dnsUNFILTERED: Derek Gabriel

[00:00:00] Mikey Pruitt: Welcome everybody to dnsUNFILTERED. Your once a month sneak peek into DNSFilter. I'm your host, partner, evangelist Mikey Pruitt. We're here to show you some cool updates, show off some new stuff, chat with big names in tech, and hear stories from DNSFilter users. Did you know dnsUNFILTERED used to be our little secret only available to partners in our 2000 member plus private community.

But the words out and the content is too good to keep to ourselves. So we're opening it up for everyone. Whether you've been with DNSFilter for a while or just found out about us, there's something for you. So what's new at DNSFilter? First off, we made some changes to how we categorize some very popular Webmail domains.

Certain Gmail domains will be listed under both webmail and chat and business. This helps your policies be more accurate about what kind of sites they block or allow. March was busy. We updated our Chrome roaming client to keep your dashboard clutter free by managing how devices connect. We also made the web app better.

Our new malicious domain protection category is enabled by default on your first policy. We tweak the navigation UI improve search on our reporting system, and smooth some rough edges on filtering schedules and universal lists. For Windows users, we have two new versions of our roaming client version, one point 13 in beta and one point 12.1 in production.

The prod release has a new update certificate, which aims to correct auto update issues and other fixes like connecting faster, not overloading your domain control.

You can now deploy no policy for testing purposes. And we didn't forget about Mac users. The Mac Os roaming client beta has improved captive portal handling just in time for travel season. You can find more details and stay up to date by checking feedback. DNSFilter.com/changelog. Stick around. At the end of this episode, I'll share a cool new feature from DNSFilter that you might not know about yet.

It's going to make your online life much more secure. Now let's bring on our guest. I'm joined by Derek Gabriel, one of the cab members for DNSFilter. Derek, tell us a little bit about yourself.

[00:02:35] Derek Gabriel: Currently I live in Honolulu, Hawaii. I've been doing this for over 20 years, which is probably way too long.

Big Microsoft fan. We use a lot of Microsoft technology. Most of our cu small, medium sized customers. Average customer size is probably around under a hundred. A hundred. We have a couple that are a little bit over, but the average is probably right around a hundred. And we've got roughly 15 fully managed customers and just a couple of staff members.

[00:03:06] Mikey Pruitt: Yeah. You know what's funny? I had the pleasure to meet Derek at a conference not too long ago. And we chatted before on our customer advisory board here at DNSFilter. And Derek was telling me a lot about his history. And you'd started off with like postscript programming and

[00:03:23] Derek Gabriel: Yeah.

[00:03:23] Mikey Pruitt: Some other wild adventures. And now, and that went, all of that eventually led into MSP land. And I'm curious how do, why do you think that progression happened? Do you think it was natural and everybody ends up there or some path there? I think,

[00:03:39] Derek Gabriel: I think it's. No, it's not natural.

It's horrible. Don't do it. Yeah, no, that's my honest advice about entrepreneurs. It's funny, I was at a chamber lunch yesterday and they had the speaker was talking about internships and they have a it's a nonprofit organization that's got a partnership with our public school system.

And they essentially facilitate getting people into internships that are in K through 12 and, all I could think about was this. When they were asked one of the questions they post they had a couple of seniors that were in high school that they were interviewing that, were speaking about the internships they had been through and whatnot.

All I could think of when they asked one of 'em what their next, what are your next plans? And she was like, oh, I'm gonna go to, I'm gonna go to college. I'm like good. Go to college. Go to college. And then they were talking to another person that was like I think I'm gonna skip college.

And, maybe get into entrepreneurship and I'm like, no, bridge out. Turn out. Don't do it. Don't do it. It's like you're gonna regret that later. You're really gonna wanna go to, you wanna go to school, but anyway I joke about that, but ultimately I think it's a more natural progression for MSP business owners or tech people in general.

With the technical skill, right? 'cause it's plumbers dentists, you gotta go to school for that. But yeah, I. One of my, I think it's Robin Robbins that famously says, people have an entrepreneurial seizure. And I fully had that I was young entrepreneurial

[00:04:58] Mikey Pruitt: seizure.

[00:04:58] Derek Gabriel: Yeah I was young and I thought, I could do this for a living. I can run a business. Yeah. It's not just solving technical problems. And I think that's how we all start out and life was easier 20 years ago. Yeah. In a number of ways. And yeah. And so that's how it happens is accumulate technical knowledge and you realize.

At some point, as horrible as it sounds, but you're like, oh, I know more than my boss. So if he can do this, or other business owner can do this then why can't I? Yeah. And the answer is there's a lot. Make sleep, there's a lot of other crap involved. That's why you can do it.

Yeah. Yeah, they were, it's funny 'cause I had all those same like challenges that like regular business owners have, but we don't recognize that necessarily in the MSP industry, right? We're always so focused on the technology and I don't think we focus nearly enough on the business. And so it's the same reason like, I think I could do accounting or I think I, I think I can do all of these things.

