Now That's IT: Stories of MSP Success
Now that's IT: Stories of MSP Success dives into the journeys of some of the trailblazers in the Managed Service Provider industry to find out how they used their passion for technology to help turn Managed Services into the thriving sector it is today.
Every episode is packed with the valuable insights, practical strategies, and inspiring anecdotes that lead our guests to the transformative moment when they knew, Now, That's IT.
This podcast provides educational information about issues that may be relevant to information technology service providers.
Nothing in the podcast should be construed as any recommendation or endorsement by N-able, or as legal or any other advice.
The views expressed by guests are their own and their appearance on the podcast does not imply an endorsement of them or any entity they represent.
Views and opinions expressed by N-able employees are those of the employees and do not necessarily reflect the view of N-able or its officers and directors.
The podcast may also contain forward-looking statements regarding future product plans, functionality, or development efforts that should not be interpreted as a commitment from N-able related to any deliverables or timeframe.
All content is based on information available at the time of recording, and N-able has no obligation to update any forward-looking statements.
Now That's IT: Stories of MSP Success
Standardization and Security: Ori Segall on Scaling Managed Services in 2024
This episode was recorded at an N-able Business Transformation event, Escape Velocity: Getting to $2M, in Austin, Texas.
From Ori Segall's beginnings as a hands-on technician to his rise as a Chief Technology Officer in the MSP industry, his story showcases the pivotal role of standardization and cybersecurity in the growth and scaling of MSPs. Ori provides a blend of unique strategies and personal stories, shedding light on the hurdles and victories faced in keeping pace with the ever-evolving tech landscape of 2024. Packed with insights and practical advice, this episode is a goldmine for anyone aiming to propel their MSP business to new heights with innovative practices and visionary leadership. Don't miss out on learning from one of the industry's trailblazers!
Hosted by industry veterans, this podcast delves deep into the findings of the MSP Horizons Report, providing actionable insights to transform your IT business. Each episode features in-depth discussions with experts, thought leaders, and successful MSPs who share their experiences and strategies for navigating the ever-evolving landscape of managed services. Listen & Subscribe Wherever You Get Your Podcasts.
'Now that's it: Stories of MSP Success,' dives into the journeys of some of the trailblazers in our industry to find out how they used their passion for technology to help turn Managed Services into the thriving sector it is today.
Every episode is packed with the valuable insights, practical strategies, and inspiring anecdotes that lead our guests to the transformative moment when they knew….. Now, that's it.
This podcast provides educational information about issues that may be relevant to information technology service providers.
Nothing in the podcast should be construed as any recommendation or endorsement by N-able, or as legal or any other advice.
The views expressed by guests are their own and their appearance on the podcast does not imply an endorsement of them or any entity they represent.
Views and opinions expressed by N-able employees are those of the employees and do not necessarily reflect the view of N-able or its officers and directors.
The podcast may also contain forward-looking statements regarding future product plans, functionality, or development efforts that should not be interpreted as a commitment from N-able related to any deliverables or timeframe.
All content is based on information available at the time of recording, and N-able has no obligation to update any forward-looking statements.
It's probably one of the hardest things to do as an MSP, but having a standardization that they don't have to figure out, oh, this is this package, but let me add this. Let me add that. Let me add that Our technicians are all on the same page. Our administrators are all on the same page, so it's really just an easy flow of billing, monitoring, maintaining, servicing our clients, and they all love it because the bill is real simple for them to read.
Speaker 1:Welcome to Now that's it stories of MSP success, where we dive into the journeys of some of the trailblazers in our industry to find out how they use their passion for technology to help turn managed services into the thriving sector it is today.
Speaker 3:He's the CTO and man in charge of managed services at Preferred Business Systems, or PBS, in Whippany, new Jersey. He's definitely a Jersey guy. He's been involved in IT for over 25 years as a technician, a leader and business owner, and he's one of the biggest New York Yankees and New York Giants fans that you'll ever meet. Please welcome, mr Ory Siegel. Thank you, yeah, sorry about your.
Speaker 2:I heard some boos because of the Giants Yankees this year, Ory.
Speaker 1:Yeah it's all right, all right.
