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MSP business community displays merit in tough economy

At The ASCII Group's MSP Connect Live event, industry practitioners discussed different ways that MSPs and IT vendors have faced challenges during the COVID-19 pandemic.

As organizations began grappling with the coronavirus pandemic's far-reaching effects, the MSP business community had to rapidly respond to the changing needs of customers.

Flexibility has been key for MSPs navigating the current environment, according to speakers at The ASCII Group's MSP Connect Live, a virtual event held Sept. 23 to 24 for New England-based members. The ASCII Group is a North American IT community of MSPs, solution providers and systems integrators.

MSP Connect Live's two-part session, "Where are the Opportunities for MSP Revenue Growth, Given Current Customer Lockdowns?" explored how partners have pivoted their businesses during the pandemic's economic fallout. Moderated by The ASCII Group President Jerry Koutavas, the session featured a panel of MSP partners and vendors in the voice, security, backup and financial solutions markets. Discussions touched on the MSPs' concerns and pain points and how they are developing offerings to keep their customers up and running.

Rolling with the punches

When lockdown orders swept the U.S., MSPs had to quickly change course in how they serve their customers. MSPs became more crucial than ever for customers faced with transitioning employees to remote work setups, according to panel speakers. Customers that had traditionally shied away from cloud-based offerings turned to their MSPs for help.

Panel speakers noted a significant shift in demand within vertical markets. As travel, hospitality and live entertainment industries effectively halted operations, other verticals needed support for continuing operations. K-12 and higher education, for example, needed laptops to enable virtual learning.

"As things started to unfold, and when it became apparent the country was going to shut down, the majority of our partners took a pause on projects they were working on … and had to switch gears to really help their internal team set up remote work environments and then help their customers through that," said Maria Moran, senior manager of cloud development for D&H Distributing, a distributor based in Harrisburg, Pa.

"Initially, we were just scrambling, trying to help as many people as we could to set up a remote workforce," Moran added. "Early on, we said, 'We need to formalize this. We need to have a plan in place to help our partners.'" Customer demand for business continuity included enabling the shifts to virtual classrooms, telemedicine and even virtual courtrooms. D&H created a business continuity task force to address hardware, cloud-based collaboration, voice, remote access and VPN, as well as security.

If you are able to operate during COVID as a company, you're entirely reliant on IT at this juncture.
Jon MurchisonCEO, Blackpoint Cyber

Many customers had to learn to abandon the "if it's not broke, don't fix it" mentality when it came to their IT setups, according to Frank Seltzer, channel chief of ConnectMeVoice, a voice technology vendor headquartered in Manalapan, N.J.

"Places that were, traditionally, a little bit obstinate to trying to switch over to a cloud-based solution had no choice," Seltzer said. "A lot of people, from a voice perspective, are very stubborn about adopting a voice solution because they've already dropped money into a system that works. … That was out the door once people had to have more [of a] unified communications set up."

IT security challenges

As the migration to working from home revved up, SMBs were tasked with solving a new set of IT problems. Cybersecurity emerged as a top concern.

In work-from-home situations, cybersecurity "was a necessity right up front," said Cameron Stone, MSP channel account manager at cybersecurity vendor Webroot. "People needed to get VPNs [and] hardware. There were a lot of cloud solutions that needed to get rolled up quickly," Stone said. "It seems like now there is a shift in the conversation towards security. Just because everything is set up, now, it's, 'Is everything set up correctly?'"

"We saw a really high increase in smaller companies having to invest in security," added Jon Murchison, founder and CEO of Blackpoint Cyber, a managed detection and response company provider in Ellicott City, Md. "If you are able to operate during COVID as a company, you're entirely reliant on IT at this juncture."

Murchison noted that he was surprised by how many office-based employees worked on desktop computers. They couldn't simply take those desktops home to work remotely. Setting up work environments and perimeters for those work-from-home stations created additional security challenges. For examples, an MSP business can't go to every employee's home or know everything about that home environment. Instead, they have to figure out what aspects of the remote work setups they can control and secure.

Companies like Blackpoint Cyber saw a large increase in demand among smaller companies that hadn't invested significantly in security, Murchison said. Blackpoint responded by offering free vulnerability scanning to highlight customers' risks.

Financial concerns

MSPs are facing pressure from their customers to lower their pricing. Panelists noted an increased need for accelerated cash flow and reduced or deferred payments. MSPs are stepping up to meet those demands as best they can.

"Even before the pandemic, we had been working on a managed remote desktop solution. We are currently offering it at no charge … before we productize it later in the year," said David Gugick, vice president of product management of MSP360, a provider of cloud-based offerings for MSPs. "We know a lot of MSPs are happy to have that [free offering] because they are doing a lot of remote work. We didn't want MSPs to be struggling with getting new customers or having to worry about customers paying them late and having an inability to subscribe to services we offer."

MSP360 was not alone. Other vendors in the MSP business space eased pricing on some of their offerings. Webroot, for example, provided two-month free trials on products, while D&H Distributing introduced several financing options to help alleviate its partners' cash flow issues.

"I feel like we're all in this together. We can all contribute a little bit. And that's kind of what we've done," Gugick said.

Demonstrating the value of MSPs

In addition to vendors expanding product options, MSPs have focused on supporting one another as an industry and learning best practices to navigate challenging times.

"I really see how close-knit the MSP community is, how much information they share [and] how many community groups and conferences are out there. We like to provide educational information, as well," Gugick said. MSP360 launched an online MSP University with educational content that ranges from MSP business management topics to sales and marketing advice, he said.

Webroot has also added additional marketing content to their online tool kit for MSPs.

As customer organizations continue to adapt to pandemic conditions, MSPs have an opportunity to demonstrate their value. "MSPs are now perceived as one of the [most nimble] industries around," noted Ted Roller, channel consultant at automated billing vendor ConnectBooster. "Even though we're not back to anything like normal, business is becoming more and more normalized every day. We're getting used to it. People are figuring out how to … start earning again."

The ASCII Group President Koutavas agreed. "We are lucky, overall, to be in an industry that is so vital, in terms of the necessity of making the gears work and making the business work."

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