NSITSP Spotlight: Steve Kazan (EP 820)

[Uncle Marv]
Hello friends, Uncle Marv here with another episode of the IT Business Podcast, the show for IT professionals and managed service providers, where we try to help you run your business better, smarter, and faster. I'm here today with a NSITSP member spotlight, and I've got a name that you should recognize, and if you don't, we're going to help do that today. Steve Kazan, the founder and CEO of Inner Onion LLC is with us today.

Steve, welcome to the show.

[Steve Kazan]
Great. Thanks, Marv. Great to be here.

Happy to chat about businesses, MSPs, and all of the topics.

[Uncle Marv]
All right. You've been around a while, and I mean, I don't mean that. I didn't mean it to say that, but I was doing it to say that Inner Onion has been around for a while, and while it doesn't necessarily scream out as an MSP name, your target is really U.S. market entry.

[Steve Kazan]
Yeah, we do that. Most of our clients are international companies coming into the U.S., but I wouldn't say all of them are.

[Uncle Marv]
Okay.

[Steve Kazan]
We have U.S. companies that want to grow their partnerships, and so that's what we focus on really is better traction, better revenue, better interactions and relationships with all types of partners, really, managed service partners all the way up to global system integrators, even technology partnerships.

[Uncle Marv]
All right. I just wanted to get that out of the way, because it almost seems that if you don't pay attention, and sometimes I don't, when you say U.S. market entry, it's more of international coming in, but you help companies here do the same thing. It's a global world.

[Steve Kazan]
It's amazing how global the world is. I was at an event yesterday with 20 different Israeli cybersecurity companies at RSA, and they just drop into San Francisco like it's nothing and start pitching their products, competing with all other products from the United States, India, around the world. Right.

Yeah. In technology, I spend, God, it seems like half my time talking to Australia, India, and places around the globe, as well as Louisiana and Lexington, Kentucky, where the local MSPs are. Yeah.

[Uncle Marv]
Okay. Talk about it. I know it sounds like MSP hubs or Silicon Valley, but I'm assuming there's got to be growth everywhere.

Right?

[Steve Kazan]
Yeah. I mean, the MSPs are always looking for new practices, new products to pitch. Part of what we help with is how to turn a technology into an actual service.

It's not just the functions and features, it's, okay, how are we going to make money doing this? And how are our clients going to be happy and productive doing that? And so the vendors we talk to are all about, oh, we have the coolest little feature and the coolest little function about this and that.

And I say, hold on, if an MSP or an ITSP can't make money doing this, then you better rethink your messaging out to them. Right. And we help them with that, walk them through that.

[Uncle Marv]
Okay. Okay. So let me ask this question because I assume that a lot of this is driven by the fact that a big part of our channel now is SaaS and cloud-based products.

So how much of what you do is focused around that and how much is focused around traditional services that IT providers would do?

[Steve Kazan]
I'd probably say three quarters based on SaaS products. That's the easy, fast, quick way to produce a new product and new technology. So yeah, most of the people we talk to have some kind of a SaaS solution or security solution and they want to bring that to bear.

And now most of the people we talk to have some sort of AI solution. So the last, I'd say, couple of years, we've been dealing with people who want to learn how to take some AI power or functionality and bring it to a specific market, solving a specific problem. So I mean, it's all based on the strange background I have.

So I started out as a financial analyst in an accounting department at Autodesk, and we were writing SEC reports. And that's, you know, as dry as it's going to be in the world of business, but then went to operations and then actually ran an IT team of people at a mid-sized company and then got into business development and was a channel manager, started out, kind of restarted my career as a channel manager, and then moved up the partner chain to director and then was responsible for the US and then eventually responsible for the global partnerships.

And so, you know, I've been in the partner world for probably 20, 25 years now. And all those different experiences come to play when we meet a new prospect who wants their partner business to be, wants it to grow, right? So it's all about how do we get these guys to grow?

[Uncle Marv]
So I know your background. So I did see that you were channel chief at least three times. But I'm also looking at the sectors that you were a part of, because you've been a part, cybersecurity, SaaS, cloud, AI, data center, VoIP, IoT, enterprise software.

I mean, that's a wide gamut. Even 20 years, that's a lot to do. So tell me about your experience and, you know, bouncing around all the different sectors.