Speaker 3:so, ory, thanks for being here with us in Austin for the past two days. I know I've heard a lot of the partners that have had conversations with you and they've really enjoyed, but why don't you tell everybody just a little bit about yourself? And just, yeah, tell us a little bit about yourself.
Speaker 2:Yeah, so I was born and raised in Jersey, I've lived outside of the country, went to high school in Israel, came back. I've been in IT for about 25 years. I had a mentor when I had first started when I was 19 years old, taught me a lot of things, got me really into technology and then, luckily, I had a great pathway from there. I was a junior system administrator when I was basically 20 years old and September 11th happened, unfortunately hit hard at home and I had lost my job and then just traveled the country, came back and started from scratch. Started on the call center, went from the call center to help desk, help desk to field tech, field tech to managing two downtown offices for a Corcoran group. And then, when I was working there, I was like this is crazy, I should be doing this myself. Started my own company called Super Tech Boys, jersey style, and then I had to have it with a Z, you know. So I had a good time, basically a one man show. I had a couple of consultants that had worked with me here and there.
Speaker 2:2008, you know, depression came hit hard, lost two of my largest clients, basically bringing in about like 7,000 in revenue a month for myself. I was like I need to find some foundations and some security, and that's when I had met the owners of Furt Business Systems, which is a. I'll use CPM a lot. It's a copy or print mail. They are a copy or company. They were a copy or company and this was back in 2009. Started the IT side with them.
Speaker 3:So why don't you tell us a little bit about PBS and maybe the journey that you guys have gone through over the last several years?
Speaker 2:Yeah, 2009, started IT services for CPM. We were doing installs, break fix, you know helped them develop a strategy. Then, 2011, around there, we decided to become an MSP, started working with the famous Stephanie Hammond over there the best account manager anyone could possibly add helped us grow our business tremendously. Our partnership with Enable at that point and then so 2011 started doing MSP services. I had a boss that we had some conflicts and didn't get along. In 2015, 16, I took over the IT side. We were about $380,000 in business on MSP and skyrocketed from there. I had a different vision for the company, on how we grow and how we push forward, and so built a team of what we called the core for which was three of the guys that worked for me and just went from $380,000 of business to about a million dollars in a year and a half and From 2017 18 to now another. We've grown probably about 20 30 percent year over year. Just.
Speaker 3:Awesome foundation. That's great, alright. So we talked a little bit at yesterday with Jimmy about the service model. Standardization was pretty big in your evolution as well, wasn't it? Yep.
Speaker 2:Yeah, from the beginning we were always. We never allocated anything the whole time that we had created our business. You know, we did take on every single customer All right, like didn't matter what they were, but we were only providing a specific type of service, you know, and and didn't ask them what they wanted. We were, we were always a tell-nots-ell, but we weren't aggressive about it until about two years ago.
Speaker 3:That's great. And then, how early did you guys realize that having an advanced security Offering was really a game changer in an untapped market?
Speaker 2:Yeah, so we started building out what we call our cyber-right Security package about three years ago. Give or take. It really got very strong in the last year and a half and but three years ago we knew that was an area that we had to start developing in. So we Really big on mentoring and guiding people in the right direction, pulling people from different areas of our company to do that. So I promoted where our guys Ruben to build out the cyber security side with me right by side and we built that a Pretty strong stack to provide to our clients.
Speaker 3:So you, you didn't necessarily have security people. Obviously Security is a part of every IT technicians sort of skill set in some level. But how creative did you have to get to sort of build that team out?
Speaker 2:I have pretty, pretty creative. I mean this is this is calling my kiddies 30 now, but it was a guy who you know came to us right out of college work to help desk. I went to cyber school for cyber security but it was eight years ago. You know things have changed tremendously. But I use a majority guy.
Speaker 2:I use my resources to a very high level. I expect you know I'm providing a service. I expect my partners to provide me a service, so I reach out to them and so I use the channel, the community. I'm very big on just picking up the phone and calling people, making sure that I had the right support and, you know Enables always given it to us. There's other Partners that we're very close with that have helped us grow that that department as well, putting a bright. You know vetting your, vetting your partners is extremely important and then once you vet them, use them. I mean there you're paying the money right. Your clients are paying you money. You bend over backwards for them, so they should be doing the same for you to make you. Your growth is their growth right. We all work together and so that's how tremendous.
