Israel's security and IT product distribution market is advancing toward an MSP model. Traditional marketers are gradually understanding their clients' need for a holistic response to a variety of solutions, along with the provision of related services in the field of information security and IT. Organizations today must contend with a variety of threats and operational complexity in managing all technological tools. MSP providers allow their clients to manage their businesses with greater peace of mind; they cover the threat landscape by using a variety of tools from different manufacturers. The subscription model they operate under allows for high flexibility in choosing solutions, and the management tools enable efficiency and a better, more available response to their clients.
Despite all the advantages, many marketers are still hesitant to make the transition in their business model. Itzik Tzarfati, CEO of I-support, explains in an interview how he succeeded in transitioning from a traditional marketer to an MSP model marketer, why it paid off for him, and what challenges he faced.
What led you to transition to working in an MSP model?
"At the beginning of 2020, the year the coronavirus broke out, the IT and cyber products market was simply booming. iSupport employees switched to working from home, around the clock, to connect our clients to remote work. In addition, at the height of the pandemic, we were informed daily about breaches into business entities as well as breaches into service providers. The period was characterized by many customer inquiries. Everyone wanted more security, everyone wanted to move to the cloud, everyone wanted a firewall, everyone wanted and wanted, and at some point, I realized I had to establish a new work strategy and other management tools to help me control all of this that was happening.
"Amidst all the pressure, I found time to research how to optimize and develop the company. While doing intensive online reading, I learned new terms I wasn't familiar with, such as MSP – Managed Service Provider. When I read and researched MSPs, I was happy to discover that I had already thought of some of these things myself. I understood that development in this direction is probably natural, and I decided that this is the future direction I want to lead my company towards. I knew I would need to close the gap compared to the business models that exist today in the United States and Europe, and to do so successfully, I would also need the right tools.
Additionally, in one of the Google searches I performed, I found the company Ofek, the only one that mentioned the term MSP on Israeli websites. I contacted them and was happy that there was a party I could consult with, who spoke my language and who I could ask questions that arose. I explained that I needed advanced management tools that would suit the new direction.
In addition, Chalaf added that in the first stage, he was looking for three main tools: a tool to enhance control capabilities for service providers, which would allow spatial visibility and control over each organization; a tool for managing service calls and service contracts, and a solution for securely storing passwords and documenting customer files. "Knowing that I have a partner on the way, who has a team that can provide local support, give me business accompaniment and marketing advice, certainly contributed to the transition and the feeling that I am not alone," he says.
How did the tools you chose to work with help you manage your business?
Remote monitoring & management – RMM – is N-ABLE's main tool, which brought about a significant change for me. From reading about the product, I understood it was a good solution for our development and that many MSPs in the US and Europe were already working with it. However, I naturally had concerns about implementing it during a very busy period, characterized by client pressure, a lot of work, stress from the fear of a breach into our clients' systems or our own at iSupport, and working from home. It was truly a surreal time to make such a fundamental change. Nevertheless, it was necessary for me.
I took a deep breath and decided I was just going for it. I installed the RMM on all of our clients' servers at iSupport's expense and we just started learning and familiarizing ourselves with the product. We went through training with N-able engineers and got more and more into it. At the same time, I worked to understand and learn the product's business advantages.
"The immediate benefits of the solution are its Patch Management and monitoring capabilities, which save time on server maintenance. If in the past we had to perform proactive maintenance for the server environment – meaning time spent logging into each individual server and checking it – now all the information and alerts appear on the RMM system's dashboard, and our focus is solely on addressing existing alerts.
"In parallel with implementing the RMM system, we also implemented the MSP Manager system and the Passportal system. Before switching to MSP Manager, we worked with two separate systems: one managed service tickets and the other managed billing records, including descriptions and time. One of the significant advantages of MSP Manager is that we received both solutions in one place, which made things easier for the team. To the system
Passportal has transferred all of our clients' confidential information, including client portfolios.
After about half a year, we transferred all of our clients from a very common cloud backup in Israel to N-able's cloud backup service. This system has saved us a lot of time due to its backup and restore speed, and it doesn't require high maintenance, which has provided us with peace of mind and security. Throughout the onboarding process, which included many Zoom meetings, representatives from Ofek and N-able accompanied us.
"Thanks to the move that iSupport made, during a time when the entire cybersecurity field was booming, we created an initial infrastructure for selling MSP solutions. Clients received solutions for hardening their computer systems: password policy hardening, implementation of a two-factor authentication solution, hardening remote access, and as I mentioned earlier, we also included RMM with Patch Management to ensure systems remain up-to-date.".
We have also included an EDR solution in our recommendations, which replaces traditional antivirus software. We chose to work with SentinelOne, whose installation and deployment could be easily performed with the click of a button from the RMM.