You can't marketing and sales, right? I think I can do those, but I can't. I can, I just can't do them well.

[00:05:57] Mikey Pruitt: Or all well at the same time.

[00:05:59] Derek Gabriel: A hundred percent. 'cause the idea that we can multitask is total bs. And so I, the, when you learn to outsource those things oh, I need to outsource you, you end up having to convince yourself the same way.

You have to convince your clients that they need to outsource their IT or their cybersecurity, that you need to outsource your accounting and other things like that. Or you need salespeople or a marketing team and stuff like that.

[00:06:21] Mikey Pruitt: Yeah, I heard a an interview with Jensen Wong, the CEO of Nvidia on the acquired podcast.

Not sure if anyone's ever heard of that. Really good. You should check it out. And at the end they asked him, if it was you 20 years ago and you knew everything you knew now what would you do? And he goes. I wouldn't start Nvidia. He's I wouldn't do it. He was mean yeah.

He didn't realize how hard it was gonna be. He elaborated on it like, but the clip went viral, right? And he's I wouldn't do it. So yeah, I totally understand that. I think every entrepreneur ends up there oh my God, this was way harder than I thought.

[00:06:57] Derek Gabriel: If, yeah. And if I'm completely honest, and I think this is another like horrible part of our industry that is like the underbelly we don't talk about, but.

Entrepreneurial poverty is real, right? Mike Mitz in, in, when in his first book profit First talks about how he sold his tech company and then goes out and buys a fancy car, and like suddenly, suddenly in a short period of time, his daughter's busting up or her piggy bank to help them cover, family bills, supposedly, right?

But like that happens, right? And even before an exit, i'm at the point where I'm basically gonna wind down my business, and it's not because I'm incapable of doing this work, it's because it's no longer fun for me. And and with security now. And, having to I've reached a point like Gary m is that he's we can't care about our customers businesses more than them.

I am at that point where I have a number of customers where I clearly care more about their business than they do. And that's not a fun, that's not a fun place to be because I'm telling them, you need to do this. You should do this. This is the best practice. This is important. What, what about this risk?

And they're like, ah. We're good, and it's like, all right, great. If you don't care, like, why do I, and if I don't care, why are we working together? So it's just, it's, yeah. It's and I think the truth is that from a financial perspective, I am. Poised now to go and get a job, which sounds weird.

Like I had to update my resume after 20 years. I'm like, what is that? Hey Chad, BT help me with my resume. Go ahead and hallucinate. Let's make it great. But like I'm going to make more in a job with a salary. Also less responsibility. I don't have to do the accounting. I'm not the person that's got they gonna call when there's the big emergency.

I'm not responsible for the business and I'm gonna make more money.

[00:08:50] Mikey Pruitt: And it's gonna be, and this is actually, I probably have we talking about

[00:08:52] Derek Gabriel: more.

[00:08:53] Mikey Pruitt: Yeah. We were talking about this at the conference We met at that you were winding down your business because of many reasons. Most, most notably the one that you pointed out is it's.

The headache ver and the weighing the headache and the financials is not balancing anymore. So you are thinking about venturing into the dirty vendor side of the msp Yeah. SP space. Which is great because like you are a perfect candidate for one of the vendors that, service MSPs. 'cause they want to.

Hear from MSPs that they can trust. So it's really good. I think it's gonna be great that you're gonna excel and I'm actually really looking forward It too, the more conversations I have. Yeah, it's gonna be easy for you. I think you're gonna, it's just gonna be like your day to day and life personality is just gonna fall right into this.

[00:09:40] Derek Gabriel: Yeah. And that's something I've actually discovered too, is I belong to a couple of peer groups. True methods is one of the ones, and I strongly believe in peer groups regardless. It doesn't matter what industry. Like I did it before I was in, in MSP did some stuff in Vistage when I was younger and, different organizations.

Like I did stuff with Rotary and that gives you some personal fulfillment doing volunteer work. And when I was younger did some, brief stuff with Toastmasters and I think it does, it doesn't matter necessarily that it is a business peer group, but be involved more with your, community and like-minded individuals. Anyway, one of the conversations that I was having with one of my peer folks this morning was a little bit about that, right? And we were talking about how and I think this is something you and I have briefly talked about and I know when I was having some.

Drinks at the conference. I definitely talked about it. Don't know what you're talking about. It's like vendors don't choose to lie. There is no vendor that I believe is out in the marketplace purposely misleading MSPs about their products. But what I think happens is. It takes a special type of person to do hardcore sales, right?

And a lot of organizations you can see as they like, the startups change, right? And they grow. And suddenly sales is an extremely important thing. And I think you see this especially with the large vendors, right? The Kase is the Connect Wises. Like they have legitimate sales teams, right? There's dozens or hundreds of salespeople, there are sales executives and.