Speaker 3:I think that that partnership piece is really key. Like you obviously do business with Tons and tons of different vendors, and so even a look at your vendors and even classify them like these are our strategic vendors, these are the ones that you know we're gonna work together when we're bringing a new offering to the table and see how they can support us on that. That was pretty key to our evolution and sounds like the same to your big time.
Speaker 2:I we do not work with anyone who does not provide us a direct account manager. I mean, if there's no one that I could pick up the phone and call for any situation, we're not. We're not working with you, and they all know that. And, and I don't care if you were my salesperson, you're still, I'm still calling you if I need to, and and all that kind of stuff. It's extremely important to have that partnership and relationship together.
Speaker 3:We talked a little bit yesterday during my session about user-based pricing and and you've shared you shared it a little bit yesterday that you made a switch, you made a transition of that user-based pricing model a while back. Why did you decide to do that? Or?
Speaker 2:it's the way the world, everyone you know, even your personal life. You buy Netflix, its user base subscription model, office 265 Subscription model, adobe subscription model everything is user-based, so it like. For us, it was easy for billing Standardization, everyone being on the same page, or sales people, as we were trying to bring on sales people and continue to try to bring on Sales people it's probably one of the hardest things to do as an MSP, but having a standardization that they don't have to figure out. Oh, this is this package, but let me add this. Let me add that. Let me add that our technicians are all on the same page, our administrators are all on the same page, so it's really just an easy flow of billing, monitor, maintaining, servicing our clients, and they all love it because the bill is real simple for them to read. Our motto is making it simple, making it simple, so try our best on every level to make sure that our clients are Getting a simple solution.
Speaker 3:That's awesome You're. You've always been one to obviously share and open up with, with other MSPs and and help them. I mean you say that over and over and over again I'm here to help. You signed up immediately, raised your hand and said I'd love to come to Austin and and share. So Can you share with the, with the group? You know, really you've evolved your service offering a number of different ways times over the last couple years. You talk about standardization. You talk about obviously the user base, pricing it. Just what other sort of other Blanket advice would you give to those that are maybe thinking about but their service offering through some change?
Speaker 2:Yeah, just value yourself. That's a huge one. Be completely transparent with yourself. Know where you need help, ask for the help and events like this, like every single one of us have issues. We're not perfect whatsoever use everyone in this community together. Just be transparent. I Mean that's it's.
Speaker 2:You know I use a tagline a lot of my LinkedIn posts like MSPs, help MSPs. You know you were no one's a competitor in this room, Even if you're guy right down the block. You know there's enough businesses in this country for all of us to succeed. But do not undervalue yourself, because then you're undervaluing me as a company and and yourself and you know we do something for companies that they cannot get in other places. We charge to 25 a user. Some of you may roll your eyes or may say that's high. It's not high whatsoever. All right, and each one of you can charge to 25 user. You just got to make sure you're providing the stack, the services behind it. You're giving them something that they can't get other places. All right, and your team is working tremendously hard and they don't want to do help desk tickets all day. You know bringing that automation that we spoke about. You know just value who you are as a company and provide those services.
Speaker 3:Yeah, I think you hit on something pretty important to the vulnerability. You know being vulnerable is Really really important and especially in situations like this, you know the peer groups. We see it firsthand because you're helping each other really grow your business. And so what, to answer some of the questions, you know this is where we are. Like you are not lying in a peer group or, if you think you are, you're calling BS, I think it's pretty neat to come to the top.
Speaker 3:Or you know situations like this and I mean or just mention it there, I've heard Jimmy talk about it, I know you know the others, matt, others will talk about it as well Like you know, no one's perfect here. We've all and I'm a good example too like we made tons and tons of Mistakes. And so when you get folks like us in a room and you want to share, like hey, this is what really worked for us, ask us what didn't work for you and we'll happily share that so you don't make those same mistakes. Definitely pretty key. All right, let's change the growth a little bit. Or you know when does PDP BS get the majority of its leads from?
Speaker 2:It was definitely Basically referral based business for a long long time and still is. A tremendous amount of our business is referral based. It's built on the customer relation and customer service that we provide. We have Broadened sales people. Some have come, some have gone. We're rebuilding that we have now are building out client success, which is going to bring in a ton of revenue, and that that engagement.
