MCP Security Resource hub, which tells you their thinking about the issue too. There must be something worth thinking about. And then I saw a really excellent blog post that I’ll link to from the show notes written by Martin Suge.

He is a senior researcher at Bitdefender. He is somebody I’ve interviewed a number of different times in the past, and he really did a deep dive on MCP security and I had a chance to speak with him last week. I had a chance to speak with someone from the Cloud Security Alliance yesterday. I came away from both those conversations, Erick, somewhere in the vicinity of terrified because MCP is [00:04:00] not terribly secure right now.

And in fact, Martin at Bitdefender said he was really disappointed upset because you know that a lot of the APIs that we’ve been relying on in the past are weak and insecure in various ways. But we know a lot more about security now than when these protocols were created back in the day.

For a company like Philanthropic to create something like MCP essentially a year ago and not really baked security in at every level is just very disappointing. And I could go on at great length about some of the security dangers, MCP poses. I’ll just cite a few. Top of mind things.

And the one that really sobered me up was the discovery that by default, Erick, there is no authentication between the MCP host and the MCP client. Now, there are ways to set up authentication mechanisms, but if you just take plain vanilla MCP and set it up, [00:05:00] there’s no authentication.

Ha you could be anyone as far as the protocol is concerned which is just a huge security danger. A lot of MCP servers are essentially open source code that you can find. So let’s just say you’re a Salesforce user and you have some local model that you’ve set up and you wanna connect that to Salesforce via MCP.

You might go into Google and search for Salesforce MCP servers and find a bunch of them that are essentially open source systems. People, no one’s going into that and like looking at the code line by line and making sure there’s not something in there that isn’t supposed to be there. And just as there’s shadow AI use at businesses right now, there’s gonna be shadow MCP server use out there as well.

And who knows what kind of security risks that introduces. The somewhat reassuring thing here is the gentleman I spoke with from the Cloud Security Alliance said he has downloaded and [00:06:00] inspected a lot of NCP servers from vendors. From the companies that folks in our audience rely on, and he said a lot of them, maybe even the majority of them, are quite secure.

The companies that set up these servers were security aware and they did smart things to make sure to implement the protocol in a smart way. But he has seen MCP servers from vendors, didn’t name names, but they could be companies. People in the audience here do business with that. We’re absolutely not secure, and it is very difficult for an MSP right now to tell the difference between a good MCP server from a vendor and a bad MCP.

I’ll say one piece of good news. Is that the connections between the LLMs, Claude chat, GPT, et cetera and MCP, that tends to be secure because the open ais and anthropics of the world are doing the right things on their end. And like I said, there are vendors that are being attentive about this as well.

The Cloud Security Alliance is working on a [00:07:00] tool that will allow you to just scan an MCP server you want to use and find out is this safe or not. The way the guy from the Cloud Security Alliance put it is there are protocols deeply embedded in the internet and in web browsing that really insecure when they first came into being.

And we figured out. Ways to get around those vulnerabilities. And we’re in pretty good shape overall now. And this is where we will go with MCP and Agent AI connecting to data through MCP. It’s just gonna take some time and do we have a few years to work that out given the dangers that a leaky MCP server could pose?

Erick: Well, rich, I foreshadowed the spooky Halloween episode. I think yes. This is pretty terrifying. A couple of, the couple of things come to mind. More and more of the vendors that we speak with and interview or standing up MCP servers or, and their, that’s part of their strategy for [00:08:00] delivering ag agent services and other things to MSPs and customers.

The engineer in me thinks, oh my goodness. I get and I hope I don’t. Let anybody know that, a way to exploit this. But if you are a threat actor, why couldn’t you impersonate, a webpage or a website or an MCP server itself and promote it the way that these guys are doing, using ai.

So it looks and feels like, a real site, a real MCP server. I guess we can’t wait for this tool and make sure that everybody uses it before they engage a vendor or a purported organization that is making these MCP servers available. But, I could just run down that rabbit hole rich and, think about all the bad things that could happen if somebody just starts connecting to these services without doing the proper assessment and evaluation.

Rich: Another scary Halloween appropriate security issue about MCP that just popped back into my head is there is no concept [00:09:00] of least privileged access in MCP. From a permission standpoint it’s very, and this is because it was designed it’s optimized for flexibility and usefulness and not for security.

And so if that’s what you care about you’re gonna be liberal with permissions. And yeah. Yeah. And about the tool that Cloud Security Alliance tool I applaud them for creating it. And I think it’s gonna be hugely useful, but something that will happen. This isn’t, this is a when, not an if is, you will see threat actors create MCP servers that are a hundred percent clean.

They’ll put it up on the web, a bunch of people will download it two months later. When they get a sufficient number of downloads, they’ll infect it with something. And if people are not re-scanning because this thing they got two months ago came back clean. It’s not clean anymore as of yesterday.

That kind of a thing. It’s gonna happen. So there, there’s a lot of thorny issues. We’re gonna have to work out here.

Erick: Yeah. Good thing we have lots of cybersecurity experts. More than we need to secure, [00:10:00] everything on the planet. We know that, that’s far from the truth, rich.

We, we are already at such a deficit for these experts. This is yeah, it’s terrifying. You said it

Rich: If you do business with government clients Erick, you wanna be extra diligent and cautious about MCP for all the reasons we’ve just discussed. But your tip of the week takes us into some other issues complications, wrinkles.

People who do business with government end users may need to consider.

Erick: Yeah. And ripped from the headlines. Rich. This tip of the week concerns MSPs that are serving organizations that may be at risk from the current economic uncertainty from tariffs. Their costs are going up from from government funding the government shutting down.

So clients in the defense industry, aerospace, public works, education, and nonprofit sectors that are relying on federal grants or contract payments are the most [00:11:00] vulnerable to the shutdown related freezes. Three quick tips. If you haven’t already started reaching out to your customers that may be impacted by this MSPs, just run a portfolio risk assessment.

