HITT- Market trends and AI's impact on data management- Jan 7, 2025

In the video, the discussion revolves around the significant market shifts in 2024, particularly due to VMware’s licensing changes that led to price increases and a reassessment of cloud strategies. The emergence of AI products has created both confusion and opportunity, emphasizing the importance of data quality for successful AI implementation. As companies adapt to higher pricing and seek effective data management solutions, the demand for data storage and security has surged. The conversation highlights the need for flexibility, education, and consultative approaches in navigating the evolving technology landscape. Advisors are encouraged to build relationships and focus on security services to meet client needs.

Transcript is auto-generated.

Thanks for having us as always. So, couple couple just cute, like, keynotes. I think a couple of us need to update our headshots, Chad. I’m looking at you and me on this one.

Yeah. And I, by far have the least interesting last name on this panel. So, let’s get going. Let’s go and flip over, guys, and talk about some markets and trends and what’s happening in cloud, what impacted us in twenty twenty four, and what we’re looking to do in twenty twenty five.

And who better to really give us guidance on these conversations than the guys that are seeing the deals at a frequent level. So we have Chad coming on. Right? Chad is out of their northeast, our field sales engineer, but a pretty good cloud background.

And whenever we had Chad come into the organization, we knew what we were getting. And, man, has it been even more than what we had hoped for. Chad, welcome. I really appreciate you being here.

Thanks for having me. Happy New Year to everybody. Appreciate it.

Mike started off with us in a similar role out of the NorCal market and with his background in data center in particular and advancement in the cloud, it made sense to move him into the cloud solutions architect role with a slight twist.

With everything that’s happened in data center in the last, I don’t know, eighteen months, it really needed more focus and attention. And Mike stepped into that role and has really, become our first ever data center solutions architect as well, really focusing on understanding what’s going on in the market, where the capacity is at, what what the movement’s gonna be. And as always, we have Josh Lupresto, our SVP, who is one of the most humble and in like, at his knowledge and how far and wide he stretches. So he sees everything with a really deep understanding of what’s going on in cloud.

But recently, Josh, myself, and Aman went to AWS re Invent and got a pretty good briefing, and there was a podcast, I think, that dropped on that if you haven’t listened to it. It really goes into some of these big trends that we’re gonna talk about today in twenty twenty five and some cutting edge stuff. And so, guys, let’s go ahead and talk about what dominated in twenty twenty four. So, Chandler, if you wanna slide and then go to the next one because this is really where I wanna get started.

These were the two big conversations that just drove a lot of activity. And where they went is really kind of the interesting part. So, Chad, I know that you saw a ton of deals right as this whole VMware blow up hit. And then if you could talk about what you saw inside those deals and really what what come out of those as far as opportunities, what partners we’re seeing, what customers are doing.

Just kinda give us an oversight of what you saw with that particular conversation happening.

Sure. Yeah. There was, there was a bit of a panic when this happened. Everybody was under the impression, and and it did happen, that prices went up substantially.

VMware, because of the Broadcom acquisition, repackaged all of the licensing, did away with a lot of of individual licensing that people had come accustomed to utilizing on a very inexpensive level. And what it drove was, again, coming out of the panic was a look at really what is happening in individual companies’ cloud, planning.

And what they wanted to do is not only insulate themselves from the cost factor that was jumping up, in some cases, seven, eight hundred percent because of the repackaging of the v VMware licensing. But they also were looking at, do they really need to keep, VMware? Is there an ability to transition off of that? And what has happened is after the initial panic settled down a little bit, there was the ability for us and the and the solutions engineering team to step in, come alongside a lot of these opportunities, and really just explain, here’s what options are out there.

You can go to a Nutanix. You can go to Azure. You can go to, a bunch of different options out there. Really, what are your needs?

And people, companies took a step back. CTOs, CIOs really took a step back and said, okay. I’m gonna bite the bullet, pay for a year year’s worth of VMware licensing the way that they’re telling me to, the way that I have to now, and really take that time to reassess what is my cloud posture moving forward. And what we’ve seen is, again, an embracing of a hybrid model where there’s some on prem, private cloud coupled with public cloud. So, you know, an Azure mixed with an expedient or an Azure mixed with some kind of private cloud offering that a lot of the companies, regardless of size, are really embracing and moving forward with. That hasn’t eliminated the VMware conversation.

What it’s done is it’s really brought a focus back to what is the overall cloud posture and how are how are these companies gonna adjust moving forward in twenty five and twenty six?

Yeah. I I think we saw a slower funnel build than what we were expecting. I think that when this hit, I think the idea you saw everybody jump on. They we we did podcast.

We did webinars. You saw a number of suppliers doing it. There’s a lot of confusion between a couple of things that happened. Not only do they change their model for their end user customers, the same time they also changed their partnering model.

And so there was a lot of confusion not confusion, but a lot of messaging around Pinnacle Partners and, Premier Partners and all these different, you know, layers that they have. And so that that really kinda subsided. To me, that that to the end user, I didn’t see a big impact. It really came down to a few key tweaks that around support, a little bit of, like, pricing model.

