Sherweb Executives On Bringing Cloud Services, Security To MSPs

‘We were lucky to have our huge base of MSP partners by being first to market with the advent of the public cloud. Now we’re making sure that we serve those MSPs well and that we add value in every way possible where we see a gap, where we see that it is possible for us to add value,’ says Matthew Cassar, co-founder and co-CEO of Sherweb.

Looking To Help MSPs In A Time Of Massive Cloud Growth

Sherweb is not an everyday cloud services provider. The Sherbrooke, Quebec-based company has built a strong niche in bringing a full range of cloud services, particularly around the Microsoft stack, to MSPs across the U.S. and Canada. Sherweb started in 1998 as a web hosting company, but eventually morphed into a software-as-a-service provider and then a Microsoft CSP (cloud service provider) before becoming a full cloud solutions provider for MSPs with a strong focus on Microsoft Azure. The company also offers solutions around Google Workspace for its MSPs.

Sherweb has also been expanding its reach with acquisitions aimed at bringing new value-added services to MSPs. The company last October made two such acquisitions, that of PurelyHR which brought it human resources management software, and of C2 Enterprise, a developer of integrated ITSM (IT service management) software.

Matthew Cassar, co-founder and co-CEO of Sherweb (pictured), told CRN that Sherweb is investing heavily in providing depth to its MSPs by being a great marketplace for best-in-class products and services, investing in cloud expertise including full support and training, helping MSPs better manage their businesses, and helping MSPs with business strategies, marketing, and business planning.

“Today, what we’re focusing on is making sure that we add more and more value to our channel partners,” Cassar said. “And we do that through those four different pillars, and it’s really all about depth now, I would say, more than reach or scale, although we’re growing very fast as a business.”

For an in-depth look at how a smallish cloud services provider can help bring the best of Microsoft to MSPs, click through the slideshow featuring CRN’s conversation with Cassar and Marc-Andre Fontaine, Sherweb’s vice president of sales and marketing.

Sherweb seems to be moving to a cloud distributor role where you’re getting the products and services out there but then adding on additional higher level services for the partners themselves.

Cassar: Our pillar around the marketplace is similar to a cloud distributor. So in the sense where a very significant portion of our business is resellers coming to Sherweb, coming to our platform, getting third-party products, and then selling them to their end customers, that’s 100 percent accurate. But on the other hand, we’re trying to be a lot more than a simple or a normal cloud distributor. We’re trying to add a lot more value, whether it’s through either developing some of our own solutions or by investing in tools and products that can help facilitate the lives of our MSPs. So that’s really one way we’re trying to differentiate ourselves versus simply having a marketplace where we invite the MSPs to come in buy products. And over time, we know [a marketplace is] not going to be enough to really support and add value to the channel.

The big thing with the SolarWinds breach is the question of unsecured credentials through Office 365. How big an opportunity is this for partners to secure Office 365 and the endpoints?

Cassar: The SolarWinds breach, which is a sad thing, creates awareness around security. Even prior to the breach, there was been a lot of awareness around security. It is a major challenge. And I think that more and more MSPs now realize--some of them, by the way, still need to be educated on this--that they need to develop security expertise and security solutions to make sure their end customers are properly secured...

There’s not a lot of solutions that are tailor-made for SMBs, which is pretty much the target market that our MSPs serve. And if you look at the SMBs, once they’ve transferred things into the cloud, yes, it’s great to protect the endpoints with a Bitdefender or whatnot. But a lot of their very important information and tools and what they do will be in the cloud, in Microsoft 365 itself using OneDrive, using Outlook, using Microsoft Teams now, and so on. So we really wanted to develop a solution on top of Microsoft 365 that would facilitate security for SMBs. And Microsoft, at the end of the day, has invested billions in security. All the technology is there, but it’s the same technology stack whether you’re the size of Apple or whether you’re a 10-person SMB business.

How is Sherweb helping MSPs with security?

Cassar: We’ve developed Office Protect, a product exclusive to Sherweb, which is our way to try to help our MSPs protect SMB customers. It does essentially three things. One, it’s an easy configuration tool. It facilitates the configuration of Microsoft 365 tenants for MSPs with pre-configured templates with a ’click-click-next-finish’ operation with best practices without MSPs necessarily having to take a deep dive inside the Microsoft 365 config tool. Two, it monitors the configs, looks for changes, and monitors data based on the configuration that you’ve done. It can create alerts like, ’Hey we’ve noticed that someone has logged into your Microsoft 365 from the Middle East, that’s not normal behavior based on your tenant.’ And lastly, it sends those alerts to the MSPs.

