Rewst Makes it Rain RPA
Its “automation-as-a-service” strategy boosts the top as well as bottom line for MSPs. Plus: SonicWall’s small yet big new firewall, Bitdefender on AI threats, and Worklyn’s two new acquisitions.
I’m not a quant. I don’t have a financial model to support what I’m about to say, nor do I have market data that proves me correct. But I’m pretty sure the total addressable market for Rewst and its partners has a lot more zeroes at the end of it than it did 10 days ago courtesy of a product update easily missed amid last week’s news deluge from ConnectWise and Ingram Micro.
Or easily missed by everyone but the investors who’ve put $104 million into Rewst so far, anyway.
Rewst, for those who don’t know, is a company I’ve written about here from time to time that makes robotic process automation software for MSPs. RPA, in turn, is a little like Robin to AI’s Batman in the hyperautomation Dynamic Duo, as in it does a lot of good but tends to get overshadowed by the other guy.
In RPA’s case, the other guy is generative AI, which will generate $611 billion of revenue globally in 2028, according to Bloomberg Intelligence, a figure that makes the mere $37.6 billion Technavio expects businesses to spend on RPA software that year look paltry by comparison. Except that $37.6 billion isn’t paltry, and MSPs will account for only a fraction of that spending.
Until last week, Rewst helped its partners automate time-consuming internal workflows. Almost straight from the product’s debut some two years ago, though, users saw potential in an entirely different area.
“They were more interested in automating their customers than themselves,” says Aharon Chernin (pictured), the company’s founder and CEO.
Chernin politely but firmly refused to help. “I was concerned that they wouldn’t be successful,” he says. MSPs were still figuring out how to run the software inside their own four walls. If Rewst encouraged them to run it in client environments too, there was a good chance of bad things happening that would make end users angry at their MSP and MSPs angry at Rewst.
That was then though. “Now, a couple years later, we have hundreds of MSPs that are very successful at automating themselves and they’re still pushing at wanting to automate their customers,” Chernin says. “I feel like we’ve reached a maturity level in the market that they can do it.”
Which is why Rewst’s platform now integrates not only with many of the RMM and PSA solutions managed service providers use but also with several of the accounting and HR solutions their customers use, more specifically QuickBooks Online, Xero, ADP, and BambooHR.
“I’m finally giving in to the MSPs,” Chernin says.
The upshot is a whole new use case for Rewst software and a whole new revenue stream for Rewst partners. Chernin calls it “automation as a service,” and envisions it producing both one-time project revenue to create automations and MRR for using them.
“Just like we’re software as a service and you’re paying a software license every month to retain access, you’re paying a license fee for your automation every month to keep it running,” Chernin explains.
The margins will get better and better over time, moreover. “You build it once and then they pay forever every month,” Chernin notes.
Unless a client cancels their contract, of course, in which case their efficiently automated HR and accounting processes will suddenly be inefficient again. Automation as a service is “incredibly sticky”, Chernin notes. “If they ever want to leave, that client has to decide do they still want that automation or not?”
You can begin to see where all those zeroes I was talking about come from. In one fell swoop, Rewst changed its TAM from the world’s 43,000 MSPs, per Canalys, to the world’s 43,000 MSPs and every client those MSPs serve. Assuming those clients employ people or manage finances, which last time I checked they almost all do.
“We think this is a big deal and it’s going to be a big differentiator,” Chernin says.
It is for now at any rate. ConnectWise and Kaseya both have RPA platforms as do MSP-focused RPA specialists like MSPbots. To my knowledge, though, Rewst is the only managed service RPA software maker that supports end user deployments right now. But given that MSPs practically bullied Rewst into letting them use its software on customers, suggesting there’s plenty of demand out there, I wonder how long it’ll be before other vendors chase some of those zeroes too.
SonicWall’s newest firewall is compact in size and big in importance
Here’s another story that might have looked less significant than it was when it broke last week. This one, moreover, involves the launch of something physically small but strategically larger.
