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Townsend Security Data Privacy Blog

On a Journey with Managed Service Providers (MSPs) for a Better Encryption KMS Solution

Posted by Patrick Townsend on Aug 10, 2020 3:30:31 PM

Every now and then something completely unexpected happens that changes your life. No, I’m not talking about the COVID pandemic - that’s a completely different story. What happened for me is that in the course of my work in business development of our key management server (KMS), I met the CEOs of two different Managed Service Providers (MSPs) and they welcomed me into their world. With grace and patience, they helped me leave behind my preconceived notions about software sales and introduced me to how their world works. Neither of these two CEOs were obligated to mentor me and to give me their time, but I am so grateful that they did. It opened a new vision for me and our team here at Townsend Security.

If you work at an MSP firm, I hope you will read on. I will tell you how I turned my lessons into real benefits for the MSP.

VMware Cloud Providers & MSPs - Win New BusinessManaged Service Providers are varied in what they do, but at the core of their business is the desire to provide IT expertise, hosting facilities, business continuity and disaster recovery, and lots of other IT services to small and large organizations. They do everything from fixing user PCs to deploying top-end servers, security, and cloud services. Expertise is at the core of the value they provide to organizations. During the COVID crisis, they are on the front lines of trying to help everyone migrate to work-from-home and they are trying to secure that environment.

They are just some of the quiet, hidden heroes who don masks and rush into data centers and offices to keep us all operational. They provide great value to organizations especially in the current crisis. These MSPs taught me about their business and about the difficulties they have with key management vendors. In a time when security is top of mind for their customers, they struggle with a KMS industry that is stuck in the past. We were definitely one of those. As we talked, the light came on for me. All of the problems they were having with KMS vendors were problems that we could solve! All it took was a commitment from us, and a change in our business practices.

Here are some things I learned from my MSP CEO mentors:

  • Their businesses run on a usage-based model. For example, they might host a VMware environment for an end customer and charge them on the basis of the number of Virtual Machines (VMs) or vSAN storage they manage on a monthly basis. They provide immediate, on-going value to their customers and they prove their worth on a day-to-day basis.
  • They deploy third-party software solutions to help them accomplish their mission. They prefer to use software solutions that match their business model. For example, some of the common backup solutions like Veeam can be deployed by MSPs on a per-month, per-VM basis. It’s great when an MSP can deploy these types of solutions on a usage basis. It is how they run their business and greatly reduces their risk. KMS vendors are not helping.
  • MSPs live in a complex technical world, and they have special needs from their software vendors. They probably deal with more technical complexity than any other IT segment. Hardware, software, Windows, Linux, security, networking, cloud, smart phones – where does it end? This means they need software solutions that are easy to install, deploy, manage and report on.
  • An MSP deals with a lot of software “vendors”. What they really need are software
    “partners”. A software vendor sees the MSP as a resource (money) extraction
    opportunity. A partner is someone who saddles up and goes into battle with you. With a partner, you will either win together or lose together. This is an incredibly important distinction to the MSP, and a really big challenge to the software vendor.
  • The MSP needs more than a software solution from a partner. With all of the complexity of the services an MSP delivers, the MSP needs help from the software partner to sell the solution, to support the solution, and to be a trusted advisor. Can the software partner help with sales collateral? How about with joint sales calls? Can we do joint webinars and podcasts that help build confidence in customers and potential customers?

Here at Townsend Security we live in the world of data security. We have encryption and key management solutions to protect data at rest. We have a number of MSP customers. Before I had the conversation with our MSP mentors, we approached each of our MSP customers the way any legacy software company would. We offered the basic perpetual and subscription licenses. We have always been very price competitive, but it was basically a take-it-or-leave it approach. We charged for each key manager that we sold.
We were a perfect example of the “vendor” problem the MSP experiences. So, we set out on a journey to see if we could align our business with MSPs and become the “partner” they want and need. It meant changing a lot of our assumptions and business practices. You will know when you have a true partner when they lean in with their marketing and technical teams to make you successful. Our goal is to be that partner!
Here are some of the things we’ve done:

  • Adopted a Pay-As-You-Go model for MSP partners. We now charge a very small monthly fee for each encrypted VM or database. Gone are the perpetual and annual subscription licenses. Scale up or scale down as you like. We get paid when you get paid. Full stop.
  • Dropped all upfront fees or annual minimums. We are aiming for perfect cost and
    revenue predictability for your MSP business.
  • Stopped counting the number of key management servers the MSP runs. The MSP
    deploys key servers in the way that makes sense. Multiple physical hosting sites, on-premise deployments, Disaster Recovery as a Service (DRaaS), encrypted storage? We don’t care, we are all in.
  • We trust the MSP to deliver their services and expertise on their hosting or cloud
    platform, and on their customer’s premises. MSPs conduct their businesses in a variety of ways. If we achieve true partner status you will feel that we are fully behind you and support you and take the risks with you.
  • We train the MSP on how to deploy our solution. We have video, on-line
    documentation, and one-on-one training to help you get up and running quickly. We don’t charge for training; we just lean in to help you get the job done.
  • We support the MSP with 24/7/365 business interruption support program at no extra charge. Support is built right into the low monthly fee.
  • Provide sales support by doing joint customer calls, answering security questions, and providing guidance on meeting compliance regulations. We don’t charge for helping you close a sale; we will win the deal together.
  • Provide sales collateral that includes sell sheets, educational material, joint webinars and podcasts, and much more. We don’t charge for sales and marketing collateral.

I feel like I’ve been on a fast learning track and have gained some great new friends. They are sharing with us what they need, and we are leaning in to help them be successful. It is an immensely rewarding experience.

Here is what one of our MSP customers said:

“You said the magic words of MSP and Low cost, consumption based! We’ve struggled to find a KMS solution we can properly price and sell to our customers to do VM encryption. Solutions like XXXXXX are prohibitively expensive. Your low cost per encrypted VM per month is very reasonable. I’m glad those MSP’s helped you understand our market and that you were able to see the opportunity. You NEED to be marketing this. You’re solving a problem that MSP’s a) don’t think they can afford to fix, and b) are just ignoring the compliance of because it’s “too hard and too expensive.” I highly encourage you to get the word out through marketing to MSP’s. Thank you, Patrick. You made my day.”

If you are an MSP we would like to “make your day.” You can start your journey here

Evaluations of our Alliance Key Manager are available at no charge. We provide technical
support through the evaluation at no charge. Let’s do this together!


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