Axcient Exec To MSPs: It’s Time To Tackle ‘Tech Sprawl’

‘The goal is to identify technologies that make our lives easier and reduce costs. ... If we still have guys going around checking that backups are successful and bootable, that’s an operational cost. It’s an operational inefficiency,’ says Tim Sheahen, Axcient’s vice president of sales.

As the U.S. moves into a potential recession, improving IT efficiency is a big way MSPs can help their customers save money and thrive.

That’s the message from Tim Sheahen, vice president of sales at data protection software developer Axcient, who Monday told an audience of MSPs at the XChange 2022 conference that the U.S. is likely to enter a potential recession late this year or early next year.

“We kind of expected this,” he said. “We just went through a couple of years where a lot of your customers saw a decline in goods and services. And we had over 50 percent of companies in general have declines in demand for goods and services. Twenty percent of companies were mandated to shut down by the government. So this is not a big surprise for everyone that we’re here today.”

[Related: ‘BACKUPS ARE DEAD,’ CEO OF BACKUP VENDOR AXCIENT SAYS]

The XChange conference, being held this week in Denver, is hosted by The Channel Company, the parent company of CRN.

The potential recession and slowdown in business spending come even as the number of security breaches continues to rise, Sheahen said.

Sheahen, citing various reports, said that the past year has seen a 10 percent increase in the number of ransomware attacks, with the average cost of a data breach now about $4.2 million. About 93 percent of small-business owners worry about a recession. This comes as the U.S. is experiencing 40-year-high inflation.

However, Sheahen said, history shows that economic downturns or uncertainty means a lot of opportunity for companies in the managed services space.

“Go back to 2008,” he said. “That was obviously a big recession. I would say that this space was booming. Companies did well. Some people call it the awakening of SMEs [small medium enterprises] who realized that, as they were trying to cut costs and figure out how to survive, one of the things they could do was to outsource IT and save potentially up to 40 percent of their IT spend.”

Fast forward to 2022, and the vast majority of MSPs are stating that they expect to grow

primarily from new business, Sheahen said.

“If you go back to last year, we actually did fairly well,” he said. “Some might disagree. There’s some companies that are no longer around who would definitely disagree. But there’s a lot of a lot of industries that actually grew last year, and a lot of that had to do with the fact that we had a lot of pandemic-related projects, whether we had to solve labor shortages or figure out how to collect data and restore data from CEOs’ laptops at home.”

MSPs also will likely see more concern among customers because of the Russia-Ukraine war and the expectation that Russia will likely increase the number of cyberattacks against the U.S. within the next year in retaliation for the sanctions that the West is imposing on that country, Sheahen said.

“And so our focus on security is going to be more important than ever,” he said. “That may scare some of you. But some of you like opportunity. There’s the post-pandemic infrastructure that we created with a hybrid workforce. We made it all work. But now we have to build on that infrastructure and make sure that everyone’s secure as well.”

Sheahen, citing various sources, said ransomware attacks are increasingly costly to customers. About 88 percent of MSPs report ransomware attacks on their SMB customers, with 50 percent of the attackers demanding a ransom of over $50,000, ha said. About 40 percent of attacks required over eight hours to address at a cost of $100 to $250 per hour. And, he said, 70 percent of SMBs go out of business within a year of an attack.

“The bad actors all know that this is potentially an opportunity for them as well,” he said. They’re banking on the idea that SMEs are going to spend less money on security because they have to cut costs. You guys understand that that can happen. But we can be very successful in a recession. Traditionally, we’ve proven this over and over and over again since 2008.”

To succeed during a time of economic uncertainty, MSPs and their customers need to increase their operational maturity level by doing things like streamlining their technology stack to create service factories, optimizing their operations by eliminating efficiency drains such as technology sprawls or manual processes, and simplifying labor requirements, Sheahen said.

“Talking about tech sprawl, the vast majority of MSPs have two or three backup vendors,” he said. “And with that comes additional costs. When you have two or three different backup vendors, you have training costs, you need more support guys, you have to worry about billing for three different companies. And so there’s a big focus on reducing the tech sprawl, reducing the redundancies, and also focusing on what we are doing that’s manual that could be done through … technologies that can automate some things,” he added.

“The goal is to identify technologies that make our lives easier and reduce costs,” he said. “And we talk about specifically in the backup and disaster recovery space things like backup verification, or auto verification. If we still have guys going around checking that backups are successful and bootable, that’s an operational cost. It’s an operational inefficiency.”

Automation also lets MSPs use fewer, lower-skilled workers to deliver higher-end services. reduce the hidden costs of recruiting, training, support, billing and operations, and increase margins and scalability, Sheahen said.

Sheahen cited a couple of MSPs who consolidated their customers’ data protection to Axcient’s technology.

One solution provider, Salinas, Calif.-based Alvarez Technology Group, saw its margins grow to 50 percent when it consolidated 25 backup vendors to three, including Axcient, and incorporated a full backup and recovery solution to its customer agreements.

Another MSP, Glendale, Calif.-based Lanair Technology Group, was able to use Axcient to consolidate 25 backup vendors into three and in the process eliminated the need to deal with 25 vendors, 25 solutions and 25 support people billings, Sheahen said.

Ben Gilbertson, vice president of Healthy Technology Solutions, a Las Vegas-based MSP and Axcient channel partner, said that his company has consolidated all its data protection activities to three vendors, with Axcient the main one, and that it may be able to consolidate everything to Axcient by year-end.

“Consolidation is very important because right now I’m the sole person that manages the backups and trains people on them,” Gilbertson told CRN. “So if we could get me away from having to train three different vendors to our staff, it frees up my time.”

Gilbertson said he prefers to consolidate on Axcient because of its good track record.

“They have good hardware, and the support is phenomenal,” he said. “Axcient also provides ease of use. If for some reason you do have a disaster, everything’s local. You spin everything up right there. In past cases, we’ve had a customer back up in as little as 15 minutes.”