Take all your clients and you know what verticals they’re in, categorize them and assess. Their risk, are they being impacted by, this, these uncertain economic times we’re in. Did they have revenue exposure that’s, with government or federally regulated sectors?

Just figure out who those clients are that may be impacted. You pretty much know who they are, but this is something that you wanna get ahead of before you get the bad news that they’re going to either, cancel your agreement or try to negotiate something, get in front of it. And reminds me of the approach Rich that we all took as a community during COVID.

The MSPs really showed up and the vendors really showed up for those end customers and said, Hey, let’s [00:12:00] be a little bit flexible. Let’s communicate, have some meetings, and figure out how we can help. We’re all in this together. How can we get through this together? So proactive communication. Don’t wait.

Like I said, rich tip number two, for the clients to reach out to you and say, Hey, we are in crisis mode. We’re cutting, all of these non-essential services we’re gonna cancel your projects. We may even wanna scale back on our services with you. Have those conversations directly with your clients in advance, be that real trusted business partner, not simply, their advisor on this stuff.

And then can you create some flexible payment and retention options? I would say raise your hand with your distributors and with your upstream vendors that say, Hey, I’ve got, this percentage of my clients that are being impacted right now. Can you help me with some payment terms, work all of these levers and then introduce some sort of flex payment terms with your existing [00:13:00] clients.

Now. If you’re an m an MSP that has a good, better, best solution portfolio, good for you because you may be able to, instead of having that client, cancel the entire agreement, maybe shift them down into a lower tier of service for a while until things settle down, and then you can scale them back up.

So bring this as a partnership between yourself and your clients and get through it together. And I’ll bet your clients will not only really appreciate this, but you’ll probably end up churning and losing, less of them because you’re taking action and letting them know that we’re all in this together.

Rich: Y two thoughts, Erick. And one is I, we, I think both frequently advise MSPs to pursue specialization in a time of commoditization and profit pressure. When there are, according to canals slash India, seven partners typically involved in a deal. The more specialized you are, the healthier your business, generally speaking is [00:14:00] going to be going forward.

But there is risk attached to that, that we need to acknowledge. And this is a perfect example of that. If you are specialized in the restaurant and hotel business, when COVID struck, you got hammered. And if you’re specialized in federal government business, ’cause you’re located in Maryland or Northern Virginia, let’s say.

You’re getting hammered right now. And so there, there are pros and cons for MSPs to consider around specialization, even though I really do continue to recommend that as a strategy for growing the business and maximizing margins. The other things, when you were talking about flexible rates, that reminded me of something all credit due to Gary Pika, true Methods and Kaseya, who in the context of recessions will often say if a client of yours needs a little relief because of the recession, one thing that you can do and you are not exploiting them if you do this, is you can say, okay, I’m gonna cut your rates to help you get through this period right now in [00:15:00] exchange for going from a one year contract to a three year contract.

And so you can set yourself up for more predictability in a longer term relationship with that client. And help them out at the same time. So it’s one real small, little tactical piece of advice there for folks who have government clients. But it did come to mind when you were talking about flexible rates.

You can offer those and you can legitimately offer those in exchange for something that is going to be helpful to you.

Erick: That’s interesting. I wonder how many, business owners already feeling this crunch and having this fear and you’re asking them to extend their their agreement over time.

I think there’s a very consultative conversation that has to happen in order for that to occur as well. And the other thing that I just thought of, rich, is, you can always say to the client, look, we will reduce your spend. They don’t wanna reduce the service, but when things, level out later on, we will then adjust our billing over the [00:16:00] term of the existing agreement to.

Recover those costs to the MSP, so if you give them $10,000 worth of, if you delay $10,000 worth of billing, you’re still billing them something and then later, they’re, you get past all of this and then you say, okay, we’re gonna add another thousand dollars a month for the remaining 10 months on your agreement, or whatever.

That’s also, I think, a really good opportunity. So you’re not really reducing if you can support it. Of course now, if you’ve got a, if every penny counts, then you’ve gotta be a little bit more creative about this. Gosh, I had another bonus tip. Oh, bonus tip. ’cause you made me think of it, rich, is, you mentioned around, specialization and verticals and things like that, think about revenue concentration in a particular vertical, right?

So we talk about the risk that happens when MSPs have, one or a handful of clients representing a large percentage of their revenue. So you don’t want anyone. Customer to represent, 10, maybe 15% of your overall [00:17:00] revenue. But you could also think about this as leveling out what verticals you serve as well.

So maybe you have one vertical that you’re, it’s very successful, but you should also be serving clients in a couple of other verticals may be to think about, hedging your bets and mi and mitigating your risks. So if you are doing business with the federal government, maybe you also have a couple of other verticals that you’re serving that aren’t impacted by, these kind of government shutdowns, which seem to be occurring pretty regularly nowadays.

It is a thing now. Remember 10 years ago, we didn’t really, 15 years ago I can’t remember. It was very rare, rich when the government shut down. But it certainly seems, in the last couple of administrations that this is happening more and more often, which forces us to think differently about how we do business with our clients.

Rich: Erick speaking about thinking differently about how we do business a lot of MSPs are thinking differently about how they do business in the age of ai and around the issue of cybersecurity. We’re gonna take a quick break here, [00:18:00] folks. When we come back, we’ll be joined. By Glenn Mathis, he’s the CEO of Integris, a giant MSP a company with resources that most of the folks in our audience here don’t have and probably never will have doing interesting things and a AI security and beyond.

We’re gonna get the view from that part of the industry, that tier, that level within the industry, not so much because you will necessarily be able to do everything that they are doing. But there are going directionally, there may be some ideas here that you can incorporate into your strategy and your offerings.

And if nothing else, you’re gonna get some benefit from understanding what you’re up against down the road a little bit. Stick around. We’re gonna be right back with Glenn Mathis from Integris.

