Cybersecurity software is the next frontier for technology services distributors, and GTS is determined to pave the way.
The Detroit-based company signed a distribution deal with professional services automation platform provider NinjaOne in April, forming a rare TSD-PSA alliance. The two companies spent almost a year ironing out the details to ensure they were a fit.
GTS’ vendor model was the reason NinjaOne chose the company to distribute its software, and why it hasn’t partnered with larger TSDs, which require higher overhead and staffing requirements from their vendor partners. Cybersecurity are a glaring gap in the average TSD portfolio. Avant recently hailed its partnership with Arctic Wolf as the first domino in a potential cascade of new OEMs. But for now, GTS has a headstart with its focus on flexibility.
“That’s where we found our stride: by taking a contrarian view and saying, ‘We'll meet you where you need us to be,’” Stackpoole said.
Most national TSDs offer cybersecurity but often rely on managed security service providers that provide outsourced security operations centers. Technology advisors also need software options for customers that want to manage their security stack in-house. GTS has assembled partnerships with various security vendors, including identity provider Okta, email security providers Trustifi and Mimecast and application protection provider Orca Security.
Technology advisor Opkalla, a GTS sales partner, leans on the company to vet potential software vendors.
“The fact that GTS has a stronger arm around true software providers makes it a lot easier of a conversation when it comes to getting client buy-in and client procurement,” Opkalla Cybersecurity Architect Matthew Caponi said.
GTS takes a boutique approach to sales and vendor management. It employs 12 project managers who spearhead the implementation of deals sold by TAs. GTS channel managers also function as the point of contact for vendors to prevent the need to hire their own channel managers.
“We're showing them that we have the proper internal employees and staff to help sell it, and we will bottleneck it on our side. We're not going to tell them, 'Here's our 900 partners — they'll email you if they sell something,’” Stackpoole said.
GTS has also used its small size to its advantage. The firm may not register as many deals as its national competitors, but its team will vet them to ensure a high probability of success.
“We're going to try and hit somewhere between 300% and 400%,” Stackpoole said. “We're not going to give you 1,000 registrations, but if we give you 100, we expect to close 30 to 45 of them with you. That kind of piques their eyebrows.”
It’s a model most of the national TSDs have rejected, largely because of issues with timing. Telarus SVP of National Partnerships Koby Phillips said TSDs relied on one-off contracts with vendors to enter the contact center market, a decade ago. But once vendors saw sales trickle in from TAs, they increasingly staffed their TSD programs and began adhering to industry standards driven by the national TSDs, Phillips said
“We're a show-me distribution model,” he said. “That's a great model that GTS is using. Once they ramp it up, then I would expect the OEMs to build real channels around it, if it starts to make business sense to do so.”
The journey into cyber
Stackpoole believes GTS is winning market share by courting security OEMs.
GTS was born in 2001 as a direct-selling TA with a focus on selling internet products. The company launched a TSD practice — then known as a master agency — when it realized the necessity of forming relationships with managed service providers. Clients wanted to buy technology from GTS, but often needed to run their purchases by their MSP first. GTS started recruiting MSPs as sub-agents, convincing them that a commission-based, vendor-billed agency model was an easy button to add ancillary revenue.
Ancillary sales originally came from telecom-focused solutions such as data and voice, but GTS’ Eureka moment came when it started offering cybersecurity. MSPs were eager to add cybersecurity services, but most wouldn’t do it in-house.
Only 8% to 10% of MSPs can currently be classified as pure MSSPs, according to Robin Ody, MSP practice leader of Channel Dive sister company Omdia, leading them to outsource SOC capabilities from white-label providers. But TSDs are evangelizing the agency model, where the partner brokers the security service and takes a commission from the vendor.
In the last decade the TSD market has undergone major price compression in traditional connectivity, as TSDs compete with each other to offer the highest commission split. For a smaller company like GTS, that wasn’t feasible. Stackpoole’s team decided that their value would come through high-touch services and a set of cybersecurity vendors no one else offered.
“We said, ‘We're not chasing and paying people 92% to sell $2,500 a year of Comcast or broadband circuits,’” Stackpoole said. “It's a race to zero.”