That would be the SonicWall TZ80 firewall, a compact new device that fills a gap in the vendor’s hardware lineup for small and home offices open since its 7th generation products shipped in 2021. Importantly, though, the TZ80 fits well in more than just small and home offices, according to Matt Neiderman (pictured), SonicWall’s chief strategy officer.
“It’s a form factor that’s super flexible in that it’ll work in IoT type applications all the way up to pretty sophisticated branch office settings,” he says.
It’s also the first product to fully unify the hardware part of SonicWall’s offerings with the non-hardware portfolio the company’s been building since Bob VanKirk took over as president and CEO a little over two years ago.
“We want you to think about this device as kind of a hub, if you will, to enable a lot of other services that SonicWall has available,” Neiderman says.
Those include the zero-trust network access service SonicWall rolled out in July following its acquisition of security service edge vendor Banyan Security in January. The TZ80 has a built-in connector to that product. “You can go pretty seamlessly from this firewall out to our cloud and have cloud ZTNA enabled very readily,” Neiderman notes.
The TZ80 syncs neatly with another key part of VanKirk’s market strategy. “It’s totally built with service providers in mind,” Neiderman says. As in it’s a subscription-priced product requiring only a modest upfront payment worth less than 20% of the list price that buyers can pay for the same recurring way they pay for managed services.
“Customers increasingly just want to get one bill every month with everything baked into that bill,” Neiderman says.
MSPs, meanwhile, increasingly want to outsource security support to MDR providers, something they can do with SonicWall thanks to its purchase a year ago of Solutions Granted.
“We can do a remote installation,” Neiderman says. “We’ll help you configure it. We’ll help you monitor and manage it.” And all on a white label basis, he adds. “We want the partner and expect the partner to still be the face with the customer.”
There’s one more MSP-friendly feature as well, Neiderman continues: The TZ80 is the first SonicWall product to come with cyber warranty coverage. Through an agreement with Cysurance, users get $100,000 of protection if their MSP supports the product and $200,000 of protection if SonicWall does the job via its managed security team.
According to Neiderman, bigger appliances with a similar value proposition are on the way. “What you see with the TZ80, you’ll see all the way up through the largest of our more enterprise-grade firewalls,” he says, noting that’s an unusual path for a new product strategy to take.
“Historically in cybersecurity, you see a lot of trends start at the enterprise and kind of travel their way down to the SMB,” Neiderman observes. “That’s flipping a little bit.”
Bitdefender prefers people to AI
While we’re on the topic of security, let me slip in some good news for anyone worried about the risk implications of AI. So far at least, it’s doing more good than harm, according to Martin Zugec (pictured), director of technical marketing at Bitdefender.
“For defenders, it’s a huge boon,” he says. “For the threat actors at this moment, not so much, with the exception of some specific attacks like business email compromise.”
That sounds good, but is true for a depressing reason. “In many cases they have more work than they can handle using less sophisticated methods,” Zugec says. Why bother learning something new when tried and true techniques are still hugely effective (recent evidence here).
Indeed, for all the terror deepfakes provoke in potential victims, there’s little evidence would-be victimizers have much interest in them so far. “We see it once in a while, but again, a basic scam often works as well,” Zugec says.
Should MSPs and their clients bother even thinking about the danger of AI-based attacks then? “Yes,” according to Zugec, “if they’ve already taken care of all the other threats that exist.”
The same is true of AI-based defenses too, he continues. Most businesses will be better off using existing defenses more rigorously than augmenting them with something boasting generative AI. Almost every breach is preceded by warning signs, Zugec notes.
“You have all these red flags, all these tools telling you, ‘look into this. This is suspicious. You should investigate,’” he says. “Did anyone look? No. Can AI help with this? No, because you really need some human elements. We try to replace it with technology and that’s the part that’s failing.”
Before shelling out for the newest genAI-powered security tools then, Zugec continues, ask yourself if you can acquire security expertise for the same money.
“Is that headcount going to be more useful for you than having an LLM at this moment?” Zugec asks. “I would say definitely yes. Get more people.”
Easier said than done, perhaps, but sound advice nonetheless.
