HOW XCITIUM INCREASES MSP VALUATIONS
Typically, MDR services are sold at prices that range between $20-$30 a month per endpoint. The average cost is around $15-$20 in today's cyber-security marketplace, but this often leaves no profit for the MSP. It's a hard problem to solve. However, this MSP owner increased his MSP's valuation by $11.3M in 6 months by deploying Xcitium MDR to 9000 endpoints, which significantly increased his MSP's market cap valuation, enabling him to sell the MSP at enormous profit. Let's ask a few pointed questions about his strategy and ambition.
I'm not going to sand the edges. During a vulnerable quarter, we partnered with Xcitium to offer Managed Detection & Response (MDR) services to 9000 endpoints. Our cost base was $3.25/EP, and on average we were getting around $20/EP from our customers. This increased our market cap valuation to $11.3M while bringing our cybersecurity profile into full government compliance. - MSP Founder, Jan 2023
THE VALUATION MATH
Buying Xcitium MDR at $3.25 x 9000 EPs and selling at $20/EP = ~$15 profit/month. Monthly $135K x 12 months = $1.6M net profit / year Multiply EBITDA value of 7 = $11.3M valuation
MSP Q & A
Q: Can you tell us your view of the Joint Government Advisory issued to MSPs for the new minimum MDR security guidelines?
A: "Well, accountability has certainly shifted to MSPs with this Guideline. If for whatever reason one of our customers gets breached and we haven't followed what the government recommends as a guideline, I'm not sure we would stand a chance in a court of law. The cybersecurity landscape has changed and I do understand why the government guidelines are in place, and as an MSP we had to take this seriously and make sure we implemented these guidelines as a minimum baseline for our customer base.."
Q: What were your concerns in providing cybersecurity as a billable service?
A: "We are an MSP and not an MSSP. We didn't have cybersecurity expertise, platform, or resources to stand up a SOC and run the full MDR services. We knew we had to provide the services, as per the government guidelines, but "how" was an issue."
Q: Why is profitability important when it comes to Cybersecurity?
A: "As an MSP we are a service driven business, our costs are our people, we try to keep a tight watch on our profitability and margins. Launching anything new in the MSP world could eat into our margins very quickly. Finding something that is operationally profitable from day one was NOT something we were expecting. Xcitium. certianly surprised us
Q: What were your alternatives before Xcitium??
A: "All that was available was a hodgepodge of different vendors: Endpoint security from X, SOC people from Y. No one was able to provide an all in one solution that "just worked". Also the costs were very prohibitive, which in turn made our costs very high for our customers, and that caused friction to get our customers upgraded to a Managed Detection & Response service. With Xcitium, we were immediately able to offer literally the most effective, award-winning solution in the market; none of our competitors can even come close to those prices. We also didn't realize that all these other solutions failed when detection failed. It's a nuance missed not just by us, but by many MSPs. We were spending huge amounts of money with these other solutions, but not increasing our own MSP's valuation, and definitely being less secure when detections were missed or failed. On top of that when their protection failed, because when detection fails (and they only rely on detection, no matter the form of detection, AI, EDR, etc etc), all our customers got breached and we had to pay extra for IR (incident response) because these providers failed to protect us in the first place. That didn't sit right with me. With Xcitium, they have patented technology that protected my customers with API virtualization, even when detection failed, so I got better security, higher profit margins, less work for us to do, peace of mind, and much higher Valuations for our MSP."
Q: Do you use Cybersecurity as a lead gen tool?
A: "We did not, until Xcitium helped us. Any MSP could tell you that customer acquisition is very expensive, and this is one of the biggest barriers to growth for all MSPs out there. When Xcitium showed us how to do Lead Gen using their technology and the tools they provided, we were blown away! It turned out to be our main strategy to generate leads, using the technology and tools Xcitium provided us!."
Xcitium, formerly known as Comodo Security Solutions, is used by more than 3,000 organizational customers & partners around the globe. Xcitium was founded with one simple goal – to put an end to cyber breaches. Our patented Xcitium Advanced ZeroDwell technology uses Kernel-level API virtualization to isolate and remove threats like zero-day malware & ransomware before they cause any damage to any endpoints. ZeroDwell is the cornerstone of Xcitium’s endpoint suite which includes pre-emptive endpoint containment, endpoint detection & response (EDR), managed detection & response (MDR), and managed extended detection and response (XDR). Since inception, Xcitium has a track record of zero breaches when fully configured.