They're like heavily compensated. And sales is extremely important, right? And there's different types of sales, but ultimately when you bring someone in to do sales who's got all the skill sets of a salesperson, but doesn't necessarily understand the technology you end up in this place where, and it happens in all industries, right?

I'm just, I obviously we're talking about ours very specifically. You end up in this place where a salesperson will say a thing. Perhaps it's something they've heard. Perhaps it's something they, they think they know and they go off into the weeds about this, could do that. Or, and also there's this weird race, like how many times have we heard single pane of glass?

We've heard that for decades. But also there's this weird like somehow people think everything is zero sum frequently. And it's like you have to have vendor A over vendor B. But potentially vendor A and vendor B could compliment each other, or worst case scenario, they both convince you that they're important and they overlap, and now suddenly you've got a bunch of stuff you don't need.

So that I think is a big challenge. And that comes because there aren't MSP operators or MSP executives, like that's not a natural like path for progression. The natural path for progression is that you build a MSP. If you sell it and you go, then you become a vendor or go work for a vendor.

There, there are a lot of I think there's, there is a cohort that exists of sP built startups that are vendors, because that an MSP wanted a piece of software. They wanted a thing to do something, and then they were like, oh, I'm gonna, I'm gonna go build this. Yeah. It's more rare.

Oftentimes they still own an MSP, and so they're not necessarily running that tech startup. But you, they are different, right? They're a lot different. And anyway I, I. I think you're right. I think that whichever vendor I do land with, I'm talking with a couple, so I'm not gonna say any names right now.

Nothing's been inked. And I think that to be able to bring that perspective to whichever organization I work with, I think will be very valuable for them. And I think it'll be really good because I've learned a statistic from this ex, this what I'm working on. And when I was at write a boom.

Talking with vendors not necessarily about implementing their software, but more about how do you operate? How are you funded, da. That's a question I think people need to ask too, right? One of the speakers brought up that we need to start asking about, the software bill of materials, right?

Like, how is your product built? What are the potential supply chain risks to me as the implementer? And that's another question I think we need to start asking startups too, is how are you funded? How much money do you have? Because there's a couple small startups I talked to, they're like, we're our burn rates acts.

And know, they don't necessarily give you specific figures, but some of them are very transparent, but they'll be like, look, we, we got a year's worth of funding. If I really believe in your product though, that's not a huge problem. That's not necessarily a huge problem.

Because oftentimes funding cycles are short. Especially when you're, pre IPO and all of those things. And this particular and that's the other thing too that I don't, not everyone's familiar with like the software startup ecosystem, right? They're not familiar with what's an angel round?

What's, what's a round what are, what are those different things, right? So you may be a true startup to me is someone that's like. Pre a round, right? Like they haven't really gotten a serious amount of funding and they may be bootstrapping it somehow, or they, in this particular situation, I talked to a vendor that has money from a couple of the ginormous MSPs, which is another new thing that's happening in this market too, right?

There's been so much consolidation in the past few years that some organizations choose to grow through acquisition and they're looking for people like me that, have done this for 15 or 20 years. Are pretty much like me. I want something better to do. I want something more fulfilling.

And then, they're like, oh, give us your customers, give us your, I want that. And then they've built a system that's designed to suck up those MSPs, and have now created these giant. Model organizations talk about that because they're

[00:15:01] Mikey Pruitt: all

gonna come. That's actually really interesting about asking the vendors about their funding and you know that I actually never heard that, which

until I ask those questions, like I

live on the marketing team now and I've never even had that discussion.

We should promote that we raised X. We did, we had like press releases and stuff, but

Right. And then the little banner goes on the website and then that's it. It's of everyday marketing. But it is,

like you said, important are you guys one year into this thing or are you like seven or are you know, do you have 8 million bucks?

Do you have a hundred? Because how. Do you invest, invest my time and space. Yeah. Because that's ultimately right.

[00:15:37] Derek Gabriel: We're investing our effort, right? We're investing it's not like we're getting equity outta the deal, but we're, we're participating in that and yeah, it's okay.

I, I don't think people should be scared that a company might only have a year's worth of cash laying around. That's just reality of how how that stuff works. And at the same time. If we real, if we believe in that, that much, then our business is, that, is that much more valuable to them as a startup, right?

And so in that case, it's like I'm putting my weight behind that particular product or service. And so I think that's important, but that also tells us how much more important the relationships are, right? So I need to make sure that. I know and like trust and understand how my vendors are operating and if they are smaller vendors, there is potential risk there, right?

I mean there's risk at all. On all levels, but it's something that we need to be aware of. It lean.

[00:16:31] Mikey Pruitt: Yeah. It leans back into the entrepreneur, like you're a tech person that had a business and now you know, you need to make sure that the other businesses that you're in partnership with are operating good businesses as well.

