ERP044 - Manage Equipment Warranty Cycle and Profit w/ Dan Wensley

Welcome to Evolved Radio where we explore the evolution of business and technology. Most IT service providers are sitting on top of a multi-million dollar sales opportunity in their existing customer base. This episode of Evolved Radio will show you how to take advantage of this massive opportunity. Today on the podcast, I'm joined by Dan Wensley, CEO of Warranty Master. Dan is a veteran of the MSP channel, having worked at level platforms, which was a darling of the Canadian tech scene. Dan was also the president of Passport before joining Warranty Master. In our conversation today, we talk about how MSPs can leverage warranty data to ensure their client environments are more stable, which benefits the customer as well as the MSP. If you enjoy the show, be sure to subscribe on iTunes, Stitcher, or wherever you get your podcast from. Also, be sure to check out the webpage evolvedmgmt.com/podcast for show notes, links, to my guests and to check out previous episodes. Now, let's get started. Joining me on the podcast today is Dan Wensley, CEO of Warranty Master. Welcome, Dan. Thank you, Todd. So, glad to have you here. Uh, warranty is a interesting topic for many MSPs. This is a persistent and perpetual issue that any infrastructure needs to be renewed and kept fresh and make sure that it's supported. So, you guys have a a great product that we can kind of dig into. And I think even for the people that are aware of warranty master or even have warranty master, I think there's maybe some bits in the corner that we'll get into in this discussion that they'll find some additional value that they may or may not have been aware of. Uh, so just as a lead in, um, I understand from some sources that you are considered a legend in the MSP industry. And uh, even at Datacon, uh, Rob Ray noted that he considers you a mentor in his career. And Rob being a pretty visible member of the MSP channel. I thought that was a a great way to underline your your legendary status. So, maybe to to start if you could give us some background on your relationship with Rob and and the history in the channel there. Well, I would question some of your sources who are calling me legendary. I I I frankly, Todd, I've been blessed and and had the great opportunity over the last 20 years. To work in some very innovative uh technology sectors, all exclusively delivering value to the channel, uh and along the way, worked with some just some outstanding people. Certainly, you know, Dave Sobel who's over at Solar Winds now, Alicia who's running marketing for the ASCII group, uh and certainly Rob Ray. We were sort of the management team over at level platforms quite a few years ago now and and we're so proud of of the team we had there. And and the team we've had subsequent to that who have gone on and done simply great things and, you know, my my time with Rob at level platforms was uh was very explosive. And for your Canadian audience, we were the third fastest growing technology company in Canada three years in a row, um, and just had a had a great time with some great people. And uh, you know, it's humbling to have Rob who's gone on to do such great things with Dato to uh consider you a mentor. Uh, I think the tables have turned perhaps. Uh, he's done such great innovative things over there, so I think uh I would say the same of him, so. Great. Well, that's uh interesting, um, you know, some some members of the channel are more visible than others. And definitely want to to give people some background on on on your history as well. So, the new role being with with warranty master. Um, would you consider warranty master still a bit of a a startup? It's been around for a while, but I feel like you guys have really sort of stepped on the gas as far as development. Yeah, it's such a. It's a great question. I've actually I'm here in Vancouver at our head office this week. And we're interviewing again, expanding our masterminds team. Um, and in those conversations even through the interview process, we talked about are we a startup or or are we established? And and certainly having done a number of startups over my career, I I don't consider us a startup anymore. We are well established, uh have really matured as a business and that is all been occurred. Long before I got here and and the great work done by the team prior to my arrival. So, uh, you know, with 6,000 partners now in 20 countries, who have been using the product for a number of years. And and taking advantage of the platform are delivering. I I think keeping the startup mentality uh is more important than sort of the the the definition around who we are as a business. We're certainly a mature business, uh our, you know, integration platforms across all the both OEMs and the RMMs and PSAs. The Datos, the Connectwise, the Solar Winds and so on. I think I think we've definitely matured, but certainly I'm near and dear to the startup mentality. So, uh hope to keep that sort of energy level going, but uh I would say no, we're we're a very established. And maturing company with a with a great road map ahead of us. Yeah, it's interesting that's part of the reason that I ask. Is that I think a lot of people would be surprised to hear the 6,000 number. That not that you guys are necessarily new, but the the I think the the the breadth of your deployment in the MSP channel is not really not as well known as I think it probably could be. And I I thought it was great at Datacon, really felt that you guys um it was