WatchGuard’s CEO Is Betting Big on MSPs

Some CEOs have a certain level of steadiness about themselves – call it self-assuredness or commanding in a way, or just that hard-to-define je ne sais quoi. I have interviewed a few, and you can pick up on it every time.

Joe Smolarski, WatchGuard’s CEO, had that. He came across as collected, confident, and very clear about what he wants to do at WatchGuard. Joe didn’t just give me product answers. He gave me a sense of how he thinks. He talked about strategy, where the market is going, the margin pressure MSPs are under, and where WatchGuard fits in the security stack. You could also see his personality come through, which made the conversation real, not CEO soundbites.

His vibe was basically: I know this market, I know what MSPs need, and I am here to make things happen. The message underneath the whole conversation was pretty simple: he has worked with MSPs at scale, he understands the pressure they’re under, and he believes WatchGuard is in a position to take a bigger share of the security platform conversation.

And that, to me, is what made him come across as CEO material. He’s only six months into the job, but you can already feel the experience and grit he’s bringing to WatchGuard, and the sense that he knows exactly where he wants to take it.

WatchGuard is clearly trying to widen its security platform story. The Perimeters.io acquisition and the launch of CloudDR show WatchGuard moving deeper into cloud and SaaS security, which is exactly where MSPs are feeling more pressure from customers. So when Joe talks about WatchGuard helping MSPs improve margins, reduce complexity, and operate security at scale, it is not just corporate messaging. He is basically saying: we know MSPs do not want another pile of disconnected tools, so WatchGuard wants to give them a broader platform they can actually run across customers.

ChannelE2E: You came from Kaseya to WatchGuard, and a lot of people may assume you are bringing the same platform-and-margin playbook with you. What are you bringing from that experience without creating friction for partners? What is your strategy, and how should MSPs understand WatchGuard’s role in their security stack?

Joe Smolarski: Even though we’re all in the MSP space, Kaseya is a completely different company and we don't compete. The reason I came to WatchGuard is that it is beloved by the channel. No friction in the channel, dedicated to the channel, and products that just simply work. All of that is why I joined this great company.

Yes, I do want to bring the experience of having worked with 50,000 MSPs over the last seven to 10 years. What we all know is important is margins, driving growth, and being aggressive. I tell people all the time, I’m bringing the Philadelphia, New York aggressiveness to this company. But that’s on the good side for MSPs, because we can go and win a lot of business together.

I know that we can because we have a great foundation here and great people. We don’t want to take away any of that. We don’t want to build any friction that’s not here, and I’m confident that we can do that.

For me, driving costs out of my platform is absolutely important. If we can democratize security so that MSPs can sleep easy at night knowing they’re protected by WatchGuard’s platform, and doing so at a price point that works for all of their customers, not just some, all of those things make a difference. We can do that and offer different flavors of each part of the platform so that you can ensure everybody’s protected.

We know a lot of customers will say no to some of those advanced levels of protection. Unfortunately, if something happens, the MSP still gets blamed. They still get sued. That’s why bringing it all together into a cohesive platform, at the right price point, matters so much. MSPs need to know the platform will protect them and their customers. There are a lot of great companies out there. Palo Alto and CrowdStrike are great companies with great products, but they were not built for the MSP space. That makes a big difference when an MSP is dealing with a cyber event and has the weight of the world on its shoulders.

With WatchGuard, all we do is support MSPs. It’s in our DNA. We understand that this is your business. Your life is at stake. Everything you worked so hard to build is at stake. We’ve got your back, and that shows up time and time again.

ChannelE2E: If I asked you to give me one thing that differentiates WatchGuard from competitors, what would that be?

Joe Smolarski: From my perspective, we’re the only complete cybersecurity platform that’s 100% dedicated to MSPs, providing enterprise-grade security. I don’t believe there’s another one out there.

There are other point solutions, but in the age of AI, point solutions just don’t get it done. You don’t have the time to manage six different point solutions because you need the correlation across the platform to cut down all the noise and point to what matters.

There’s nobody else that’s out there. Being 30 years strong, it just makes a big difference because you know you’re not banking on a company that’s going to go away. There are always sexy new companies that come up and sound good and have some sizzle, but they’re usually swallowed up and their product goes away within a few years.

