From The Expert Feature Article
September 10, 2013

LabTech CEO Talks MSP Deals and Technologies

MSP Today was spending so much time covering LabTech, we figured it was time for a good old fashioned CEO sit down. Matt Nachtrab was happy to oblige, and answered 11 questions on everything from RMMs to partnering and acquisitions.

MSP Today: Why is RMM so important for MSPs?

Nachtrab: MSPs tell me that they run their business on their RMM tool. It drives their revenue and efficiency. There are two reasons that an RMM is so important to MSPs. An RMM tool is used to make the MSP more efficient, so it can drive greater margin for its MSP contracts. There are two key parts to driving efficiency at an MSP. 

The first key driver of efficiency at an MSP is doing more support remotely. A great RMM tool allows you to substantially cut down the number of truck roles per month per technician. At Nemsys, we are running at about 2.5 roles per month per technician. This is achieved by allowing technicians to multitask and by drastically reducing the switching costs between technical tasks. The second key driver to efficiency is automating more and more of what you would have to do manually without an RMM tool. Automate a task that takes 10 minutes and is completed 10 times a week saves 100 minutes per week or 5,200 minutes per year. We like to measure automation hours at Nemsys. It is the total output of the automation engine that MSPs are creating to drive down the cost to support each managed service user. At Nemsys we strive to add automation that equates one additional engineer worth time or 2,000 hours. 

The second reason that MSPs really rely heavily on an RMM is to get out of the reactive mode and to get more proactive. They partially accomplished by monitoring all of their clients systems and networks with the monitoring features in the tool. The monitoring notifies and can kick off automation that repairs the issue. The goal is to get your network standardized and stable so the workload is predictable and scalable. 

MSP Today: What apps best integrate with RMM?

Nachtrab: Anything that needs to be managed by an IT department integrates well into an RMM. There are lots of different technologies that IT departments manage and an RMM platform unifies all those technologies in one place, so they can perform most of their job duties through one interface. Applications that integrate into RMMs are Antivirus, Malware Protection, Backup and Recovery, Remote Control, Repair tools and utilities (i.e. CCleaner, Spybot Search and Destroy), Cloud Applications (i.e. Office 365). LabTech has the most powerful integration framework I have ever seen. The applications end up being in the Control Center screens like they are a part of LabTech. LabTech integrates the software with the client, location, and computer. Custom automation can be added for these applications to allow them to be incorporated as script functions and managed just like an imbedded LabTech function. End to end management, reporting, monitoring and automation can be created around any software that integrates into LabTech. 

MSP Today: What is the value of this integration?

Nachtrab: The MSPs that use LabTech know that the software or hardware that is integrated into LabTech can be managed within their existing operational procedures. It becomes compatible with their business because they can manage it like they manage all other technology they take care of. 

MSP Today: Why are partnerships so important for vendors that serve the MSP community?

Nachtrab: Strategic partnerships and integrations is a top priority at LabTech. The only thing constant in MSPs’ business is change. Partnerships help us make sure we are helping our partners manage technology that is important to small business. 

MSP Today: Tell us about your most important partnerships?

Nachtrab: We enjoy our relationships with companies that get the spirit of partnerships. Partners that focus on the benefit to our partners and the clients they support. The partnerships that have the greatest impact on our partners businesses and lives. Our largest strategic partners are ESET (News - Alert), Vipre, and Storage Craft. 

MSP Today: What types of future partnerships might we expect?

Nachtrab: When we build integrations with product categories, we build a framework that makes it easy for others to integrate that product category. I would expect more Antivirus, Backup, and Remote Control Partners. Strategically, we are interested in more partnerships that affect our partners’ clients. For example, Office 365 integration or other cloud applications that solve the needs of our partners’ clients. 

MSP Today: What do you make of all the RMM acquisition activity?

Nachtrab: LabTech is the only leading RMM platform that still has the original founders remaining. Some people refer to the ConnectWise (News - Alert) investment in LabTech as a purchase, but that is not the case. ConnectWise invested in LabTech. Greg Buerk, Johnny Walker and I still run the business and set strategic direction. That direction has not changed and we remain committed to the IT solutions providers we serve. 

I knew a lot of my competition was looking to sell. It was interesting how all of the deals happened at once. If you look at our competitors, none of the founders remain in the businesses. Kaseya (News - Alert), Level Platforms, N-Able, Zenith, and now Packet-Trap are all absent their founders. It has caused a lot of uncertainty in the marketplace and we have seen an increase in activity as a result. 

MSP Today: Why should an MSP partner with LabTech?

Nachtrab: LabTech’s remote management capabilities and automation can drive more efficiency in their operations than all the other RMM tools combined. LabTech came from an MSP and we are here to assist our partners to drive their profitability up.

MSP Today: Where are managed services heading? Do you see more and more IT shops recognizing the value?

Nachtrab: At Nemsys, my MSP, we switched to 100 percent managed services and standardized the technology we support at our clients. It took about a year and we began to experience major economies of scale. My technicians are supporting 400 MSP users each and our client satisfaction surveys are at 99 percent. I see managed services continuing to be a large and larger share of an IT shop's revenue. I think that more MSPs are starting to see the tangible benefits of building proactive monitoring and automation. They are starting to see profit margins rise. Those MSPs that are truly getting proactive are building automation machines and it will be used to differentiate and consolidate the IT Solution Provider space. 

MSP Today: What are the continuing areas of resistance?

Nachtrab: I think that the largest resistance is caused by MSPs acting like they did when they were break fix. It’s a difficult cultural shift to make. My technicians at Nemsys still sometimes login to a domain controller over RDP, open up the user managed for the domain, and reset passwords through there, when it can be done in the control center in 1/10th the time. MSPs much think efficiency, build procedures, build scripted automation and stop doing inefficient tasks. As they do this, managed services will be a powerful force everywhere in the world. There is no stopping our community if we can be the best at delivering high quality IT management at a reasonable monthly price. 

MSP Today: What should MSPs do to make their services more attractive?

Nachtrab: I strongly recommend bundling HaaS and training with their offering. Check out what Nemsys is doing now at Bundling HaaS makes clients more willing to sign three year managed service agreements AND they renew because that means they get fresh new computers. 

MSP Today: What is the coolest thing about LabTech?

Nachtrab: The coolest thing about LabTech is that it is fun to see what you can do with LabTech. It’s kind of addicting for a geek like me. I come up with an idea I want to implement with a script or a plugin and I can’t stop thinking about it till I get it to work. When we started LabTech, I said we have to make it addicting for technicians. Otherwise they will not use it because it’s easier to do the tasks the slow way they used to do. We wanted to make technicians wonder how they can do their job without it. I feel we have accomplished that and we are not going to stop making it fun and addicting to use. Check out to see how people are geeking out on LabTech. 

Edited by Alisen Downey