And welcome back to part two of this episode of the Ms. Beach Chat podcast, our spotlight interview segment where we are pleased to be joined [00:19:00] by the CEO of Integris. His name is Glenn Mathis. This is obviously a very interesting time to be an MSP for a number of different reasons, security, AI, and beyond.

Lots of stuff going on. We wanted to bring you a perspective from a larger and very sophisticated MSP on those and other trends and that very much describes Integris. Glenn, thanks for joining us on the show. Yeah, thanks for having me Tied to beer. For folks who are unfamiliar with you and unfamiliar with Integris give them a little background on both.

Glenn : Yeah. I’ll start with me. I’ve been in the space 28 years now. Variety of different roles within the industry. Helped start a business called All Covered Back in 99, early 2000 after I sold my MSP and and we built that into a real powerhouse. I sold that to Konica Minolta in 2011 and stayed part of the Konica Minolta organization, part of their executive team helping run the North American managed IT [00:20:00] services business that they had took on a lot of their professional services for Co Coon Minolta and north America, and then worked globally with them on their strategy to, to build out more MSP and MIT infrastructure around the world.

So we built data centers in Canada and in Germany, and we we bought MSPs in, in Europe and APAC and around the world. So Alping k Minolta, as they, we’re shifting their business from sort that product in mindset to the customer out mindset, become more of a services led organization.

And then a couple years ago had a great opportunity to to meet up with Frontneck, which was a private equity firm that was looking to recapitalize with Integris and the CEO of Integra. Rashad Bora great individual was was looking to move on and do other things. And he’s you chairman of our board today.

And so I came on and we we recently went through a recapitalization with our new and great partner OMERS. And so we’ve been we’ve been on our journey now for next, the last 10 months with Omers and having great time. That’s me. And on theater side Integris [00:21:00] is a national managed service provider, or MSP as we, we like to call it, serving thousands of small and mid-sized businesses across the us.

We tend to focus more on the upper end of the SMB, lower end of the mid market. And our job is to help organizations manage secure, modernize their technology environments so they can focus on doing what they do best, which is run their business. And that means that means running everything from their IT infrastructure and cybersecurity to their cloud services.

And now more and more automation and data insights, all delivered with obviously local care, but a national scale. And and over the past few years, we’ve grown from a group of exceptional regional MSPs. We’ve done 10 acquisitions in the last five years into a single unified platform with really one mission, which is to build a modern digital MSP for the industry as it’s evolving and changing.

Our clients there are regulatory compliance verticals. And they don’t just want someone to keep the lights on. They want a partner who’s gonna help them use their technology to grow. Stay secure, move faster. So we’ve been transforming how the work gets done from standardizing systems to integrating [00:22:00] acquisitions and building what we’re calling the digital state, which is really a flywheel that moves from standardization to orchestration, to automation, and then ultimately to consultation.

And that’s how we’re aligning Integris with the next chapter of the MSP industry, one that’s gonna be built on data and automation and human expertise working together. The typical MSP has always had the user and the device as the center of the universe. And while those are still spiderweb off of our important components of what we need to do for our customers, the center of the universe for us has better be around data.

And we’ve done a great job of engineering our customers into the cloud, but they’re more sophisticated than they’ve ever been, and demand more from that ecosystem that they’re now a part of. And that’s what we’re really focusing on as we’re building up the new the new platform of SP of future.

Rich: So I I remember all covered well you and Erick have this in common in that you, your roots in managed services go back to the first chapter of MSPs as we know them. But let’s talk about the next chapter as you said, and one of the [00:23:00] things I always like to do, and I get a chance to speak with somebody like you who is leading a company with the resources to get serious about ai.

And there are a lot of different ways to get serious about it. But let’s start out with how you are using it internally. Where are you using it? How are you using it? What sort of impact is it having on productivity and how are you maybe realigning your staffing model given what you’re getting from AI and anticipate getting down the road?

Glenn : Yeah, for us, AI is AI and automation. They’re not really, they’re not boltons for us. They’re built into how we design the work that we do and. From an MSP’s perspective, a lot of them are asking how they can add AI to what they do. And, but we flipped the question more, both internally and external of their customers, is we’re asking which workflows can be replaced or rema reimagined by AI agents.

And the mind shift or the mindset shift has been really has been huge for us. And we’ve built, as I talked about, the digital state where every process from ticketing to monitoring the client [00:24:00] environment client reporting, it’s broken down, it’s standardized, it’s exposed to orchestration. And then once you do that, AI can make the decisions, they can trigger the actions, and then they can obviously even predict the issues before they happen.

So internally, we’re doing a lot of that work ourselves too. It’s not just about we tend to want to think about where we can, utilize the buzzword suits of the day like ai, but the reality is you’ve gotta be able to manage your data more effectively. The thing we do more than anything else as an MSP is we manage time.

We sell widgets, we don’t sell things, we don’t sell devices per se, right? We might sell we might do procurement with our customers, but the vast majority of what we do is we have to be experts at time and how we manage the time, where the time sits, how do we utilize it, how do we bring the right resource with the right skills to the right problem, right situation at any given moment, whether it’s an incident, a ticket, or a project or a consulting engagement, whatever that might be.

So a lot of work internally has been built around creating a lot of our own automations. It’s been about creating skill-based routing routes for us so that we can utilize our [00:25:00] scale. Most MSPs, even the larger ones, still very much regional focus. And so while they may have 2, 3, 4, 500 employees, they’re really built up into these regional models more, almost like franchise models.

And so usually the Atlanta customers are supported by the Atlanta people. Both all on the CX side, the sales side, the delivery side. And really in our world, we have 800 people. I have 800 families that I’m responsible for, and I should be able to leverage any one of the 800 people to any one of the customer environments that I have across the country.

And the way we do that is by utilizing automation and AI to more effectively get the right people in front of the right situations. We built this year alone, we built hundreds of automations where we’re utilizing them really effectively and in creating a tremendous amount of efficiency in our business.