But when they cut forty five hundred MSPs, it really affected them, but not other end users, not your enterprise level, medium sized businesses, etcetera. They were more affected by that price increase. And to your point, you know, and Mike, this is where I think you’ve had quite a bit of involvement in these opportunities as well.

Seeing seeing the emotional response from customers and then when like you said, they took a step back and they realized, hey. We we can probably band aid our way through this a little bit, but then we need to reevaluate everything. And the analogy we’d come up with was, it’s like if you’re redoing a room in your house and then a pipe burst in your kitchen, even though your kitchen was done, they’re going back and now looking at everything in the kitchen too. Do I like my backsplash? Do I like my appliances?

I might wanna just start redoing everything. Mike, how has that affected the deals that you’ve seen in this particular conversation?

You you’re absolutely right. I think at the very beginning, people got this rugs being pulled out kinda mentality, and I have to do something, but what is it going to be? But then they find themselves still under contract for a period of time. So I think we’re going to get to a critical point where all of this educating that we’ve been doing, all these conversations and all these, opportunities that we’ve we’ve been working on will ultimately come to a head.

We’ve already seen a couple of them. Like Chad said, they’re just buying some more runway, and they’re signing that twelve month contract with Broadcom just so they can buy that migration time so that they can figure things out. And it’s kind of like when gas went from two dollars a gallon to five dollars a gallon and then six dollars a gallon. When it settled at four bucks, people thought it’s as a great deal because it’s not six dollars anymore.

And I think that’s what’s gonna had happen here with Broadcom, unfortunately.

People are going to get used to the the higher pricing. They’re going to get used to, hey. We can still function to be a profitable business, and they’re gonna stick with it. And that’s really Broadcom’s, whole strategy behind this is they wanna keep that very segmented piece of business, which is the upper echelon of the users. They can’t afford to go to cloud. They can’t afford to abandon physical equipment. They can’t refactor.

And so that’s not really going to be where we focus. Sure. They’re good data center prospects, but they’re going to keep that. What I’ve seen on the other side, again, as Chad alluded to, is people have just saying the word Broadcom or VMware leaves a bitter taste in their mouth. So they’re like, what else can we do? And so we’ve got really large opportunities now where they wanna refactor into Hyper V or they wanna go to the Azure Stack. And I’m just now starting to see some of those deals come to fruition because their runway is is running out of space, and they they’ve either gotta take off or they gotta buy more time.

And Put a lot of Band Aids on stuff. They didn’t They’re Band Aiding the hell out of it right now.

And I just ran through an opportunity as an example.

On a three year term, it’s nineteen bucks a core from Broadcom. On a one year term, it’s thirty bucks a core from Broadcom. And they’re looking to spend thirty dollars a core just so that they can get that runway, they’re not gonna wanna do that forever.

Yeah.

But So and and, traditionally, those were much less.

Right? Those are pretty hefty price increases. Yeah. I’m gonna I’m gonna take on a couple of questions from the chat really quick.

Harry, yes, we’ll plug this heavily all year. Telarus University has been broken up. So there’s clouds, modules in Telarus University, one zero one, two zero one, three zero one, both on the technical conversations and the sales conversation. So you’re gonna have six total modules that you’re gonna be able to choose from and take those.

So as soon as you can jump in there and check that out in Telarus University.

And then, Andrew, the reason they cut forty five hundred MSPs is really to get down to a few key partners that they wanna focus on.

In our portfolio, there’s only twelve in the US domestically of Pinnacle partners, and six, if not technically seven, reside in our supplier portfolio. One of those is actually just a data center only operator, but they’ve made some acquisitions globally, got qualified in those spaces, but not really, available. So we can we have, tons of information on who those are and the differences between Pinnacle and non Pinnacle partners within the VM space. Like I said, for end users, very little difference. For MSPs, a little bit of a pricing break, who can support who, and then who gets direct support from VMware versus having to go through their distributor like Ingram Micro, etcetera.

So that’s that’s really kind of the background on on the whole partner thing and a little bit of the background. So you got a CEO with VMware or Broadcom who said, hey. We’re gonna lose thirty percent of our market share with this move. We bundled some other products that weren’t as desirable, and we’re forcing those on our on our, customers.

If they wanna save money, they can start utilizing our products around, like, containerization and other things like that versus use utilizing the other other, players in the space. And if they don’t wanna use it, then we’re gonna gouge them for the products they do wanna use. So we’re gonna cut thirty percent of our market share. However, we’re gonna double our EBITDA.

And that’s what Broadcom’s usually pretty good at. This the CEO is notorious, for buying companies and doing exactly what he’s done here.

And so it’s no surprise. They’ll also they also sold off VMware Horizons, which was their VDI platform. There’s some other stuff that’s rumblings about what they’re gonna do with, with Zendello for SD WAN and some other things that they own. So more changes to come here.

Opportunity for advisors.

Go pull back to any of these conversations. If you haven’t had it, you didn’t miss the bus. As you heard, a lot of people just put band aids on stuff and they’re still looking and evaluating.