[00:16:45] Derek Gabriel: Yeah, maybe,

[00:16:46] Mikey Pruitt: maybe DNS Fulter. We're just tech guys and we have a, now all of a sudden we had a business, like you would wanna know that and you trust us enough to make it to the next level or not. That's something that you should have enough variables to make a decision on.

[00:16:59] Derek Gabriel: And I love that you said it that way because I, I have worked with vendors that were, that, right? They were tech people that started a product. You could throw a dart and like I said there's now a big enough cohort that you can recognize the ones that have been started by MSPs or have spun outta MSPs.

And we worked with a product that was like that. And it got to the point where it was completely obvious that was the problem for their growth. And, this was a few years ago, and it was the end of the year, and they were doing like a. Like a town hall. They did like a town hall webinar.

And the CEO and the I'm gonna use quotes 'cause they weren't real, they were people in roles, CEO and the CTO. And they're describing like where they're at and their roadmap and things like that. And that's really important to be able to get that information.

And I, I applaud them that they did that. But the challenge for them became, I don't think they were aware. That they had reached the point where the founders had to get outta the way, right? And they needed to start hiring real people, right? They needed to have real developers, not the guy that enjoyed developing, right?

Like they needed to bring those things in. And fast forward two or three years, now, they got a, there's a whole new team coming in, right? New CEO bringing in a bunch of people, they built a different product and exited and did some stuff, and now they're coming in and it's oh, so sub suddenly.

This company is now taking all of that seriously, a real dev team, doing DevOps the right

[00:18:27] Mikey Pruitt: way, but, and that's the signal in your mind okay, now I can trust this product again.

[00:18:33] Derek Gabriel: I don't know if I necessarily would trust, trust

[00:18:36] Mikey Pruitt: the product ever again. There's other variable, there's other factors.

Yeah,

[00:18:39] Derek Gabriel: yeah. In simple terms though, that's that's definitely a signal that. There are some people there that are serious, right? Like the money behind it now has put a it's not what happened ultimately, right? At some point someone came in smart money and said, you need a better leadership team, right?

And put that in place. And so now you've got an opportunity. If they execute correctly, then yeah, it's it could probably be an amazing product at some point. But it took them three, two to three years to figure that out, right? And they lost us as a customer, a, shortly after that webinar.

But like at the same time, like this is part of the maturity process of our industry, and we have a lot of, we have a lot of technically smart individuals running MSPs, but we don't have a lot of like operationally mature MSPs. And that scares the crap out of me. Anyway, so that's the, that's one of the problems I want to try to help start to solve.

Yeah. So that, and that's what I'll be exploring with my vendors that I, or a vendor that I eventually land at. But the idea that my personal goal is to land with a great company that has a fantastic culture and team that. I can then start waking up again in the morning and feel like I'm making a big difference.

I did 20 years ago when I started my business, and for the very long portion of the time that I operated at MSPI, I really felt that I was making a difference for a lot of businesses. But the cybersecurity focus and, that, that has really changed the game a lot. And I know I'm not alone in that, that there are people that also feel this way.

I've talked to other business MSP owners and operators, and there's a lot of people that kind of feel that way. And change is coming. Let's explain

[00:20:22] Mikey Pruitt: that a little bit more. You're saying that cybersecurity is like a new thing that's not well understood. Is that what you mean?

[00:20:28] Derek Gabriel: It's not that, it's not well understood. It's that it's so pervasive and it's oh, what's the right way to describe this, it's such a large risk. Maybe it's a huge risk. It's right. And that's ultimately what it is, right? It's, it is, like for many organizations inside and outside of our space, it is a ticking time bomb, right?

Yeah. And ultimately the question is, it's like playing hot potato or musical chairs, right? When the music stops, I hope you got a seat. Because what you don't wanna have is. Not have an instant response plan, not have cyber insurance, not have not have any of these things.

Not have ever done a tabletop and it, they just don't know what they don't know. And even if you do know what you don't know, then it's even worse because now you're acutely aware of the problem and reliable. And the risk. Because essentially we are all like one click away from hell and.

Now we're racing to it with forward with ai and it's could we potentially make the clicking less in the AIing more, and can that make things worse? And I'm not like, Skynet's coming and we're all gonna die. But I do believe that, we are moving so forward, so fast. And it started with the pandemic, right? There's anecdotal conversation and quotes. Bill Gates said, Microsoft was moving 10 years a year, right? Is how it looked for them operationally. And that did happen for like our, like it catapulted us forward.

Pandemic, honestly, and like in the last five years was the best year that we've ever had from a financial standpoint business, jumped because it was so high in demand. I got to the point where I couldn't talk to some of my friends 'cause I had friends that owned restaurants that were like circling bankruptcy.