So that’s obviously increasing. Our EBITDA and our margin in our business is creating more efficiency, but it’s also more importantly creating standardization. It’s allowing us to be more deliberate in our quality management of what we do. People make mistakes. The AI or the automations typically don’t.

The scripts don’t. And for us, AI sits at [00:26:00] the center of our skill, data, workflow, and insight loops. And it’s something that we’re also building for our customers. So we’re continuously learning for every task we perform across our customers and our verticals. The more consistent the data, the smarter the system gets.

And that’s what makes virtualization really powerful for us. And it gives AI clear context of how, the business actually operates. And so the future of MSP isn’t just a service provider, it’s a decision platform. And our job is to build the systems, the data and talent, make that possible and bring it to bear in the right situations.

And that’s pretty much where we’re headed. We have this thing that we’re trying to trademark called Shore Automation, and that’s taking the repetitive low value, high volume work, not only off our plates internally, but also for our customers as we build this out as a platform so that they can focus on higher order thinking.

We can do more consulting, better at problem solving and relationship building. And it just makes us more efficient but also makes the work more human for us.

Erick: Glenn, everything that you’ve just expressed is music to [00:27:00] our audience’s ears. As a former MSP, it’s man, this is the. This is the goal, the vision standardization, selling consultatively growing nationally.

We’ve accomplished all these things. I’ve got a question about not the AI that you’re using internally, because, we’re seeing a lot of our vendors integrating ai selling that to MSPs. Correct. But I’m interested in, how, what you’re creating from a services catalog or a portfolio of services centered around AI that you are taking to your clients.

What does that look like and how do those conversations evolve over time so that they, so that you’re able to get them to say yes to some of these services and solutions?

Glenn : Maybe, I think the first thing we gotta just settle on as the beginning premise is that again. 20, 25 years ago, or 28 years ago when I started in this space the sophistication of the SMB user and owner wasn’t very [00:28:00] high.

And now more than ever it’s higher than it’s ever been. The sons and daughters of those companies now run those businesses. They’re certainly digital native natives. And the, and as I said we’ve orchestrated and engineered our way with our customers into the cloud more effectively.

And they’re demanding much more. And so it’s not so much about how we have to convince them. They’re already convinced. In fact, we do a lot of events around the country with our customers lunch and learns, and we do, a lot of see, first understand sessions because the voice of the customer for us is really gonna drive what our products and our services look like.

And without a doubt, most emotional customers get is around the topic of AI and automation. And in part, some of them it’s because, it’s out there as a term, like I said, the buzzword soup of the day. And they don’t wanna miss out on what, what they think they might be missing out on.

But for a lot of people it’s because they have now this access to data that they’ve never had before, and they really don’t know what to do with it. And so what they really need is someone to come and help and leverage that. How do they create efficiency for themselves? How do they do some of the same [00:29:00] things that I was just talking about earlier?

How can they bring that to bear? The biggest one in our world is shore automation. So we built a package around shore automation where we go in and we identify inefficiencies in workflow and process within a customer environment. You take something simple. For example, a lot of our customers use things like QuickBooks, right?

And how do they leverage that in a more effective way? How do they access that data in a more effective way? Are there ways in which they can marry process and automation together? So that they can create more efficiency, drop down their costs and their business, and become more effective with their, with the resources they have.

So identifying chores in a customer environment is really critical for us. And then we bring in our data intelligence platform. We give them access to that data intelligence platform. They now are part of that data lake. And in a vertical way, we’re able to like capture that information around that Rosetta Stone that particular compliance driven vertical speaks.

And in doing so, we’re not only able to create automations and AI and utilize AI in those environments for [00:30:00] that particular customer sake commercial banking, but we have 200 community banks out there that look very similar to each other. And so what we build for one, we’re able to then leverage across all.

And so it truly is this situation where you’re not creating snowflakes every single time in these two automations. You’re identifying. In these industries and verticals, we’re able to identify chores that exist there. And when we build for one, we can build for meti. And it’s not a sale. It’s really easy to show the use cases and we’re able to show how we’re able to increase productivity.

We’re able to show how we can increase access to knowledge by giving ’em access to our Atlas AI as a, as an example, or giving access to our compliance ai. Those are the types of tools that we bring to bear that allow us to be more effective with our customers. And it makes everything just more effective for them.

And it, it sat satisfies that itch that they have around how does AI work in our world? And we don’t spend a lot of time talking about it. ’cause ai, you can utilize almost anything out there. It’s gonna change every day. It’s gonna become something different. But what isn’t gonna change is the [00:31:00] organization around data, the orchestration around data the standardization around process and the evaluation and consulting around process.

And that’s where the secret sauce is. And then once you have that organized inside our data intelligent platform, then you can throw any AI against that. Today it might be this thing, and tomorrow it might be something new, it won’t matter. But so we try to demystify it with our customers and our bundles of service are really built around that to start in a vertical fashion.

Rich: So let’s let’s begin transitioning gradually from AI to security by talking a little bit about the intersection of AI and security. AI obviously poses security risks in terms of attackers using it to enhance BEC attacks or using deepfake technology. Earlier in the episode, Erick and I were talking about some of the risks attached to the MCP protocol.

At the same time, AI is a very powerful tool for enhancing security in the work that companies like in Integris do for their clients. Talk to us a little bit about how you are both [00:32:00] protecting your clients from the AI security risks and attempting to leverage it to deliver better security for your customers.

Glenn : Yeah, like you said, it’s a powerful enabler, ai but as you also said it, with any major technology shift. It, it creates superior risk. And we, and as a, as the MSP for our customers, we sit right in that intersection. So for us, we really think that of three key areas that we can focus on.

One is obviously the data exposure and control. AI systems learn from the data you feed them, right? So if that data isn’t governed properly, all the more regions to create the standardization that Erick was talking about, ensure that we we have organization built around that data appropriately.