It really comes down to two key conversations for your customers. You’re either gonna optimize to the new VMware environment that used to be measured by RAM and usage. Now it’s gonna be measured by cores like what Mike had alluded to in in his previous statement. That’s a big shift, and it takes a lot of work to change over and change the optimization of how to take advantage of those products. Or you’re gonna migrate away from it. As both Chad and Mike alluded to, go into an Azure environment, go into Nutanix, etcetera.

There’s a lot of different play places to do, but here’s the big opportunity.

VMware owns about eighty percent of the market share still. Eighty percent. So that means about mid to to large enterprises have some kind of relationship utilizing VMware.

And that means that you have about an eighty percent chance to have a conversation around this that it’s affecting them. So if nothing else, put it into your talk track, bring it up, and know that you have teams of resources that have seen a lot of these deals, know a lot of all the options, and know how to give guidance to your customers.

The other major conversation that we saw kinda hit really heavy in twenty twenty four, and, Josh, this is where it’s your time to shine, dude, AI. Right? You get to see you’re sitting in a seat where you get to see the impact of AI, not only what you’re seeing in the cloud and everything in our space, but that CX conversation and all the the buzz that that’s creating around AI, but then how it trickles over into our space. What what insights can you give everybody on what’s going on and what how to take advantage of that AI hype?

Yeah. So last year was was really the emergence of products, the emergence of productization where people could really start to see, okay, here’s a product in CX or maybe a product in cloud, and I could see myself getting my data right, getting my data clean, working on governance, working on, you know, where all that data sprawl is, doing consulting engagements, and then saying, alright.

What do I wanna do? What’s my desired business outcome? Do I wanna provide better analytics for our sales reps based on the data that we have? Better next best action for our customers that are gonna buy this product or that product based on historics or customers like you bought this, you know, those types of things.

I think, we got a great start on that, and and, you know, hit the market hard with that last year. And I think, you know, this next year and probably even surely into twenty twenty six, these are gonna be the years of the optimization and the competition of the large language models. And so I think the the great thing here, is that with all this, it puts confusion in the lap of the customers. Right?

You got you got models from OpenAI. You got models from Llama. You got all these different models. And how does anybody tell the difference of which model is better, or should I use Gemini?

The reality is while there’s confusion that creates opportunity.

And in that, at the end of the day, what the customers have to have to do and what real they realize they have to do is they have to figure out how to use this, and they need help with that. This is this is really complex, very, very exponentially powerful, but very complex. And I think we’re still continuing to see and we will see as we see the products and the large language models and the adoption of those and and getting, you you know, not this crazy complex API conversation. It’s gonna be a little more click.

It’s gonna be a little more build within kind of the web GUI studio. It’s gonna be all of that is gonna still require, though, good clean data sources. So that’s not gonna go away. The adoption of the models is is we’re we’re right in the thick of that.

And so, again, you know, kinda like what you talked about with VMware, you’re gonna see this idea of people have already started to jump into it. They need help optimizing. People down here are going, I don’t know if I wanna go that route. What do I do?

Which which route do I go? Either way, there’s confusion, and that brings opportunity. And so I’m I’m just excited to see it every other day. Something interesting comes out that, that, you know, we’re paying attention to and figuring out how to kinda incorporate that into incorporate that into how we train, how we go to market, how we explain what a language model is, why you need to care, and, you know, I think we’ll continue to to build that out into here’s how we talk to the customers about that and how we open up that door and and find out what they’re doing.

And I think now is such a great time to go to be the one proactively asking them and encouraging them. Have you thought about using it for this? Have you thought about using it for this? And that’s when people get excited about it.

Yeah. And I’m gonna address a couple of things. And thanks for that that overview. Like, there’s a there’s this old adage, and I this is if I’m an adviser, this is my this is my go to market talk track for twenty twenty five. When it comes to AI, CX, and cloud, cyber, and network, and how to kinda tie them all together with a bow. It’s follow the data.

The data AI is the hype, but the data is what’s driving the AI engines. Right? You’ve gotta have good clean data. But You gotta have a good network to transport the data. You’ve gotta protect the data with your cybersecurity.

And you know what’s creating more data that’s being analyzed more than anything else right now for a lot of organizations? That’s right. Your collaboration tools, your internal sharing, your documents, your files, and all of that, as well as your customer contact center tools. The interaction you’re having with customers and how those go and what are the buying trends, what’s propensity to move forward and things like that.

Those that those datasets are becoming more and more analyzed and put back into it along with a lot of the other traditional datasets. And customers can have, like, Josh, to your point, one of the deals that we’ve seen on this, they had seven different, streams of data coming in. None of them were connected internally, yet they were trying to put a technology in to tie them all together, and it doesn’t work that way. They gotta clean it.

They gotta put it into a usable format. And that’s the power that our advisors have is just giving them guidance on it. Right? Number one’s data quality.

Number two’s use case, and then you kinda build it from there. And so you’re gonna get a lot of that, guys, throughout the education part of it. Where clouds are gonna come in, two major conversations. And, Chad, I’d love to get your opinion on this.

How many big data storage deals are we starting to see towards the back half of the year because of the amount of data that needs to go somewhere that’s getting analyzed? How many big data just simple data storage deals did we see pop into the funnel towards the end of last year?