When small PE thinks big
Much has changed in managed services M&A over the last year. Declining interest rates have triggered a rise in deal volumes for tech firms of all kinds, the emerging MSP “platform grab” has begun picking up steam, and Worklyn Partners, the archetypal “small PE” firm we introduced you to last November has begun thinking bigger both in terms of who it buys and who it serves.
Per earlier coverage, the company’s original vision was to acquire “good founder-run businesses” that big-time equity investors typically ignore with sticky customer relationships among mostly midsize end users. That’s still the strategy today, according to co-founder Zack Miller (pictured), but with a twist. Worklyn’s hottest niche has turned out to be midsize end users who are as aggressive about getting big as Worklyn itself.
“We’ve got a bunch of customers that are themselves growing really quickly,” Miller says. “They’re buying businesses, they’re standing up new offices. So we’re just going where our customers are taking us in a sense. That’s the North Star.”
Worklyn has been scaling up this year to keep pace with those customers and find more like them, first by beefing up its leadership team and more recently by purchasing more IT providers. When we first met the firm, it owned an MSP in Denver, another in Walnut Creek, Calif., and an MDR provider in Jacksonville, Fla. This week, it added IT Management Solutions, of Salem, N.H., just weeks after buying Framingham, Mass.-based Harbor Networks. The latter company, according to Miller, has particular strength in a good place to be strong these days.
“They’ve got a tremendous cybersecurity consulting practice,” he says. “They’re the guys you can go to figure out how to leverage AI for email security, for instance, and they’re the guys that are doing third-party risk management and all sorts of cybersecurity advisory services for pretty significant customers.”
As in “names everyone would know,” Miller adds. Though SMBs are still the sweet spot for Worklyn, Harbor brings the enterprise within reach as well.
It’s no coincidence that Harbor and IT Management Solutions both bring customers in New England within reach too. “Our goal is to become a national provider,” Miller says, partly because its ambitious clients are also expanding nationally.
Worklyn plans to add skills as well as geographic coverage through its next few acquisitions. “Data analytics is a place we’re going to look next,” Miller says. “Can we find a provider that’s got a managed data analytics practice that’s helping customers figure out what to do with their data, getting it in the right place, getting it in a data lake, and then adding some analysis on top of it?”
Miller’s taking calls if that’s you.
Speaking of private equity…
Check out the eighth name on PitchBook’s top 15 list of potential take-private targets.
Cleaning up nice pays off
MSP and brand strategist Lisa Shorr explains exactly why in the latest episode of the podcast I co-host, as well as in her excellent new book, Your B.R.A.N.D. Unleashed: 9 Proven Strategies That Build Trust and Maintain Lasting Client Loyalty.
Last but not least
If you like this blog, it appears you’re not alone. ConnectWise’s IT Nation partner community has named me the winner of its first-ever IT Nation Torch Award for Media Excellence.
I’m not a young man, but this is a young publication. For it to get this kind of recognition 20 months into its history is truly something worth celebrating. Thanks to any and all of you who cast your ballots my way, or would have if offered the chance.
Also worth noting
Interesting: SaaS marketplace AppDirect has bought an MSP.
Speaking of marketplaces, TD SYNNEX has added PSA connectors, real-time IaaS consumption reporting, and more to its StreamOne site. Hoping to get into this next week at TD SYNNEX’s CommunitySolv event.
Veeam’s cloud storage solution now offers “low-cost, all-inclusive pricing” designed to make forecasting easier, as well as tighter integration with the Veeam Data Platform.
1Password has joined the Microsoft Intelligent Security Association, an ecosystem of ISVs and MSSPs that integrate with Microsoft security solutions.
AWS service provider Mission has added cloud detection and response from CrowdStrike.
Jonathan Bartholomew, Paul Monaghan, and Andy Hudson are the newest additions to the executive team at N-able.
Andy Cormier is the new MSP channel chief at Syncro.
Lou DiFruscio is the new CEO at data erasure vendor Blancco Technology Group.
Anyone interested in deploying AI at edge locations should check out the edge-friendly new server from Eaton.