What are the main advantages you identify in your business as a result of the transition to the MSP model?
First and foremost, the main benefit is for my clients. Any change I make at iSupport must first and foremost be for the benefit of my clients. As a managed service provider, I operate and maintain my clients' technology for them, based on the organizational needs of each client. I create more predictable expenses for them, with fewer budget overruns. If in the past we worked with a client on an hourly bank model, they didn't know what monthly charge to expect, and if we worked on a retainer model, disputes arose regarding the scope of support as we requested adjustments for a growing client.
We used to waste precious time explaining and reaching new understandings, which is now saved for all parties. The transition to a subscription model, which is service-oriented and better adapted to today's approach, where marketers are partners, not just sellers of products, but also providers of services beyond products, encourages a true ongoing relationship between the service provider and its customers.
"I understand and have internalized that the market is changing and that large companies are undergoing changes in their business models. Our expert services are a product like any other product. Selling products along with providing services on a subscription basis is the right way forward in my opinion. Perhaps it's only a matter of time before this permeates support service companies and their clients, but it's an improvement for everyone. A customer can decide they are not committed to a specific product and can choose to change products whenever they want; they have no commitment. This way, I am also at ease, knowing that at any time I can choose the right and best solution for my clients, and that I am not tied to specific products for a long period. With a market that changes so quickly, clients who are tied into long-term bundles are not necessarily exposed to the most advanced solutions and may be left behind.
Another advantage is thanks to N-able RMM's remote monitoring and management functions, we monitor our clients" IT systems, perform repairs and updates on client systems remotely and not on-site. There's no need to try and schedule appointments, there's much higher availability for our clients remotely, and that's an important advantage for those involved in service.
What were the main challenges you faced during the transition process?
First of all, I am still in the process of transition. Like any strategic process, it takes time. The main challenges I faced were understanding the best path for iSupport and its customers without anyone getting hurt. I had to figure out the right tools for the job, how to implement them, and also create a shift in mindset and work habits for the entire team – sales, service, and collections. There was a change in procedures and work configurations, a sort of re-education of the system. Another challenge was that I couldn't fully implement the subscription model as I would have liked, because at the time, not all solutions common in Israel were sold on a subscription model. Therefore, we started with an intermediate, hybrid model, as there was no other choice.
"It was difficult to crack the billing issue. There are years of established habits with clients, and the change needs to be explained to each client, including a change in the way expert services are provided. One of the things that is most important to me to emphasize is that the client receives expert services remotely only. I left the "hours bank" for cases where it is imperative to provide service at the client's site. As mentioned, the most significant difference in this model was that we removed on-site service from the routine, and the contract included remote support only. The hours bank was used for physical arrival at the client's site, for projects, and for the lab.
What are the first steps you recommend for a traditional integrator to take to navigate the change?
First, as with anything new, I always recommend taking an interest and becoming proficient. This could involve reading some material on the trend of transitioning to a subscription model in the international distribution sphere, or attending workshops on the subject. Beyond that, on a practical level, I would simply meet with a representative from Ofek Distribution, a company specializing in this area, to get a clearer idea and understand the practical management tools relevant to my business.
"It's important to understand that the process is gradual. In my business, for example, my initial strategy was to implement the new business model for new customers only. I decided that at first, I wouldn't touch existing customers or contracts and would wait for a suitable opportunity to transition them. This way, for instance, we created the opportunity to convert existing retainer clients to the new model when we migrated them to the cloud. Technologically, installing the RMM product on client servers is the foundation. Working with the RMM has proven to be nothing short of marvelous; it has fundamentally changed the business from end to end, and I find myself constantly eager to understand the capabilities of this excellent platform in greater depth.
Where do you see yourself in three years?
"I am still in the process of understanding and implementing the new model, and there are still certain points regarding pricing that I am working on. In 3 years, I am confident that everything will be clearer, which will allow my business to grow. More automation will be integrated, and I expect to grow by 2x, as it will be easier for me to deliver. The processes will be less cumbersome and less manual, so there is definitely an opportunity to increase the volume of activity.
"I look forward to becoming an MSSP, with more emphasis on security, selling and implementing as a service. I am sure that the streamlining will free up resources and we will also be able to improve service and strive for excellence more and more. We will be more proactive rather than reactive to the market. I truly believe in the change and recommend that everyone involved in this field move forward to it, this is the future.
According to Rahav Rosenthal, CEO of Ofek Distribution, regarding the international arena, the Israeli market is still in its early stages of transitioning to the MSP model. "It's gratifying to see the change in our resellers and align with the global trend. We continue to develop our work methods and establish advanced technological infrastructure. Ultimately, the change is made by people and technologies," he concludes.