There were a lot. I don’t have an exact number, but it was a lot, and it was a significant increase. And what what I see happening specific around AI and there’s some really good questions in the chat that I think we got to here in a little bit. But, what I see happening specific with AI is gathering all of that data with companies, and and it was a point brought up in the chat.

They wanna keep the the information private to them. That company wants to keep it private to their own internal, structure and them only. So placing that in an area that can be easily accessed in the cloud, obviously. And and, again, to your point, Koby, getting the connectivity right to access that information in a timely fashion, be able to use LLMs to then sort through that and gather the infer gather the specific information that’s wanted and needed.

Leveraging AI is is key to all of this. But cloud storage, it’s it’s at the forefront of all of it. You you’ve gotta protect it. You’ve gotta get it in there.

You gotta get the databases established and all of that. One of the other things that I’ve seen, personally here in the northeast too is there’s companies that have a lot of paper records that are trying to get it scanned and digitized. And I had one my most recent one was six pallets of of box boxes of paper, and we were able to help the partner out, get their customer in in touch with a supplier that digitized all of that, dropped it into, a SQL database, and and they’re off and running. So, again, there’s a lot of parts to this.

You know, AI is is is the flashy aspect of it, but there’s a lot of parts that go into making it, a successful rollout.

Chad, let let me let me add to that real quick.

Sorry, Koby. Yep. Just to draw a similarity between, early cloud deployments and early AI deployment. So when, hyperscalers first came out and multi tenant environments were just showing themselves, you could not get those certified for HIPAA compliance, PCI compliance because they they couldn’t physically see the barriers that were created between the data. And, of course, all of that went away with the implementation of security capabilities.

So right now, folks are like, we’re gonna put a lot of our personal pro prioritize pry proprietary data out in this LLM.

How are we going to ensure that it’s not going to be cross pollinated? So it it’s on that path where you can go into a cloud environment if need be, and those those security measures will be in place. So it it it seems like a risky move today, and early adopters, are kind of blazing the path to show that it can be done. But I think we work more on the bell curve of the it’s perhaps tried and true at the very top.

So if you have those particular questions and, Tim, I see that you asked that specifically.

Let’s get on a conversation with them so we can show them and present to them the solutions that are available and how they go about protecting that data from cross pollinating or being exposed or or anything of that nature.

Yeah. I want I I I saw that one too. It’s such a great question, Tim. I I think the that in that question, in lies part of the biggest opportunity that I think while we have plenty of customers that are asking, how do I keep my data secure and private and do the large language model piece?

And I’ll add a little bit of thought onto that. But I think that in lies the opportunity of within your customer base, they probably have a lot of people that are experimenting with new and interesting and exciting tools because that is fun to do, unbeknownst to them what access that gives the language model to their dataset. Because some of these large language models are great about, yes, check this box, yes, don’t check this box, help and and they word it very, very tricky. Right?

Help make this large language model better. Okay.

When, really, that’s feeding everything that you’re doing to help train the language model, right, and train their GPUs a little better. So sometimes it’s as simple as that. Sometimes it’s a, no. They need to be SOC two.

You know, they need to have these compliances. And so other times, if you’re, you know, you’re building out some kind of deep end API integration, the proof is in the pudding, and that comes from the engagement to see, alright. Let’s let’s run a real network crawl and to see in these APIs, where is that data going? Is anything really leaving and going out, and what’s in that data stream?

So that takes a much deeper, to Mike’s point, consulting engagement, and and deep end engagement. But what what I think, again, trends and emergence of what you’ll see, option one, option two. Right? Option one is a privatized you can you can actually download believe it or not, you can download some of the basis of these large language models.

Right? There some of them are only gigs in in size because the beauty that that brains is done in the pretraining. And then the customization takes a little less time. But, you know, you there’s versions of this where it might be the customer says, you know what?

No matter what, I just wanna download this private large language model and have a whole custom build against that. It might be let’s put a footprint in the data center. Maybe let’s get some of our own GPUs, whatever that case may be. Or it may be, yes, let’s leverage some of our cloud suppliers to build out a fully private large language model, but let’s leverage the power of OpenAI of or, you know, or of Azure or whatever it is.

And so to each customer’s preference, there’s not a universal answer there, but the the short answer is yes.

We can help with both of those, but it does take a a a discussion.

I’m gonna set the stage of the other impact that we’ve seen AI have. And and, Chan, well, let’s go ahead and flip the the slides too.

The the big thing too that we’re seeing here, guys, is number one, customers still this this rate actually went up from seventy percent to eighty one percent in the in the last one, and that came from, Gartner’s twelve k CIO, piece where they’re not really achieving their their transformation goals. Right? Now AI is gonna even throw that in even more. That’s all opportunity for you guys.

Improving project completion percentage and the ripple effects that come with that and the ripple effects that all of this is having. And another key area that AI has really blown up is the number of AI companies that have emerged. So you’re seeing a lot of investments from private, equity companies. They’re getting a lot of funding, and they need a couple of key things to drive their products.