[Steve Kazan]
Yeah, so, you know, I'm reside halfway between San Francisco and San Jose. So all my neighbors, all the, you know, the parents at the schools, a lot of them are in the technology business, you know, for big tech firms are small. And as all those technologies progressed, they all wanted to figure out a way to build their ecosystems and their partners.

And so I went from kind of company to company to help them do that. But you're right, at every company, learning a new technology was kind of the fun and kind of the challenge. And so it forced me to find mentors, technology mentors at every level.

And now we're dealing with new technologies like AI. And so it's a skill, I think, to be able to jump into a new technology, learn it, understand it, be able to ask questions about it, get educated about it, and then figure out what the business opportunities are for those new technologies. So, you know, even today, I haven't done IoT in years.

And I bumped into an IoT security company yesterday and was able to chat IoT with them and what they do and how they do it and understand basically how their technology works. But you never know in the IT world, you know, what's going to be the next technology that's going to bubble to the surface and require everybody to kind of study up on it. So it's constant, you know, being a student and learning never ends in the technology.

[Uncle Marv]
Right. Let me go back because I know that you mentioned that, you know, you had the 20 companies from Egypt while you were at RSA yesterday.

[Steve Kazan]
Israel.

[Uncle Marv]
Israel, I'm sorry. Israel. You've talked about Australia.

I know that we talk a lot of times with people over in the UK that are bringing products to the channel space and stuff. It seems as though there are a lot of international companies coming into the MSP market, I guess, is the best way to describe it. But sometimes we hear, you know, we hear about a company, they make a big splash and then they disappear.

There was a company called Red something, I forget, Red Backup, something that comes to mind when we do that. And so sometimes I look at companies that come in, make a splash, disappear. And I wonder if it is, is it a mistake that they've done on their part where they don't have that staying power?

Or is it, you know, hard to translate what they've done overseas into the U.S. market? Do you have any thoughts on that? I know I didn't prep you for that, but.

[Steve Kazan]
That's fine. So, yeah, there are probably a few reasons. One, there's a, you know, a management team somewhere, probably overseas, that's looking at their return on investment and they are probably being not as patient as they should be.

They look at the first year, 18 months, maybe even two years, and they're not getting the ROI that somebody promised to them. And so then they turn off the budget spigot and the marketing goes down, the visibility goes down, the PR goes down, and then they just sort of disappear. That's one possibility.

Another possibility is they get acquired, they get sucked up by somebody else, and then they completely disappear. But I read a quote by Bill Gates who said that they completely overestimated the revenue in the first year of a new technology. And this was back in 96, but they far underestimated the revenue on the five to 10 year horizon.

So, yes, you think that a technology is going to take off in the first year and you get disappointed. But if you keep going fourth, fifth year through 10, you know, you'll be surprised and pleasantly surprised by how much traction that technologies drive.

[Uncle Marv]
All right. I agree with that. I've talked to both vendors in the space and IT providers in the space, and it's almost like you have to plan for five years.

And, you know, IT providers, managed service providers, you know, solo techs do the same thing where they assume that the money is there and it's just manna from heaven. It'll just fall into their laps. But it's not.

I mean, listen, I've been doing this a while. And when I look back at my first five years, they were rough. Part of it was me.

[Steve Kazan]
I mean, well, no, I think part of it is building the relationships and the trust that just takes a while to do. You just can't do that overnight. You can't do that in a month.

You have to have this staying power of relationships with people so that they know that you're going to be around and that you're going to support them. And, you know, if you have a budget or a revenue projection of 18 months and your channel manager turns over three times, how are you going to build that trust? Right.

How is somebody going to sell your product if your staff people are, you know, disappearing every six months, moving to a different job or a different territory? We did a study. This was a year, a couple of years ago, and we asked MSPs.

We said, you know, what do you want from your vendors? What are your vendors doing right? And what are they doing wrong?

And one of the surprising things was staff turnover. They said, you know, we have these new people who show up every three months and they say, hi, I'm here to support you. And then, you know, they're going to be gone.

And it doesn't build the trust. It doesn't build the staying power, doesn't build the relationships. It's hard even to do a sales cycle.