Office Protect also comes with an option that we’ll be launching shortly, Office Protect MDR (managed detection response). What we’re seeing today is, MSPs really love the product. We have a few-hundred partners already using the product. One of the challenge is dealing with alerts. Anyone in security knows that when you get a lot of alerts, they can be time consuming to deal with. But with our MDR option, basically if you do not have an internal security operation center or NOC (network operations center) to look at those alerts, Sherweb can take that load and let you know when a remediation or something requires intervention. That’s a gap in the market where we’re investing in making a solution available for our MSPs so they can better serve their SMBs. And of course, it’s on top of Microsoft 365, because it’s by far the most used product. But Microsoft 365 needs to be more SMB friendly. Hence why Office Protect is there.

Movement to the cloud seems to have accelerated during the COVID-19 coronavirus pandemic. How has the pandemic impacted your business and your MSPs’ business?

Cassar: Really, we’re lucky in a way. We’re in an industry that’s been kind of benefiting, to a certain extent, from the pandemic because of the acceleration to the cloud. So if you look at Sherweb, as a whole, we’ve had a great year. Year-over-year growth will be well over 30 percent.

I think initially some MSPs were struggling for a month or two. So I think if you go back last year in March or April, a lot of deals, a lot of the opportunities that our MSPs were working on came to a standstill. There were a lot of unknowns, and some insecurity in the marketplace, but then when the summer started, June, July, I think even May, things were much better. And since then, we’ve seen growth across the board.

What’s your mood looking at 2021? Are you still seeing accelerated cloud adoption?

Cassar: No one has a crystal ball. But every business that’s transformed digitally, that’s got on-boarded for remote working, that started working with products such as Microsoft Teams, they’re not going back. And I think we all know that business post-pandemic is not going to go back to the way it was. How that will look, and whether the pace at which small and medium-sized businesses have transformed, will keep going post-pandemic is really the big unknown. What I can say is that, so far, month over month, it’s steady in terms of growth, in terms of net-new businesses or net-new end customers that are on-boarding into the cloud. It’s been steady since the first few months after the start of the pandemic.

Is Sherweb looking to hire to meet expected growth in 2021?

Cassar: We’re growing. Sherweb today is just over 1,000 employees. We expect the growth of the business in terms of employees to keep pace with the growth of the business. So if you look at us today, I think we have over 70 positions open. [We’re looking] at another 20 percent increase in hiring.

You’re seeing all this activity. You’re adding new services. What’s your advice for MSPs to be successful in 2021?

Cassar: I think they need to build a business plan. That’s a messaging that we’re trying to communicate across the board. What surprising and what’s scary is that a lot of MSPs don’t have a business plan, are not necessarily projecting themselves over a one-year period or two-year period to look at which products they want to bring to market, what roles they want to do, what kinds of marketing they want to do. So our big recommendation and the way we’re trying to work with our MSPs is really to try and incent them to build a business plan, to look at different areas where they want to differentiate, and of course not try to do everything at the same time but look at certain things like security, how to go and get new customers. Really, we’re trying to get them to be maybe a bit more sophisticated. And that’s really our big recommendation for our MSPs. And what we want to accomplish with our fourth pillar, which is really business strategy. ... It’s important for MSPs to learn about the new technologies. But you also need at least a one-year plan, and ideally a three-year or five-year plan. And of course, part of that plan, once we deep dive into it, we want to make sure they have a strong productivity offering. That they have a strong security offering, because security will get only bigger.

Anything else?

Fontaine: Another trend that we’ve seen in the past year is how effectively MSPs are managing their businesses. This trend was amplified by the pandemic: MSPs that were not able to manage billing properly, accounts receivable properly, and so on, struggled last year. [So] we’re launching C2 for MSPs, an ITSM (IT service management) for MSPs, to help partners, better manage their business. This is something that will launch in the next few months. A lot of our partners don’t use PSAs (professional services automation). So that becomes a bridge between what they do currently and their next step.

Why don’t most of your partners use PSAs?

Fontaine: There’s a lot of reasons: the cost--the big [vendors] are not cheap--and time--how much time these partners have to invest to implement these type of systems--and the non-native integration that some other players don’t have. So I’d say that these are the main reasons why they don’t invest more in PSAs.