Because when it isn’t governed properly, it can only intentionally expose client information in ways that you don’t want. There’s intellectual property that, that gets exposed and or internal credentials. So we’re pulling strict data go, we’re putting strict data governance in place and defining what data can be used, how it’s stored, and then how it’s accessed, and ensuring that client data never leaves our secure environments.

That’s one. Two, we have to model integrity and [00:33:00] trust. And so as AI generated output can be manipulated or models can be poisoned by malicious data, that means we are gonna have to validate not just the data going in, but also the logic that comes out of it. So we’re implementing human in the loops where we review anomaly detection validation layers before a before any of the AI recommendations or automations that we create are acted upon.

And then three, I think there’s a lot when you think about attack surface expansion, as AI integrates into systems and workflows, it creates in new endpoints and new APIs which attackers will also start to target, right? So our cybersecurity teams treat AI engine just like any other critical asset, has to be moderate.

It has to be patched, it has to be logged, it has to be governed and it has to be maintained and managed. And so at Integris, we think. We think of AI and security as is really codependent. Every AI initiative that we put in place starts with the security review because trust is gonna be the foundation of everything we do with our customers as it’s always been in the MSP space.

And [00:34:00] so we’re also flipping the equation and using AI for security. So ev AI driven anomaly detection think about behavior analytics and automation that helps our SOC teams respond faster, are gonna be the things that we really focus on. And yes, AI changes the risk factors, but for us it’s the, it’s an opportunity, a good opportunity to also strengthen it.

And then. If I were to add a course, which I, probably should have is, education and training. And so we have to do a better job as an industry of making sure that our clients and understand what those risk factors are, help them better leverage the automations and AI that exist and understand how to feed them.

It’s just like with copilot chat, g pt, those things are always as effective as the prompts that you give them. And so we have to also do a much better job of educating the user and the customers as they go through it.

Erick: So Glen you’ve done a, a very strategic, you’ve got a very strategic vision around differentiating yourself against competitors.

And, we know that commoditization [00:35:00] is, a big challenge for MSPs generally out there. Yeah. So how do you perceive. That distinction and differentiation factor for Integris. And when you’re going head to head against maybe a com, a competitive, a com, a competitor, an MSP or the same client, how do you leverage your distinction and differentiation to avoid being considered the same as everybody else?

Glenn : It’s, for the last 28 years, it’s this, I don’t think the question’s any different than it’s ever been. It’s always been the question, how do you differentiate yourself? And, the things that people tend to wanna call out is factors are things that are really fact. We all can say we have resources.

We all say we can have, quality of people and efficiency and value. But the reality is how do you prove that? And how do you show that? I think that the word that you use that’s really important is the commoditization. And I think that when you think about, you think over the years the way we used to go into sales calls for the [00:36:00] most part has always been.

Sitting down with a potential prospect and talking about how many devices, how many users do you have? Because from there you just very quickly move to how do you watch their environment while they’re sleeping? How do you put in the knock? How manage their RMM and their monitoring and they’re stock, and how do you provide help desk services and give you them maybe four or eight hours a week of a body, that’s mature into, those are things that are just table stakes.

And so you can’t lead with that anymore. And that’s just one side of the coin that every MSP has always done very well in all the time that I’ve been in this space. But there’s the other side of that coin, which most MSPs, and let’s be honest, the vast majority of the thousands of MSPs that are out there are really small.

There aren’t many large MSPs out there. There aren’t a lot, especially that serves the SB operating the SB lower in the mid market or even the micro SB space. There aren’t a kind of large MSPs out there. And so their ability to actually flip that coin over and start investing in a lot of the things we’ve been talking about so far.

Deeper and diving deeper into security layer, diving deeper into the cloud [00:37:00] layer, diving deeper into the data layer application layer. Remember the OSI model was really physical all the way up to application. The modern MSP has gotta start from the application and the data side and work its way down to the to the physical.

The physical is just come part of the, you still have to be good at you at the help desk. You’re still gonna have to be good at having a great knock and sock and while you were sleeping services, but really what you’re getting at managing your outcomes. And that’s the part of the conversation I think we can have as we talk about the digital state.

The digital state for our customers isn’t just infrastructure. It’s not just stopping at the edge. It’s gotta be about how the customer builds a Rosetta Stone around the vertical that they’re in. And can we create that Rosetta Stone with them and leverage both the infrastructure side of the coin and the digital state side of the coin and bring all that together to, to provide real value for our customer.

And so I think when we talk about there are use cases within our verticals when we talk about. Show them, the things that we’ve been able to do for them. And we talk a lot about some of the companion services that we’re providing on the application and data and digital state layer.[00:38:00]

I think you can easily and very quickly see as a customer how we’re different for other MSPs. And by the way, as we think about m and a, we have lots and lots of of m and a that, that, that’s occurring our conversations with a lot of acquisitions, potential acquisitions where they can see the value of what we do.

And rather than spend the money in building it themselves, which they may or may not be able to do they’re every day looking for which platform do I wanna be a part of. And so our story’s resonating both with customers and with m and a in that we’re growing on both sides of that of that equation.

And I think it’s because, we spend a lot of time talking about traditional infrastructure, MSP, but also that digital state, which is so important.

Rich: Verticalization is part of your strategy for avoiding commoditization. And this conversation turns out to be timely.

’cause earlier on the episode, Erick and I were talking about the importance of specialization. We didn’t specifically spin it in terms of vertical industry [00:39:00] specialization, but we were talking about the importance of specialization, their MSPs in terms of growing and differentiating their business. But we also acknowledged that there’s some risk attached to verticalization.

And specifically if you are specialized in, let’s say federal government customers and the government shuts down, you are very exposed suddenly. And so I’d be, I’d love to get your perspective on how people in our audience should think about specializing and verticalizing, but maybe not going too far down that road and exposing themselves to enormous risk.

