M&A, Security, And Cloud: 2022 Market Strategies For Solution Providers

‘From a partner perspective, what we’re seeing is just the ability to really consult with the customers and truly provide that overall solution for the end users that can really address the overall digital IT transformation,’ Melissa McCoy, vice president of channel sales at Flexential.

With a huge focus on security and the move to cloud in remote and hybrid work environments, there‘s myriad opportunities for solution providers.

“Marketplaces are really emerging,” said Jared Pangretic, senior vice president of sales for Denver, Colorado-based distributor Pax8, last week at Best of Breed (BoB) Conference in Atlanta, hosted by CRN parent The Channel Company. “It‘s because of these shifts in buyer behavior. The consumerism is bleeding into how we operate.”

Pangretic was a part of a channel outlook panel along with Subo Guha, head of product management for Ontario, Canada-based vendor N-able, and Melissa McCoy, vice president of channel sales at Flexential, a Charlotte, North Carolina-based solution provider. The panel was moderated by Manak Ahluwalia, president and CEO of Aqueduct, a Waltham, Mass.-based solution provider.

This is both a challenging and exciting time for solution providers, Pangretic said, as it‘s the first time in recent history companies are working among team members across four generations, from baby boomers to Gen Z.

The mix of generations set the stage for new ideas from how to do business to capturing new customers to offering new services.

Here are five ways solution providers can grow their company and win big in 2022.

Offer More Security Services To Cut Down On Response Times

“It‘d be silly for us to not talk about security,” Pangretic said. “In the first half of 2020 there were 36 billion public records exposed. IBM reported that the average life cycle of a security breach from identification to containment was 280 days.”

He added that 95 percent of security breaches were caused by human error.

“There is a need for compliance monitoring,” he said. “The second major area that is of need today is threat hunting and MDR (managed detection and response) services. And then finally mobile security along with dark web monitoring.”

Companies are pivoting to automate data across all security services, he said, to reduce the time it takes to understand the incident, find more threats and more incidents and reduce the chance of human error.

Make Security Make Sense To The Customer

There‘s a big opportunity to help customers understand what security services are needed.

“ Customers don‘t just need to know about the vulnerabilities in terms of data protection and backup, they need to understand the whole world order of security and make sense of it, or what they should recommend to their customer,” said Guha.

“Security will be ongoing for the next several years of how we can provide services and how that provides revenue services for MSPs,” he added.

Co-managed services are another big aspect as he is seeing that many MSPs want to work with their customer‘s IT team to scale security operations.

It‘s important to understand where the customer is in terms of security in their environment, and the first step is to understand the customer’s security capabilities to be able to provide those security services, he said.

“It‘s an endless analysis that you have to be as an MSP to provide to customers to understand their current state,” Guha said. “And then providing guidance and blueprint and how you provide services to your customers. It is daunting and challenging in terms of being that trusted advisor and providing security services, but I think it is an opportunity.”

Cloud: ‘It’s Not An If, It’s Happening’

“The world is moving to cloud,” Guha said. “It’s not an if, it’s happening. Data center spend will be overtaken in the next year with cloud expenses.”

The move is happening for a number of reasons such as moving operations from a capital expense to an operating expense, outsourcing IT and just taking advantage of the predictability and scalability of the cloud, according to McCoy.

“We’ve been talking about cloud for years but the pandemic has really accelerated customers wanting to move applications to the cloud,” she said. “That really creates a great opportunity for partners because when we talk about the move to cloud, there is this belief that everything goes to the hyper scalers, which I don‘t think is true. There’s really a hybrid IT solution.”

That is a big opportunity for partners, she said, whether it’s continuing to deploy hardware and software, outsourcing to data centers or delivering the application through private cloud.

“From a partner perspective, what we’re seeing is the ability to really consult with the customers and truly provide that overall solution for the end users that can really address the overall digital IT transformation,” she said.

Work Side By Side With Customers And Their IT Teams

Guha said now is the time for solution providers to provide those managed services and work side by side with a customer's IT department to deliver the best results.

It’s a challenge though, as managing people and devices in a remote workforce and having the right software to assess capacity and performance and security aspects can be difficult.

“This is going to be the norm,” he said. “We need to provide IT services that can manage this new norm, whether it‘s an office of people, remote and globally, and being able to provide the software and security solutions for that.”

McCoy said it‘s important to step back and reassess with products and services are being offered to the customer as they are “always looking for multiple options.”

“It‘s something that we focus on in working with our partners and making sure that we can help provide enablement and really help transition sellers to solution sellers, as opposed to point solutions,” she said.

More Mergers And Acquisitions

Guha said that it’s also important to complement and integrate offerings so partners can provide a fluidity of services.

He said N-able likes to work with its channel partners on how to manage that merge and how to efficiently collaborate on services with the newly acquired company.

“You can imagine just the complexity of two different IT systems or services that these different MSPs provide when they come together and consolidate under acquired companies.”

With mergers and acquisitions, Pangretic said companies want to consolidate both efforts around a central go-to market strategy which allows for “richer, deeper” margins.

“It‘s been an element that in our marketplace we’ve had to adapt and evolve to meet the demand,” he said.