Speaker 3:So you have, you've had, sales people, or you have sales people, but how much are you involved in the sales process?
Speaker 2:a tremendous amount. I hope close you. They call me my nickname's number 42. Yankee fans would understand that. So that's Mariano Rivera's number Closer, and so it was a tremendous amount. I do a lot in the company. I'm now separating out a lot of my duties. Jimmy makes fun of me about the amount of emails I get every day, but yeah, it was a lot. A lot of the deals was me closing, but now I'm training someone to take that responsibility away. That's great.
Speaker 3:Can you talk about the importance of? I started my session around determining your ideal customer profile, who that target customer is, how important that is that for folks?
Speaker 2:Extremely important. Now that comes in time. Obviously that didn't happen overnight, but we target companies that understand the value in their technology. That is our target customer profile 20, 25 users up at this point, but they need to understand their value in technology.
Speaker 3:I think the other one you had told me too, and Jimmy says this, and I've heard others. You can say no, oh yeah.
Speaker 2:You have to say no. It's very hard when you're growing the business, and a lot of you all are one, two, four, six people shops, eight people shops. It's definitely not easy, but I'm going to tell you that in the long run it will make it easier for you. We're at a point where we have to fire a ton of customers. We have a ton of customers that are killing our technicians and the morale, and we're huge on culture, and so if I would have said no years ago, I think we'd be in a way better place at this point. We're in an amazing place, but now we have to go through something that no one ever wants to do is fire people that you've known for so long, and Jimmy spoke about it. It's not an easy thing to do, but you could say no at any time. You should say no and definitely provide one package.
Speaker 3:You guys have not a unique business model, but you have a business model that some others in the room have, where you've got another side of the business that is large, very large, and that's how the company was started. And so can you talk a little bit about how the copier business sort of feeds the MSP business and maybe vice versa? How do you play out for each of that?
Speaker 2:Yes. So I would say that the MSP side feeds the copier side of the business. I mean, the copier side of the business was the revenue and the money that helped create the MSP side of the business. We're trusted advisors on the IT side. People trust us and they will buy anything from you once you're in there and you treat them the way they should be treated. So we've converted probably about 90% of our IT clients into copier clients.
Speaker 2:On the copier side it's way more difficult and that's where we went through a complete rebranding about four years ago to change the look of our company. It is not a copier company and an IT company but as a full technology solution provider. Because, speaking to Steve over there, he used to own a copier company and run a copier company and you looked at completely like I mean, all of you probably know what your copier guy is and is like this guy. So we've changed that and we've now started converting some of our copier clients into IT clients. But with that target customer profile it's helped us really just go after the specific type of copier clients that we want and those are the larger ones that we have and that's helped out.
Speaker 3:Can you talk a little bit about? Obviously and I get to know Rich, your CEO, through the peer groups, and Rich is really the copier guy though, right, so can you talk a little bit about that transition for Rich to be more of a yes?
Speaker 2:So everyone that knows me Stephanie, chris they always thought I was the owner of PBS Because Rich knew nothing about IT. He's a copier sales guy to heart and an incredible person and really smart business owner, but didn't know anything on the IT side. And for years I've been trying to get him to go to Empower and all these other events and finally he came to an event with me and Rich just takes in information and this is amazing. And now he's coming to these peer groups and he's learning so much and now he understands all these abbreviations and he knows what an MSP is now.
Speaker 2:It's absolutely incredible Even myself. There's verbiage that I've learned from Wilkie that I didn't care about before, Like I didn't think it meant anything or I needed to know it. But the operational efficiency thing that you guys did a couple of years ago brings this transformation on Learning what we should be looking at for metrics and KPIs and benchmarks. We're doing $4 million in business. Until about a year ago we were 3.2. I wasn't looking at KPIs. I wasn't looking at. I knew we were profitable, we were making money, but I couldn't tell you the exact percentage. Today. I could tell you we're at 18% this year. I could tell you a whole bunch of stats. A year ago I would never have been able to sit there and tell you.
Speaker 3:Awesome. We'll talk more about peer groups in a minute, but let's talk about something that is pretty passionate to you, and that's culture. So culture I think you shared that. That's something that really changed your business and it would actually help you catapult the growth in your business. Talk a little bit about that.