And it was weird to have a conversation. Oh yeah. You're like, oh

[00:22:03] Mikey Pruitt: man, times are booming. Things are great. How are you? Yeah. You're like, and the rest of like 80, 90% of the world is not

[00:22:08] Derek Gabriel: and moved up and,

[00:22:10] Mikey Pruitt: yeah.

[00:22:10] Derek Gabriel: Yeah. I had a friend that owned a restaurant, closed his restaurant just coincidentally like in January or February of 2020 and was constructing a new one.

Boom. Can't get permits, can't get construction, can't get, like suddenly he's sitting I'd stood there with him in the dirt, of where his restaurant was supposed to be, man, asking him like. How are you doing personally? Like how are you paying your bills? And luckily all of the people in his chain between the banks and the landlords, like everyone was like sympathetic cool about it, right?

Yeah. I then that's community again, right? Like he had a great community and now he is got a thriving restaurant and everything's great, but, bankers were calling or financial advisors were calling like, Hey, do you need a PPP loan? And it's we don't qualify that. Do you want the EIDL Don?

They're like, yeah, we don't you. That probably did

[00:22:55] Mikey Pruitt: just sign here. You probably do.

[00:22:57] Derek Gabriel: Yeah. Yeah. A little bit of fraud going on. But yeah but it was, it's yeah. So that made things work. But anyway that things have changed and the risk, the risks now are much, much higher, right?

Yes, there's fantastic rewards and that's always the balance, right? High risk, high reward. You can go put it all on red, 28 and potentially, win. All of it back, but the house probably has the, the house does have the advantage. They'll get it back actually. Yeah.

And that's what happens too is do you want as a MSP, operator or owner, do you want to, do you want to struggle into the future or do you want to thrive? And so I, and that's a lot of the challenges that we've reached a point now. Because the risks are so much higher that there's, people just don't wanna deal with that risk.

And what do you think that unfortunately, bearing your head to say isn't an option?

[00:23:48] Mikey Pruitt: That's not option. What do you think the thriving looks like? What are some of the strategies that you would employ if you were gonna, throw your hat in the ring one once more.

[00:24:00] Derek Gabriel: It's definitely on the compliance and the cybersecurity side of the fence, like doing all of that, the challenge is, it's not. And everyone's throwing AI at it, right? Microsoft's about to launch on April 1st, not a joke. Security co-pilot, right? That's gonna be a mid market enterprise product. Small businesses could potentially use it. They just gotta pay for it, right? And that's oftentimes a, and that's one of those conversations that we have.

Ironically, or coincidentally, for all of our customers, they would rather pay a Microsoft license any day of the week than they would pay us more money. When we tried to raise rates a few years ago when inflation went out of control. The way that we ended up doing it is we we had some Microsoft licensing that we had bundled in our service licenses, and so we were doing all in seat price and we just wrapped it all in and we're like, we called it like a basic, and the basic was a hundred bucks a user.

That included a 2020 $3 business premium license. And so instead of raising it from a hundred to say 120 or $150, what we did is we just took the Microsoft license outta the bundle. Kept it at a hundred bucks and then had them pay directly for the Microsoft licensing as a separate

invoice.

And so we essentially immediately increased revenue by making the customer pay directly for the licensing and the bundling licensing from Microsoft made sense pre NCE right before they. Put out the new commerce experience and now the way Microsoft bastardized, how they do licensing and the weird obligations that you have that no longer made sense for us, we wanted to really make sure that the customer was on the hook for those licenses not just us.

And

But yeah, so we separated for two reasons, but it ended up being, it ended up being this interesting discovery that customers. Understand what and what that tells me. At least in, in my sort of like discovery analysis of it, it tells me that they find Microsoft or some people are Google, Amazon, whatever.

They find those vendors. Critical to their businesses.

But

they still don't see us as a critical component. Yeah. If it's easier for me to convince them to spend more on Microsoft licensing, they consider us expendable or replaceable. Because if I say, look, we need to raise your rates 6% or whatever, and they're like, oh, that's that's gonna be a problem.

That's because they don't value and we did have some where they're just like, send us invoices. Like they, they didn't care. So we did, we, we did have some of the right customers. The challenge is the right customer now is fewer and farther, in between. And I talked to, I listened to a lot of people in my peer groups and I talked to a lot of people and, I happened to hear one gentleman, I think he was, I don't think he was an owner, but he was, like a technician and he was talking to a vendor and I just happened to be standing nearby. And, they were like, we've got this platform, da. And he's I'm really interested in this.

However, like we're, I've heard the. The phrase tools moratorium out of more people's mouths in the last month than I've ever in my life, which is neat. 'cause it, it's neat. It's it's neat because in a way good, it's the way to say, no, I don't, I'm not buying tools right now. Without saying no. Oh, we're a tool moratorium. I can't, I'm sorry. It's outta my control. But this guy. He was a younger gentleman, so I wanna call him a, I'm 47, like everyone's younger than me. That's, that feels like in the tech space, except the, the other owners are some people are older than me.

