DataEndure Unleashes WhiteDog To Help Other MSPs Deliver ‘Accelerated Security’

‘The ideal scenario would be a local IT MSP that might not even have a security portfolio and is getting completely overwhelmed trying to address security. ... What we can do at a very competitive price is walk in with a very thorough platform. The MSP can take our complete offering or any level based on the customer’s needs or current cycles of licensing ownership. I think [WhiteDog is for] that MSP just on the verge of selling security,’ says DataEndure CEO Kurt Klein.

DataEndure’s WhiteDog Aims To Turn MSPs Into MSSPs

Security is a key part of a sound IT solution for customers. However, it can be a complex part of the solution, and one that smaller MSPs may not be able to provide. And the lack of a sophisticated security offering opens the door for other solution providers to do business with an MSP’s customers.

DataEndure, a 40-year-old MSP with a long history of providing security services, is looking to bring its experience to its fellow MSPs via WhiteDog, a new managed security service just launched this week.

DataEndure CEO Kurt Klein, in an exclusive meeting with CRN, said WhiteDog is a culmination of his company’s managed security services experience, packaged in a way that can help other MSPs add security to their offerings.

[Related: Here Are The Fastest Growing Managed IT Services In 2023, According To MSP 500 Executives]

WhiteDog will bring “accelerated security” to a wider MSP community, Klein said.

“Speed to security is one benefit,” he said. “Also, the comprehensiveness of our portfolio. It’s not just MDR [managed detection and response]. It’s not just endpoint. It’s a true, robust XDR [extended detection and response)]offering. And it’s got some unique nuances with a portal that we created internally on our own. So kind of a single pane of glass for all of the separate security offerings that we have.”

Klein said MSPs who sign on with WhiteDog need not fear DataEndure will steal their customers. Customer relationships will be protected by deal registration, he said. Furthermore, he said, DataEndure knows it cannot afford to make a mistake with its MSP partners.

“We get one strike,” he said. “I mean, if I were to in any way jeopardize the sanctity of their customers, it’s over. So between a formal registration process and us being stewards of ethics, I don’t think there’s anything MSPs have to worry about.”

DataEndure, which has grown with no outside investment, could one day spin out WhiteDog as a separate business, Klein said.

Here’s what Klein had to say about his company and its new role as a provider of managed security for its fellow MSPs.

How do you define DataEndure?

I would first define it by the legacy of amazing employees that we’ve had over 40 years in existence. I mean, that’s something I pride myself on as the leader. It’s all about who’s in the building. And we’ve got tenure that’s just amazing. Our top producer has been with us 32 years. Our CFO just retired at 20 years. So first and foremost, it’s a collection of very bright people that work together and believe in the same outcome, which is just continuing to grow the company.

From a product and services standpoint, I would say we’re a technology integrator that provides core legacy IT products and services, so think storage, information management, servers. We do all that. But we’ve just completely reinvented our security practice into a managed security practice. And that’s been very fruitful for the company and the employees over the last four years. We’ve had a security practice much longer than that, but in earnest, the managed services are really within the last four to five years where we have a recurring revenue stream that we can count on and budget toward and invest appropriately.

So DataEndure is celebrating its 40th anniversary this year? Congratulations. How would you describe the phases the company has gone through?

We started with commodity products back in the ’80s, selling tape. We were the tape guys and gals in the [Silicon] Valley. It was absolute truckloads of round reel tapes. We actually sold toner cartridges, then we went into DLT and then LTO tape. So a lot of tape. That was what I’ll call the first phase, when my father owned the company. The second phase was when we really began to see erosion in tape business margins, and we became more of a technology integrator, which meant we had to upskill our staff around architecture, primarily around storage. We were an EMC player early on, but then we really found our groove with NetApp over time. And then adjacent IoT products and services around networking and security eventually over time with planning and great partners just really blossomed. Now we’re roughly a $125 million company with 50 employees. So it’s a good little engine, no debt, no private equity. We’re doing this all on our own. And that’s important to us.

And I would say the third phase, without overthinking it, is this new managed services division that we created, which is providing security at a very thorough level to a lot of our existing customers as well as net-new. And the phase that’s unfolding is a new chapter, which is where we become an MSSP to regional MSPs. So we’re bringing the security platform that we’ve created with best-of-breed products and services, as well as some IP of our own, in a platform to MSPs across the country so they can go into their customers and secure their customers better than they are today.

We’re excited about that new venture, called WhiteDog. The attention is to scale our overall business. We’re looking to increase the amount of endpoints that we protect. And if we can do that in a direct model with our existing business, and now with an indirect model, we just feel that the scale and the speed of scale is going to be a great thing for us going forward.

So what will WhiteDog offer to channel partners that they may not be doing on their own?