Glenn : So I think first off, we have to define what verticalization is. And when we talk about verticalization at Integris, we’re really talking about depth, right? We’re talking about building industry specific expertise so we can move from managing the technology to managing the outcomes. Like I was talking about before, the vast majority of MSPs are very horizontal in nature, right?

And that they create bundles that they deliver very similarly, regardless of the industry. And I think there’s [00:40:00] a difference between industry and vertical practice, right? And so when, what there, you can be a legal industry customer that isn’t being serviced within legal vertical practice bundle. And so the vast majority of the MSPs we talk to, whether it’s through m and a or what have you, they’ve got lots of legal industry customers that they provide a very horizontal service to.

And so we treat that a little differently. I think that’s our view on it. I think the other thing too is yeah I get your point. I think if you pick the wrong vertical. Or you go too deep as you were saying, into just one particular vertical, then yeah, I think you leave yourself open to some exposure.

We like to look regulatory, compliance driven verticals. So we’re in community banks. We’re in we certainly are in healthcare. We’re looking at, we like legal as well because legal itself may not have a lot of regulatory compliance in itself. It services most of their customers have that.

So legal, banking, healthcare regulated manufacturing, those are really important to us. And I think when you stratify it [00:41:00] that way, you spread the risk. So yes, you might have, we don’t have government, but if we did have government and that was one of our verticals, then you know, we’re not just pigeonholed into just supporting the government sector.

We also have legal owned banking and healthcare manufacturing. To that point, I don’t wanna have to add or 15 or 20 of them either. I think you wanna be really, in order to be really good at the right number, you’re gonna have to have maybe four or five. That’s our view on it. And so we’re trying to tailor everything from the playbooks to the automations, to the KPIs around those, the, those things that those particular customers really care about.

We’re not just about fixing tickets or patching servers, designing digital states that align to the business. So for example, legal, we’re automating intake and document routing and case workflows and banking. We’re embedding compliance and audit reporting directly into the managed services. We’re using our compliance AI tool to gather compliance information for customers.

That asks 400 built and prebuilt answers to questions. It just gets things done much faster and more quality away. We’re using data to optimize uptime. And product pro [00:42:00] production visibility and all of that fits into that digital estate flywheel that I was talking about. So that’s the standardization.

It’s the orchestration, automation and cons consultation. And so that’s what verticals really is for us. And even when you look at community banks, for example, we say community banks, but I really even like better rural community banks in part because I’m trying to also manage that risk that you were talking a little bit about.

If I had larger community banks then they’re likely to be acquired by some of the other larger banks that are out there. But the regional community banks have the same regulatory compliance needs to have the same challenges that they have to to adhere to from a compliance perspective.

And they don’t have a lot of options in those rural environments that they’re in. And so we get very specific even within our vertical in terms of what the ICP is, and we’re very strict around reporting that particular ICP. So that’s what verticalization really is for us, is taking the MSP playbook.

So rebuilding it around business outcomes instead of infrastructure. And it’s how we’re gonna create more value per client and differentiate in the market. And ultimately I think [00:43:00] scale smarter, but we’re definitely not gonna be pigeonhole into just one or two. If you were a nonprofit today, for example, as that would you be a significant problem?

That’s not to say we don’t have non-profit customers, but they’re industry customers and so they’re horizontal move for us versus our vertical practices and the support and the CX and the everything that goes, the factory that goes into supporting and selling to those. We have those corded off into the four or five that I just mentioned.

Erick: Yeah. Glen you mentioned the term cx we know that it’s difficult enough for MSPs, just a hundred, 200 customers to, to delight their customers and measure the satisfaction. There’s no way that. You’re gonna get a true pulse of a client sentiment by just, having the smiley face or sad face at the end of every ticket asking them to rate you.

So an organization of your size, I’m just curious, how do you measure client sentiment and satisfaction when you’re dealing with so many different users and with so many [00:44:00] different, advanced solutions?

Glenn : Yeah, so the key thing is the vertical pods that we’ve created, right? So the key to making verticalization real is how you operational operationalize it.

So for us, it starts with those vertical pods. They’re not regional vertical pods. They’re, or they’re not regional pods, they’re vertical pods. And so those dedicated teams are aligned to each vertical that combine delivery, account management and consulting in those pods. And those pods live and breathe that client’s world.

They speak and learn the Rosetta Stone of that particular client environment. So what goes into understanding what makes ’em happy, what goes into. Creating the solutions and the responsible IT architecture that we tend to sell to our customers. That comes from knowing that the customer base really well, and it’s putting the best people that speak that language in that pod to support them across all those d different disciplines.

They understand the regulatory pressures, the critical applications, and then as important as anything, the metrics that really matter in that particular industry. Then underneath that, we’re standardizing the data in the system. So every acquisition we integrate goes through the [00:45:00] same process, same say, same ticket taxonomy, same financial models, same security stack, and that allows us to pull data across all the different markets that we have is see performance trends, which really fuels the automation and the AI layer.

And that’s again, where that digital flywheel comes in, comes into play. So that’s how we go, for me a great, a collection of a lot of MSPs to being a single modern platform that really is focused on. The health and happiness of that particular customer within that that, that customer base. And so we might have thousands of customers today, and you’re right in, in, in a regional model or even at a platform model where you don’t, where you’re not verticalized, it’s gonna be a lot harder for you to hear the voice of the customer in those different silos.

But in our world, all of our community banks are reporting into that pod model supported by those same people. And so as big as we are, you’re able to shrink it into these smaller mini platforms, so to speak, where every pod is specialized, but the engine underneath them is unified. And I think that’s what [00:46:00] allows us to scale our expertise faster than we can grow headcount and deliver consistency inside that, that really legacy MSPs simply can’t.

And we’re dogmatic, we’re paranoid about that customer engagement and everything flows through sentiment analysis. And the more and more of these tools that we’re building and pulling these customers and their data into the, to the digital platform that we’ve created. It allows us to, to see insights and then predict things like where is churn going to come from.