But anyway he's we need two years to get our stack in order. And all I could think of is holy shh, holy s two, what are any of us gonna even be around in two years? Do we even know what two, like two years is that might as well be a decade, right? Yeah.

[00:27:38] Mikey Pruitt: You're like, I thought you were gonna say next Tuesday or

[00:27:41] Derek Gabriel: something. Yeah. Yeah. And it was interesting because then I looked at the vendor that was he was talking to, and I just saw this interesting look on his face and I realized that he just didn't have a rebuttal for that. It was like, but also, and then when the person walked away, I went up to him, I said what, like, how do you take that?

What do you think that meant? And the first thing was right, he is he is not the decision maker. I'm like, ah, obviously okay, there. Fair enough. And if you're a sales person you wanna talk to, okay, from a sales standpoint, that's okay, done. But more a broader, what I was interested in is what does that, what what does that is this where our industry is at?

And so this leaves me to the next big revelation that I found out from talking to vendors. Is on average the utilization of the licenses and the services that we purchase as MSPs is 50%. That's the high side. Oh really? I experienced that with one of the vendors that we worked with a couple of years ago when we signed up, they had a new service dah.

And I'm like, oh, this is great. I need to get this for my customers. And it's oh, I can get in on the early bird pricing dah. And I'm a sucker for a deal, and suddenly I'm spending, six, seven, $800 a month and eight months down the road, we haven't deployed, which means it's a cost.

I'm not deriving any new revenue off that. And so like unused seats, unused licenses, whether it's on purpose because. It's never on purpose, but if it's a cognitive choice that someone made I want the 500, I want the 500 seat package because I get an extra 20% off. Versus, and hunters used to do this to me, love hunters to death, but I used to do this math in my head and I would be like, eh you're sneaky.

Yeah, because that's cool. I'm not gonna save enough money if I buy the 500 bundle. Until I hit, like 3 75 or something. And I'm not there yet. So you're, that's a, you're like trying to get me to buy more now because I can give you more money and then I'm gonna grow into it. Which always sounds great like that.

Like the best late plans of my cement, right? We're always like, oh, we're gonna grow into that. I, how many times have you heard of salesperson? Say, you only need two customers, or you only need one new deal, and you go cover this whole thing. And that is the unfortunate that is the unfortunate math that's constantly going through people's heads. And the shiny object syndrome is, and you combine all this together, and this gets back to where we were coming from with this of why it's no longer fun. Because, at write a boom alone, there was almost a hundred vendors, right?

And like 50 of them were new this year compared to last year at that particular conference. And there was. Literally companies I had never heard of. I have no idea where they came from. And I didn't even stop to talk to them. 'cause I'm like, you know what? I don't have time for this crap. I do not have time to figure out who you are.

And now I'm getting follow up emails in the right and they're like, did you come by our booth? Booth? You remember let me, if you gotta send a follow up email that says, let me refresh your memory on what we do yeah, that, that is hello red flag. And but yeah. Anyway, so if I was doing this all again.

I would definitely focus on the compliance side because that's driven a lot by regulation, right? Yeah. They can't get around it. Cyber insurance has been very good for us over the last couple of years, and I would definitely double down in focusing on that. And that's actually advice I just gave to one of my peer members this morning because cyber insurance has been the dog that wags the tail, right?

Or excuse me, the tail that waves the dog.

[00:30:56] Mikey Pruitt: Yeah. The tail that likes

[00:30:58] Derek Gabriel: the

[00:30:58] Mikey Pruitt: dog.

[00:30:58] Derek Gabriel: You do a risk assessment, right? You got un quoted service pass, you got, PII and documents that are, and hard drives that aren't encrypted. Like that person's not eligible for cyber insurance. They're not gonna find a policy that's gonna take them, right?

They don't have EDR deploy, unless they don't buy or something. And believe it or not, that's happening, right? And so that's the next shoe that falls is they do have some kind incident. Yeah. And they are starting to do that, right? Yeah. And that's also. A challenge. That's another place where we're now seeing like a challenge, right?

Because all of the major cyber carriers now they've acquired like MSPs, right? They have money involved. They're like, hey. Do you need compliance services? You bought insurance from us, we can help you with compliance. And I, I know people that have lost MSPs that have lost long-term clients to cyber insurance companies that pushed another, either their own or another compliance partner down into that.

That relationship and it drove a wedge in there. And it didn't matter that they were a tenure client. They were like, we need compliance. They didn't realize that the MSP they were working with was capable of doing it 'cause that MSP wasn't having those conversations and boom, lost a big customer. And and that's what's happening, right?

