ConnectWise has invested in Perch Security, which offers self-service threat intelligence tools for MSPs and technology solutions providers, Perch CEO Aharon Chernin has confirmed to ChannelE2E and MSSP Alert. The deal is part of a $9 million Series A funding round. Fishtech Group also participated in the round.
Related: Interview with Perch CEO Aharon Chernin on MSSP Alert.
The deal is particularly important to ConnectWise and its partner ecosystem. ConnectWise develops business automation and IT management software for MSPs, IT service providers and technology teams. Those partners and customers have largely embraced endpoint security, but they often don't know how to address deeper managed security services and risk mitigation strategies. Moreover, those SMB partners and customers often don't have the talent, finances or business resources to build and monetize dedicated security operations centers (SOCs).
Private Equity vs. Private Ownership: For its part, ConnectWise is locked in a battle against several rivals -- particularly private-equity-backed companies like Continuum, Kaseya, SolarWinds MSP and Datto -- to define how MSPs address cybersecurity in the SMB customer market.
ConnectWise remains closely owned and held by its founders, particularly CEO Arnie Bellini. The company has had multiple private equity investment offers over the past 12 to 18 months, according to several sources in the PE industry. But Bellini has respectfully turned down the dollars -- preferring to maintain full control while working with a select group of financial advisors. The advisors include Grant Thorton veteran Stanley Levy and former Tech Data CEO Steven Raymund, both of whom are now ConnectWise board members.
ConnectWise Finds A Target Investment: Perch Security
Bellini has spent more than a year carefully scouring the technology market for potential cybersecurity investments. His goal: Help all IT service providers to automate IT security for SMB customers, while ensuring that those partners won't have to make massive financial investments in SOC (security operation center) build outs.
Bellini's research in the security market leverages a handful of trusted lieutenants within the halls of ConnectWise. That team has quietly met with a range of MSSP and cybersecurity companies over the past year. Perch has been on the company's radar for quite some time, and even attended a closed-door MSSP and CISO gathering that ConnectWise hosted in June, ChannelE2E has confirmed.
Aligned with Perch and multiple endpoint security partners, ConnectWise is "building out a comprehensive strategy for technology solution providers to integrate Security-as-a-Service models into their business," the company said in a prepared statement about the investment.
What Perch Security Offers to MSPs
Perch Security appears to align well with that mission. The company's cybersecurity services and products include:
- Real-time threat detection, including east-west traffic
- Threat intelligence centralization and automation
- First-tier threat analysis to alleviate the burden for the service provider and users
- Access to view and participate in the process as much as desired via secure web application
In an interview with MSSP Alert, Perch CEO Aharon Chernin said the company will offer SOC and Master MSSP services to peer MSPs. Describing the partner strategy, Chernin said:
"When you install ANY security tool, the end result will be alerts. Both MSPs and their customers do not have the time or resources to triage these alerts. Perch’s SOC triages the alerts, and escalates true positive incidents to the MSPs – with enough detail so that the MSP knows what to do with the incident. This dramatically reduces the MSP’s workload when dealing with the output of security solutions."
The ConnectWise-Perch relationship sounds promising. But rivals also are making moves. Chief among them:
- Datto is taking a close look at the security market, CEO Austin McChord told ChannelE2E during IT Glue’s GlueCon conference in September 2018. If I had to guess, the company will layer more and more security into its networking equipment, potentially competing against SonicWall in the SMB sector.
- Continuum recently acquired CARVIR and has built outsourced SOC services for MSPs. CEO Michael George in September 2018 told MSPs to take the cybersecurity mountain during the Navigate 2018 conference in Boston.
- Kaseya also is looking at the security market for potential moves, CEO Fred Voccola told ChannelE2E at GlueCon. The company already has two important pieces of the puzzle — RapidFire Tools and AuthAnvil.
- SolarWinds MSP last month unveiled a Threat Monitoring Service Program at the company’s Empower MSP conference in Phoenix.
- Moreover, organizations such as Alien Vault, Arctic Wolf Networks and Infogressive have developed SOC-oriented strategies to assist MSPs as customers and partners.
As for ConnectWise, watch for Bellini to share more cyber strategy updates during the IT Nation Connect conference in November. The agenda includes a heavy dose of cyber and managed security services.
