(Pictured above: IT Glue CEO Nadir Merchant on stage at the company’s GlueX event in Scottsdale, Arizona, Sept. 16.)

IT GLUE GLUEX — SMB IT spending is accelerating at six times the gross domestic product with more emphasis on automation and cybersecurity, providing massive opportunities for MSPs.

That’s what Nadir Merchant, IT Glue’s general manager and CTO, told attendees at the start of this week’s GlueX, the company’s third annual user conference in Scottsdale, Arizona. About 500 attendees are at the conference.

IT Glue has more than 7,000 partners in more than 50 countries, serving more than 100,000 users and 500,000 businesses globally.

Five years ago, most partners’ revenue was from break-fix, while today 80% comes from managed services, Merchant said.

There’s been a “substantial maturing” among MSPs in that they operate more like businesses today, as opposed to IT services, Merchant said.

“A lot of MSPs were a person who was well-versed in IT, and helping their friends and family, and they ended up turning into a small business they run themselves,” he said. “They didn’t often operate like businesses; they operated more like a convenience store than a well-run and executed business. We’re seeing a lot more of that supermarket mentality in MSPs where they’re a lot more efficient, they have a lot more standardization and structure, and they know what they’re doing. They’re not just putting things on the shelves, but they’re analyzing how do we put them on the shelves. That is really what prepares a lot of MSPs to really serve this market as it grows. And the tools they’re using are substantially better.”

What IT Glue now is looking to do is “gluing workflow together,” Merchant said.

“We believe that IT Glue is uniquely positioned to really tackle this problem of the space between different products,” he said. “We can enable the automation to integrate more tightly with these tools … so they can find the answer to solving the problem, they should be able to click a button and solve their problem. It’s a big shift in the way that we’re looking at our business.”

Of the revenue opportunities cited by partners, one-half said automation is their biggest opportunity. IT Glue’s history with automation “colors everything we do,” Merchant said.

“I want everything to be fully automated,” he said. “There’s just too ambiguity; they’re not repeatable enough.”

SMBs now are more open when it comes to conversations about cybersecurity, and security as a service is much cheaper to sell to existing customers than new ones, Merchant said.

“When you tell SMBs that we’re going to fully protect your cybersecurity, we’re going to take care of you top to bottom because this is a huge problem and lay out all the risks to their business, I think that’s an easy conversation for people to have and I think they do get it,” he said. “If they don’t get it now, they’re going to get it soon because it’s in the news every day, we see it all the time. If that doesn’t wake them up, I don’t know if anything will.

In addition, DRaaS specifically is the next big opportunity for partners, he said.

Joseph Noonan, Unitrends‘ vice president of product management and marketing, told attendees DRaaS is hot in the market, with growth expected to surpass backup and cloud backup. The three ways of tackling this opportunity are building your own solution, offloading to a public cloud or offloading to a DRaaS provider, he said. 

“This problem is not going away,” he said.

Priscilla Matus, security manager for Veeya, an MSP that mostly serves schools and small businesses, said the speakers were spot on in saying …

… security needs to be a priority and is a “huge” growth opportunity for MSPs.

Veeya’s Priscilla Matus

“That’s exactly why I was brought on,” she said. “In my experience, with customers, it’s a battle for sure,” she said. “Some of them are finally getting it, but I’d say the majority still don’t know the importance of security. We’re ahead of the way that the whole world is going, especially the business world, and security is going to become a staple thing; everyone’s going to have it eventually, but they’re just not getting it yet. We’re ahead of the curve.”

Juan Perez, IBM Security‘s business development representative leader for MSPs, said protecting devices and protecting the server are “so important to make sure the end client doesn’t suffer when they have any tragedy, human error as well.”

“I can see from the stories … that the message is now making sense, for the MSP community especially because they were kind of reluctant to spread the word and now they know that we as vendors and suppliers of security tools, we are telling them, ‘Hey, we need to be proactive,’ and that’s exactly what we’re doing,” he said. “We need to be proactive with password management and how we tell the story to our end clients. So it’s taking back home that message of security for the end clients, and all the time, not just when we care about a breach.”

Also at GlueX, a panel discussed the ins and outs of everything as a service (XaaS), including solving dilemmas of deciding what to offer, determining what customers want and how much they’re will to pay for the service. Juan Fernandez, vice president of managed IT services for Image Net Consulting, said everyone’s looking to diversify their offering, but “you have to understand what as a service means, you have to start thinking about who the future buyer is going to be and you have to understand the fundamentals of how they buy.”

Nicole Mead, business development manager with GreatAmerica Financial Services, said the biggest task is getting buy-in from your entire organization because if sales reps “are not on board and don’t have compensation for the new way, they will keep doing it old way.”

“Look at your current core offerings; if you have a good foundation in place … look at what additional services you can offer,” said Jay McCall, co-founder of XaaS Journal.