Speaker 2:Yeah, we had a horrible culture about five, six years ago. We had two owners, went through a pretty bad divorce and we changed the way our business was and brought in, removed people of drama and didn't want to bring it into our shop. And culture is extremely strong in our office and it has built our business over the last three years. Our revenue has grown because of it. People are happy to come to work. You know our guys are doing unofficial happy hours. We take them out. We do events, our kickoff, our kickoff meeting. This year we closed down the largest go-kart place in New Jersey for two hours just for them to go go-karting. It has changed the daily life of an IT shop. Like these guys are having fun.
Speaker 2:You'd never know If you walked into our company. You'd never know that we are an MSP and we take a huge pride on it. It's extremely important. I don't know if you're going to show a picture, but so that's on our wall. We live by it every day. That's in our kitchen. It means a ton to us. You know it's all of us in our office. We live together. We want to laugh every day. If you're not laughing, life sucks. And then we want to grow together, and that's not only as a business, but that's your personal as well. Like we want everybody to succeed, if it's with us or with themselves, they need to grow right. And when you put that out there and you're helping every single person in your company, there is no way your company cannot succeed. So it's what we live by.
Speaker 3:Cultures and I can tell you that from experience as well. It's one of those things that when it's really good, like you said, it can really catapult the growth, but it can also catapult the retention, right. I mean, you're paying your training employees and then they see a 30% jump somewhere else, but the grass isn't always greener on the other side. If you've built that trust in that family, it's pretty powerful and you can do that for a long time. I mean we got to 300. And I will definitely say the culture was not like it was when we were 70, right, but still to go from 10 to 70 and still have that we've got beers in the office and a kegerator and ping pong and puzzles. Now I would always go in as a service delivery manager and go, we have time to build puzzles like we go close tickets, right. So there's a balance. But to feel like this is a family is pretty.
Speaker 2:Yeah, I mean our guys 4pm. They've got a timer on the TV. It starts at 8am or 7, 7. When the first guy comes in 4pm it flashes. Crack them open. There are a lot of beers after 4. I mean we've got foosball they're.
Speaker 2:You know we're very lenient but at the same time they work extremely hard. So they've got to enjoy themselves and if you can't enjoy your life then you shouldn't be working where you're working. It's life, work balance extremely important. We give 17 PTO days right off the start. You know there's we bonus out every single employee. Now one employee made under $3,000 bonus in our company last year 48 employees. We take 6% out of every single sale that we do. So every dollar of revenue that comes in, we take 6% out and we put it in a bucket and at the end of the year we portion it out to our employees. These are small things. They're big, definitely big, but they're small things that you would never believe what they do. Our retention we do not lose employees. It's because of the work, life balance and the style of life we do and we don't not pay well. But you know it's hard in our market, Like we're in the Jersey market. You're it's not an easy market to be able to stabilize like that, but that is key.
Speaker 3:So you've obviously worked really, really hard to build this, to change this culture. How do you continue to keep it going as the MSP evolves, as you bring new employees on?
Speaker 2:Yeah, we hire our personality way more than technical skills. Every person that applies to our job. We send them actually personality questions to see what they return before we actually we bring them in for an interview and then they sit with a couple key people. We're changing some things that we've learned from the peer group as well. I mean, we're having people take them to lunch that aren't managers before they start, you know, because it again we don't want to bring in a sour apple into into our environment. So we know the type of people we look for and that's really it. It's a personality. Obviously they need technical skills. I said I'm a college dropout, I learned from reading, doing business right and I'm running a $4 million the company's $11 million, but I'm running $4 million side of it. And that is just from passion. Pushing, reading, peer groups, these groups, your community, that's how you grow. That's awesome.
Speaker 3:What? How do you handle employees that don't? Either they don't align to the culture that you built or they don't agree with that?
Speaker 2:So I'm, I'm a very outspoken person. I don't do drama. I was telling some of the guys, like we had two administrators, the employees that that had worked on my team, that one of them still does, one of them doesn't, but at that time they had some drama and I just don't do drama and I don't do both Beep and so this is really hard for the website.
Speaker 3:He has not dropped one F bomb. Yeah, it's incredibly hard.
