Cybersecurity Consolidation: How One MSP Benefited by Standardizing

Many MSPs today agree that cybersecurity is the third pillar of their tech stack, the first two pillars being RMM and PSA. But that’s a recent development. For years cybersecurity was an add-on service and often an after thought.

That was the case at Buffalo, New York-based MSP PCA Technology Group, which hummed along at approximately $5 million annual revenue for years. But PCA realized that there was a major opportunity for MSPs, driven by the demand for cybersecurity services amid an increasingly complex threat environment.

While many didn’t think of cybersecurity as an SMB problem back then, PCA realized it was a multi-faceted opportunity: They could boost revenue, expand their customer base and at the same time increase the average size of their customer.

“We were at about $5 million revenue for years, but about five years ago we started looking at ways to boost the revenue through managed services and cybersecurity,” Stephen Neuss, director of sales at PCA Technology Group, Inc., told ChannelE2E. “We have clients usually sized at anywhere between 25 and 250 people. Our customers have tripled in size,” he added.

But let’s back up for a minute. Five years ago, Neuss said, PCA began asking how they could accomplish their goals — boost revenue, gain customers and increase the size of those customers. When Brian Powell, the current CTO at PCA, was hired, he introduced WatchGuard‘s Fireboxes — firewall appliances — to the company. From there, the relationship flourished, Neuss said.

“How do you grow in a world that’s more complex? How can we achieve these new levels? Our clients wanted us to grow to keep pace with this landscape of threats; AI threats and all the emerging different attack vectors,” Neuss said. “Normally, the cross-sell/upsell conversation with customers is kind of nerve wracking, but our customers are actually begging us to cross-sell and upsell. They want us to lead them to where they need to be, to help them solve their technology issues so they can focus on their core business.”

Selling the Value of Cybersecurity to SMBs

The integration of WatchGuard’s products provided PCA with more opportunities to cross-sell and upsell customers with the promise of better security delivered at a reasonable cost.

“We started off at the edge with WatchGuard, and the roadmap fit, the technology fit, and it has just accelerated. The number-one attack vector now is email, so we expanded to their multi-factor authentication (MFA), then we expanded our offerings even further,” he said. “We had a mix of brands in our portfolio, but we weren’t confident about the vendors’ ability to transform their offerings with the times, and we also wanted to consolidate our offering to simplify management and drive efficiency. WatchGuard’s approach and offering met our needs then, and because their platform was built to be easily updated with new security services, we were confident they would continue to work well for us in the years to come. At that point, we consolidated our portfolio down to purely WatchGuard.”

That has provided fuel for PCA to achieve rapid growth. In just the past three years, PCA increased its client base by 82% and grew its monthly recurring revenue by almost 100%. Over the last 18 months alone, monthly recurring services revenue has grown by 56%. Overall growth is evenly split between existing customers and the expansion of existing accounts. PCA has also extended from its upstate New York roots to northeast Ohio and northern Pennsylvania.

The Value of Standardizing on a Single Cybersecurity Provider

Since standardizing on WatchGuard as their single cybersecurity services vendor, PCA nearly doubled its client base and drove a dramatic increase in revenue. Standardizing on a single cybersecurity platform vendor enabled PCA to offer more cybersecurity services, increase cross-sell and upsell opportunities, and shift more of its customers to a subscription-based, as-a-service model, while simplifying management and improving efficiency, Neuss said. 

Standardizing on a single vendor isn’t for everyone. There are plenty of MSPs that look to best-of-breed offerings. In addition, there are platforms, that are open, enabling multiple cybersecurity vendors to plug into them. That can give MSPs the benefit of a single platform that incorporates multiple solutions without the need to integrate those solutions themselves.

Chris Wachel, regional VP of sales, WatchGuard, said that organizations may have been reluctant to standardize on a single platform in years past, but that’s changed with the evolving threat landscape.

“It used to be that folks didn’t want to put all the eggs in one basket, but now they are realizing the benefits of standardizing,” Wachel said.