Video: Phantom Technology Solutions CEO On Raising The Bar As An MSP

hey Channel insiders welcome back to channel Insider partner POV your source for untapped opportunities and unfiltered opinions in the it Channel all to help you make Better Business decisions I'm your host Katie boso by the way if you want more industry news Trends and insights delivered right to your inbox sign up for the allnew channel insid newsletter head on over to channnel insider.com to subscribe okay back to the interview my guest today is Henry Tim CEO of phantom Technology Solutions an MSP with a focus on proactively readying their clients and their employees for anything that could go wrong in this episode Henry speaks to the industry Trends he's both hopeful and concerned about including new cyber security legislation and what the ongoing private Equity backed consolidation of msps could mean for customers Henry welcome thank you Katie happy to be here with you happy to have you I know that it's been a bit of a crazy week for you there in Indiana because you faced some severe windstorms so before we get started and the questions I had planned how are you how are your customers and how have you been able to serve them during this crazy weather period doing good uh it was kind of a a wild 24 48 hours there that everyone kind of had to Bunker down and weather through the uh 80 mph winds that took out a large portion of power in the area but everyone's back to normal and business marches on business Marches On is the best way to put it because you can't focus on uh what happened you can only focus on what you can get away from that your next outcome I've heard this season that we're walking into between Summer and the start of fall actually known as like the power blackout season because the weather patterns all across the US are usually negative there's something that could imp whether you're on the coast or in the middle of the country so I'm sure that you've been preparing for probably some more episodes like this with the weather yeah no and and that's uh it's always a good reminder uh uh for continuing the conversation with our clients make sure that they're prepared and have their own Disaster Recovery plans uh in tune and up to date yeah well let's dig more into your clients there so as I said your company Phantom Technology Solutions you've been CEO of the company 15 years which is an awesome stretch obviously you love what you do and you're enjoying the work talk to me a little bit about the MSP that you are and what are your services and who are typically your customers Phantom Technology Solutions uh was a small MSP we started actually over my garage uh 15 years ago uh purely accidental I had actually been a biology major and thought that uh I was going to go down that line of work and uh propose some ideas around technology to the hospital Tech Team I was offered a position and my career kind of took off from there the MSP though uh came about where I was looking at things that I didn't like seeing in the marketplace people that were approaching selling to me as the CIO at the time for a uh area distributor and kind of gave us this opportunity to build something that we hoped I would have been on the receiving end as a client and so we service primarily compliance-driven organizations which means mainly manufacturing uh legal and Healthcare when it comes to those regulated Industries are you seeing a a lot of difficulty right now trying to make sure that they're not just dumping new trends like AI into their work systems that's something I've been itching to ask because I can imagine that they're just as excited as as retail or any other industry like that but I'm sure that they probably face a bit more of an obstacle with adding those but have you had to you know smack anybody's hand and and tell them get your hand out of the cookie jar lately for better or worse I mean everyone is is obviously excited about the latest Buzz that's coming around uh but uh was old is is new again as far as you know jumping from Trend to Trend but with AI yeah we've we've certainly had to kind of pull the reins back on people and explain the the uh risks that are out there for these organizations especially compliance driven organizations around specifically the their data usage uh in some of these AI engines and programs so becomes a a good discussion point for us though to have with them about what their objectives and goals are for the usage of that information and how we can help to find secure and better systems that take that sensitivity into consideration do you think that's the biggest challenge that you and Phantom face right now is just trying to make sure that you're keeping everybody compliant while also implementing new tech safely based on their needs and based on what you know is not just going to be a fad would that be the biggest challenge is that correct to say or what else are you facing give me some insight into what patterns you're seeing yeah I think the the biggest thing is making sure that we're keeping our clients as educated as possible and about where the industry and their own Industries are headed in regards to how they're implementing and integrating technology towards those business outcomes I think AI obviously has been one of those things where it's everyone kind of rushed into and is now understanding the scope and risk and having those uh mitigation discussions but there's other things too where we're constantly looking at Future legislation other compliance requirements that might be coming down the pipeline And discussing how we can build out an IT program for them that takes those things into consideration and really focuses on defensibility longterm in their decision- making absolutely I think there's a a lot to take in there but the biggest theme that I see you mentioning is staying ahead uh you're you're big on education you're big on being proactive in the industry and I think we'll see a lot more of that come out through this interview but before we go through that I'd love for you to be able to kind of talk about your success stories and differentiators first of all how do you feel aside from prepping your clients ahead of time where do you feel that you stand out as an MSP in this industry we went through the same process as a lot of msps with transitioning from traditional break fix and that reactive approach to the more proactive MSP approach several years ago but to kind of take things a step further we decided that we needed to become more in intentional about our involvement in the industry the education cyber security portion of things and understanding what those uh future things are that we're going to be impacting our clients so that we could better provide those uh services to them but also help kind of decipher some of the marketing crud with the actual realities of things that we're going to impact them so when it comes to differentiators I think we kind of put ourselves in a place where all of our staff are highly incentivized to be focused on their continuing education they have dedicated time each week uh we pay for all their training materials uh College cours workor we pay tour certifications and so forth and those we build out that career path with the idea that you know we we want to make sure that we're providing the best education and resources for our clients uh as well as our employees uh around that we're also though looking at the education piece as far as how can we teach and build resources for those clients in these specific vertical so how can we lead those discussions that are happening around legislation such as breach notification and cyber security requirements Frameworks that might need to be adopted for those uh individual client sectors I'd love to dig in to uh because you mentioned it a couple times now