almost like a really sort of a celebration of of the next step in in the development of the company. And really coming out of the shadows to to demonstrate that deployment and the the the the depth of your guys's establishment in the industry. Yeah, nobody honestly, nobody was more surprised than than myself. Uh when I walked into warranty master and and was talking to the team here originally, it was amazing. And I I said, you guys are the best kept secret in the industry as far as I'm concerned with that sort of adoption rate. Um, and and a part of my due diligence process even Todd was I supplied a list of of 12 MSPs that I've known over the years. That I part I partnered with in other businesses who I really respect and said, hey, if any of these guys are are partners of warranty master. I'd certainly like to speak with them and get their impression of the platform and so on. It turned out all 12 were already partners of warranty master. And that was frankly the additional validation I certainly needed to know some of the, you know, the most progressive best in class MSPs that I have the privilege of knowing. Uh, we're already we're already members. And it was it was quite an interesting, you know, first couple of weeks even for me. I I got a week to spend with our dev team, um, who, you know, showed to me the their absolute dedication to quality of the product. Which is um, you know, not not as often as it should be in the DNA of of a startup business like this one, um, and then got the opportunity to come in, meet the sales team, meet the marketing team. And the great infrastructure that had been built and then that was topped off with being able to spend a week at Datacon. Um, with you know, A, what a great event and B to get in front of of partners and really listen to their feedback. And it's it was really I I couldn't have uh scripted a better way to sort of start my tenure here at warranty master. Excellent. So we'll turn a bit to the the the the topic of the day. And uh what the the tool sort of provides in the MSP channel for the partners and one of the the key problems uh that the the tool addresses. Is uh managing and progressing the warranty cycle obviously of of a managed infrastructure. And this is I think a a very evident problem for a lot of organizations where they have a tough time convincing organizations. That, you know, the the age of the server is a problem, the age of the workstations is a problem, and I definitely encourage MSP partners to be looking at an evergreen cycle. Where they're constantly replacing some parts of the infrastructure. I think it's difficult for any organization to budget to replace their entire infrastructure if you approach them with that. But I think setting them on a path to understand how they budget for the replacement of their assets and having a a plan around that is becomes really key. Uh, do you want to elaborate on on sort of how warranty master fits into that? I'm not sure I could have said it much better than that, Todd. I mean, you're you're absolutely accurate. It it's I mean, there've been so much innovations in managed services. Obviously, in in the transition that that the channel has gone through over the last decade and adopting RMM and PSA and recurring revenue models. And today everybody's looking for, okay, what's the next step? How can I continue to drive down my service delivery costs? Provide better value to my customer and the highlight and the points you highlighted there. Are actually right on point. This is about asset life cycle management and what that means both for the MSP or the IT service provider themselves. And the value it delivers to the customer with good asset life cycle management, renewal and refresh as we we refer to it as. Obviously, the best case scenario is that on a regularly scheduled agenda, you are refreshing your customer's infrastructure, keeping them, you know, most up to date with with, you know, non-bog down servers, workstations. Uh firewalls, wireless access points, everything. That's Nirvana. Often though, our customers don't have the budget or haven't pre-budgeted for, which is again, part of the problem for those refresh for those refreshes of the hardware. So, at a minimum, keeping those devices under warranty is critical to both the profitability and service value the MSP is delivering to their customer, as well as the obvious advantages for the customer with uptime and performance of their network. And what warranty master really provides at the highest level is just the ability to get to that data and understand it and allow both the MSP themselves and their customers to better budget and and foresee planning for either refresh or warranty renewal. And that's that's at the cornerstone. And it's been such a manual arduous task for the MSP that it's often been either costly and and unproductive to do or simply ignored at the risk of all the, you know, attributes we just talked about. Yeah, and I think the the automation of the the record keeping. I think is is a huge bonus, uh obviously very core to the product itself. But uh you could track warranty when you acquire equipment and maybe that's a little easier. But if you absorb uh on board a new company that you have not purchased the equipment for, the labor to actually collect that data is is probably outstrips the the the necessity for collecting it in a lot of cases. Uh and even if you can even find the information. So, um, the the beauty of the tool obviously is that it just checks the PSA, the RMM, finds what the assets are, goes