A, I’m gonna hit. Yvette asked, what are you doing for data storage and and managing storage costs? Great question. We addressed it. We touched on it lightly, but there’s a there’s a lot of different options in the portfolio to choose from. Having a conversation around what are you doing with your data storage is gonna be the closest that any of us get. My I cut my teeth at a little company called Integra Telecom out of Pacific Northwest, and my claim to fame was cold calling and saying, do you wanna save twenty percent off of your your phone service?

Right now with data storage and the options you guys have, if you wanna pick up the phone and say, do you wanna save twenty percent on your data storage cost? You’re gonna have a pretty good chance of landing a yes, and you’re gonna have a good chance of being able to deliver that because you have a lot of different less expensive storage options than that what’s out there for a lot of clients.

AI is driving a lot of that. Right? Again, all the things that Josh alluded to and Mike added to. Mike, the other piece that we see AI and all these companies and what they need to drive it is space and power. So how is it affecting that data center conversation, and what’s it done to the data center market, and what do you think is gonna happen in twenty twenty five?

If we can talk about data center as being a housing boom, we’re in the middle of a housing boom right now. I have never in my career seen so many multi megawatt opportunities come across my desk like I have in the last six months.

Now these are all good, very good opportunities, but the place the the the problem is the data center market did not see this coming, and they did not build to be able to support this. So the ones that had some, you know, several megawatts available for expansion for existing customers or future sales, that just evaporated.

Now what we’re talking about, and this probably started again six months ago, is increased capacity, add ons that take a year to get another five megawatts, ten megawatts, twenty megawatts.

And so if if you’re working with, an opportunity, there’s there’s two sides to this. One is they think they’re gonna have the next big greatest AI platform the world has ever seen, and they’re going to need a hundred megawatts of space, forty megawatts of power, whatever that may be.

They have to they can’t get it today. They have to have some strategic planning that they’d be willing to buy it today, but wait eighteen months before they can get it delivered.

What we would rather do instead of getting these big huge megawatt deployments is find out if we can do something of a smaller scale as an initial platform, or is there any any way that we can move this to a GPU as a service platform? So go out and utilize resources that are already in place that you can buy as a service. We are as a service business, and we’d much rather prefer to sell something as a service than have them take down forty megawatts, which is going to be, you know, a really big, monthly, price tag. But at at the end of it, it’s gonna be very small commission rate because it’s such a huge, huge platform and deployment, huge risk.

Yeah. Let me let me educate our, audience on generally, guys, you get to a megawatt and above, you drop to what we we call a wholesale data center rate, which means a lower commission payout.

It’s pretty industry standard. It’s usually about a third or so of standard data center payouts. If you guys get into these opportunities, we’ll definitely get into the weeds, but that’s what Mike’s alluding to on why you might see a million dollar deal with the commission rates are gonna be a little bit lower than something on, say, a two hundred thousand dollar deal with higher commission rates. So, like, sorry to cut you off.

Just wanna make sure everybody No.

I I think that’s great. And, also, not a very small percentage have started to catch on and started treating AI deployments kind of like, Bitcoin mining operations. Right? Large, large power consumptions, but a very risky business. So now we we just can’t go out and ask for forty megawatts. We have to fully qualify who the customer is, what they’re, how they’re established, what they’re doing for them to accept it and be able to put it in. Because, obviously, if they sell a company forty megawatts and they go under that, that could be hugely detrimental to, the operations.

So some of the partners that we’re bringing on supplier partners that is it’s GPU as a service. This is very common when big companies first get their venture venture capital money, and they say, hey. Angel round of funding, you have to go into an AWS because there’s there’s low to no risk. It’s a monthly cost.

And then as they grow and they mature, they say, hey. This is getting really expensive for us. Where else can we go? How can we reduce our cost?

How can we get more for the spend? And those are conversations everybody should be having all the time is why folks should move out of AWS and into, you know, a a CSP that runs VMware, Hyper V, or, you know, so on. But if those come up, I would love to talk about options that you can go in and add a lot of value to someone rather than just saying, I need this big space. Let’s talk about the use case.

Let’s see if there’s ways that we can help them in other fashions that would be both better to the wallet share and also shorter lead time and more profitable to the customer because they can get started faster.

What I love about that approach is and I think that’s what we see out of our entire engineering group. Right, Josh? Is that idea of understanding the business case and and then solving the technology needs afterwards. And what that does for you guys as advisors as I think it’s pretty pretty on the wall, but just in case, like, it’s really awkward, like, creating additional opportunities in conversations, like, to Mike’s point.

A lot of those times after those education sessions, it does flip over to a bare metal opportunity in the transition time that could grow into that bigger data center opportunity. You also start to look at their network and some other other components. So it’s adding more and more funnel and more and more opportunities for you guys. And I think that’s what our biggest value within that group of engineers has become is really the methodology of approach, not just answering a question about the technology, but understanding that use case that that can grow into additional opportunities.

And if you look at these priorities that come from these surveys, right, this is what the opportunity is in the landscape as a whole. Go down to that third bullet point. Sixty nine percent of CIOs plan to upscale or reskill employees. That takes time.