when it comes to that changing legislation including the breach notification for things like that from from previous conversations that we've had you seem to be I wouldn't use the word excited but you seem to be hopeful when it comes to some of that legislation can you kind of walk me through how you feel this legislation helps the managed Services industry should it be something that makes it through sure so I I think it's an important area we have to keep an eye on and I'm hopeful uh that we as an industry will uh kind of put our best foot forward in and kind of take control of that legislation and shaping it what I think is going to happen is or needs to happen is that unfortunately there's a lot of Technology providers that are out there that are kind of Fly by Night pop up and they think because it is a low barrier to entry uh Market that uh they might be able to replace an incumbent MSP without truly understanding the risk and all the the proper things that should be done for a clients's best interest they kind of lack that uh for lack of a better term fiduciary responsibility with those clients that they're onboarding and I think having some of these uh legislative pieces put in place will help hopefully mean that clients will get a better uh product and result in the long term and and really kind of hold us accountable but as part of that we need to make sure that we are doing everything we can to help self-regulate as best as possible rather than leaving those that discussion and those decisions up to those outside of our Market such as uh the insurance companies that would like to very much enforce their own requirements Upon Us surprisingly I think that may be the first time the word fiduciary has been used on this podcast so I'm very excited that you used a new vocabulary word for that but in all seriousness continuing down that line you mentioned a low barrier to entry to just call yourselves an an MSP not you uh in particular but for anybody that might start a business what are some of the other trends that you're seeing in this industry right now that make you a little concerned there's kind of a uh change right now in the industry where people are pushing either towards a mega MSP which is usually uh private Equity backed and loses some of the personal touch with uh clients and you're having the other side of it where there's these smaller msps that are not necessarily putting uh the best value and safeguards in place place for their clients because they're trying to compete on price and it's kind of creating this Valley in between which is not beneficial for the clients um so that's one of the risk areas I see that needs to be addressed is we need to help uh some of the larger organizations out there better understand and uh that they need to partner with probably smaller midsize organizations so that they can maintain those relationships with clients better in a more personal touch and we also need to help the smaller startup Style msps and one to two man operations understand that there are things they should be doing for the clients not necessarily on cost but because it's the right thing to be doing do you see a world in which the mega msps can work alongside those smaller Boutique shops is there a world where you think both of those sizes are necessary yeah I think uh I think that there's a a place for both I think probably what will happen is that the smaller msps will need to hone in and focus on their specialty uh and their specific verticals and your mega msps will be more of a Walmart style type of organization where they're providing bulk service at a discounted price but but really they're going to need each other in order to uh properly fulfill duties because the smaller guys will not have the resources necessarily to take care of some of these larger organizations or at least in bulk and the larger organizations just won't have the depth in knowledge to be able to provide to some of these smaller or more focused um market segments when you say those smaller more focused market segments do you mean some of those regulated industries that you serve or are there some even more Niche ones that maybe I'm not considering in the moment yeah regulatory as far as things like cmmc where good example right now with that is I believe there's only about 200 assessors to Nationwide that are tasked was somewhere around I want to say it's about 100,000 companies that need to be assessed in the next year or two here H and obviously the numbers just don't work out for that is there anything that can be done to speed I don't want to say speed that up but obviously that ratio doesn't make any sense is there anything that you would say msps can do to prepare so that when they do have that that time does come for that assessment they can get a 100% passing grade right away sure um so I think a large part of it is uh unfortunately going to be a waiting game to see what comes out of the Practical nature of the once it's the final rule is adopted here but preemptively uh and what we're doing is we're looking for uh assessors and uh msps that are specialized in that particular area that we can partner with because quite frankly I don't have the time nor Resources with our MSP to be an expert in it ourselves we we need to maintain a good surface level uh education so that we can best guide our clients in making the appropriate choices of who to partner with but really we're going to rely on those Partnerships with people that have gone through it and specialized in it to be able to help get them across the Finish Line with all of these topics in mind between the m&a activity between uh those private Equity backed msps that we're seeing more and more of the changing legislature the cmmc and cmmc 2.0 and whatever it's going to continue to grow to in the future what would you say to customers who are actively looking for that next MSP to partner with right now how can they better understand to choose the right one for them is there any advice that you have for those customers out there depending on their size yeah I think the uh Bas thing is looking for the relationships uh that that uh MSP may have with other organizations whether they're a big or small MSP is is what type of Partnerships do they have with their vendors and other community members that are out there that can help fulfill and service everything that that the uh client may need both now and into the future because it is a rapidly evolving landscape and for example uh while AI is not new it's been around for a very long time the gold brush around it here over the last uh two years has really pointed out the fact that there needs to be people that specialize in that uh and bring those resources to the Forefront for the partners that can take advantage of it or need it uh on the client side so I think having those relationships is is huge of course also plenty of other due diligence that needs to happen as well when a client is letting msps but uh there's some good resources out there actually from Department of Defense uh that offers a free resource uh and I believe cisa from uh Department Homeland Security also has some free resources for businesses that are evaluating msps in the market there's more to this interview with Henry Tim come back on Tuesday for part two thanks to Henry for joining me today and thank you for watching or listening you can check out all episodes of Channel Insider partner POV on Channel insider.com or watch on our YouTube page at Channel inssider newws and Trends don't forget you can also listen to this and every episode as a podcast on your preferred podcast listening platform go ahead and like subscribe and follow wherever possible so you never miss an episode once again I'm Katie boso and I'll see you next time

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