Speaker 2:So you know, I was telling a couple of guys last night. You know I it's a right to work workplace. I brought them into a room and I said listen, you know each one individually and you know, talk to the first one. And I was like you know, not that big of a deal, I don't know why you guys are like this, but the other one in same thing. Then I brought both of them into the room and I said listen, enough of this. Beep, beep, beep. You're both adults, we work together, figure this out, no drama. I figured it out, the door's right there. And I was like hopefully you guys use that door, not that door. And I left. I was like you guys got to stay here for 15 minutes. I don't care if you don't talk, but you're staying in here for 15 minutes and figuring it out. And then they were good, that's it, that's how we take care of it.
Speaker 2:Yeah, yeah, it's. It's again culture and leadership mentoring. I can't live in a world where we have to babysit Right and be politically correct all the time. And this is that. I am an extremely passionate, nice, helpful person and truly believe that everybody can succeed and I will guide you and help you get there. But I'm not going to sit around and wait for you to be a little whatever and then so we're very strong on do you work, be passionate. We have things up all over the walls and urgency and our core values are extremely important and you know, be accountable for your actions. Customer first, gratitude, integrity, honesty.
Speaker 3:Last section here. You've already hit on it and we don't want to feel like we're beating a dead horse here, but just want to talk about the value of peer groups. Ori and you know what motivated PBS to join sort of that first peer group and what specific goals did you guys have?
Speaker 2:Yeah, so first, it's priceless, truly priceless. If you're not doing it, do it get into something. So that's number one. Number two is, like I said, no one's perfect. And you know we're building this business and we became an EOS shop and you know we're doing great in business, right, but no true direction and processes and procedures in place and all that kind of stuff.
Speaker 2:So we built upon that the EOS strategy and I was looking personally to get a better understanding of service and metrics and KPIs and knew that we were at a point where we need to understand that should have been years ago. I mean, it should have been. I'm gonna tell you right now that if I was in a peer group where I was a million million and a half, I'd probably be at about 78 right now, easily, easily, not even a question, because I would have the understanding of the metrics and had to really target these KPIs and have my whole service team on it and everybody in the company. We're a very transparent company. Everyone knows exactly how much we make and our KPIs and stuff.
Speaker 2:But we weren't able to put that up KPIs and stuff whoring up on the board until I joined this peer group and learn things from Jimmy and these other guys that are in peer group with me. The relationship like you guys see me and Jimmy laughing and everything. We've only known each other a year we're like brothers, but only a year and so like that relationship that's built off of that, it's amazing, amazing. We call each other spin off ideas. It's just priceless.
Speaker 3:I think what's even more impressive is, I think, the first session you guys got in pre-peer group. You guys and Jimmy talked a little bit about it yesterday, like you created a Slack channel or a Teams channel and Russ is in it and Benji's in it. All these guys none of them knew each other and now they're all telling each other hey, did you hear about the new business transformation session? You ought to come down here. Like it's just hey, I've got this new tool. What do you guys think about that?
Speaker 2:Yeah, russ and I just argue if it's a pork roll or a Taylor hand but people from Jersey understand that battle or if we should charge for PC setups or not. But yeah, no, the relationships that you built in these like use them. Like you are meeting so many people in this room and every single person in here has some type of an issue and that person next to you probably has the answer or at least the direction. So just keep your ears open, your eyes open and just keep that relationship. I've spoken to a few of you. Feel free to reach out. I've got no problem answering and helping out anybody in this room of challenges and it's extremely important To grow. This community is important Making an alliance to have a true standardization of security products and it's very. Do not undervalue who you are. It hurts every single person next to you.
Speaker 3:The one. I just wanted to ask you about this. I'm going to share with the group the other cool thing about peer groups that I've seen, specifically with that in-person peer group your ability to sort of stay up to date with industry trends and technology. You brought something to the group when you got together in Miami and I think it opened up others' eyes. You want to share the group, like how you guys do things like that and maybe what you were talking about.
