MSP Success has been closely following the strategic moves of the top four MSP platform vendors—ConnectWise, Kaseya, N-able, and NinjaOne—in 2024. This week, N-able announced the acquisition of XDR/MDR vendor Adlumin, a company it had been partnering with strategically for more than a year.
We sat down with N-able CEO John Pagliuca (pictured above at the Empower conference in March) and Adlumin CEO Robert Johnston to talk about what this acquisition brings to the table for MSP partners. We also asked Pagliuca if this move was a competitive response to recent acquisitions by Kaseya (SaaS Alerts) and ConnectWise (Axcient and SkyKick) and if N-able planned to roll out a lower-priced bundled offering in the future. Find out the answers below.
This is an edited and condensed version of that conversation.
MSP Success: How does the Adlumin acquisition fill a gap for N-able?
John Pagliuca: Whether we’re building the technology ourselves or we use a third-party or we look to acquire, it really all starts with the MSPs and what their needs are. What we found is that more and more the main part of the MSP’s remit is on security operations and to make sure that they’re keeping their customers secure, helping them be compliant, defending from the bad guys.
An MDR/XDR type of offering was the number one thing our partners have been asking for the last couple of years. And they would love for that to be coupled with all of the great technology that N-able has to offer. And a couple of years back, we set off on the mission to find the best solution and the best team that we could partner with. [Adlumin] has been a perfect match. They share the same vision on a bunch of different fronts, but more importantly, as it relates to the MSP, this concept of IT operations and security operations isn’t really two worlds. It’s really just one world for these folks.
They’re trying to efficiently help manage and protect the IT environments all around them. And that’s what Adlumin does in such an elegant, agnostic way, because the MSPs are dealing with a wide diversity of IT environments. [Adlumin] has an open ecosystem that ingests all these different bits from a whole host of different vendors, which really appeals to our 25,000 MSPs.
MSP Success: Is Adlumin a cloud detection and response (CDR) solution?
Robert Johnston: It is. We stop a breach a day on just M365 alone in the Azure ecosystem across our portfolio. That doesn’t include Google, AWS, all the other stuff. We are delivering extended detection response and managed detection response through a single platform at the endpoint through the network and into the cloud. [Detection and response] are automated and there [are] analysts in the response activities.
MSP Success: This acquisition comes on the heels of your competitors acquiring cloud security products. Is this a response?
Pagliuca: No. This was a well-thought-through strategy that has been in the works for quite some time. The [N-able and Adlumin] teams have been working side by side defending the small-medium enterprise from the bad guys for over a year now. So this is not a response to anything recent. When we build our strategy, we start with the customer and get a good understanding as to what the challenges that they’re facing today and tomorrow. That led us to Adlumin because they’re able to defend not only just the endpoint and the network, but the SaaS applications, the cloud environments. And we know that’s where the puck is going.
The other thing is … the solution is basically two platforms in one or two solves in one. It’s the XDR piece with the MDR piece, with humans in the loop. That makes it a total cost of ownership no-brainer for the managed service provider. This technology effectively democratizes the ability to bring cybersecurity up to an enterprise grade, but at a price that a small-medium enterprise can afford.
MSP Success: You’ve talked about the importance of your open ecoverse. Why acquire Adlumin versus just continue to partner with them?
Pagliuca: Rob’s view is very similar to our open ecoverse. They can ingest all the different endpoint security, mail security, cloud environments. It aligns very nicely to our ecoverse. A lot of the folks in the space [are] kind of closed loop. If it’s not their technology, they’re not really talking with it. We don’t believe that’s good for the channel. We don’t believe that’s good for the small-medium enterprise. We don’t believe that’s good for the MSP. We want to make sure that we’re there to enable them, pun intended, regardless of their tech stack.
Why acquire? Because we can be better together. Number one, with … deeper integration both ways we can provide more intel into the RMM and the RMM can provide more intel or data into [the] XDR platform. We actually can make the RMM more secure. We all know the bad guys go after the RMM … so we can make the RMM a more secure platform for MSPs.
[With] deeper integrations we can do things with our Cove offering, we can do things with our PSA offering. … It’ll make it much more efficient. It’ll push the data back and forth, put the alerts back and forth. The one thing that Rob’s technology and his team do differently than most is the big R [respond and remediate].
Johnston: Outcomes [are] what really matter in security. And that means putting an end to threats. Not, “Hey, you have a threat,” but “Hey, you had a threat, and we stopped [it].” It’s an outcome-based value proposition. … The deadliest place on the internet right now is that cloud email ecosystem, whether it’s Google or Azure. So the big R in response and remediation is the delivery of outcomes for the end customer [with]… AI driven, automated decision making, with analysts in the loop doing that last mile of remediation, customer communications, those kinds of things.
MSP Success: Does N-able plan to roll out any bundled, lower-priced offerings similar to Kaseya’s 365 bundles or other vendors’ bundles?
Pagliuca: We actually have some bundles in market right now, and that’s just the early bit. So we’re beginning to look at ways to bundle [Adlumin] with some of the EDR technology that we have, to start. But a bundle’s only good if your customer is interested in all the services that it provides. I think some of our folks in the industry are kind of throwing everything into the bag, even though a lot of the customers might not want everything in the bag. So we want to be mindful that the solutions that we’re bundling is something that is useful to the MSP and can make them drive a lot more efficiency and a lot more security. We want to hear from the community, but I can see a world where monitoring and management, EDR, and XDR are together as a potential bundle down the road.
I can see us doing some clever things with data protection and [Adlumin] as well …So a couple of things are in the laboratory. Our goal is to drive value to the MSP and by giving them a couple of things that work together, drive more efficiency, will be a winning combination for them.
MSP Success: Will the bundled pricing be cheaper to buy it as a bundle than to buy the pieces individually?
Pagliuca: By and large, when any company implements more of a bundling strategy, it’s to provide better economics for the customer. We’re looking at different approaches on that, so TBD. I’d say what’s different is we don’t believe good enough security is good enough. And so I think that’s a differentiator. [Adlumin] brought a weapons-grade, enterprise-grade level of technology that doesn’t require a pricing trick to put in the hands of MSPs. It stands on its own for the quality that it provides. And if we bundle, it’s more because the solutions work better together, and we’ll provide that to the MSP.
MSP Success: Have your MSP partners been asking for a lower-price bundle, because there’s been a lot of attention on the cost of goods sold?
Pagliuca: Bundles aren’t new in the MSP market. The RMM itself is a bundle. So MSPs are used to consuming things in bundle. So yeah, they’re always interested in understanding how they can bundle these things up. A lot of times because of efficiency, especially at the smaller MSPs. Tech sprawl creates a lot of inefficiency for those folks. So whatever they can bundle and get software from one vendor, that’s always something that they’re asking for.
MSP Success: Is the acquisition an opportunity to get net new N-able customers where you don’t have overlap?
Pagliuca: Strategically, we’ll have a new beachhead. Right now, we go to market primarily as an RMM vendor and a data protection vendor. We historically would use security as more of a cross-sell, but now we will go to customers with this XDR/MDR solution. What we’ve been finding is 70% of this is greenfield. So this is something that MSPs are needing to make decisions on now and we’re helping them make that decision. And we have a piece of technology that we think is perfectly suited for them, regardless of their size.
Image courtesy of WhiteFox Marketing
