MSSP SKOUT transitions to MSP model for SMB-focused cybersecurity services

SKOUT provides SOC-driven cybersecurity services that are custom-designed for the needs of the SMB market, and while they started out on a direct model, they have moved to a channel-only one for new business, and are actively recruiting partners.

LAS VEGAS – SKOUT Cybersecurity, an MSSP headquartered in the New York City metro region, was a new attendee at the CompTIA ChannelCon event here this year. The SMB-focused company has moved from a direct sales model to a completely-MSP focused one, and found the ChannelCon audience to be the ideal one for their channel recruitment efforts.

SKOUT started out in 2013 as Oxford Solutions, and discovered ‘Oxford’ is a highly popular brand name which can make a company hard to find online.  In 2018, the company was purchased by venture capital firm RSE Ventures, who renamed it as SkOUT Secure Intelligence. In June, the company was rebranded again, to SKOUT Cybersecurity. Throughout the name changes, the company continued to expand, and has maintained a focus that is predominantly on the SMB space.

“What we do is provide cybersecurity monitoring and technology specifically for MSPs for their SMB-focused clients,” said Michael Dinapoli, a Solutions Architect at SKOUT. “We offer a SIEM SOC service, email protection and endpoint protection, all as managed services. Our focus is on the SMB market, but our technology scales right up to the enterprise, and we do have a couple of enterprise customers.”

“We define ourselves as having enterprise quality cybersecurity at an SMB price point,” said Michael Latchford, SKOUT’s VP of Marketing.

The new venture capital ownership has resulted in additional funds becoming regularly available over a period of time.

“To provide the types of services we do, you have to provide people, processes and technology,” DiNapoli said. “The people and the technology come at a high cost. The funding gave us the ability to scale the people and the technology as we build out the processes.” That includes an office in Ireland to give them a presence in EMEA.

The company’s technology was designed from the outset to be simple – something that DiNapoli said was a prerequisite for the SMB market.

“The SMB cybersecurity market is still horrifically underserved,” he said. “There are 30 to 40 vendors who have offerings in this space, but SMBs don’t have people who know how to use them properly. Our goal, from the very beginning, was to make something that an SMB organization can use.”

A major change has been the move from a largely direct model to one focused on MSPs, something that DiNapoli said was a logical progression because of the way SMB customers often buy security.

“We started working with SMB companies directly, but because they don’t have IT staff, they farm that out to a managed service provider,” DiNapoli indicated. “So now we offer our services through MSPs.”

DiNapoli indicated that the transition in business models began about two years ago, and last year culminated in the transition to a fully MSP-centric organization.

“We had to talk to MSPs anyway since they worked with the customers, so we decided ‘why don’t we just start there,’” DiNapoli said. “We protect the same SMB companies, but we now do it through their technology partners, their MSPs.”

Many MSSPs expand their reach by developing an MSP channel to resell their SOC-based services, but SKOUT believes that they have some important differentiation for the SMB space.

“We bring some very different things to the table,” he said. “Most MSSPs are enterprise-focused. We go about this from a different perspective. SMBs not only tend to have no or little IT staff, but they are also fundamentally different. They tend to be more dynamic, so their needs can change because they can grow quickly. Today they may have no physical office, no on-prem file server. We built our services to be able to adapt to the SMBs’ specific needs.”

Today, while SKOUT still services their legacy direct customers, they have moved to a 100 per cent channel model for all new business. They are looking to build out a fairly large MSP channel, and saw their presence at ChannelCon as important in that.

“We joined CompTIA and are here at our first ChannelCon because of our channel-first focus now,” Latchford indicated.

“At ChannelCon we have been speaking to the exact people that we want to talk to,” DiNapoli said. “The volume of traffic at our booth has been pretty good, but it’s important that it has been the right people. It’s the right target audience for us, who are looking for a platform like we provide. MSPs we have spoken to here say they like the fact that while we provide the cybersecurity services that they need, they don’t lose the relationship with the customer. We are not a white label, but are Powered by SKOUT.”

The goal is to recruit a blended channel of national and regional MSP partners.

“We do want to work with the big MSP partners, but you also need to play with the regional players,” DiNapoli said. “We are working toward a large base of MSPs and to get there, you need both, a channel of key national and regional MSPs who work different angles.”

SKOUT has a channel program to enable partners, which is single tier at the moment, but that is likely to change.

“As we add partners who do much larger volumes, there may be additional tiers,” DiNapoli noted. “We still have a relatively small number of partners, but we are growing every day. We may be introducing tiers sooner than we thought.”

The Canadian channel is relatively undeveloped at this point.

“We are speaking with several partners in Canada, but our Canadian coverage today is North America-wide MSPs who have a Canadian presence,” DiNapoli said. “We are looking for more direct relationships with Canadian MSPs.”

The new channel focus was also explicit in two recent senior leadership hires over the last two months, both of whom came from Datto. Mike Hanauer, who had been Datto’s VP of US sales, became SKOUT’s Chief Revenue Officer, and Don O’Neill, who was Datto’s Senior VP of Operations, moved to SKOUT as Chief Financial Officer.

“Both are well established-professionals with a great track record of building, expanding and sustaining channel roles,” DiNapoli said. “Their predecessors moved on of their own volition, and when we replaced them, we looked for people with a track record of working with channel-focused companies.”

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