That takes effort. What that also does is open the door for the ability to come in and add in an MSP or an MSSP. So a managed solutions provider or managed, security solutions provider to come in and grow their teams without having to, like, add additional headcount to manage. And oftentimes, that upscale reskill type play, they’re not available.

There’s still a major skills shortage in our space, and that is another great opportunity to have. And what you’re also starting to recognize, the the cost of those employees continue to rise. It is starting to pencil out more and more where an MSP or MSSP is more cost, like, responsible than it used to be when it came to all internal. So you have that in source, co source, outsource conversation that’s really allowing the ability to drive an op a lot of opportunities with us, and that’s what I think we’re gonna continue to see.

It’s it’s the other major conversation that I always love, Chad, that comes out of these the additional opportunities.

Night a lot of conversations start with, my customer wants to go to Azure.

But we see more hybrid wins now than we’ve ever seen, but it takes a lot of education. Can you talk about, like, what that means in in inside the deal? Like, what’s the methodology that that you take and your peers take whenever somebody says, hey. I wanna go to Azure. I wanna go to AWS. Like, what’s what’s the conversation look like?

Well, the conversation starts with what what are your applications? What are your daily applications that your employees are utilizing, and what does that look like on, essentially, the network? How how are you accessing them? What are you doing?

And is it is it network intensive? Meaning, it takes up, a a lot of network resources to to do that. And is it necessary for that to remain in house? Is it necessary for that to maybe migrate to a private cloud because it’ll be better?

Or can that go to Azure and have, and leverage an on ramp specifically to Azure at at a certain speed to to be able to access that and do that? So, really, what it it is is, again, to everybody’s point on the call here today is you really gotta dig into what is specifically going on on a day to day basis and dig into that customer’s needs, to really build out an accurate plan and help guide them through the process of what does a hybrid cloud look like and what is the need for it. Is there the possibility? Sure.

To move everything to Azure? Absolutely. Is it cost effective to do that? Is it better to to split it up, or is it something that is completely a private cloud migration from an on prem?

Or you leverage all three. Maybe they keep a couple of servers on prem and leverage a a managed service provider or an MSSP like you mentioned, put some stuff in a private cloud that that needs that and put, the rest of it or or just storage in in the public cloud aspect. So, again, speaking candidly, my goal is to find out what does their daily routine look like, what are they accessing, what are they utilizing, what are their applications, as I mentioned, and then build from there.

Fantastic. And, guys, what what the opportunity here is is really having a a consultative conversation with your clients and knowing that you’re gonna be able to give them guidance. If you go back to that eighty one percent of companies not achieving their digital transformation goals and having struggles on seeing the value behind it, It’s really the idea of understanding it and putting them in the best position with flexibility to to ebb and flow as things come and change. Right?

We’ll go back to that VMware example. One of my the the most eye opening conversations I had, Chad, Chad, I think you’re on the call with us. We had that customer call, and the question I asked the customer is, like, how many projects did you have to punt on this year because of this VMware change? And they said seven.

Now this was an in source only customer. Right?

That means they did everything internally. They were just looking to buy a product. They weren’t looking to buy services. As we started to talk through that, and we said, well, what if you had a bench and a team and, some resources that you could call on that allowed you to keep those other seven projects going while you address this one way or the other.

You’re either outsourcing the VMware conversation or you’re or you’re moving some of those other projects over. Because if you start to think about the business conversation of what not doing those seven projects did to that organization. How much did it slow you down? Does it put you behind a competitive curve?

Does it really, like, affect multiple different things that you’re trying to do, you know, the next twelve to eighteen months, but now those are eighteen to twenty four months and you’re continuingly to kick the can down the road versus address these issues. Those are what cripples organizations. If you go to the next slide, Chandler, you see it here. Right?

Like, the what people are spending money on is information security, AI technology, cloud infrastructure, and they’re all trying to get to these things. But if you wanna go to the next one, this iterates as we kinda conclude. Technical debt is what’s driving a lot of customers down. And technical debt is when you make bad investments or investments that don’t seal and don’t get provide flexibility and don’t give customer options down the road.

And that’s what I think I love about what Chad just laid out and what Mike does and or in all of their peer group does on a day in and day out basis is they’re looking to put them in flexible agile positions, which is the whole value of cloud for customers.

But then seeing the entire landscape of how does it affect your network, how does it affect your your communications with your customers and internally your CC and UC. It really starts to tie everything together where you’re able to grab all of this information and start to pull it through and go from being, hey. I sell network or I sell UC or I sell this to I can consult on everything. And the world’s kind of my oyster when it comes to what I wanna be able to present to my clients. It’s just a matter of what problems we’re trying to solve.

Josh, you know, as setting on top of this team as the SVP, what are some of the other things that you’re seeing kind of emerge in twenty twenty five as we put a bow on this, part of the the session here, and then we’ll go to some q and a? You know, what are you seeing as and take us home and kinda conclude, like, what you’re seeing come across twenty twenty five that’ll impact cloud, but also everything else, you know, cyber, CX, network, everything.

