Former ConnectWise founder turned venture capitalist Arnie Bellini is jumping back into the channel. He sat down with MSP Success for a wide-ranging conversation on managed services, cybersecurity, artificial intelligence, and the issues in the channel he wants to solve. While he did not disclose the specifics he expects to announce next week, Bellini Capital’s investments in ConnectSecure, Nine Minds, and Compliance Scorecard offer some signposts. This is an edited and condensed version of that conversation.
MSP Success: Your first channel appearance after your noncompete from selling ConnectWise was at the Right of Boom conference earlier this month. In your keynote, you implied that the tool sprawl problem is solvable. Do you have a plan?
Arnie Bellini: We have a plan. It is a problem in our industry. Vendors are not doing a great job with application programming interfaces. And if they do a good job with their APIs, they don’t necessarily make them public. That’s all designed to limit your choices. I see the industry moving in a direction where there’s too many tools and there’s not enough choice and there’s not enough integration. That’s a systemic problem. Someone needs to come in and fix it, and I’m that guy. I have some secret sauce to help reverse that trend.
Do we really need 40 applications to deliver our managed service? And that’s just the IT operations side of the business. MSPs really have two major responsibilities, half of their responsibilities are to manage the IT operations. The other half is to keep those IT operations secure and to perform security operations. So IT operations, security operations, put them together. It’s like a Reese’s Peanut Butter Cup.
“I intend to die with very little money. But that means I have to invest it, and I can’t think of a better place to do that than to help my friends in the managed service industry.”
Arnie Bellini
[For] IT operations, I’ve got 40 applications to deliver that managed service. For compliance services or cyber security services, I’m going to have another 20 applications, so now I’ve got 60 applications. If I’m taking care of my clients holistically, that’s just not tenable.
Someone has to come into the industry and start to force open APIs, force choice. How do you do that? You do that with innovation and affordable solutions. That’s the formula for fixing it. I have been working on that formula for a while now. I have a solution that will start to bring a lot of these disparate, disjointed silos of chaos in our industry back together. We have a press release coming out next week to discuss that.
MSP Success: Why are you getting back into the channel?
Bellini: I got very involved in a lot of other things once I exited ConnectWise. Then I came back to the first Right of Boom with my son, Peter Bellini. [We] scratched our heads and said this industry is in worse shape now from a tool standpoint, from a pricing standpoint, from a scalability standpoint, than it was when we exited the industry. We both agreed that the number one thing you’ve got be doing right now is cybersecurity. That’s why he jumped into building ConnectSecure [a vulnerability management solution]. ConnectSecure is the prime example of what you’re going to see.
So that’s the security operations. The IT operations, I just gave you the tease for it that comes out next week.
On the security operations side, everything starts with understanding your vulnerabilities. You have to do a full assessment of your [client’s] infrastructure first. Where do I have holes? I scan. I now have a full report of what’s wrong and what needs to be remediated. I even have it in a prioritization order. This is a very practical approach, but nobody’s doing it in a way that MSPs can afford the solution. So the commitment has to be to choice, integration, and aggressive pricing, so that MSPs can jump into the cybersecurity game and double their revenue by doing so. We have to make it a profitable endeavor for them. We have to create the right environment and the right ecosystem for them to thrive. That is what I did when I started ConnectWise.
Cybersecurity is having the same issues now—too many tools that don’t talk to each other, not enough choice, and way too expensive for almost any MSP to profitably provide cybersecurity services or security operations services to their clients. That has to change.
MSP Success: Bellini Capital has invested in Nine Minds, an AI company, ConnectSecure, and Compliance Scorecard. Are you building a platform company with these three businesses?
Bellini: We’re going to be the first ones to put solutions out there that offer choice, that integrate to all the tools that you’re using already today, and that eliminate these silos of chaos. I wouldn’t say it’s a platform.