out, checks with the vendor automatically and populates the data back into the PSA and RMM. Boom, you're done. Yeah, and and you're right. It's it's. The data is there, the data is accessible. It is not, however, produced and and delivered in a reportable or manageable fashion. And that's sort of again at the top layer of our value proposition to partners. The ability to simply have all that aggregated data in one easy to understand and delivered spot is the first criteria. The second is the reporting capability to be able to actually walk into your customer and and show them reports for budget planning and when things are going to be out of out of life. And expect to refresh or renew. There's some great best practices that frankly I'm learning from some of our partners such as, you know, mandating inside their SLA. And inside their managed services contract with their customer that if a if a device comes out of warranty, uh, we will automatically renew that warranty at a minimum. They're not even having to do a sale there. Um, in the traditional sense, they are executing the extended warranty, um, automatically, uh, without having to have that awkward conversation and do a sale with the customer because they've pre-sold that. And that's where the value of of budgeting as you you talked about early on comes into play. We're for the first time, many MSPs are able to forecast, okay, this is what's in our pipeline for hardware refresh, which is the ideal scenario for both the MSP and their customer. Um, but at a minimum, we must make sure that they are all all the devices are under warranty. So, it's a great proactive way and again, coming from an RMM background myself. And being a part of of the evolution of managed services. That's what this entire service delivery model has been about is proactive, not reactive, um, both, you know, IT maintenance as well as now budgeting and and management of assets. So, you hit on exactly one of the the the points that I wanted to get across is the warranty renewal capability. And that's one of the ones that I don't know is is really top of mind or or heavy awareness for people that are familiar with warranty master. And a really cool feature. Because it sort of addresses the idea that if a if a server or a workstation is three to four years old, does that mean you automatically need to buy a new one? Maybe, maybe not, you know, maybe there's budgetary pressure, uh so what's the best case scenario if you can't get the client to agree to replace it? Well, it should still be in warranty. So you can simply extend that. And one of the capabilities of the platform is that in warranty master, you can automatically or uh ad hoc extend warranty from the tool itself. Which is a really cool feature. Yeah, the in app purchase, again, automation is the key. So, the ability to buy an extended warranty has been around for a long time. Um, is it automated? No. Is it. Easy to do? No. Does it take a lot of time and effort to to do? Yes. Um, so often again, for an MSP and and a business owner, it's just forgotten about. The in app purchase capability, um, is just uh it's fantastic for all involved. Um, you can literally inside the warranty master application, uh understand the warranty that needs to be extended, get a price point, set the margin and actually produce the quote and and provision the warranty within minutes. And I've again, learning this side of the business uh in the depth that I have over the last month or so here. Uh understand how many steps it took previously on calling the OEM, getting it sent and and it would take uh days if not weeks in some occasions. So, we're actually allowing that warranty to be executed within minutes, that's better for the MSP and that's better for their customer. And because of that automation, it it's more likely to be done. Too many MSPs have been leaving too much money frankly on the table for themselves. And putting their customers at risk by having products out of warranty, which are going to break more often. I mean, you know, it's as as Anthony Day reminded me, performance degrades with age. Um, I'm pretty sure he was talking about servers and not me specifically, but I can attest to that. It does happen to humans as well. So, it's it's incumbent on the MSP to ensure that their customers are at a minimum under warranty and have those those SLAs for for service and and repair. Um, should the need arise, which it often will in in aging equipment. Yeah, and I think that's the the benefit that the the tool provides. Is that it's not necessarily for knowing what's out of warranty, it's that giving you perspective. And uh some battle plan for how to deal with that and and at least elevating the conversation with the client. Uh because a lot of people will think, well, I know this is out of warranty, but they don't have any money to replace it. So therefore, what am I going to do with this? And I I think the the people need to flip that sort of uh feedback or that push back in their head. And and come up with a plan of how you're actually going to manage that. Um, so rather than just saying, well, there's all this equipment out of warranty and I need you to replace it all. Which is a non-starter. Uh, okay, how much are we going to replace? And and uh sort of weaving this conversation into their their QBR conversations and making sure that there's at least a discussion about it and some awareness. Uh at the very least, maybe having some some equipment spares or, you know, warranty at least on the servers and maybe warranty for