So, go back to an earlier point that I made a little bit of you know, you mentioned private equity. You mentioned everybody sees this as the next hot thing to dump money into. So what’s that gonna translate to for in in in our worlds?

It’s gonna translate to product after product after product getting thrown at at the customers and them deciding, what is this? What is this? What is this? And that’s where, everybody on this call, you know, everybody has so much value in helping keeping these customers on the straight and narrow of what’s the business goal of what they’re trying to accomplish.

And then let’s keep it very simple into how we get there and paint the picture for them on what that path is. And there’s just a there’s a lot of noise. Cool stuff. I’m a nerd. I get excited about the noise, but you also have to know when to block that out.

What is the next greatest thing versus what’s just another product, another product, or what’s vaporware, or what’s so I think that’s kind of the important thing that we have to help our customers pay attention to because I just think for the foreseeable future, this is the next gold mine as far as, you know, the private equity world is concerned of of product and and getting those to market. And some of those are gonna be great. Some of those are gonna be complete duds. Some of those are gonna you know, we’re gonna have paths into our ecosystem to be able to get to those over time through our supplier base, and some we may not. And so, again, it’s it’s all it’s boiled back to the basic business conversations, and that will allow us to help them whether that’s a cloud strategy, whether that’s crossing over into cloud impacting security, impacting the customer experience.

You’re you’re seeing a lot of this right now, and I think you’re gonna continue to see a lot of that as all these different products emerge and customers say, okay. I’m starting to get an idea of how I need to get my data in order. Now what do I do? Now what do I build?

How does how do how does this impact me here with AI? How does it impact me here with security? How does it impact me here with cloud? And so, again, I don’t care whether your customer is a big giant enterprise that’s spending a gazillion dollars or they’re down here just trying to figure out, do we get some of this equipment off prem and maybe think about a VM or two VMs or whatever.

The story is the same. What is the business goal, and we can help them articulate a path of how to get there, crawl, walk, run, meet them where they are, help with the, you know, the the resources, the consulting, buy the products as the serve what whatever it is. There’s there’s not always a one size fits all, and there’s so many options, and there’s gonna continue to be an expansion of options. But, again, the same the same rules apply.

I appreciate that. And so focus on the business conversation. We’ve been touting that for three years, five years, ten years.

But more and more, we’re giving you examples of what some of those business conversations are. See a lot of that in the Telarus University and that sales portion of cloud, the one zero one two zero one three one, it breaks down personas, questions, how to go to market, with some of these things. So check that out. I’ll keep giving a a big plug to that, and let’s get to a couple of questions. Mike, I know you had one you wanted to take on in the chat, and then we’ll kick over to Doug to let him sort through the rest.

Yeah. So so Ryan Ryan asked you, how do I get leads? How do I get this thing started? And so I want it it’s kind of twofold.

One is you have an established customer base, and you’re just looking for good usable information to go back and add value to that existing customer. We’re giving you a ton of that right now. Hey. Saw this information today. You know, what what is your AI strategy for the next, twelve, eighteen months? And and just have that business conversation.

But I’m an engineer. I’m a firm believer of don’t sell services, sell yourself. So the biggest value that you have is you. If the client if you cold call and they don’t understand what you do by the time you get off the phone and you haven’t even talked about one service or try to sell one service, then you really didn’t have a successful phone call.

So get on the phone with them and just show all of the great things that you can help them with as part of their daily business, not necessarily yours. So, Ryan, I can tell you one thing that you can do is security services, people that can support security services in an organization are very difficult to find and hire. Go to a job career posting website. Look for companies that are looking to hire security admins, security directors, anybody that’s dealing in the the cloud space or security space are very difficult to find.

Call them up, talk to that business, and introduce yourself as someone that can help you avoid having to hire these these bodies, and instead you can move that over to a services platform.

So I think we’ve seen that with a lot of people even if it’s from insurance, selling cyber insurance. We can’t sell cyber insurance. We can sell all the services around it. But if you get an alignment with, an insurance company that sells cybersecurity and you start getting introduced to their client base, you can start selling them all the services so they can they can get that policy. So I think those are two really easy low hanging fruit type of opportunities to create leads for yourself and start having those conversations because activity breeds activity. When it starts to go technical and you can get them to commit to a thirty meeting to talk to Chad, myself, anybody on our teams, that was a successful sales call.

I’m gonna I’m gonna I’m gonna add one little note to that.

Prompt engineers. As people are looking for prompt engineers, it’s the same thing that Mike talked about. Security people, this is impossible to find, you know, those types of things. Same problem as it goes down the cloud and the infrastructure and the large language model, really, really hard to find, but also very opportunistic because it means if they’re looking for that, they’re looking to try to figure out how to develop this, how to grow this, how to move into this, and and how to leverage language models more.

Alright, Doug. Back over to you. But then you guys Guys. What you got?

Great presentation. You’ve already addressed a lot of the, major questions that are in there. But a couple of things, let’s pull back out. Mike, you’d already responded to Thomas Murphy a little bit about the difference between MSP and m m MSSP security solutions. Let’s go down that road just a little bit farther in terms of security, solutions. How this discussion naturally takes itself into a security discussion, And what specifically are some of the resources that Telarus provides to assist our advisors in taking on that security portion of the discussion?