So yeah. It's a lot of, like you said, it's cybersecurity is complicated, but it's not complicated like algebra, it's complicated, like making sure you keep the refrigerator door closed every time you use it, right? Because sometimes you're in there, youre like, I need these three and four things.

And you do the thing with the foot close and the door doesn't Yeah. The door doesn't close. You walk away and you make your sandwich, you do whatever, and then two hours later you're like, oh, crap is the milk rot. Yes. That's what cyber insurance and cyber, or that's what cybersecurity and cyber compliance is about, making sure that their refrigerator door's always closed.

What and. Yeah,

[00:32:45] Mikey Pruitt: exactly. But I was gonna say let's shift real quick to another topic I was encouraging you when we were chatting in person to start your own podcast called defender. Does that because yeah, you were telling me of all the things that Microsoft Defender does. And showing me, in fact, 'cause I haven't had the opportunity to use defender because I use a real computer.

It's called a Mac. You should look it up. But anyway, tell me a little bit about that. For Mac,

[00:33:13] Derek Gabriel: not Mac. Yeah, from an EDR standpoint now it's available for Mac. So yeah, we, so that's something that. That was a pretty conscious decision I made early on. We've been a strong, I've been a strong Microsoft partner all my life.

Like all of my business iterations. When we first started before Microsoft had real co-sell, before Microsoft had we used to have a, like a a tam technical account manager, I think. They were referred to as then for a while. Telephone. I can't remember, but at one point we actually had a real Microsoft account manager that I would talk to and like person, we'd go to lunch. Yeah. I was like, wow, you're human. And and then they had programs, right? And I'll never forget, it was like, 'cause software, right? Like we used to, that's what we did. We sold software all the time, right? Oh, hey, there's a new version of exchange coming.

Everybody get out your licensing checkbook. It's time to write some checks. And I remember one. Steal they did where they sent us a spreadsheet and they're like, this is all of, these are all the customers in your zip codes that are due for new versions of exchange.

We're gonna send out postcards, let's start making calls. And that and that's the kind of thing that we did before cloud. And then in my environment, we worked a lot with, like I said, small businesses. So we'd have an office of 20 people and they would, I distinctly remember this one deal we were working on, and they came to us and they said, look, we want to take advantage of office.

We'd like to use exchange, da. I'm like, okay, you're a perfect candidate for Microsoft Small business. Okay, what does that entail? You're gonna need. They didn't, they basically needed everything. They had computers. They weren't, it was just at, and it was Windows.

I think we were Windows seven at that point. But it was like, all right, you're gonna need licensing for the computers. You need windows, you're gonna need office licensing for the computers. You're gonna need a server, which you don't have, and that server's gonna need to be capable of running all of this software.

And so it's gonna, redundancy, blah, blah, blah, blah. And by the time we pulling the calculator wheel and at the end it's 20 grand for an office of 20 people. And that's an upfront investment they have to make. Like cash or credit. Like how are we doing this right? And it's oh, you wanna finance it?

Sure, we got a financing partner, no problem. But we're not a bank. And that almost always those things that people wanted. It's hard to drop 20 grand and like in any business, right? And that was, that made that sales cycle really slow and arduous. And then there was this thing, they're like, we're doing this online blah, blah, blah, business productivity suite.

And I'm like, wait a minute. That's Exchange, that's SharePoint. That's essentially all the stuff, this fancy thing called SkyDrive, which became OneDrive, right? Remember when they called it SkyDrive? But yeah. Anyway. And I was like they don't pay upfront. It's just a subscription. Like

[00:35:45] Mikey Pruitt: It's already financed, basically.

They're just financing. And the Microsoft was Yes, but forever.

[00:35:52] Derek Gabriel: Yeah. I was like, what do we sign up? We need this right now. And yeah. Because in my mind I was like, how many deals did I have for 20 grand that I couldn't close? Because people couldn't find a way to finance and or and that is, it is just, it.

It was just. Logical progression. It just made sense. And yeah, like I remember and all those nightmares went away, right? Patching exchange server, which is funny 'cause there's still people doing that. If you're patching exchange server, stop just get rid of it. Just get rid of it already.

Like you have, there's no benefit to having on-prem equipment anymore. Anyway. But yeah that's what happened. And throughout that we took advantage. Every time Microsoft was like, Hey, we've got this new thing. We got Defender. Great. All right, now Defender does vulnerability management.

Oh, great, let's get that license right. That's two bucks. Great, let's do it. Let's add those on. And slowly, yes, you do have to pay higher licensing fees to be able to get these features, but. I don't need as many third party vendors to manage our customers, right? And we heavily are relying more on automation.

And for example, I was trying to install my fancy microphone on my new computer that my computer died and I had to get this new computer. And I downloaded it. The, we were talking about this, I gotta focus, right? Scarlet, I go get the drivers like normal. I hit install and it, I can't write to the temp drive error.