That's a nine month sales cycle if you only have a channel manager there for six months. So, you know, you need to have those relationships. And I think that's kind of one of the nice things about the tech community is you can build those relationships.

And even over time, you can go back and people will come out of the woodwork and they say, yeah, I remember when we did that deal or had that project that we worked on. So that's been kind of a rewarding, very rewarding part of working in this industry. Right.

[Uncle Marv]
I know that when I was looking up, you know, stuff about Inner Onion, I saw that the approach and philosophy kind of was around four things. And these are my four things. So I don't know if they match with theirs.

But I know that one of them was thorough planning, you know, being able to start with a clear plan. You mentioned just right now, relationship building, something that has to be done. Branding, creating memorable and distinctive partner programs.

And then, of course, the adoption of tools and technology, which, of course, is, you know, geared towards AI right now. How does my summary of Inner Onion sound?

[Steve Kazan]
It sounds good. It sounds right. Makes sense.

So the planning thing probably comes back from when I was a financial analyst working my spreadsheets early in my career. But it's one of those things that younger emerging technology companies don't invest the time to do. And then they're just running around, scurrying around, trying to close five customers and then 10 customers.

But they're not prepping for year two and year three and year four. And so that's one of the things that hurts them. And that's one of the values that we provide is, you know, hey, let's stop, take a breath, look at the long term.

And the clients, right, they appreciate that. They appreciate that we are able to do that. The branding, I think, is important, particularly for the international clients coming to the U.S. They have to have a U.S. brand. It has to be professional. And so one of the things we harp on with clients is, you know, what you did with your marketing team of two people, just not going to cut it when you're competing with 5,000 other cybersecurity companies in the United States. And your website has to look like you're a $100,000, $100 million company, not like you're a $500,000 company.

And so we try to impress on them the need of that and then the culture of that, too. So you have to understand the U.S. business culture. And it's a little bit different in different parts of the United States.

But if you don't make that transition to U.S. messaging, people will understand that, they'll see that, and they'll be a little skeptical and less likely to open their door to hear your pitch. So we help clients with the cultural transfer, right, the homologation, the localization to U.S. markets as they're coming in from overseas.

[Uncle Marv]
Wow, that's got to be tough, because I'm thinking about just from the east coast of Florida to the west coast of Florida.

[Steve Kazan]
Yeah.

[Uncle Marv]
My clients are different on either sides of the state, let alone the country. All right. All right.

So, Steve, there you go. I'm going to take a quick transitional break here, folks. I'm going to have the information in the show notes for inneronion.com, and that's where you can go and find out about go-to-market implementation for global B2B companies. Steve, I want to say that it's pretty notable when AI recognizes that you serve on the board of the National Society of IT Providers. So it's pretty significant there. So tell us about your history with NSITSP.

[Steve Kazan]
Yeah, I'll tell you about my journey a little bit there. So, you know, during COVID, people were at home, we were at home. I was looking for kind of volunteer activities, and I saw a LinkedIn post.

It all started from a LinkedIn post about a meeting that was coming up. And so I signed up for the meeting and attended, and it was Karl Palachuk and Amy Babinchak. And they talked about an association of managed service providers and partners.

And I felt like I had been working with this community for decades, and I kind of owed them. I owed the community something. And so I wanted to give something back to the community and help grow it and make it more professional so that the MSP community can be more like doctors, more like lawyers, more like accountants, in that they're professional and that it's a profession.

And, you know, the idea is that all that really technical, valuable knowledge should be appreciated, and MSP should be appreciated out in the market. And part of what the NSITSP is trying to do is make business more professional so that it can be appreciated. And one of the byproducts of that is if you're appreciated and you're offering strategic advice and guidance, then you should be able to charge more, right, because, you know, lawyers charge more, doctors charge more, and IT professionals are providing guidance that is at least as valuable for keeping companies alive as keeping people healthy.

So I got involved that way. I volunteered on the marketing committee. I was on the marketing committee for a year.

You know, our goal was to bring in more members and spread the word. From there, I ran for the board. I had a board seat, and I was the secretary, so it was my job to take notes.

So I took copious notes of the monthly board meetings and got those posted on the website. And then last October, we had a board meeting, and the board was looking around at who should step into the president's role, and two of the board members pointed at me and said, you do it. And so I said, OK, fine.