A couple of things. I’m going to call it ‘accelerated security.’ We have already on-boarded about 12 customers from these MSPs. And we’ve got a couple of MSPs that we’ve known who are already bringing us in and we’ve on-boarded their customers. So speed to security is one benefit. Also, the comprehensiveness of our portfolio. It’s not just MDR. It’s not just endpoint. It’s a true, robust XDR offering. And it’s got some unique nuances with a portal that we created internally on our own. So kind of a single pane of glass for all of the separate security offerings that we have. We feel that’s a big difference.

It’s really about the expertise we have for on-boarding and for ongoing assessment of new technologies. If a technology falls out of the Magic Quadrant and another moves in, we can assess those technologies on an ongoing basis and replace them if we feel that it’s a competitive advantage for us and our customers, whereas some of the small shops and their MSPs don’t have the ability to go in and assess these complex technologies. We call it on-demand expertise. And in the case of an unforeseen need for remediation, we’ve got a lot of experience helping customers get through the very uncomfortable scenarios that a lot of folks are going through when they’ve got ransomware.

What types of MSPs are you targeting with WhiteDog?

The ideal scenario would be a local IT MSP that might not even have a security portfolio and is getting completely overwhelmed trying to address security. They might be addressing it with a single product like CrowdStrike, or some endpoint product. What we can do at a very competitive price is walk in with a very thorough platform. The MSP can take our complete offering or any level based on the customer’s needs or current cycles of licensing ownership. I think it’s that MSP just on the verge of selling security. We have gone in and displaced existing MSSPs with a couple of our new MSPs just with our thoroughness and our pricing structure.

Will you be hiring more people to set up WhiteDog and prep that as a potential spin-off? Or will you do that with your existing head count?

It’ll be a shared model at the beginning, with milestones in place that trigger different levels of key hires. The hiring growth that we have currently in the company is all around the security practice, whether it be to support our direct model or the MSP model of security sales. We’re hiring security analysts. And we have a location in the Cincinnati area with a facility with folks that are monitoring 24x7. In Santa Clara by the San Jose airport, we got five individuals here doing 24x7 monitoring. So that’s where the majority of our head-count growth is coming from.

Have you already signed on other solution providers? If so, how many?

We’re coming up on a dozen.

Since you also have your own customers for the security offering, how do you keep your customers separate from other channel partners’ customers? What assurance do they have that you’re not going to take a customer?

We have a registration program we will roll out. I think the biggest part is eventually we will spin off WhiteDog when the financial timing is right. I think it will happen relatively quickly. The distinction in the separation between us and other partners is, I would rely and lean on the ethics of our company over 40 years. We have our existing customers. We’ve shared with our existing customers, verbally, one-on-one what we intend to accomplish with WhiteDog. Our initial WhiteDog partners know exactly who we are. And for me, we get one strike. I mean, if I were to in any way jeopardize the sanctity of their customers, it’s over. So between a formal registration process and us being stewards of ethics, I don’t think there’s anything that MSPs have to worry about.

How are you recruiting partners for WhiteDog?

We will be at two budgeted events this year. One is a [CRN parent] The Channel Company event in August, XChange, in Nashville. My CRO and my CISO, who essentially built this whole platform, will be on stage. The community is a tight-knit community, and we feel that these two events that we’ve budgeted for this year will give us what we need in this calendar year to ramp this eloquently and professionally and get us queued up for the following years.

We’re excited about it. Shahin Pirooz, our CISO, we’ve been together for seven years, but when he walked in our door, we were relatively old school. Yes, we were selling security. Yes, we had a security practice but it wasn’t a true recurring model. The goal Shahin and I had was to create an enduring profit model that wasn’t project-based, which was unpredictable for us, but was recurring. So now we’ve got just a dynamite predictable gross profit top-line number that we walk into every year with. And we believe that WhiteDog will just further strengthen the company.

You said DataEndure has had no debt, no outside investment. Often, outside investment enables faster growth. Why have you not taken outside investment in 40 years?

We’ve had a really good run. We’ve operated more as a family operation. And we’ve taken care of an amazing amount of employees and families over the time. And we’ve grown steadily. I think when I started, we were doing $6 [million] or $7 million a year in tape. Also, the growth that we’ve had is manageable, It’s not been hyper growth. You can always hypothesize or pontificate on what you would rather have at some point. It’s just been a very predictable, profitable growth over the years that has enabled us to take care of our partners and our customers and our employees in a way I believe is important not just to me, but to a lot of us here.

How big is DataEndure?

About $125 million in revenue. And we’ve got 52 or 53 employees.

Has DataEndure ever done an acquisition?

We have not.

Is that something that you could see yourself doing some day?

We’ve looked at a couple of interesting ones that I can’t mention here because they’ve gone on to be acquired, and you would know who those folks are. Is it something we would look into? Absolutely.

How about Data Endure as an acquisition target? Getting calls?

We’ve gone through that as well. As you’re aware, for a lot of business owners in my age group, it’s this natural thing that seems to have to happen. And I’m trying to make those decisions in light of my family as well as the other folks that work here. So, never say never. You’ve just got to keep your options open.