some of the VIP uh client uh uh clients. And then um being able to at least replace some of the equipment or having some level of four-hour or 24-hour support for the critical equipment. And and having that discussion with the client to say, how important is this to you if it's dead for two days and we have to order equipment that takes another four days, then how how how uh how much of an impact is that going to be on your business? That's a really important business business discussion that I don't think happens enough. Yeah, and you you've lived it, Todd. I you know, with your background in managed services, you understand it better as anybody as well as anybody. Um, and that that's really what it is. That that device will fail at some point, it will have to be replaced. It's never replaced fast enough for for me for an owner of an MSP because that's what you want to do, but yes, make sure it it's there. But budgeting for the ultimate failure uh and requirement to replace is as great an attribute as moving the the the refresh cycle ahead. Uh but in the meantime, you're able to keep that device under warranty and ensure there there isn't a three-day downtime uh if that server, you know, implodes on you. So, it it's a win-win for everybody. And I I can't emphasis emphasize this enough. What I love about what we're doing for partners is is it's a win for the partner with revenue, with their own budgeting, with their own lowering cost of service delivery. But there is more as importantly or perhaps more importantly, real significant value for their customer. Um, so that they have better performing IT environments that they have are better serviced. Uh and that, you know, they can start to budget for themselves, um, what they need to replace and when. So any small business owner can put that into the budget. I I don't think too many are doing that today. They're just getting that dreaded, oh no, you know, $10,000 server has crapped out. Uh, please slip that in the budget, Mr. CFO. Yeah. Yeah, and I think that's uh the common pushback that you hear when you're discussing with the clients. Well, if this fails, it's fine, we'll just replace it. But that's a very different conversation at the time when it actually happens. Uh especially for a VIP, they they're supposed to leave on a business trip and their laptop dies just before they're about to leave. It'd be nice to be able to have at least some spare equipment or to be able to have some guaranteed warranty coverage. And I think a lot of those situations, even if you're traveling with a laptop, the warranty still covers it kind of at least uh North America wide and in some cases globally. So, it's really important that, you know, you're on a beach in Mexico, still doing some work and then your laptop dies. It'd be nice to be able to have that actually replaced and not have to fly someone there to do it. Yeah, and the hard work's been done. Uh, you know, the the channel has done an outstanding job converting their customers to a proactive service delivery model versus a reactive. I mean, that what you just described is is how we did break fix in this business 15, 20 years ago. Where, okay, when something dies, you call me, I'll run over and I'll fix it for you. Um, the whole managed services evolution we've gone through has been about, no, there's a better way to do this with with proactive preparedness to be able to uh ensure your IT infrastructure is always at its peak. And if there is a problem to be able to uh remediate that more quickly. And that, you know, that's exactly what we're talking about here with budgeting and and asset life cycle management. So, this uh topic becomes a lot more prevalent um with the use case now, uh Windows 7 and Windows 2008 uh in 2020 are now end of life. And I think that this acts as a really good touch point for most MSPs to get savvy with this conversation and start discussing this issue with their clients. Uh and it like we like we've talked about, at least start the planning. Because uh the having those assets and having no plan to replace them and having no budget. The sooner that you start on that, the sooner you'll actually get to replacing it. If you wait until, you know, 2020 to actually start having these conversations with the client, that likely won't get replaced for 6 to 12 to 18 months. So, starting that conversation now and at least addressing the high risk assets, I I think is really critical. Yeah, Todd, you're absolutely right. It's having a tipping point or or what I call in sales, you know, a call to action, um, this is a great gateway to have that conversation with your customer. Because it is happening, there is an end of life. I mean, you know, I I've been around this industry long enough to have gone through Y2K. And that was, you know, the greatest thing to happen to technology sales. Uh it was time to refresh everything if you had a any device in 1999. That uh you were worried about, that was the greatest sort of influx of sales uh that we could have hoped for in the industry. So, you're right, the same thing's applied with with the end of life on on Windows. So, get in there and have those conversations and use that as as a, you know, door opener and a tipping point to start talking about proactive asset life cycle management with your clients. Great. And with the the core product really being standardized and established, uh I know that you guys are are very focused on innovation and development of the uh the solution that you're providing to the industry. What do you see as the next