The cyber warranty company backed by channel icon Austin McChord (along with some other big names from outside the channel) is enjoying some early success. Cork’s early access program (EAP) has reached full capacity (with 300+ MSPs) just three weeks following its launch.
Cork CEO Carlson Choi attributes this early success to creating the product the market wanted.
“This product is specifically designed for the MSP channel,” Choi told ChannelE2E.
Choi’s team did that product/service design by going out to talk to MSPs and insurance providers before they ever created the warranty program or launched it.
But don’t worry if you didn’t get in on the early access program. Cork has opened up a waiting list for general availability of the Cork Protection platform, which the company says is expected in Fall 2023.
The Background on Cork
Cork was born out of a need in the SMB and MSP market as the cost and complexity of cyber insurance was making it tough for these companies to get the protection they needed. Cork offers a cyber warranty program that creates near-instant access to financial coverage for clients in the event of a security incident. This is designed for small businesses that don’t have cyber insurance, or mid-sized businesses that may have insurance but need something to cover the insurance deductible.
The Difference Between a Warranty and Insurance
What is a cyber warranty anyway, and why is it a good fit for the MSP channel? Choi compared the warranty program to one that a consumer would buy for their Apple Watch. It covers you if something goes wrong.
He explained that Cork’s cyber warranty program uses the MSPs own RMM technology to verify an MSP’s security stack. The minimum requirement is that the MSP has a remote monitoring and management (RMM) solution installed and multifactor authentication enabled across end-customer sites. The RMM solution then monitors the environment for activity, but also verifies other pieces of the MSP’s security stack. As an MSP adds additional protections to the stack such as EDR, that MSP receives a rebate on the price they pay to Cork.
Choi said that rather than verifying cybersecurity technologies as they operate, cyber insurance companies typically rely on filling out forms. (Although ChannelE2E and MSSP Alert have heard of some companies that are relying on cybersecurity vendors to verify environments.) MSPs check a box on the form to indicate which technologies they have in place. But that information is not verified in real time. The form is filled out at one point in time, and the cybersecurity stack and the threat environment continue to evolve. The form is out of date as soon as it’s completed.
Another difference between a warranty program and an insurance program is that a warranty program will pay out a claim in days, much faster than a cyber insurance claim will pay out. That helps small end customers who cannot afford insurance but need help immediately. It also helps mid-sized companies that have to wait for a cyber insurance payout.
What’s Different About MSPs?
Every MSP’s security stack will be different, Choi said. MSPs want to assemble a best-of-breed security stack to sell to and protect their end customers.
Many cybersecurity insurance promotional programs require an MSP to use several pieces of technology from a single cybersecurity vendor to receive a discount. Choi said that’s not how MSPs typically work.
“Of the 150,000 MSPs in the world and the 50,000 in the U.S., there’s no two MSPs alike,” Choi said. “If you design specifically for one stack, you are never going to get there.”
Plus, Cork’s cyber warranty program is designed for the MSPs to sell to their end-clients themselves. Cork does not require the MSP to co-sell to the end-client with Cork.
Cork secured $6 million in a seed funding round in May led by DVx Ventures, with participation from Outsiders Fund and Vestigo Ventures.
The company has deep channel roots from the outset. Choi is formerly an executive at Datto. Datto founder and former CEO Austin McChord is a managing partner of Outsiders Fund and is on the board of directors at Cork. Former Datto business development executive Rob Rae, who is now at Pax8, is on Cork’s advisory board. Datto’s former CISO Ryan Weeks is also on Cork’s advisory board. Kaseya acquired Datto in April 2022.
