N-able chief sees headwinds and tailwinds for MSPs

John Pagliuca, CEO of N-able at Empower 2022.

It’s one of the more unique linchpins you’ll see in a vendor keynote to partners. Still, N-able CEO John Pagliuca spent his keynote at the company’s Empower 2022 event clarifying the differences between climate and weather.

The climate for MSPs looks great, he said. The weather? You might want to pack an umbrella with spiking inflation, continuing supply chain challenges, and rising interest rates. 

“It’s a little bit stormy outside,” Pagliuca told attendees. “And a bit of a misstep could land you, your customers, your people, in a bad place.”

To help deal with those challenges, Pagliuca urged solution providers to look back at the lessons of the 2009 recession. He had a lot of advice learned from the Great Recession:

  • Take a close look at your balance sheet and make sure you understand who your most-profitable customers are.
  • Plan for 2023 and beyond, build a financial plan and find new opportunities to expand with existing customers.
  • Optimize, standardize and automate. These are always goals of successful MSPs, but even more so when things could get lean for a while. Drive sales teams towards higher-value opportunities.
  • Get close to your customers. “What can you do right now to ensure your customers know you’re a strategic partner?”

“We need to be mindful. We need to be in preparation mode,” he said.

He said that there are reasons for MSPs to be optimistic. For one, he said Wall Street has been telling him they’re very bullish on the role of managed service providers. While the last half-decade may have been the Golden Age of the MSP, the present and near future are looking to be a Platinum Age. 

Over the next five years, SME customers’ spending on cloud services is poised to more than double to more than $1 trillion (U.S.) globally. 

“Who’s going to bring that to them? Some of them are going to self-serve, but the opportunity is right there in front of you,” Pagliuca said.

And at the same time, larger enterprises are engaging more often with managed service providers, he said. The co-managed motion is becoming more prominent, and that means an opportunity for MSPs that can bring together a message that resonates with bigger customers.

“Today, in this room, we have MSPs servicing Fortune 1,000 customers,” he said. “We’ve all grown up, the industry has matured, and the technology is better.”  

But MSPs must do the work to be ready to work with bigger customers. That means planning how to engage, offering a clear value proposition to get in the door, and then finding ways to expand business with enterprise customers over time.

“You can’t just show up and ask what you can do,” he said.

Many of the challenges that MSPs face are also facing their customers, giving innovative service providers the chance to transform headwinds into tailwinds.

For example, Pagliuca said that the ability to attract and retain talent has been an issue for everyone. That’s true for N-able, he said, for MSPs and customers. So MSPs who can step up the automation and take as many mundane tasks as possible off their technicians will be able to scale the business and offer higher-value services to more customers.

“A lot of MSPs aren’t embracing all of the tools we offer to automate,” he warned. “Make sure your people are learning, are developing.”

Every business has heard ‘do more with less.’ Still, Pagliuca stressed solution providers who succeed in this optimization would be able to manage more customers per employee, a key metric in driving MSP productivity and profitability.

Another example is cybersecurity. Yes, MSPs have been targeted more by bad actors than ever before. But so have their customers, and if there’s one area where the tight talent market is felt more than most, this is it.

Pagliuca urged solution providers to move from “sell to tell” with their customers to optimize their security operations. Make it clear to customers and prospects that their recommended layers of security are not add-ons but a requirement of engagement.

“Standardize your security stack, and you’ll be more secure and better able to protect your customers,” he said. “There’s no reason you should be upselling security.”

Robert Dutt

Robert Dutt is the founder and head blogger at ChannelBuzz.ca. He has been covering the Canadian solution provider channel community for a variety of publications and Web sites since 1997.