things on the road map? Do you have any any things that you can discuss publicly about uh innovations that you're you're breeding into the platform? Yeah, the so part of our key innovations will continue to be automation. And and make sure that we're delivering to partners, you know, the most automated, single click, efficient uh use of the product. But I think as you've pointed out early on, Todd, not enough of our partners are taking advantage of the in app purchase for for warranties. Um, so that is not an innovation because it is there today. Um, and I I'm sort of, you know, hesitant to even tell you how few of our partners are taking advantage of it. Um, they're able to buy these warranties at a lower cost typically than an OEM. And at a higher margin, so it's again a win-win for the customer. And a win-win for the MSP. So, um, our road map is first to ensure that uh more of our partners are taking advantage of of that. Um, and we can expand into into some other things. I've had some great feedback from from current partners on on very simple ideas that that we can add. I think we can do a better job, um, showing our partners what they've got in sales opportunities around. Um, IR what we call IR instant renewal uh of those servers, of sorry, of those warranties. Um, and give them even better reporting to push more hardware sales and maybe extend the breadth of that, um, into desktops, laptops, IoT devices. Uh and other things. So, um, I don't think I'm going to I've got any sort of pull the cover off a big new feature that I'm going to discuss today. But uh we've got some exciting things uh coming down the road, but I think ensuring that all partners are taking full advantage of the platform today. Is is my top priority here in the short term. Yeah, and I think that's a a really important approach. Uh as I kind of rail on about in the industry is most tools are 20% deployed for in the MSP channel. People just don't take full advantage of it. And that's part of the reason that I wanted to underline that feature. Um, because as you said, like you guys even in the reporting, the report says available sales opportunity. And it's it's uh more for an internal measure of the opportunity that's latent in their client base. Which I think is a great way to view the that opportunity is that it's not work to be done, it's revenue to be had that's legitimate. And I think that that's a distinction. Uh some people may say, well, you know, are these tools worth it? You know, can I spend more on these tools? And I think in this case, yes, you can. Because if you're doing this correctly and you're taking advantage of the information that's provided, it should absolutely pay for itself, right? The there's millions and dollars of legitimate opportunity that's latent in most people's client base. And and if you have the assets and the information, the data to take advantage of that. That becomes a real opportunity. You're so. I mean, you know, Anthony said it during our keynote at Datacon, um, you know, we know the average size of a managed service provider in North America. We know how many servers are typically out of warranty, it's a whopping 64% out of out of our customer base. I mean, that is a that is a fact. Um, and that represents millions of dollars in opportunity. The hardware refresh calculation is staggering. And and but you're right, as we've discussed throughout this this conversation. We know that all customers aren't immediately going to go, okay, yes, I'll buy that new $10,000 server. Uh they will eventually because they have to. The greatest opportunity and short-term opportunity and immediate opportunity is to at least get those warranties. There was in the Datacon uh audience, there was almost there was $995 million in refresh opportunity. But what we didn't highlight enough was. There is tens of millions of dollars in warranty renewal opportunity within that same audience, which is arguably much easier to obtain than everybody refreshing their hardware the day you get back from Datacon. Um, so I think that that is again. A a huge focus for us and I know the partners who are doing it, um, are loving it. And and not enough are, so that that's going to be our focus. Right. So there's there's definitely some risk out there. There's equal opportunity available and people should definitely take advantage of it. So, uh if people wanted to know more about warranty master or they're they have warranty master and maybe want to understand the features better, uh who should they reach out to? Warrantymaster.com is the place and and what what we provide. Is we provide a completely free trial uh for partners. So, every partner who's come on, all 6,000 have gone through a free trial process. The API, again, the automation of even setting up the platform is so simple. Uh and it shows the immediacy of the value. So, I'd encourage everybody to simply go to warrantymaster.com if you haven't tried it already, uh you can get a free trial. It'll connect all the APIs to your RMMs and PSAs and show you your opportunities for both uh uh refresh and renewal. So, that's a great place to get started. Uh my email is Dan@warrantymaster.com, I I love to talk to partners. And and answer any questions, so they can also contact me directly. Awesome. Well, appreciate your time, Dan, and hopefully this is uh going to get people motivated. To address the asset risks in their client environments. And uh make a win-win-win for everybody. Love it. Thanks for the uh opportunity here, Todd. Really appreciate the conversation.