N-able CEO On AI Plans, The Biggest Lesson Learned This Year And 2024 Plans

‘Others in the industry, frankly, are focused inward on trying to organize and what they're doing,’ says N-able CEO John Pagliuca. ‘We want to be 100 percent focused outward, ear on the ground listening to the MSP partners and have them guide what our investment and our roadmap needs to be.

To stay ahead of the competition, N-able is “100 percent” focusing outward on MSPs, listening to their wants and needs and building the blueprint to help them succeed.

“If we're listening and not just giving the MSPs what we think the answers are but asking what their problems are, building our roadmaps and investments that fit where they're going to be where they need to be in 2024 and 2025, that's how we keep our competitive advantage,” John Pagliuca, CEO of Burlington, Mass-based software vendor N-able, told CRN. “Others in the industry, frankly, are focused inward on trying to organize what they're doing. We want to be 100 percent focused outward, ear on the ground listening to the MSP partners and have them guide what our investment and our roadmap needs to be.”

Pagliuca said there's three big trends that he’s watching in 2024, and they all center around GenAI and making MSPs more efficient.

“GenAI is the first stop,” he said. “Today we use machine learning in our mail security offering. We’re pulling millions of mailboxes, any type of nefarious activity and we're using all that data, putting into our machine learning algorithm and driving a more efficient and more secure email security solution. Our backup also uses machine learning as well, but we're going to continue to use the machine learning and some more AI to have more of a cyber resilience framework so that we can give anomaly detection to the MSP.”

N-able is also investing in other areas of their business to help MSPs scale, whether it be advancing its cloud agenda, automation or security. And it’s all because MSP needs are changing.

“We're seeing MSPs going more upmarket and now their changes have evolved,” he said. “How are we reprioritizing our investments to fit their needs? It's an opportunity-rich environment so for me the hardest part is the prioritization of those things, making sure that we're listening to the customer and delivering on where they're going, not where they just came from or where they are today.”

Pagliuca spoke to CRN about MSP needs, what N-able is doing to differentiate in the competitive landscape and what MSPs can expect from the vendor going into 2024.

With more and more vendors coming onto the scene, how do you stay competitive in the market?

It’s simple. It starts with listening to the MSPs and understanding what their goals are and where they're heading. In some ways, business is simple. We're a business that has over 25,000 MSPs, hundreds of thousands of technicians, so we listen to what those technicians say and those business owners say. They're providing a blueprint for our success. If we're listening and not just giving the MSPs what we think the answers are but asking what their problems are, building our roadmaps and investments that fit where they're going to be where they need to be in 2024 and 2025, that's how we keep our competitive advantage.

Others in the industry, frankly, are focused inward on trying to organize what they're doing. We want to be 100 percent focused outward, ear on the ground listening to the MSP partners and have them guide what our investment and our roadmap needs to be. There's a lot of very successful SMBs out there that these MSPs are driving. If we take the time out and listen, they'll provide us the blueprint.

How does AI fit into N-able’s product roadmap over the next 12 to 24 months?

We're going to continue to help MSPs with the ability to drive analytics across all of our functions. We have a brand-new analytics tool that's just getting started right now. It's focused on N-central and helping MSPs with more automation in dashboarding effects that they can look at their patching and all the key metrics. We'll be able to give MSPs a central source where they can pull all this data whether it be N-able solutions, or down the road third party solutions, where they can build their own dashboards and their own analytics. We want to put the power back into the hands of the technician so that they can pull and push this data. Other folks have some of this but it's standalone third-party bits. We're going to do all that lifting for them so they can focus on the analytics and the automating of their business.

GenAI is the first stop. Today we use machine learning in our mail security offering. We’re pulling millions of mailboxes, any type of nefarious activity and we're using all that data, putting into our machine learning algorithm and driving a more efficient and more secure email security solution. Our backup also uses machine learning as well, but we're going to continue to use the machine learning and some more AI to have more of a cyber resilience framework so that we can give anomaly detection to the MSP. With Cove, our data protection offering, we're beginning to use all the data in the machine learning there so that MSPs can have a little bit more of a cyber resilience flavor and have a little bit more of an anomaly detection. How do you do the anomaly detection? You're pulling in all that data using AI to help the user identify what the anomaly is, take a closer look and stop potential threats.

