Exclusive: WatchGuard CEO on the opportunities for MSPs and growth in APAC

CRN Asia caught up exclusively with Joe Smolarski, WatchGuard Technologies CEO on his plans for the company as well as why the APAC region presents a unique opportunity for MSPs.

It’s been six months since Joe Smolarski took over as CEO of WatchGuard Technologies. Over that period, WatchGuard has made acquisitions and also strengthened its offerings for the MSP community, which the cybersecurity company is exclusively focused on in its growth and expansion globally.

The former Kaseya president was in Bali for the WatchGuard Impact partner summit, where he shared the company's plans and goals as it doubles down on its AI capabilities for MSPs to enhance their services for customers. This includes the recent launch of Rai, an agentic AI tool which is expected to revolutionize the way MSPs work with WatchGuard and its customers.

CRN Asia caught up exclusively with Smolarski to take a deep dive into his plans for the company as well as why the APAC region presents a unique opportunity for them and how his experience in his previous role gives him a good advantage in truly understanding what MSPs really want from cybersecurity vendors.

What follows is the transcript of the interview between CRN Asia and Smolarski at the partner summit in Bali.

Since taking over, what seems to be the most exciting part of your journey as CEO of WatchGuard?

I am six months in, and I could not be more excited about the opportunity. Sometimes, as you know, when you look at something from the outside, it looks attractive, and then you get inside, and it's a shit show, and it's been the opposite here.

I've probably talked to about 600 partners so far. I'm extremely active in terms of communications with our clients, and I'll be meeting with a series of them here to just get the real reality of how they see WatchGuard and the opportunity.

And what I hear is, our products are great and our products work. For as basic as that sounds, that's not the case in a lot of different companies. A lot of different companies, you have the challenges that hold you back from product growth and maturity and stuff like that, and that's not the case.

So, people really trust the products, and then the core of the people of WatchGuard just stands out compared to other providers that are out there. It's easy to get distracted and start getting greedy and going after the enterprise, and this company's always stayed focused on this market (MSP), and people absolutely see that and want to double down on WatchGuard and the platform.

Do you feel that being an MSP as well in your previous, and now as a cybersecurity company CEO is an advantage for you?

Yes, having the opportunity in my past life to deal with 50,000 plus MSPs and really get to know this market at a very intimate level through a hyper growth curve, I do believe I have an unfair advantage of understanding where we're at now in this market and where it's going.

And I think partners appreciate that. They appreciate somebody who really understands what they're going through on a daily basis. And my job is to make sure I bring that experience to their benefit every single day.

I think they've already seen a difference at WatchGuard, a difference in how fast we're acting and how well we're listening at this point.

How important is the APAC market for WatchGuard?

APAC is extremely important. We almost doubled this business last year. So, this is an area of extreme growth for us and great opportunity. Certain areas of APAC trails behind some of the other parts of the world in terms of maybe the conversion from VAR to MSP and things like that. But it's catching up rapidly. And as the economies continue to stabilize and grow here, it's a great opportunity.

So we are doubling down on some of our investments in the region and plan on significantly growing our customer-facing resources to help support that growth.

How different are the partners in this region? Are they in the same piece of the partnership with WatchGuard or are you seeing differences?

Yeah, definitely very different. And obviously very different cultures, but very different business practices that go with that.

I think certain regions are still in the VAR (Value-added reseller) world and not the MSP world that we've seen really accelerate in most parts of the areas. I think if you look at an Australian market and a Japanese market, it’s very different in terms of how they're approaching the market.

It doesn't mean they won't get to the same spot. I just think there are different levels of evolution in terms of getting there. And we need to tailor our approach to where somebody is now and help them get to the future on that path.

Looking at the APAC market, what are you hoping to achieve most?

The APAC market presents unbelievable opportunities. And one of the good things about me getting to the region is it's tough to know the intricacies of each of the cities and each of the regions without actually being here and talking to partners and knowing that one size doesn't fit all.

What we do in Australia doesn't work in Japan and we’re making sure that we tailor that fit for each market that's here. We doubled our growth last year. We expect to double again. And we're looking at new markets.

So, we already have a strong presence in certain areas, but we want to expand that global reach. We have the platform, we have the technology, and we just want to listen to our partners as to where we go next.

Would you say Japan and Australia are biggest APAC markets?

For us, they are, yes. We're certainly attempting to grow in areas like India and some other areas. We've established a relationship with Tata (Tata Tele Business Services and Tata Communications) to really start to grow that market with one of the major players there.

And we're excited about growth opportunities there. But I think APAC is a very mature MSP market. And Japan is a very mature VAR reseller market, both of which present us with great opportunity.

India definitely has a big opportunity there. Our approach there is what big players can we partner with? And the first for us is Tata. So we are partnering with them and we think we can really conquer the market with just a massive partner like them. And we plan on doing a lot more of that.

Are you seeing more resellers of ours moving towards becoming MSPs? How are you guiding them on that journey as well?

Yeah, that's our job to guide them because we have the privilege to support 25,000 MSPs, partners, resellers. And we've seen that journey. And quite frankly, becoming a successful MSP is not that tough.

There are blueprints out there for how to win and what path you need to follow. And it's incumbent on WatchGuard to provide services that show them that path. So if you look at all of our customer-facing teams, we're helping MSPs every day understand how to sell into that market, go to market plans, how to create go to market, and to do so in a very efficient way using some of the resources that we have.

So yes, that evolution continues to occur. And I think the maturity is different in each market, with maybe Australia in this region being a little bit more advanced.

Why do MSPs love to work with WatchGuard?

Ultimately, you need a platform. You can't have 15 different vendors that you'll support. You'll go out of business. You won't be able to support it.