Speaker 2:Yeah, we were talking about automation and I have a very close relationship with the people at Roost and we were talking about automation. Jimmy does power automate and I was looking. He's got in-house developers. We don't, and so we brought in Roost and Pia, which are two RPAs that are out there, and had them talk to the group and then we had a full discussion on it. We were using Roost and went with Roost and it's helped everybody understand. Like Jimmy said earlier, if you're not doing automation and it's extremely hard at your size, but you've got to bring in at least the cookbook and do some scripting to enable. But if you have the ability to put a technician on full time in automation, definitely go with a product, whichever one you want. We're really big on Roost because of all the integration we do, but you have to standardize. If you're not standardizing, automation is not going to work for you. And so, having that discussion in that peer group and everybody bouncing ideas now there's a few of us. A lot of us are doing automation, a lot of us are using AI.
Speaker 2:The Jimmy started with the chat. Gbt is reading all of our tickets, it's changing our summary, it's putting in the internal nodes the top three ways to fix the issue. Based upon what's in there, we can now research tickets. Before it was like you're depending on a technician that changed the summary Come on, we all know that's not going to happen every time. And then, depending on your clients, the need help one is the best Need help and then there's nothing but those discussions in peer groups and with the people. It's again priceless. I don't know what else to say.
Speaker 3:Can you share? You talk about being vulnerable. Can you just share with the group? Over the past number of years since you joined, you've obviously helped catapult the growth. You've done some amazing things, but can you share with the group any things that maybe you didn't do so well or mistakes that you had made, things that might help the team?
Speaker 2:Yeah, I get hundreds of emails a day. It's because I didn't delegate early on enough. I didn't drop part of the vine or whatever that term is and put a service manager in place earlier. You know, I had my core four guys, but we're all like taking tickets and doing this and I was still taking tickets. I did not take tickets anymore, which is awesome.
Speaker 2:But delegation, opening yourself up, you know, letting everybody in in the company, you know I also. You know, our company was very CPM focused and so I had to get the mindset and the transition changed off of that. So it was a lot on myself. So, but I had to trust that these other people could step up and from the copier side and, like I said, people looked at copier people as copier people. I did also, so I didn't let go certain, certain abilities onto the other side of the business. So we did everything internally in 19. And then, when we hit two million and I was about to explode and was still doing everything, is when you know that separation started and then three million, and then now it's every day still separating out my duties.
Speaker 3:But yeah, learning from the other guys and how they did is how you get it still, but what questions we have for Ory None, thank you.
Speaker 2:Yeah, we do a hybrid schedule. We have one day of work from home. A couple guys have two, depending on their, who they are, if I like them, but they all come in, Even on their work from home days. A lot of our guys come in. It's like I said, our culture is so weird, but yeah, we do. Do we give the ability of?
Speaker 1:work from home. I have a question about your 225,. That's not too far off where we are. What is obviously. All labor is included. What external costs? What vendor costs? Office 365, firewall, updates, subscriptions?
Speaker 2:Yeah, so licensing for firewalls and all that stuff is definitely not included. Labor is included in regards to your day to day, but we charge for PC setups, projects, all that other kind of stuff. What's included in? There is an Office 365 business premium license with a $20 credit because we actually automate all of our billing. We charge per user, so it's charged per an assigned license above a business standard license, and so we have it fully automated that. It looks in our Office 365, it says there's 20 licenses above this license type and then it puts it on the bill. So we set and then we're billing for the Office 365 line item. But it's included. We've got a full security stack. So proof point, iron scales, auto elevate on every single machine, threat locker on every server, all included. Cove's Office 365 included Hunter CDR, hunter's MDR. I'll give you the full stack. It's everything Minus the pro-serve.
Speaker 3:Minus the pro-services, yeah, so minus the.
Speaker 2:PC setups and stuff like that.
Speaker 4:All right, I have two questions. This one got asked a lot yesterday after Jimmy's, but since you both do careers at pricing, I don't have to mention so we gotta go. How do you guys account for the backup cost, right? You guys such a variable difference between one company and the next and backup size, so how do you guys deal with that?
Speaker 2:Just don't deal with it, man. We're going Azure and cloud and really moving a lot of things to Windows 365 and desktop and VDIs and stuff like that. You go to a company, they've got one server, another one has four. You're pricing per user. If a company's got four servers, like one physical and three virtuals, right, they probably have a certain amount of users. So we've averaged it out and understand what our true averages per user the 225 covers, and you'd be at probably about I think right now we're at about we're 18% net profit and 57% on the labor loaded. So it works out. You take your numbers and you break it out. You'll see what your average is across the board.