And so I've been doing that for about six months, and I have another six months in my term. So we have elections in September, and the campaigning is in August. But it's been great that we have about, I want to say, 50 committee members across all the committees and task forces that we run.

They do multiple different things from legislation, keeping track of legislation, keeping track of regulations, which are done on the state level. We have development committee, which helps MSPs become more professional and improve their business and their branding. I mean, the big issues that have popped up recently, the state of Maryland had a 3% tax on all MSPs.

And this is a big deal, because it's not just in Maryland. The state governments around the US are going to be looking for revenue, because their budgets are getting tighter and their revenue is decreasing. And so one of the things they're going to look at is, how do we slap a tax on IT services?

And we're not just taxing products like sales tax. We're going to tax services. And so if the MSPs and the ITSPs don't have a voice in their local legislatures and assemblies, then those taxes are going to fly through unchallenged.

And so we need to have that voice. And I think that's probably one of the most important things that the NSITSP does, is we educate our members. We get our members locally, because you can only have any leverage in your local regions and your local states.

So we get our local people to contact the Chamber of Commerce, contact their local assembly person, their state senator, their governor's office, and explain to them that a 3% tax on a company that's only making 10% profit margin is going to be damning. And the impact is going to be MSPs are going to move across border. They're going to move out of state.

You might put some MSPs out of business. So that sort of trend in state taxes is a little bit scary, I think.

[Uncle Marv]
Yeah, that's happening down here in Florida, because most people come down here because of no state income tax. But we also benefit from no tax on services. And like you said, they have started to try to find a way to loophole some taxes on us.

And currently, it's anything that you do that's tangible. So if you install a part or a server or a computer, you've got to pay that tax on it or collect the tax. Get that terminology right.

But now, downloading and installing software, not taxable right now. They're looking at changing that.

[Steve Kazan]
Yeah. Well, so the big companies, the Amazons, the Microsofts, Googles, they have lobbyists. And they have lobbyists in every state.

So they jumped into the state of Maryland and said, hey, we provide a value to your people. We shouldn't have to pay a tax. And the state of Maryland carved them out.

So they don't have to pay that piece of it. The other huge issue facing the NSITSP is CISA. So the cybersecurity infrastructure and security agency that protects and helps communicate all the cybersecurity problems across MSPs so those MSPs can educate their clients is under the gun.

So they've had their budget cut. They've had people fired, people laid off. And there's talk about doing even more of that.

And so we're trying to rally the whole community, vendors, MSPs, ITSPs, to support the CISA through the local congresspeople. We had a meeting with one of our members with Congressman Loudermilk from outside Atlanta to impress upon him, you know, this is a big deal. And it's going to impact small businesses and big businesses because the threats won't be as either as well-known or as well-communicated out to the field.

So that's a big issue that we're dealing with. And it could potentially be a very big problem for U.S. businesses.

[Uncle Marv]
CISA currently looking at a loss of 10 percent of its workforce, between 300 and 400 employees. And, you know, that's one of those things that we've used CISA as a guide to help us in managing our clients and stuff. So that'll be a very interesting follow over the next few months and stuff.

Steve, let me ask this question. And it's a slight departure because you're, even though you've been in our space a while, you're not your typical managed service provider. So which are, you know, for the most part, most MSPs are small.

They're, you know, under five million, a huge chunk under even, you know, one million stuff. So you come with a little different perspective when it comes to the NSITSP. What do you see as some of the things that MSPs need to really understand?

And from that understanding, what needs to be, you know, what fire needs to be lit to make these things happen?

[Steve Kazan]
Oh, that's a great question. So let me just agree with you. Yes, my perspective is different.

I look at MSPs as potential clients. I also look at MSPs as potential partners. So people are constantly coming up to me saying, hey, you know, technology, can you help me solve this technology problem?

And typically I say, well, that's not necessarily my business. But here's, you know, an MSP over here. Here's an MSP over there.

Here's an MSP over there. You know, I make those introductions and, you know, my end customer friends are excited and happy that they got their technology question answered. Lighting a fire.

Yes, let's light a fire. I mean, this may sound a little silly, but the professional thing makes a difference, right? If you have a code of ethics, if you have a code of conduct, then you can go into your prospects and your clients and you can say, this is how we run our business.