I do it a couple times thinking this, like it's, is this software crap? Is it my fault? And then I realize, oh, defender, oh, defender blocked that. And I go and look at the little security center and it's yeah. It is, right? Attack surface reduction. Again, these are things you have to turn on and tune, and that's part of the problem why people don't do them.

It's also part of the problem why people buy software from vendors and don't deploy it because you have to put the effort in to understand them, but attack surface reduction, block this piece of software, it's. For prevalence in age, and I'm certain it's prevalence in this particular situation. So what that means is Microsoft across all of their endpoints of all of the customers that use, defender, tax, service reduction, all of that telemetry that feeds back to Microsoft.

But on your TFO hat, they're still on my data, da, no, whatever. There're just making life better. There's always gotta be a patient. Zero. I don't wanna be it. And they have not seen that particular it's not a hugely common, it's for audio files, right? Like people, how many people run podcasts anymore that actually use Yeah.

And now they

[00:38:01] Mikey Pruitt: have another ping in their database about it and you making an exception for it now. Exactly.

[00:38:05] Derek Gabriel: Okay. And that's what we had to do. So it, and it took three minutes, right? We log into the defender, the thing you put in the exception for that particular piece of software. And then you go into the company portal, you hit sync by policies and within, three minutes you can run the software, but how many vendors are doing stuff like that, right? We've got application, white listing is a thing, or zero trust, they call it application zero trust is, one of the buzzwords. But do I need a third party product with a lot of management overhead or can I lean on Microsoft's built-in tools that exist within the product, right?

By not having to have. OAuth or a third party, API connections into my systems or my client systems, I'm reducing the attack footprint.

[00:38:51] Mikey Pruitt: Yeah,

[00:38:52] Derek Gabriel: so is that worth potentially paying a little bit more for a license? Gotta do the math on that and decide. But that was, that's the thing that, that happens quite frequently.

And you and I did this a, it got to a point where we made this into a really stupid game and it probably got really irritating at the end. 'cause I kept saying that to you. I'm like, defender does that, when someone would say we do. And I'm like, defender does that,

[00:39:12] Mikey Pruitt: So anyway. Is there anything that Defender doesn't do or doesn't do well that you use something else for?

[00:39:20] Derek Gabriel: DNSFiltering

[00:39:24] Mikey Pruitt: and honestly they obviously do, they do dn.

Yeah. Yeah. They barely do DNSFilter.

[00:39:29] Derek Gabriel: There's, yeah, there's some DNS security, but it's not filtering the way that you'd expect. Yeah, you can, you can go and block and whitelist and do a bunch of stuff like that, but you don't have the luxury of the categories.

You know that, that. All of the behind the scenes stuff that you guys do that's so powerful. But yeah. And, what sassy is another big one, right? Everyone's talking about Sassy secure edge. Microsoft's got that in beta, that's that's gonna ga soon as well too.

And so again, it's all and then, but because from the security standpoint and and I know we're at time, so I'll try to make this quick, but like. When you can have those, when you have that end-to-end solution and you get all of those signals, now you can apply that same information to all your conditional access policies, right?

So you got compliance policies in there, you got conditional access policies, and they work off of each other. And so if you're coming in on Microsoft system, you're using Microsoft's Secure Edge system. Yes. You can get that data from third parties. Do. Do you need to, is it better? Is it faster? Yeah. So anyway.

[00:40:30] Mikey Pruitt: Yeah. Most business clients, future thought. Yeah. Most business clients are already, we'll definitely do a follow up ecosystem. Yeah, we're, yeah, we're gonna do a series podcast. We'll do a little series on that yet,

[00:40:39] Derek Gabriel: I think it'll be a lot of fun to explore some of the specifics around that.

[00:40:43] Mikey Pruitt: Absolutely. Derek, thank you so much for joining me. I really appreciate it. And I don't know, we're gonna have to kick you off the cab if you sell your msp. Is that what's gonna happen? No, it's gonna break my, yeah, I know. That'll be sad. We can still be friends. Alright. We'll still be friends.

We always have LinkedIn. We can't take that away from us. No, we can't. Thank you Derek. I appreciate it.

[00:41:02] Derek Gabriel: Yeah, thanks a lot.

[00:41:04] Mikey Pruitt: That was a great conversation with Derek, and if you wish to become a guest on dnsUNFILTERED, just reach out. I'm very easy to find now for that secret feature. I promise. I'm talking about DNSFilter's, latest ACE in the hole, malicious domain protection, and yes, it has been available for a few months and yes, I even mentioned it at the beginning in the change log, but it's too important not to call out again.

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[00:42:34] Derek Gabriel: Click, click.

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DNSFilter isn't just reacting, it's predict. So there you have it. MDP new again DNSFilter. Must have must Enable feature. Thank you all for joining me on this episode of dnsUNFILTERED. I'll see you next time.