Cassar: Our ITSM is much more flexible, and it can adapt more to the business process of the MSPs. [PSAs are] good in the sense that they’re built from the ground-up for MSPs, but normally an ITSM is much more powerful in the sense that there’s a lot of more things you can do. There’s a lot more customization that you can do. What we’re trying to do is really provide the best of both worlds where you get an ITSM, but you can start with templates that are made for MSPs and let them, as they grow and evolve, customize in such a way that’s much more advanced than what you would get from an out-of-the-box PSA.

Is Sherweb making any changes to its partner program to accommodate its new focus on growth and depth?

Fontaine: We’ve slightly modified our partner program to adapt to the pandemic mostly in terms of added value. A lot of partners had seen a rush into the cloud from their customers, so we added more services, more pre-sales, more technical aspects to help them on-board to the cloud. UCaaS, for example, has had tremendous growth in the past few past few months, and our partners were not [accustomed to] selling these types of solutions. So we created Managed Teams Voice, which is management over Teams to help them manage the growth that they’ve been seeing in these types of industries. We also launched last spring a lot of different promotions to help with cash flow [for] partners who were not managing their cash flow and or billing accurately solve problems with invoices and the payments coming in. We deployed six or seven promotions with different types of products to help them bridge the gap between the invoicing and the payment. That was the main aspect that we’ve tweaked on our program. And our ’MBA for MSP’ program, basically helping them with their business strategy, was also something that we added free of charge.

Who are your biggest competitors? What’s your competitive advantage?

Cassar: From a pure marketplace cloud solutions standpoint, Pax8 has been making a lot of noise in the market. So they’re definitely there. But to your point, we really try to differentiate and listen to our customers and adapt based on what our customers will require to be successful. Pax8 will be a competitor. Ingram Micro and other traditional distributors will be competitors of ours. But we try not to pay too much attention to them as competitors. We try to focus mostly on our MSP partners, and that’s really what drives us to differentiate in certain area. ... When you look at things like our exclusive solutions such as Office Protect or PurelyHR which we acquired [last year] which is an HR system for SMBs, none of [our competitors] really are in that game. When you look at what we’re doing in terms of operational effectiveness, yeah, everybody now has integration with PSAs and different systems out there, but the way we’ve done it is superior to all of them when you look at the details. [And] no one is doing what we’re doing [on ITSM] with C2 for MSPs. ...

We were lucky to have our huge base of MSP partners by being first to market with the advent of the public cloud. Now we’re making sure that we serve those MSPs well and that we add value in every way possible where we see a gap, where we see that it is possible for us to add value.

You mentioned the advantage of a larger MSP base. How large is Sherweb’s MSP base?

Cassar: We have close to 6,000 MSPs today.

How important has Microsoft been to growing the MSP market and business? Is Microsoft your biggest vendor?

Cassar: Microsoft is our biggest vendor. ... And yeah I don’t think we would have had the success we’ve had over the past few years if it wasn’t for that partnership. That partnership started in 2005 with the Service Provider License Agreement. It evolved when they came out with CSP. Name any of the large providers out there: Google, AWS, Salesforce, who else. They don’t have as advanced a program for the channel as Microsoft, not even close. I think now, a lot of those players are starting to realize the competitive advantage that Microsoft has by having this huge channel, by having such depth with so many thousands and hundreds of thousands of partners all over the world. So now I think they’re all moving in that direction, but Microsoft is years ahead. And yeah, we were lucky to be one of their early CSP partners for the public cloud.

What is your vision regarding Microsoft Teams? What you’ve seen in terms of MSP adoption, and how important that is for Sherweb?

Cassar: We’ll see how important Teams becomes as the center of the new cloud operating system. That’s definitely, I think, Microsoft’s vision. And they definitely want Microsoft Teams to be the platform on which other software builders and other products will build. Our approach is to make sure that some of our initiatives like Office Protect works with Teams. We need to make sure that Teams is protected. We need to make sure that it’s well supported, well taken care of. But whether that becomes a lot more than really a kind of a video meeting solution, I think that’s still really honestly to be seen. From what we’re seeing thought from MSPs, adoption has been through the roof. That’s definitely because of the work from home movement due to the pandemic. We’ll have to see whether it really become as important as, say, Microsoft Windows was once upon a time.