Speaker 4:All right, this one. I'm asking for a friend, yeah, yeah, when you're? You mentioned, when you're at that two million mark and you're going crazy, you know what was. If you could go back and do it again or recommend to someone else what is the thing that would have had the biggest impact to make it less stressful for you, the thing you should have done?
Speaker 2:A true service manager, bringing in a true service, joining a peer group and it's actually a mail. Assigning a service manager. Honestly, you can't do everything, so you probably you're doing service, you're doing sales, like it's impossible Find. You're looking at financials. You know I'm really big on the financials so like I was doing it just too much. So if I was able to, I would have done that way earlier than when I did it.
Speaker 1:So what size customer do you typically look at? You mentioned you have a customer with a physical server and three virtuals. The people we deal with tend to have 70, 80 virtual machines, so 225,. How do you adjust for somebody who has that size so?
Speaker 2:I don't care how many machines they have, it's how many employees they have, I mean how many FTEs, how many full-time employees. We do adjust based like we'll drop down. We just signed up 110 user a few weeks ago, so they're at 175 a user. But tip, you know we're trying not to move away. It should be 225 user. It shouldn't change.
Speaker 1:You don't care if they have 100 VMs servers.
Speaker 2:So I don't know why any customer would have 100 VMs at 100 users, so that would not make sense to me.
Speaker 1:So it would be different build-out. They're internal applications.
Speaker 2:Still sounds way crazy to me. I would change it. I would go in there and change the environment. Honestly, to tell you the truth, I'd rip and replace.
Speaker 1:at that level I'm just curious, because, I mean, I'm definitely intrigued by the per user pricing, but we have a lot of customers with SCADA systems, so how many users are they though? Some of them are 50, 60 users, and 70 virtual servers.
Speaker 3:Yeah, something's not right there, that's all I can say Every app gets a server.
Speaker 2:I mean, what's that?
Speaker 3:Every app gets a server.
Speaker 2:Yeah, yeah, every app. I mean that's crazy. I don't know the environment and I don't know if anyone else has environments like that, but that to me just seems out of this world. So we don't run into that. So I can't answer the question Because I've never been in that.
Speaker 1:Yeah, well, that was kind of my reason for the question, Because in our business we run into a lot of outliers. Some of them have SCADA systems. We're focused right now in the energy environment. So, there are control systems and things of that nature which dictate having separate machines, dmzs, and different VLANs and jump boxes and all of that stuff.
Speaker 2:Yeah, I would say that we have gone after our last five clients that we've onboarded in the last three, four months, or all 50, 60 users and up. The last two have been 100 and 110. Both those clients are four servers. I mean, they've got an app server, file server, dc, and we've moved them all to Azure anyway and we do it in the same way. But that to me. I can't answer for you after this. But I don't know, I've never seen it. You're shaking his head like he's never seen it. Yeah, yeah yeah.
Speaker 2:There you go. That should have been my answer.
Speaker 1:They wouldn't be a client of mine. That's what I was kind of searching for is what is the real algorithm that comes up with the 250, 275 number.
Speaker 2:Yeah, I mean our standard customers, our target profile customers. They're not having those type of server and environment. So it's 225 a user and we move on. But yeah, like Jerry said, they've got 70 servers and 50 users. Yeah, and you really like them and their culture's there and they meet your values, yeah, charge them 500,000 a user? I don't know, I couldn't.
Speaker 1:So there's no magic to the algorithm, then is what you're saying?
Speaker 2:Not at that type of scenario or situation.
Speaker 1:Because, I'll be honest, I wrestled with it a lot.
Speaker 2:It's the way to go. That's all I'm telling you. It's definitely the way to go. All your competitors are doing it. They're starting to do it. So the standardization and, like Jimmy said, if you are not automating in the next three to five years, you will not be in business at all. It's a true fact, same as years ago when they were saying if you're not doing cybersecurity by now, that you probably aren't going to be in business by the end of this year. If you're not doing cybersecurity, you're not in business. So it's the same thing with automation.
Speaker 3:Ori, thank you very much for being with us today and sharing with the group. Appreciate it.