What threats do you think AI poses to the cybersecurity landscape?

It's kind of that line: with great power comes great responsibility. I'm not sure the broader universe understands that depending on the service they're using and what they're putting into the machine for the prompt…once you're entering that data in you're not really sure where it's going. I would urge companies to make sure that they're not putting their source code in AI machines as we’re not sure where that data is going. My message to folks is that what you're actually putting into that machine learning model, or that generative AI application, do you want that in the public domain or not? You're potentially putting your crown jewels out in the market that you might not have intended.

From a macroeconomic standpoint, 2023 was a hard year for everyone. We saw layoffs, some revenue growth was stagnant, but N-able seemed to keep a steady pace. There was revenue growth every quarter and there were no layoffs in 2023. How were you able to keep that steady pace?

The service that our MSPs provide are mission critical. Don't confuse small with weak. The MSP is small servicing the small-medium enterprise, but those small-medium enterprises that they're servicing our hospitals, doctor’s offices, financial advisors, chiropractors, dentists and logistics companies. Those are very much recession-resilient industries. When people think recession they often look at the small-medium enterprises being more susceptible. In certain verticals, that's true. But for the verticals that the MSPs are providing cybersecurity services and compliance bits for, if they're looking for cybersecurity services and they can afford EDR (endpoint detection and response) or they're looking for an MDR (managed detection and response) offering, they’re typically in an industry that's recession resilient. A lot of it's the power of the channel. The channel is much more resilient than people think.

N-able prides itself on being a profitable entity. We invest, I would say, very judiciously and we want to make sure that we're growing. But we have a responsibility to our employees and to our shareholders to grow responsibly, which means at a level of profit. I believe software companies at scale should be profitable. We also tend to focus on the long term, and this industry is very much in the early innings. There's many more tomorrows than yesterdays in the MSP industry. Because of that we want to invest in the future tomorrows and not necessarily worry about that today. I often talk about climate versus weather, and while the weather might be a little bit stormy in the short term for some parts of the software universe, the climate for the MSP market continues to be bright and strong and growing. We want to invest for that long-term climate while we're managing some of the short-term weather that the software universe might be feeling.

What was your biggest challenge this year and what was the biggest lesson you learned?

I mentioned all the different ways that MSPs are helping this small-medium enterprise, and there's all these other ways that N-able is trying to help these MSPs. Whether it be advancing our cloud agenda, advancing our automation agenda or advancing our security agenda, the hardest part was the prioritization, and if you try to service all of those things at once you're not going to do things in an optimal manner. It’s finding the right sequence, the right investment level and also making sure we're listening to the MSPs because they have evolved. We're seeing MSPs going more upmarket and now their changes have evolved. How are we reprioritizing our investments to fit their needs? It's an opportunity-rich environment so for me the hardest part is the prioritization of those things, making sure that we're listening to the customer and delivering on where they're going, not where they just came from or where they are today.

What is your message to MSP partners in going into 2024? What can they expect?

We will enable them to leverage automation to be that best MSP where they can be more efficient and more profitable. We’ll continue to invest in automation, and that is that hybrid world. We’re going to be making a lot of noise about cloud and giving MSPs the ability to automate and drive more of an efficient workflow. MSPs have a strong relationship with Microsoft. We're here to enable that relationship, not to get in its way, but really enable that relationship so they can drive a more efficient experience for their end customer.

What can you tease about N-able’s Empower conference in March?

We're trying something different in that we know what makes a successful MSP. There's a bunch of different roles and personalities and responsibilities that make up a successful MSP: the business owner, a technician, the lead technician, somebody in sales. What we've done this year that's different than years past is we've driven, articulated and designed a bespoke path for each one of those personalities so they can go a little bit deeper and have that conversation. If you're a business owner and you want to maybe talk about M&A, if you're a technician and you want to understand that best practice to drive automation…we've designed Empower 2024 around these personalities of what it takes to make a successful MSP. That allows us to go deeper with a goal for these MSPs to walk out of that experience and be able to drive their businesses. My ask for the MSP: don't just show up with one person. We have so much to offer that you're not going to be able to get to it all. Bring your team, bring those personalities and divide and conquer. We're very thoughtful in what are the components that drives a successful MSP and we know just like every other business, it's not just one person that makes a successful business. It is a team. So we built a framework so that each member of that team gets the most out of it.