In most MSPs, it’s a subjective review and it’s someone putting a subjective score in something and if they do that at all, versus there’s lots of markers inside the data from tickets that we’re doing every day from the sentiment of the customer, the rating of the csat the skills you assign the soft skills you assign to employees and using AI to.

To measure those soft skills. As an example, if they get a three CSAT where they were a five level, and now they’re dropped down to a two, you stop funneling, you stop routing tickets to that person, right? And then you figure out how to train that person and get the back home. So there’s lots of [00:47:00] things that we look at various different levels within a customer environment to ensure that we’re delivering great service to them.

But it is complicated and it’s, and it doesn’t become easier by taking a CX person and expecting there to be masters of all the different types of industries and verticals and utilize them in a regional way versus in a pod way where you can create that specialization.

Rich: I, as you said before, there are thousands of MSPs here in the us maybe even tens of thousands depending on how you define MSP.

And as he also said, most of them are significantly smaller Yeah. Than Integris is. And so one of the things that the majority of MSPs out there have on their mind is. The rise of these much bigger MSPs with national reach and hundreds of employees and economies of scale and so on. And how am I, what’s gonna be my competitive strategy or just my strategy going forward?

Given the existence of these companies and some folks are selling into roll-ups and [00:48:00] so forth, others are looking for ways not to do that and yet to continue to grow and be profitable. What advice would you give for the folks in our audience here who are in that latter tamp? They are, to some degree going to be competing with Integris and companies like it.

They’re looking for a way forward that allows them to continue to be successful in this industry.

Glenn : Yeah, I would say that the playbook big or small, isn’t that different. I think you have to really think about what, I think the biggest mistake most MSPs make smaller, big is they’re not they’re not discerning as much as they should be around what their ICP is their ideal client profile.

And I think that typically gets a lot of MSPs we do acquisitions. It’s probably the biggest thing we see is that a lot of MSPs tend to be, want to be everything for everyone. And you can’t be schizophrenic on who your customer is because then it makes it really difficult for the factory that sells into that customer base.

That supports that customer base that tries to [00:49:00] manage that customer base from a CX perspective makes it really difficult to do that. And then it impacts things like churn, it impacts things like, scalability and it impacts your ability to be more efficient, which then limits your growth.

So I would say the, and so there’s lots of different things that come from really the main culprit, which is being really clear on who you are and who your customer is and how you want to go about servicing them. I would say to any MSP, that’s the most important thing that you could focus on. I would rather turn away a $50,000 per month MRR deal with a particular customer if it doesn’t fit inside that bullseye of what we do, because it can only hurt and break the business if it’s different from everything else.

So I would say that’s first and foremost the most important thing. Any Ms. Beacon, whether you’re looking to join a platform where you’ll be more attractive to a platform if you have more discipline around your customer situation or if you’re trying to compete by just growing your business.

It has to start there and then everything else builds from that standardization. I could go [00:50:00] hours and hours about the different things that an MSP should do, but. All the evil typically starts from trying to be everything to everyone. If you’re going to bere on your ICP, you’re not gonna have a, an easy go of it as an msp.

Erick: Tagging onto your last thought there, Glen. And I agree. It’s stick with your ICP, but opportunities come to MSPs and it’s hard for them to turn away that opportunity unless they have a partner that they can, bring into that conversation or refer to. So do you at Integris today, partner with other MSPs in that fashion?

Are you strictly looking for opportunities to acquire and grow?

Glenn : It’s actually funny you bring that up. We had a board meeting yesterday. We had a great strategy session and one of the things that we talked a little bit about is exactly that question. There we’re part of a peer group HTG, which was acquired by co ConnectWise.

And so we’re part of that HTG peer group. I think it’s 500 MSPs or a part of their peer group. There’s other ones, that’s the one [00:51:00] that we tend to spend a lot of time at. And we and we’re a part of the platform group. And so we do a lot of outreach and we spend a lot of time coaching and mentoring and spending time with the smaller MSPs.

And regularly they ask that question, you just ask, which is, especially when I’m talking about AI and I’m talking about automation and building out our digital platform. The data lake that we’ve created and the tools that we’ve created a solution architect in a Box, or we built our our various AI tools and oftentimes we’ll go instead of me building, can I just buy it for you?

And, we’re seriously considering it. I don’t know that isn’t something we wouldn’t do. It’s not something we do today. We’re not, I’m not, I must say no to that, but I do think it’s an opportunity for some of the larger platforms to think about how to service the small ones better if for nothing, no other reason, selfishly, to help fund the next wave of acquisitions you might want to do at some point.

But also I think there’s responsibility for us to, who have been, call it lucky, have been fortunate in what we’ve been able to build, is to give [00:52:00] back to the industry. That’s a large part of why we’re part of the Evolve Peer group, is we like to help those companies along the way.

And a lot of times it serves us well because we’re able to. Pickup acquisitions on the backend that look a lot more like what we do, which makes integration so much easier and and allows us to, to inherit customers that we think really fit our profile much better. It’s a great question.

It’s one in which I’m open to, and one in which we thought a little bit about. We talked a little bit about yesterday in particular, but I think there’s a way where that might happen for sure. Chore automation. I start creating chore automations for us and we, we leverage it within our base.

I can see situations where I can sell those or have nps be part of our digital platform and a multi-tenant. We’d have to figure out all the security and everything. That goes a lot with it. But yeah, I can see that happening.

Rich: Glen really interesting conversation. We really thank you for making some time for us and coming on the show.

Any chance we see you at at the ConnectWise IT Nation Connect event in a few days as we record this.

Glenn : Yeah, either I’d love to see you. We will be part, we have [00:53:00] our Evolve peer group on Sunday, Monday, and Tuesday, and then I’ll be at IT Nation. I’ve got, I’m on a couple panels and I think I’m also presenting a couple topics as well.

One of them builds around ai yes, I’ll be there. So hopefully we’ll see each other.

