How Machine Learning (ML) and Artificial Intelligence (AI) Drive MSP Success

Change is the one constant in the IT world, and the way companies purchase and consume technology continues to transform and evolve. These changes are forcing both MSP IT vendors and partners to evolve their business models to provide full range of technical services to configure, integrate, operate and secure the range of new hybrid platforms and systems, develop specialized skills and expertise that leverages advanced technologies such as artificial intelligence (AI) and machine learning (ML) to put both traditional and cloud-based technologies to work in the real world.

How Machine Learning (ML) and Artificial Intelligence (AI) Drive MSP Success
How Machine Learning (ML) and Artificial Intelligence (AI) Drive MSP Success

This article provides an overview of ESG’s security research in this area and outlines the benefits partners can enjoy when they integrate machine learning and AI-based technologies into their offering.

Content Summary

Advanced, Powerful Cybersecurity Technologies Fuel Partner Growth
Machine Learning and AI: What’s in it for Partners
Background: 2018 IT Spending Intentions and Endpoint Security Trends
The Impact and Potential for Machine Learning and Artificial Intelligence in IT
Driving MSP Success with Machine Learning and Artificial Intelligence
Key MSP Questions
The Bigger Truth

Change is the one constant in the IT world, and the way companies purchase and consume technology continues to transform and evolve. As customers continue to disrupt the IT value chain, a successful transition to cloud and hybrid models requires managed service providers (MSPs) to evolve their people, operations, and processes and employ advanced technology to secure their customers’ environments.

As part of this transformation, the responsibility for securing complex infrastructure and systems has shifted from the customer to the vendor and, today, increasingly to channel partners. MSPs are now called upon to provide a full range of technical services to configure, integrate, operate, and secure the range of new hybrid platforms and systems.

These changes are forcing both IT vendors and their partners to evolve their business models, provide a full-solution approach, and develop specialized skills and expertise that leverages advanced technologies such as artificial intelligence (AI) and machine learning (ML) to put both traditional and cloud-based technologies to work in the real world.

Advanced, Powerful Cybersecurity Technologies Fuel Partner Growth

Successful partners seek out new vendor products that are strategically important for their customers and highly competitive in the market. The best MSPs commit to and invest in vendors whose portfolio of products deliver not only innovative technology advances, but also MSP financial benefits: solid gross margins, follow-on and attached services revenue, and service team productivity enablers that impact cash flow and bottom lines.

After multiple discussions with MSP partners, ESG concludes that investing in a security practice built around advanced solutions that feature machine learning and AI helps partners to succeed by addressing their customers’ core business security needs with innovative technology at attractive deal-level margins. In addition, MSPs that adopt this new functionality are better able to differentiate their service offerings by accelerating incident detection and response and improving their operational efficiency and “cost to deliver” outstanding service.

This paper provides an overview of ESG’s security research in this area and outlines the benefits partners can enjoy when they integrate machine learning- and AI-based technologies into their offerings.

Machine Learning and AI: What’s in it for Partners

Machine learning and AI enhance MSP growth and profitability in several important ways:

  • Advanced offerings expand specific high-value opportunities via a strong customer value proposition and open up the ability to sell “up the stack” to key customer influencers.
  • Partners can leverage the existing knowhow and experience of their security sales and tech teams to communicate customer value of total solutions, resulting in shorter sales cycles and more predictable renewal/retention rates.
  • New partner-branded MSP “total offers” create differentiation that stands up against competitors.
  • Efficiencies in service delivery means lower support costs, yielding increased revenue capacity at a faster rate.

Background: 2018 IT Spending Intentions and Endpoint Security Trends

The pace of business continues to accelerate as it strives to keep up with a dynamic economy and demanding consumers. Organizations are responding by embarking on digital transformation initiatives, opening geographically dispersed branch offices, and increasing their use of cloud computing. From an IT perspective, this means they must deploy solutions with higher levels of agility, security, and performance and adapt as necessary to keep up with ongoing, rapid transformation.

ESG consistently sees cybersecurity cited as both an IT priority and a challenge. This was once again the case in ESG’s annual spending intentions survey, which revealed that among organizations identifying their top IT initiatives for 2018, nearly one-quarter (23%) identified strengthening cybersecurity tools and processes as their most important initiative, with a clear gap between the next initiatives.

Most Important IT Initiatives for 2018
Most Important IT Initiatives for 2018

Within cybersecurity, IT decision makers reported that three areas of significant investment for this year included network security (cited by 39% of the respondents), data security (37%), and endpoint security (33%).

ESG research has also uncovered a clear concern over a range of operational issues within endpoint security that affect customer productivity, in terms of both security teams and their end-users. As seen in the top two most-often cited endpoint security challenges, respondents feel that their security team spends too much time investigating possible incidents (25%), and that regular re-imaging of infected devices negatively impacts help desk and end-user productivity (23%).

