Absolutely Everyone in Tech is All In on Services

Even long-time PC makers and erstwhile firewall mainstays, as recent news from HP and SonicWall makes clear.

It’s starting to look like the worst is over for the PC market.

True, sales were down 9% year over year in Q3, per Gartner, but the analyst expects global device shipments to enter positive territory after eight straight quarters of decline in Q4 and then grow 4.8% in 2024. That’s good news for resellers, obviously, but will still leave hardware revenue trending well behind IT spend generally (which will climb 8% next year, Gartner predicts) and services more specifically (due to rise 10.4%).

HP’s latest financials and forecast track pretty closely to those numbers. Net revenue for the company’s Personal Systems group was down 8% in fiscal Q4, which ended last month, but will recover in 2024, according to CEO Enrique Lores. In fact, HP’s PC sales are already headed in the right direction given that Personal Systems revenue dropped 18.9% during 2023 as a whole.

Still, like Gartner, HP sees even better things ahead for services judging by changes it plans to make next spring to its Amplify for All partner program.

Eagle-eyed Channelholic readers will recall that I’ve been trying to get time to discuss Amplify for All with Kobi Elbaz (pictured), HP’s global channel chief, since the company first unveiled the program late in October. That conversation wound up happening last week, as it happens, on the sidelines of the Canalys Forum North America.

If you’re new to Amplify for All, here’s a quick recap:

• It rolls formerly separate programs for three big acquisitions—Poly, Teradici, and HyperX—into HP Amplify, the retooled partner program HP introduced in 2020. “If you are channel partners of HP, you don’t need to work now with many programs,” Elbaz says. “You have one.”

• It includes a program called Amplify More for More that offers extra compensation to partners who work services, peripherals, and Poly headsets into deals, and another program called Amplify Fast Lane designed to help eligible partners collect MDF up to 50% quicker.

• It pulls distributors into Amplify for the first time. That will benefit resellers and MSPs too, according to Elbaz, by giving HP access to a rich new pool of end user data. “We can do more targeted campaigns, more targeted selling, together,” he says.

Most notable for me about Amplify for All, however, is how HP plans to amend it next May when it rolls out Amplify Growth Plays, a new specialization program aimed at rewarding partners for cultivating skills and sales in especially strategic market segments. The final list of Growth Areas is still TBD, but includes managed services, managed print services, lifecycles services (like setup, repair, and replacement), and SMB video collaboration solutions. Elbaz sees particular potential in that last segment, which presumably encompasses the managed collaboration services HP announced last month.

“The fact that there are 90 million [conference] rooms in the world but only 10% of them are equipped with video just shows you the opportunity,” he says.

Enthusiasm for services more broadly isn’t exactly a new development for HP. The company has been calling itself a hardware, software, and services provider for years now. That all of the strategic markets it’s revealed so far for 2024 and beyond, however, involve services tells you that rebounding PC sales, though welcome, aren’t the growth drivers HP’s most excited about at the moment.

SonicWall makes a services play of its own

You know who else is sweet on services? Security vendors, who are especially into managed services right now, and extra especially into managed detection and response services.

And with good reason: worldwide sales of managed security services will be up 15.9% to $70.2 billion by the end of 2023, according to Canalys, with MDR spending more specifically up 34.5% from an admittedly smaller base. Hence recent developments like the EDR/MDR service Malwarebytes introduced in August, the incident response retainer service Sophos announced in September, and the brand-new MDR subscription WatchGuard rolled out last month.

And hence as well SonicWall’s acquisition last week of MDR vendor Solutions Granted, a deal that underscores the degree to which outsourced SOC assistance is quickly becoming a mandatory component of any viable managed security stack.

“The MSPs to whom we sell and support really require this,” says SonicWall CEO Bob VanKirk (pictured).

Don’t just take it from us either, he adds. “This has been a resounding request. It has been key feedback coming from partners across North America.”

There are several reasons why, including the high price and low availability of security talent, and mandates from cyberinsurance providers. An arguably even bigger factor, however, is the growing consensus among MSPs that today’s complex threat landscape has made security monitoring and management a 24/7/365 need, according to Solutions Granted CEO Michael Crean, who now heads up SonicWall’s managed security unit.

“People don’t unplug their internet,” he observes. “It’s on all the time. Somebody’s got to be there to watch out for it.”

And that somebody better be a thoroughly trained expert, adds Crean, employing a medical metaphor. “These MSPs are like the best family practitioner that you ever wanted in your life,” he says. “When they need a heart surgeon or a brain surgeon or something like that, we act as that specialist.”

Meeting needs for MSPs has been a top priority for SonicWall since VanKirk took over as CEO last August. The company named managed services veteran Michelle Ragusa-McBain its global channel chief in August, introduced a new, MSP-friendly partner program the following month, and has MSP-friendly SD-WAN and SASE services coming soon.

“Channels and partners are in our DNA,” says VanKirk, conceding that SonicWall lost sight of that heritage during the four-year stretch when Dell owned it, and lost partners as a result. “In 2016, when we divested from Dell and [private equity firm Francisco Partners] took us private, we saw a number of those partners come back.”

Now it’s courting the rest of them, and more besides, VanKirk adds. “We’re doubling down on our partners.”

Three last underreported notes from SonicWall

As far as I can tell, no one else has reported any of them yet:

1. Its new Solutions Granted division will be adding an important managed security service shortly. “In the coming weeks, not months, but in the coming weeks, we’ll be rolling out support for Microsoft Defender,” VanKirk says.

2. New and unspecified AI functionality is coming to the Solutions Granted SOC as well somewhat further in the future. “We’re going to get faster and more capable, and we’re going to bring some new offerings to the table that are going to get really exciting and open up the ecosystem in a different way,” Crean says.

3. A new integration platform for SonicWall’s growing portfolio is currently in development and likely to ship next year. When it does, that cross-app foundation will exchange threat telemetry, reporting analytics, and more not only between SonicWall products but with third-party solutions too. You pretty much can’t do security properly these days without that kind of collaborative multi-vendor approach, according to VanKirk. “That is what we’re hearing from the analyst community,” he says. “That’s what we’re hearing from our MSPs.”

Also worth noting

• Huntress has published its first-ever SMB threat report, which says among other things that 65% of security incidents during Q3 this year involved illegitimate use of legitimate RMM software.

• Cloudli has officially unified ConnectMeVoice, the voice, data, and messaging vendor it bought in June, with its corporate brand.

• Security vendor Guardz has shipped a “growth hub” for MSPs offering risk assessment tools, marketing collateral, sales materials, and access to a new referral program that pays up to a $1,000 commission for every MSP conversion.

• Rapid7 has added an AI-based service that detects and prioritizes anomalous activity in an end user’s cloud environment.