Techaisle Blog

SMBs are the backbone of any economy and are crucial in driving innovation and creating jobs. Yet, when it comes to cybersecurity, they often lag behind larger enterprises, lacking the resources and expertise to defend against sophisticated cyberattacks. This is where Managed Detection and Response (MDR) emerges, offering SMBs a cost-effective and scalable solution to secure their valuable data and infrastructure.

The cybersecurity landscape is littered with threats, and small and medium-sized businesses (SMBs) are often the most vulnerable targets. According to Techaisle's research, not many SMBs are aware of Managed Detection and Response (MDR) services, a powerful tool designed to safeguard against cyberattacks. This begs the question: are SMBs missing out on a critical line of defense in today's ever-evolving digital landscape?

Awareness drives adoption

Techaisle’s SMB and Midmarket research data shows that small businesses are at a much earlier stage of their journey to MDR than their midmarket peers. Just 17% of companies with 1-99 employees report being aware of MDR, compared with 61% of core midmarket firms and 76% of upper midmarket organizations. Looking only at companies that are aware of MDR, current adoption rates mirror this pattern: 5% of small businesses that are aware of MDR are currently using these services versus 45% of core midmarket and 58% of upper midmarket organizations and virtually all companies that are aware of but not using MDR are either currently considering MDR or planning to evaluate these services within the next 12-18 months. These statistics indicate tremendous potential in each SMB segment: vendors must boost awareness of MDR’s benefits while executing an effective conversion strategy. This is especially true in small businesses – which should be an excellent fit segment for a managed service.

Selling sophisticated products to SMB customers is a significant challenge for IT vendors. This problem is especially acute with cybersecurity. Most SMB and Midmarket customer environments need defenses against many different types of threats, attackers, and threat vectors. Most SMBs lack the internal resources to understand what is required to protect against vulnerabilities and how different “shields” can be connected without leaving (or even creating) exploitable gaps in defense posture. Even the channel partners struggle to keep pace with simultaneous growth in threats and threat actors, vulnerabilities tied to in-use technologies or common business practices, and the ever-changing security vendor community.

Not long ago, channel partners tended to fall into two camps: those primarily engaged in transaction-client relationships and those who believed (or wished to believe) that their customer relationships were consultative and advisory.

Today, the channel window has changed. Forget the “trusted advisor” moniker; become a “success partner” because shared risk agreements are reshaping the channel landscape.

Shared Risk, Shared Success: The New Channel Paradigm

Techaisle has seen a rise in outcome-based relationships – in which customers define their target objective (rather than issuing an RFP detailing a specific set of products) – and shared risk agreements, in which the client contracts for a specific outcome (often, one which is tied in some way to financial metrics), where the partner is paid on achievement of the goal rather than delivery of a bundle of technology.

Techaisle’s recent Channel Survey confirms that this migration is well underway. Across all 2,115 channel partners, more than 45% describe their current “relationship philosophy” as outcome-based or shared risk. These new relationship models are best established in the MSP community, where shared risk is a primary philosophy for more than one-third of the survey’s MSPs, with an additional 23% reporting that they primarily engage in outcome-focused agreements.

Shared risk is also a critical relationship model for SIs. This seems like a logical step forward; SIs have often been targets of complaints about solution timeliness or completeness, and a shared-risk agreement helps forestall these potential objections. In contrast, VARs are only half as likely as SIs to pursue shared risk agreements; they are far more likely than any other channel group to establish transactional relationships.

The End of "Trusted Advisor"? Why Channel Partners Must Embrace Shared Risk for Mutual Success

There are few more cherished channel objectives than attaining the position of being a 'trusted advisor' to clients. The phrase connotes a relationship rooted in respect, where the channel partner provides sage counsel to clients who rely on the partner for technology and strategy. Channel partners who act as trusted advisors can direct client attention and investments in ways that enhance the long-term relationship between supplier and buyer.

Users recognize the value of advisory services. More than three-quarters believe that there is a real advantage in a supplier's ability to respond to business pain points with helpful advice. 71% report that a partner that "listens to business needs and guides a customer towards the right technology solution" provides a vital service. Nearly two-thirds believe that a firm that "shares vision and partnership with both IT and business units" facilitates outcomes important to supplier selection.

2024 will focus on metrics, not manuals, resulting in the rise of customer-centric channel strategies. The year will also center around data, not dials, and the imperative of winning in the new era of AI, partner collaboration, and ecosystem commerce. The partners will be compelled to move from silos to symphony by orchestrating the ecosystem to meet customer demands for AI and as-a-service. The Techaisle channel survey shows that the partner community members are searching for a roadmap to success. That roadmap will vary across partner models, as will the opportunities and requirements for suppliers. This shift will be driven by the rise of AI and ROI, which have made prioritizing metrics that align with business outcomes essential. Once again, vendor disintermediation will be real. The reseller channel will be under pressure as it explores different business models, product mixes, and strenuous demands for new skills and service capabilities. Techaisle partner predictions rely on extensive research with over 5000 partners leveraging a panel of over 300K partners. Here are the top 2024 top 10 channel partner predictions.

In 2021, we predicted that AI would permeate small and medium-sized businesses (SMBs) and midmarket firms, not as an independent solution but as an integral feature within other products. As SMBs fully comprehend the inherent nature of AI, they will increasingly seek AI-powered solutions to prescribe actions that mitigate risks and enhance decision-making, business agility, and innovation proactively.

We also predicted that AI technology would evolve so rapidly that by the time SMBs become comfortable with data-driven decision-making, AI would be executing decisions that might be beyond the comprehension of business executives. The challenge with AI would shift from trusting data over intuition to trusting AI when insights into its decision-making process are not readily available in the cloud applications used by SMBs and midmarket firms. We expect this trend to continue into 2024.

After surveying over 3000 SMBs and midmarket firms, Techaisle has announced its top 10 SMB and midmarket predictions for 2024. There is intense market pressure on SMB and midmarket executives to deliver tangible progress towards – and benefits from – application innovation and digital business. At least some of this results from a worldwide fascination with Generative AI and its anticipated potential to transform nearly any function it might apply to. Gen-AI offers significant potential for SMBs and midmarket firms to enhance their operations and drive innovation. By leveraging this technology effectively, these businesses can improve efficiency, productivity, and customer satisfaction.

In 2024, SMBs and Midmarket business and technology leaders will maintain a practical perspective as they move into the digital future powered by AI. SMBs will invest in AI-infused, AI-embedded, tailor-made technology solutions to streamline operations and expand their customer base. To improve manageability, reduce complexity, and limit sprawl, pragmatism will overtake progressiveness. Technology choice and deployment complexity will create purchase inertia, empowering SMBs to seek suppliers capable of supporting a roadmap from the current state to a future-ready organization. SMBs will look for proof points in AI solutions that deliver tangible benefits within their environment. SMBs will adjust their own pricing strategies and implement cost-control measures. Labor shortages will prompt them to invest in employee training and retention initiatives to ensure smooth operations and efficiency. Additionally, SMBs will opt for proactive supply chain management and diversification strategies to minimize disruptions and exploit growth opportunities.

Here are Techaisle’s top 10 SMB and Midmarket predictions for 2024.