Here, you’ve got a giant that has always been dedicated to the MSP space and always will be dedicated to the MSP space. That’s our commitment.

ChannelE2E: You’ve talked about changing the economics of cybersecurity for MSPs and improving partner margins. You’ve said WatchGuard can double MSP margins. In practical terms, what has to change in vendor pricing, packaging and service delivery for that model to work at scale?

Joe Smolarski: From our perspective, it’s a tricky situation. The sticker price of the software is not the only thing that matters. You can go out and buy cheaper software, but you get what you pay for. In cybersecurity, that usually means more work and more noise. So maybe you saved money on the software, but your human capital costs go up significantly.

We believe we’ve found the sweet spot. We can drive cost out of the platform and pass those savings on to our partners and their customers, but do it in a way that is efficient. Because we’re built for MSPs, we don’t get distracted by the enterprise market.

We know what MSPs need. We know what they need to look for. We reduce noise through a correlated, automated platform driven by AI, and it is making a difference. We’re not there yet, but the opportunity to double margins from cybersecurity offerings within MSPs is very possible.

First, we can help them grow. We can help them grow their top line. Cybersecurity is getting easier to sell because the world sees the threats. They’re all over the news. Cybercrime is the third-largest economy in the world, behind only the U.S. and China. That is hard to fathom.

Look at what happened when Kaseya was hit in July 2021. It was all over world news. I had the FBI and the White House in my office within hours of the event, and we had the bad guys in prison 33 weeks later.

You don’t get that kind of attention when you’re an SMB. That’s why the attackers get away with it. You can talk to any federal authority, and I’ve had the pleasure of doing that over the years, and they’ll tell you there are not enough resources to protect and follow up on attacks against the SMB community.

It is also why cybersecurity is easier for MSPs to sell now. SMBs see these attacks in the news. They see a business three doors down go out of business because it got hit. They see the attention around AI, faster attacks and the velocity of threats.

All of that creates an opportunity for MSPs. We can help them raise the top line, make these solutions more affordable, sell them across more of their customer base, improve their overall profits and do it without adding more noise and complexity. There are enterprise security companies out there doing great things. But when applications are built for the enterprise, they become complicated and convoluted for MSPs. That model does not work for them.

That is where WatchGuard has found its fit. We are not going to get greedy like so many companies have. Some companies that were once great with MSPs have gotten greedy and moved upstream to chase the enterprise market. We all want to grow. But we are going to stay in our lane and stay dedicated to this channel. We are happy doing that because it is a great channel, and it is one where we have been very successful.

ChannelE2E: WatchGuard has added core capabilities through acquisitions, including Perimeters.io and earlier acquisitions. For MSPs, the question is whether those additions actually make service delivery easier. What does this look like for partners? Do these acquisitions add more operational complexity, or do they simplify things?

Joe Smolarski: If you look at what we did with the Perimeters acquisition around cloud and SaaS application security, we had it integrated from day one. There will be deeper integration over time, but we are not introducing a ton of complexity. We are helping MSPs and SMBs fill a massive hole.

This was an area I was very passionate about because companies I’ve worked with in the past have been personally impacted by breaches in this area. The attack surface created by cloud applications is massive, and you do not always realize it until it is too late. You may not think of an accounts receivable clerk in India making $8,000 a year as a major attack surface, but that is exactly how these incidents happen. These are real stories.

I’ve worked for companies where an AR clerk was compromised. His identity was stolen. The attackers came in through the front door of Microsoft 365, downloaded the entire invoice register, and sent out invoices that looked like they came from the company. They got paid millions of dollars.

You do not get that money back. It is not the customer’s fault. They paid the invoice. The breach happened on your side.

That is why filling these gaps around identity and cloud application security is so important. I have seen it happen too many times. I have seen state actors get into SharePoint environments and steal the secrets and intellectual property that companies were built around.

For us, it was critical that the Perimeters technology was already integrated into the platform before we announced the acquisition. We wanted customers to be able to use it from day one without adding a lot of inefficiency. There are more steps we will take to embed it more deeply, but we are proud of where it started. I think the proof is in the pudding.

ChannelE2E: A lot of MSPs know they need to offer stronger security services, but they do not want to build, staff and run their own SOC. How are you helping partners deliver SOC-backed security without taking on all that operational burden? And where does the MSP still keep control of the customer relationship and service delivery?