Rich: Yeah. Yeah. We will keep an eye out for you so we can say hello face to face. In the meantime, for folks in our audience here who maybe wanna get in touch with you, maybe wanna learn more about Integris, where should they go?

Glenn : They certainly should go to integris it.com find a lot of information there. They can certainly reach out to me at [email protected] as well. Love to connect and chat. You can get me on LinkedIn and love to connect with you there as well. And and we’re at a lot of these events.

Look out for our name. We’d love to shake hands and talk a little bit more about where the business is going and the industry and and create a one post, one equal three situation, so excited about that.

Rich: Awesome. Thank you very much again, Glen. Folks, Erick and I are going to take a quick break here.

When we come back we will share some final thoughts about this very interesting conversation with Glen Mathis of Integris. Have a little fun wrap [00:54:00] up the show. Stick around. We’re coming right back

and welcome back to part three of this episode of the MSP Chat podcast. Once again, we thank Glen Mathis from Integris for joining us. Very interesting to get. His perspective atop a company the size of Integris on the managed services landscape right now. Lots of different directions I could go in terms of commenting on this.

Erick, I’ll just do two very quickly, and first of all, for years I’ve been talking to MSPs about how the four things that the most successful MSPs tend to have in common all happen to begin with the letter S. And that’s standardization specialization. Scalability and strategy, and three of those came up in a big way in that conversation.

With Glen, they’re clearly obsessed about standardization. It was one of the things we talked about in particular at the end of the show, how [00:55:00] specialization in the form of verticalization at Integris. And then he was talking as well about outcomes and outcome oriented conversations and relationships with customers.

That’s the strategy piece. So Integris, its success is validation for the idea that these four S’s that I like to talk about really do matter and managed services. The other thing I’ll point out Erick, and we did not plan this, but it it that, that conversation put a nice little bow on where we started the episode talking about MCP.

Data security and ai because it was very interesting, the degree to which when we talked about AI with Glenn, he talked about data. And we know data is hugely important. That is the foundation for success in ai. And so it was very interesting to hear him underscore that, but it also underscores the importance for MSPs who are doing AI and doing that around data to get that data access secure.

So you’re gonna wind up using [00:56:00] MCP, just make sure you do it in a safe way.

Erick: Yeah. And just a couple of quick add-ons, rich, and maybe amplifying what you’ve already shared. This is, do the things consistently that grow the business. Don’t get distracted. Focus on the things that matter and so you know, again, you’re selling a bundle of services and solutions and like we always talk about on the show, rich, taking that conversation from the server room to the boardroom, you heard Glen basically.

Kind of express all the stuff that MSPs do. It is a commodity. These are things that are, of course, the client expects you to do that, but that distinction and differentiation really comes in when you’re understanding that client’s needs that vertical, the platforms the pains, the growth challenges.

I love that he introduced the concept of, having pods that specialize in any specific solution. There’s all different ways to build out service desks, right? Rich, there’s, tiering service desk, there’s pods for different services specializations. I love [00:57:00] that he expects that POD and the folks that, that, that support that pod and the customers that they are serving to really understand at a deep level what those clients need and therefore are measuring that, their sentiment and their satisfaction in a very specific way that isn’t a generic kind of a survey that goes out.

Or like I said, the smiley face at the end of every ticket. ’cause after a while nobody responds to those. So really appreciated that. And then the other thing is the ability to identify your ideal customer and focus on that. So that also, as a former MSP Rich, we made all those mistakes.

We tried to serve everybody and after a while there was no differentiation. No distinction. And we started to really focus on our, the four S’s that you mentioned, and then targeting our ideal customer profile only, and the ability to say no when we have sales opportunities, like a client is willing to sign up and pay.

But for us [00:58:00] to get to a point where we were able to say no, that’s a level of growth and maturity that allowed us to focus on our mission. That’s how we ultimately, became much more successful after the fact. So really did stuck.

Rich: It’s a it’s a dimension of specialization, basically, to know who your ICP your ideal customer profile is, and yeah, say no when you’re talking to somebody who doesn’t fit there.

Folks, that leaves us with time for just one last thing, and we’re coming up on Halloween as we record this episode of the show here. And I have a hunch slash fear. Erick, you’re gonna tell me this is like old news to you and most of the world. And I’m the last person to catch onto this phenomenon, but I am just learning that there is such a thing in America during the Halloween season as Halloween themed.

Scary mansion, car washes, ordinary car washes that sort of black out the windows. And they put their employees in scary costumes and they play music and they do to make washing [00:59:00] your car into a Halloween experience. There are people paying 25 to $30 for a wash at one of these places.

And totally new to me, Erick.

Erick: Yeah, haunted car washes are the new thrill ride around Halloween time, rich, we’ll clean your car and we’ll terrify you while we’re at it. Also, pay us more money to do that. Nothing says, a great ride as a chainsaw wielding clown that jumps out at you while you’re in your car trying to get through the carwash.

Rich: And it’s funny you mentioned clown ’cause that’s immediately where my mind went when I was reading about this. The idea of clowns appearing out of nowhere. As I’m going through the car wash didn’t sound very appealing to me, but very creative idea and a whole new holiday treat for fans of Halloween out there.

And folks that is all the time we’ve got for you this week on the MSP Chat podcast. We thank you for joining us. We’ll be back in a week’s time with another episode for you. Until then, we [01:00:00] will simply remind you that this is both a video and an audio podcast, which means that if you’re listening to us right now, but you’d like to check us out on video, go to YouTube, book up MSP chat if you’re watching us on YouTube, but you listen to audio podcasts, sometimes.

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Channel Mastered has a sister organization called MSP Mastered, that’s Erick working one-to-one with MSPs to help them grow and optimize their business. And you can learn more about MSP Mastered at [01:01:00] www.mspmaster.com. So once again, we thank you for joining us. We’ll see you in a week. Until then, folks, please remember, as we always encourage you to, that you can’t spell channel.

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