Every industry is really an ecosystem of products and services. We’re literally zooming out from that ecosystem and saying, where is that ecosystem stuck? And that’s what we’re making our investments in—how do we get them unstuck? How do we connect them better to the solutions that let them get their jobs done quicker, faster, better? How do we make each and every one of their employees tremendously more productive? How do we spread their labor costs out thinner across a greater client base so they have greater scalability? That’s what we’re addressing.
MSP Success: In your Right of Boom keynote, you also noted the shortage of both IT talent and cybersecurity talent. Can you talk about how you’re trying to address that?
Bellini: We’re addressing that with education. We’re addressing that with artificial intelligence. We’re creating cybersecurity training working with one of the best educators in our industry, John Strand. John and I have partnered with Saint Leo University in the Tampa Bay area to take his curriculum and his knowledge of cybersecurity and security operations and to codify that and embed it in an educational curriculum that will be offered first to Saint Leo in class as well as virtual training for a four-year degree for cybersecurity. [We’ll have an option later for] vocational education [and the industry]. We’re going to make it really affordable.
MSP Success: Is AI going to be the linchpin to solving the problems you want to solve, and more specifically, what you’ve been developing at Nine Minds?
Bellini: I’ll show you how that fits into the overall scheme. What’s missing is talent. We’re addressing that with education. We also intend to provide a pipeline [of that talent] directly into the MSP community.
Second, you want to look at [the ecosystem] not just for the problems it has today, but the problems that we’ll have 2-3 years from now. That’s where artificial intelligence comes into play.
When I look at it from a cybersecurity standpoint, if you …vulnerability scan and then you do the basic things that are necessary for that client, you will have closed 90% of their vulnerabilities. … So artificial intelligence has got to help us find the remaining 10%. Then let’s also talk about what we said earlier with the problem [of too many tools]. AI will be the tool that is used to start to bring the silos of chaos together. … connected in a meaningful way.
If we had everything in a central place and we had access to it … that’s the utopia that we’re looking for. Artificial intelligence is going to play a big role in providing that integration. We have plans for it to do that.
[Nine Minds’] current product is for help desk technicians. That is exactly the talent pool that we will be upskilling to cybersecurity experts. Nine Minds can already take a single help desk person and make them five times more productive. If I’ve got 10 help desk people, [you can] bring the other eight over to cybersecurity. And now let’s get you started to provide the security operations services and start doubling your revenue by doing so.
MSP Success: OK, you’re bringing tools together, but you say that choice and interoperability are important. That means I’m still working with a lot of tools and applications, right? How does that reduce the sprawl?
Bellini: First and foremost, you’ve got to start being more deliberate about the stack of solutions that you’re going to use and still have the same level of serviceability for your clients. I think that once certain solutions start to connect with each other, it automatically gets rid of a number of solutions. But the main idea here is to reduce [sprawl] and not let it proliferate more.
And then over time what happens? Am I going to have a solution? I will solve all the problems until they’re solved. I have an unlimited budget. I promise you, I intend to die with very little money. But that means I have to invest it, and I can’t think of a better place to do that than to help my friends in the managed service industry, the industry that gave me that money.
I will be working with every vendor in the industry, encouraging them to open up their closed APIs to integrate more. And to some extent by keeping our prices very affordable across the board for everything that we do at Bellini Capital, we will be forcing the rest of the industry to offer more reasonable pricing.
MSP Success: Finally, I know you can’t speak for ConnectWise or it’s investor, but can you speculate on last year’s sale rumors and what might have happened?
Bellini: First, I really appreciate and respect all the hard work that the current ConnectWise colleagues are doing, including [CEO] Jason [Magee]. The reality is, is every company that is owned by private equity is for sale every single second of every day.
Any investor [during] that time frame would have been very possibly scared by the economic terms and the wars that started to ensue. Investors, when they’re making a big purchase, whoever that might be, they’re always going to pull back when geopolitical situations are dicey. The other thing that has changed over that course of time is interest rates went from half a percent to 5.5%.
I can’t speak to ConnectWise, but I’d say a whole lot of deals that were on the table at that time got wiped off the table because of interest rate change.