Joe Smolarski: The MSP is always going to be the face of the customer. They’re the expert. They have the relationship. They’re the trusted partner to the end customer. WatchGuard does not sell direct. We will never sell direct.

The real power of the relationship with the MSP is that an MSP, unless they’re massive, is going to struggle to do things at scale at the same price points that WatchGuard can because we obviously have a very large SOC business.

We have an agentic-powered SOC business. We made that acquisition a year ago, which was very beneficial for us because layering AI on top of technology is one thing. But having technology that was built from the ground up with AI, like our SOC solution, makes a big difference for efficiency.

The real synergy is for an MSP to not have to build a 24/7/365 SOC because it’s almost economically impossible unless they’re a very large MSP. Some of them are out there. They use us for that, and we can do it at scale. Both of us make money off of it and are very happy. We take that operational complexity. They don’t want to get called at 2 a.m. because a breach occurred. Let WatchGuard handle that. They can be the face and present the findings to their end customers. That’s what we’re doing every day for nearly a million companies being supported through 25,000 partners.

ChannelE2E: Are you speaking to MSPs directly and getting feedback from them on what WatchGuard is doing?

Joe Smolarski: Yes. I just spent time with 500 MSPs over the last three weeks at our events in Dubrovnik, Croatia, and Cancun, Mexico. Next week, I’ll be in Bali talking to another couple hundred MSPs.

That is what this is about. We are trying to respond to what MSPs need and where they need us to go next.

The good news is that WatchGuard has a strong track record of listening. We do not need to be rocket scientists. We just need to listen closely to the MSP community, understand what they need, and try to stay ahead of that curve. That is exactly what we are doing.

ChannelE2E: What is at the top of the list in the feedback you are getting from MSPs? Is it price points, cost pressures, margins or something else?

Joe Smolarski: I think it starts with making sure the platform is easy to migrate into because change management is never easy. The struggles at SonicWall have been well-publicized, so we have tried to give MSPs automated tools that make their lives easier. The goal is to help them avoid spending weekends on migrations.

If an MSP wants to come across from SonicWall, we have automation and tools that can help with that. It keeps labor costs down, reduces the burden of change management, and gives them more time with their kids instead of spending that time doing migrations.

The confidence level is growing because WatchGuard is getting very big at this stage. We are not a little WatchGuard anymore. We have great technology, and yet it is tailor-made for SMBs. That is why we are excited.

ChannelE2E: WatchGuard has launched Rai, which is being positioned as an agentic AI workforce for MSPs. The Analyst role is already there, with Auditor and Admin roles expected next. As you expand those roles and bring more AI agents into the platform, where do you see the biggest business impact for MSPs?

Joe Smolarski: This is a very special time. While there’s a lot of hoopla out there about AI, it’s very real - for the good guys and the bad ones. WatchGuard has been fortunate enough to have AI embedded in our platform. Rai was really the coming-out party to make sure everybody sees the face of what we have going on throughout the platform. It’s a great opportunity to reduce the need for growing staff when you’re growing your business. That’s what it’s about for us.

It’s about going from a reactive world to a proactive world. If a configuration change is made in the platform that we know is not healthy for your security profile, we can automatically act on those things, unlike before, where it gets caught in a monthly audit.

We can reduce operational complexity in many areas, including patch management. We have agents working on your behalf, deploying patches at the right time and at the right moment. We have agents that can detect when there is a CVE tied to one of the software platforms you are using and automatically bring that to light, so you can patch appropriately.

That is the kind of work these agents can do on your behalf.

Our focus is on reducing the need to add more labor as you grow your business. We believe we are going to move the needle for the industry in the October timeframe with the second release of Rai. We are confident because the technology is now there. We are developing agents right now to address the top 20 most common areas and automation needs inside the platform.

ChannelE2E: What message do you want to give MSPs that are trying to grow their security practices?

Joe Smolarski: The time is now. The opportunity is immense. It is sitting there waiting for us to go get at this stage because everybody sees the threat. Everybody understands why they need cybersecurity.

By partnering with WatchGuard, you get the very best cybersecurity, tailor fit for the MSP community at the right price that you can provide it to all of your clients. There’s no better time to start that partnership than now.