MSP-Turned-Security Reseller: How Revenue Tripled In Year 1

Matt Johnson, Phalanx

Matt Johnson founded Raven Data Technologies in 2011 as an MSP. However, this year, he completed a realignment of the company and, in its first year as a security reseller, he says Raven – now Phalanx Secure - is growing by more than 300 percent.

"Our monthly revenue is higher than it has ever been," he said.

Johnson (pictured), Phalanx’s CEO, said he began to reposition the company in the first quarter of 2014 in response to the increasingly competitive nature of the MSP market. With gargantuan public clouds like AWS and Azure starting to offer services, and telcos and cable providers beginning to compete with MSPs in an already busy marketplace, Johnson decided he would refocus his MSP’s efforts around security.

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"The market was getting insanely competitive and we were looking for an edge, a way to stand out. So, we started offering higher-end firewalls and more security services," he said.

But with the change, the business began to shift. Johnson said that throughout 2014, he saw the security side of the company quickly outpacing the rest of his business.

"In the last year, we pursued 75 percent security and 25 percent managed services, and our rates for security were going up," he said. So, he let go of the managed services side of the business, and earlier this month, changed the company's name, steering its focus toward reselling security and occasionally providing managed security services.

The decision to redirect the business was one Johnson said he was confident about throughout the process.

Johnson said it’s now easier to generate leads as an IT cybersecurity consulting company because, as a specialized consultant, Phalanx doesn’t intimidate his clients' regular IT providers.

"We can play nice with everyone because we do not want their hardware and software sales; … their regular IT consultant can have those," he said.