Here, I’ll I’ll take a stab at it. So when we’re building all this really cool stuff and going and, like, creating all these really awesome things, you’re gonna have the security guy come in and say, don’t do that. And so you might you might as well get ahead of it to begin with. But in all seriousness, the way that this works is everything we’re creating, everybody is now so security conscious.

And if they’re not with a one or two conversations, they will be. There’s so much risk out there for organizations. And and having the cybersecurity conversation is, again, one of the best lead ins to this. Like, you go in and talk about security, then you’re naturally gonna start talking about their data, their infrastructure, where everything goes, how everything’s housed.

So it naturally goes together, Doug, where whatever you’re building, you have to protect it. Whatever you’re creating, you have to protect it. And cybersecurity is gonna be the element that fits in every single it’s gonna go along with network, with CX, with cloud.

And so the pull through conversation is really simple. What you’re gonna see out of the cybersecurity team this year is exciting, Expanded portfolios, great providers that are already in there. And with additional solutions architects and Jason Kaufman and the established Jeff Hathco, you’re gonna see Telarus be able to really advance under Jason Stein leading that program, growing more awareness and more, like, talk tracks on how to go from cyber to network or network to cyber in in that pull through conversation. So I think you’re gonna see a lot of that happening. And as far as MSSP versus MSP, it’s managed services on both. One just does security on top of it, and the other one doesn’t.

Very good. Zachary asked a great question as well about the limited data center availability.

As with so many things, we’re seeing scarce resources come about.

There will be a bit of a a curve, I think, in terms of being able to keep pace with the available demand for data center supply.

Where do you see smart advisors advising their clients to use storage capacity and maybe in counsel their clients as to where to locate their data storage and take advantage of those, available resources?

Yeah, Doug. So this this could be a full time job in itself.

Last count, I think we had twenty five different suppliers that offered colocation data center in some form or fashion, maybe as a standalone like an Equinix or Digital Realty or something like a Flexential, which is a full service MSP plus data center and a tier point.

I have been working with each of these, finding the right contacts so that we can get up to the minute updates on newly available power or existing power within the network or within their network of facilities.

And I would say that you there are there’s tools out there that will show what data centers are available and what markets, but it doesn’t really give you the visibility into what’s available. So we have built a back end database that is, evolving, if you can call it that, to be about as accurate as we can be in this type of a marketplace.

And so if there are opportunities that arise, I can be a resource and Chad can be a resource as far as running that through our tool to shorten the list of available locations that could support a five megawatt deployment today or a one point two megawatt deployment today. We we have that information on the back end.

And that is unique to us as well, thanks to Michael and his efforts to pull that together with Koby and and the rest of the team internally here. So that’s not something that’s out there in the marketplace that we’re leveraging. That is a unique database to us here at Telarus that we can leverage for that.

I wanna be sure we throw you an obvious softball and ask you to talk a little bit about the Telarus resources available to assist with this. I’m thinking specifically of solution view and the other modules that we’ve created.

Yeah. So we have some great tooling, right, on the education side. We last one for the day maybe. Telarus University and and what we built out there.

We have great live trainings, solution view as far as just like a a standard guided path of more technical questions. Josh and his team put a lot of effort into that on getting into some of the depths that then creates a report, can go out to you can grab a resource. Our team can do it alongside you, but that gives us more insight to the suppliers. And what has really emerged, Doug, and just a quick note on that, the suppliers have done a really good job of recognizing the value of technology advisers now where they used to jump on calls and ask the same questions that our team had just asked for day you know, two hours, three hours, and meetings, and it really kinda under undermined the value.

We’ve seen a big change where by, where our, sorry, suppliers come in and they go, they might validate it or they might expand on it, but they certainly give, like, a lot of credence to the team and the advisor and the and the situation there. So we’ve seen a big growth there. It’s not always perfect, but it’s sure certainly come a long way.

So you’re seeing a lot more, like, ecosystem management that’s being done around these larger deals, and that comes from just maturing of, like, a lot of the suppliers that have come in, understanding, and also the sophistication level that all that all of our advisors are are bringing into it and understanding it and the resources that Telarus provides. So it’s a really good mix to provide a way better sales experience for the end user than they’re gonna be getting on their own.

Great presentation to all of you. We’re about out of time for today, but, thank you so much for the information. Reminder to all of our advisers that these calls, of course, are recorded. You can catch the recording later today in Telarus University under the forum section. And, of course, any or all of the members of these panels or their teams are certainly available for your questions and comments at any time here at Telarus. Koby, anything else we missed?

No. I think we got it. If there’s any questions that we didn’t get to, we’ll certainly address them in email and make sure that we get those answered for the individuals. But, I think it was great and great audience questions as always. So thanks, Chad, Mike, and Josh, and off to a fantastic twenty twenty five. Appreciate it, Doug.

Thanks, everyone. Job, guys.

Thanks, everybody. To all of our experts for today’s fantastic presentation and to all of you for attending.