“They're not really interested in giving you 1000 chances”: WatchGuard executives on understanding MSPs and earning their respect

Adam Winston and Anthony Daniel at WatchGuard explain why trust is more important than product for Aussie MSPs.

Vendors must work for Australian partners’ respect and only get one shot at creating a relationship, according to WatchGuard executives.

Speaking to CRN Australia at a recent WatchGuard Sydney Roadshow, Adam Winston, field CTO, managed services at WatchGuard explained how tough the Australian channel market can be for vendors.

Winston said if vendors are going to do a bad job, don't do it in Australia.

"[Vendors] come to the Australian market, and they find that [partners] will not be able to accept what they give them at face value,” he explained.

“They must test it, they must see it for themselves. They do not just simply look at case studies. They need to validate the technology for themselves.”

Winston said this is both a blessing and a curse for vendors.

“Because you get the opportunity, but if you fail, you get a bit of a scarlet letter. They're not really interested in giving you 1000 chances, and that's a great thing if you have your things together,” he said.

“But it also can be dangerous if you release product too early, if you have something that doesn't work, they will find out, and they will not buy it.”

Anthony Daniel, managing director ANZ and the Pacific Islands at WatchGuard noted that Aussie MSPs don’t want to hear what vendors say unless they understand their business.

"They want to understand the value of the vendor to them, because once you understand their business, you can then understand what solution you should be offering them,” he said.

"We do a really good job of having those conversations with MSPs, earn their trust, but that's understanding their business first. What are you guys doing at the moment? We're going to help you grow your business.”

Daniel explained that if vendors don’t understand an MSP, they will shut the door on them.

“That's probably one of the most important things, is understanding their business solely from the core up, and then be able to add our value as a vendor overall,” he added.

Winston further explained that vendors can hawk their products and brag that they’re the best but that won’t matter if MSPs don’t trust them.

"It's very important as a brand that people know that trust is rewarded and that it is a loyalty thing for us as well,” he added.

A shift is coming

Winston believes there is a huge change that is coming for MSPs around consolidation.

"87 percent of the 75,000 plus MSPs are less than 10 people. There's huge multiples for their businesses to get acquired,” he said.

“That means consolidation, that means a lot of change, that means a lot of companies will think about the labour arbitrage, they will think about the way they deliver services, and they will have to innovate.”

He added, “The sort of tried, trusted and true model of IT outsourcing that has just been smart people behind a desk answering the phone for you, that's going to get a pretty big remodel too.”

Winston said he is excited to see the market change too as it will enable disruption and move the industry forward.

"Frankly, the MSP community has suffered with really low margins, less than dentists, less than lawyers, less than consultants, accountants.

“All these people have been making 30 to 40 percent margins, and it has had to squeeze itself over again into sub 10 percent margins that don't make this business very attractive.”

Winston has been in discussions with businesses where the father would like to hand down his business to his daughter or son, but there is no interest from them due to those low margins.

"They look at this and go, this would not meet my expectations of what a company would look like,” he said.

“If we can re-imagine the design, the margins and get back to a healthy, good business for MSPs, it'll be a good business again. We might even start to see young people starting them again.”

The possibilities from AI

Having a background in software development, the channel and network security, Winston said AI is changing the user into “something new”.

“I'm really excited to see, the new innovations that are going to come from this. We're probably going to have to pivot as a cybersecurity company to keep pace with that,” he said.

“But that's what I'm most excited about is AI's role in apps and AI's role in security, probably for the next 12 months, because this is a very big 12 months, as we move from basically just chatbots to something agentic.”

He said identfying the agentic bots and understanding that attacks are agentic-based will change the conversation.

“Once people can start to do the attribution to say the bad guy was an agentic bad guy, which I don't think they can do now,” he said.

“Once you can start to see that you were really talking to a bot, I think that'll start to change a lot of people's perspective.”