This is what you can hold me and my people accountable for, right? My people may wear T-shirts, but they will be honest with you, right? They will provide you an honest day's work for, you know, the amount you're paying every month.

We will treat you fairly. So having that code of conduct and the code of ethics, I think helps the whole industry and it also helps your particular company, your particular practice, because it'll differentiate you from not only the other MSPs out in your local market, but with other businesses. So that's one of the things that we try to light the fire under our members of, you know, hey, if you don't have your own version, here's ours and you can edit it to make it pertain to your company.

And so I think that's a great tool. And I guess it's just a way to improve the whole industry to make the industry more respectable. I was, again, in a meeting yesterday and somebody said, you know, an MSP screws up and they get in the press and it's one bad apple, you know, tarnishing the whole industry.

And so part of what we need to do is prevent that by making sure that, one, the MSPs that we work with raise the bar and deal, you know, effectively and ethically with their clients, but also open ourselves up to even the littlest MSPs who are just getting started and they're just have spun off from their IT departments and they're starting their business by providing them knowledge and sources and best practices to be able to make sure that, you know, their brand and their reputation is as good and strong as it possibly can be.

[Uncle Marv]
Yeah, I like the idea of coming up with something that we can point to, kind of like those mechanics when you go to get your car serviced, you know, there's the stuff on the wall that is for the most part standard. You walk into any, you know, auto shop, you walk into any repair center, you're going to expect the same thing. Yeah, prices might be a little different and local flair might be a little different, but the expectation is the same.

And I think with IT professionals, we don't get that so much. We're still fighting that, well, you know, my brother's nephew down the road, he can do this for cheaper.

[Steve Kazan]
Yeah, well, so it's interesting because we have a series of badges and our logo that we use and people, our members put those logos on their emails and on their presentations and on their websites. And then they present those to their clients and they say, I'm a member of this organization and it's our values and mission to treat our clients fairly and honestly. And so it becomes part of their pitch, becomes part of who they are, becomes part of their culture, right?

It becomes part of managing their people. And, you know, if you, what do they say? Culture eats process for lunch.

You know, if you have the right culture and your tech support person, you know, goes that extra mile for a client that needs them. I mean, that's just not always a golden, right? In terms of business revenue, but it's golden in terms of you've done a good thing.

You've done the right thing, right? You've trained that employee, right? And that customer got good value because your culture was such that you wanted to provide great value to your clients.

And that's just the way we should live, right? That's the way businesses should transact is let's be honest, let's be ethical with people.

[Uncle Marv]
Absolutely. Absolutely. So, Steve, I'm going to give an early prediction that when it comes time for that election, you might be, you might do in another term.

[Steve Kazan]
We'll see about that. I mean, we love to have people come in, volunteer for committees, get used to the organization. They make great friendships.

They make great relationships in these committees. And then, you know, they're ready to step up and they're ready to step up to the board and they're ready to volunteer their time. It's not a lot of time.

It's not a lot of effort. But I think our members on the board and the committee would say it's worth it. Right.

They all think it's worth it. So.

[Uncle Marv]
All right, folks. And you should, if you are not already, take a look at the NSITSP. I will have the link in the show notes, not just for the website, but for you to join.

The commitment's not a lot and the financial commitment isn't that much either.

[Steve Kazan]
We undercharge. That's the biggest thing is we're way too cheap. I would just say the website is .org.

So it's NSITSP.org.

[Uncle Marv]
So I'll have the link there, folks. Steve, thank you very much for joining us for this quick member profile. Thank you for introducing us to the Inner Onion.

And thank you for your service as president of our current board.

[Steve Kazan]
You're welcome, Marv. You're so welcome. It was a pleasure.

I love chatting and getting excited about all these topics. So the time today will be the highlight of my week.

[Uncle Marv]
Yay. There you have it, folks. Steve Kazan, the Inner Onion and president of your NSITSP.

That's going to do it for this member profile. We'll be back, of course, with more down the road. And of course, our regular business podcast.

Check us out at itbusinesspodcast.com. I almost said org there. But that's going to do it, folks.

We'll see you out there. And until then, holla.

[Steve Kazan]
Got it. How was that? Uh-oh.

That's all right. Chop that off the end.