Endpoint Security Challenges
Endpoint Security Challenges

The Impact and Potential for Machine Learning and Artificial Intelligence in IT

Machine learning is increasingly being viewed as an important tool for many areas of IT. Several important trends that relate to customer perspectives on the value of machine learning and AI were emphasized in a recent ESG survey, including:

  • Almost 90% feel that ML and AI will have a primary or significant role in digital transformation.
  • Two-thirds see ML and AI as critical or somewhat critical to achieving their business outcomes.
  • IT leaders expect to see these top three benefits from investing in ML and AI use cases: Operational efficiency, Reduced risk on business decisions and Improved and fortified cybersecurity.
  • Customers will look to professional services companies (31%), systems integrators (30%), and managed service providers (28%) to help select, implement, and manage ML and AI technologies.

One area of caution is that machine learning and AI are currently viewed by many IT decision makers as general-purpose tools. They currently lack full understanding with regards to endpoint security on the applicability of ML and AI by threat type when compared with more traditional streaming/behavioral analysis.

A clear opportunity is developing, however. Even though more than half of the respondents (52%) indicated that they were only somewhat knowledgeable about machine learning and its application to security analytics and operations, 39% indicated that their companies had already deployed machine learning/AI technologies for security analytics and operations either extensively or on a limited basis.

Driving MSP Success with Machine Learning and Artificial Intelligence

So, what does this mean for managed service providers? Let’s start with three key areas MSPs must understand:

  1. MSPs need to investigate how leading security software vendors have integrated ML and AI into their products and understand the benefits those technologies provide to end-users. This is critical to allowing MSPs to cut through the noise and present clear, concise benefit statements to their existing and potential clients.
  2. With this in place, MSPs must then gauge the impact of ML and AI functionality on their operations and productivity. This will guide them in determining which vendors lead the pack and where to place their bets for the long run.
  3. With this in place, MSPs can then focus on the net benefits to their businesses that come from integrating machine learning- and AI-enhanced security tools into their offerings.

ESG believes that the benefits of ML and AI can enhance MSP growth and profitability in several important ways:

  • Advanced offerings expand specific high-value opportunities via a strong customer value proposition and open up the ability to sell “up the stack” to key customer influencers.
  • New partner-branded MSP “total offers” create differentiation that stands up against competitors.
  • Partners can leverage the existing knowhow and experience of their security sales and tech teams to communicate customer value of total solutions, resulting in shorter sales cycles and more predictable renewal/retention rates.
  • Efficiencies in service delivery mean lower support costs across a growing customer base.

The combination of all these factors enables a more effective and valuable managed service offering that is easier to communicate, sell, and, importantly, support over the life of the contract. For innovative MSPs, these factors help to deliver more clients at a faster rate and provide increased revenue capacity and efficiency, which all translate to a healthier bottom line.

Key MSP Questions

  • How will ML and AI functionality benefit my customers?
  • How do I present and explain this?
  • How will ML and AI help me in attracting, renewing, and expanding my installed base?
  • What will be the impact of ML- and AI-enabled security on my efficiencies of both selling and supporting my customers?

Machine Learning and Artificial Intelligence Impact for Managed Service Providers:

  • Help MSP offerings stand up against competitors.
  • Differentiate and improve total end-user value propositions.
  • Shorten deal cycles for net-new to improve sales effectiveness.
  • Drive high renewal and retention rates with total benefits.
  • Reduce costs to support for each customer with more efficient incident detection and response.

The Bigger Truth

Integrated Machine Learning and Artificial Intelligence Delivers Compelling Returns for Managed Service
Providers

Managed service providers are at the point of attack under the new IT consumption model and are counted on to create the real-world solutions for customers’ business problems. As such, they are constantly looking for not only new technologies, but also profitable products and services to help them evolve their businesses to meet the challenges of this new era.

This paper supports a strong business case for MSPs to adopt advanced security solutions that incorporate machine learning and AI capabilities. ESG asserts that ML and AI help partners to succeed by better addressing their customers’ endpoint security needs with innovative technology, and also by providing the MSP with a combination of attractive business benefits: solid deal-level margins and renewal rates, increased efficiency of sales and technical teams, and a predictable ROI to ramp sales and delivery of a comprehensive solution.

Also, and critically important for the long term, when packaged into a services-led, total solution to solve a customer’s specific endpoint security problem, ML- and AI-led solutions provide access “up the stack” to CIOs and line of business executives. This last factor can create a real, positive impact on a channel partner’s transformation, growth, and success.

Because of the combined benefits for partner sales efforts, services teams, and business owners, ESG expects a growing commitment to ML and AI by forward-looking managed service providers and organizations.

Source: White Paper: How Machine Learning and Artificial Intelligence Drive MSP Success: What Advanced Cybersecurity Technology Means for MSPs By Kevin Rhone, ESG Practice Director & Senior Consultant
This ESG White Paper was commissioned by Webroot and is distributed under license from ESG.