And from our perspective, we're the only mature platform that is solely built for MSPs. So lots of other vendors out there, if they're serving big companies, they're always going to win over a small MSP when support is needed.

So that's why they're doubling down on us. We have that, and we're listening.

I think the CloudDR (Perimeters) acquisition just shows that we are trying to stay ahead of the curve and making sure that we add that to the platform so that you have one vendor that you could rely upon for all your cybersecurity needs.

So for customers, when they see that with the MSP getting that kind of service from WatchGuard, it resonates with them as well, right?

Sure, great products is one thing, but people want to work with great people that provide great service. And you get a lifetime partner who shows up when it matters, when they are dealing with a breach at their end client, and they have the weight of the world on their shoulders, and WatchGuard is there to support them.

Even if it has nothing to do with WatchGuard, from a platform perspective, we always show up, because it's their business, it's their livelihood, and we know that every single day. And that makes a difference. That partner will never leave for the rest of their business life when somebody steps up for them like that, and when they're in a time of need.

RAI seems to be popular among partners since the launch announcement. How do you see it enhancing MSPs?

I think you need AI in the background fighting faster than the bad guys. You're not going to beat it by hiring more people. So, you need a platform that's AI-enabled in the core. Some of that you don't see. It's just operating at the latest speed in the background to stop attacks and to be proactive.

But then you also need AI from an efficiency perspective, because smaller MSPs just won't be able to compete with the big guys that are putting in all kinds of AI-agentic tools to drive their operations.

And that's why WatchGuard's filling that gap. We're able to provide agentic workers in each of the key areas, whether it's an analyst, an auditor, or an admin that can pick up some of those tasks that you were doing manually. And instead of you working odd hours from a patch management perspective to handle some of those things from an automation and agentic perspective, we’re working on your behalf. For configuration changes, instead of figuring that out when you do a monthly audit, we have an auditor working on your behalf on a 24-7, 365 basis to detect those changes that occurred and make sure that you're aware that that was a negative change that needs to be reversed in a real-time basis.

The overall plan is that allows you to grow your MSP from a revenue perspective without having to grow headcount in a proportionate factor.

That's an interesting point, because headcount is right now the biggest problem for everyone, not just in Asia, but globally.

100%. We are reaching a stage where AI is the only option you have. And there's always room for humans. But as you look to double your business, you don't want to double your headcount. That's not a good math equation.

So, by doing agentic in your MSP operating layer, it allows you to grow very efficiently, grow your margins.

I've made it crystal clear. My goal is to double margins when it comes to cybersecurity protection within the MSPs.

And that's very possible using a strategy such as RAI. We have over 280 MSPs already using RAI and the feedback is it's a great foundation. It's a foundation that's super exciting for them to build upon. They can see where it's going.

It's a great start, but more importantly, it's a great foundation. And it's a foundation that they're going to see agents being deployed throughout the year that really help them become a much more efficient and much more secure MSP. So, it's been great feedback so far.

And these agents, can they also integrate with the other agents that they're working with?

Absolutely. And that's the crazy part about the agentic world is that you have agents talking to agents, which is hard to believe and scary, but that's the reality that we need to cater to in this ever-changing AI world.

Now, there were some acquisitions that you guys made as well, including Perimeters.io and plans for a few more acquisitions towards the end of the year and next year as well. How much of the acquisitions are being influenced by what MSPs are wanting to see?

I would say it's 100% influenced by what MSPs want to see. Ultimately, we need to stay ahead of the curve.

So getting their feedback, and sometimes their feedback we're not going to act upon because they're not seeing the future maybe the way some others are, or we are. But we drive almost all of our roadmap based upon MSP feedback, as well as some future-looking stuff that maybe they didn't even know was possible through some very bright minds that we have working for us.

It is critical to continue to add to the platform so that they have one place to go for cybersecurity, and that's WatchGuard. So that's really the strategy. And in this world of AI influencing people's technology roadmaps faster than it's ever been, we need to stay ahead of that curve. And that's what acquisitions will help us do.

Some of it will come through homegrown R&D, but much of the platform expansion will occur just as it did with Perimeters. Perimeters was a fantastic cloud and SaaS security platform developed out of Israel that we had the opportunity to add to the platform.

And there's many other pieces that are out there, a lot of it around the AI security layer that we plan on adding.

Another interesting aspect is third-party integration. How important is this for MSPs?

100%. I think that's very key right now, because MSPs need it. Although the platform is there, they still need it because of what customers are asking from them.

That's an area that since I became CEO, we've really doubled down on. Ideally, rip everything else out and put WatchGuard in everywhere, but that's not going to be the case. They're acquiring clients, they're getting new clients, they've got networking equipment in place, they got other third parties in place. And we will absolutely continue to integrate in a quick evolution.

Where do you think MSPs struggle most right now?

I think they're struggling to understand what to do with AI at this stage. AI is a great opportunity, but it's also scary, and you see people wasting a lot of money trying to solve it themselves with third-party solutions and add-ons and everything else.

So ultimately, that was what was behind the RAI strategy to not bolt AI on top of platforms. It's got to be integrated into the platform, so that they're not out there wasting their capital investment in different solutions that are out there.

So that's one of the top pain points that we're trying to solve with that respective area.

My final question, how would you define the MSP of the future to be?

It needs to be based on a platform, and they need to double down on AI, because ultimately they won't be able to catch up with the rest of the world, that’s moving faster, and much more efficient, and they won't be price competitive against AI-enabled MSPs in the future as well. And there's multiple ways of getting there, but no better way of getting there than doubling down with an AI-enabled platform, and somebody that can help them fill the gaps, from an enablement perspective, even just when it comes to knowledge and what else they need to be doing within their platform.