Open Source MSP Solutions, Community Growth, & AI Integration in SaaS Management w/ Kelvin Tegelaar

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[00:00:57] Dave Sobel here with another bonus episode of the Business of Tech broadcasting from IT Nation Connect. I'm joined with Kelvin Tegelaar, who is, you have several titles in your, the CTO at Lime, and you are also the founder of Cyberdrain, right?

[00:01:14] I get that.

[00:01:14] That's correct.

[00:01:14] Yep, absolutely.

[00:01:15] Kelvin, it's great to sit down and chat with you a little bit. Now, what I want to sort of start with is, you've entered into a space that I'm fascinated by, which is sort of the SaaS management broadly space.

[00:01:25] Now, you've gone very deep on a particular part of that, but what also makes it different is the business model. Tell me a little bit about what's going on with CIP and Cyberdrain, the initiative there.

[00:01:36] David Sip is the Cyberdrain Improve Partner Portal. It's a project I started about two or three years ago, and it's an open source multi-tenant management solution, specifically for Microsoft 365.

[00:01:48] Which always is really a mouthful to pronounce that, but thankfully it explains the whole premise really quickly.

[00:01:53] Exactly. Yeah. So the biggest thing that Cyberdrain and CIP have is that there is a need in the MSP space for multi-tenant management, but everything priced itself out of the market.

[00:02:05] So I decided to make a completely free and open source tool with a sponsorware component where people can only have to pay for the support that they want on the product or a little bit of hosting and these kind of things.

[00:02:18] So it's sort of flipping the script a little, where every product that MSPs use are always price per user, price per tenant, but instead it's a flat fee model or free model that you're able to use whenever you feel ready for it.

[00:02:32] That's really interesting the way you've sort of taken the open source model and added a commercial element to it.

[00:02:38] It's classic for those that tend to study a lot about open source, but it's unique for those that tend to focus a lot on the commercial software.

[00:02:44] What I want to dig into a little bit is, is tell me a little bit about how you're seeing the divide work.

[00:02:50] How many people are really diving in and doing it themselves and how much are embracing the commercial side?

[00:02:55] So, I always have to be careful with these statements because we don't track all of the data.

[00:03:02] But the data that we do track is that in the last 90 days we had about 7000 active MSPs using the product.

[00:03:10] Okay.

[00:03:11] One fourth of that is paying for the hosted, subscribed model where they don't have to maintain it themselves, where we do everything for them and they have support.

[00:03:20] So, the paid commercial version.

[00:03:22] And then the other part is just users that have tried installing it, are trying to use it themselves or get support in our community.

[00:03:28] Because we don't want to drop people immediately into depths unknown if they don't understand how to install or maintain the product.

[00:03:38] We also have a very active and vibrant community of members that are trying to help self-hosted people.

[00:03:44] Just MSPs amongst MSPs saying, oh I got this error too one day, this was my solution.

[00:03:50] So, it also brings an element of camaraderie into the software space.

[00:03:57] So, that's really fun to see.

[00:03:58] Now, it's interesting you and I would have expected exactly what you described in terms of the community effort for helping people one another get that self-hosted done.

[00:04:05] I'm a little curious, and I mean this more to just understand.

[00:04:10] There's open source, everyone always talks about, well anyone can contribute code.

[00:04:13] Now, let's be realistic, most people don't contribute code.

[00:04:17] And this is true across all open source projects.

[00:04:21] Oftentimes we talk about Linux which has a very large collection, but Linux is a unique thing in the open source.

[00:04:27] And I'd like to get a little bit of a sense, talk to me about the dynamic of the team that's working on the code itself.

[00:04:33] Yeah, so we have our professional team which is just a cyber drain team.

[00:04:37] We have a lead developer, we have a chief operation officer, Ashley Cooper.

[00:04:42] She's absolutely amazing and helps us with anything operationally that we need.

[00:04:47] And then we have our CEO which took the day-to-day business stuff out of my hands so I can focus on the visionary, the coding and being a little bit of the nerd.

[00:04:54] Right.

[00:04:56] I enjoy having my hands on the keyboard and he enjoys having his hands on contracts.

[00:05:00] Okay.

[00:05:01] That's a good balance.

[00:05:02] Yeah.

[00:05:03] But on the non-professional side we actually have a group of very steady contributors.

[00:05:11] Okay.

[00:05:11] SIP has been created with system administrators in mind, not developers.

[00:05:14] Okay.

[00:05:15] And that is the biggest fear that a lot of people have to contributing to open source software.

[00:05:19] I'm not a developer, I don't know what to do.

[00:05:20] But we made SIP as a PowerShell product which they need to use for their day-to-day administration anyway.

[00:05:27] Okay.

[00:05:28] So, a lot of system administrators are jumping in.

[00:05:30] We have a group of, I want to say 30 regular contributors outside of our professional cyber drain space that are actually improving the code and sending updates to us.

[00:05:42] Okay.

[00:05:42] So, that's 30 active contributors and possibly in total maybe 100 contributors that even correct small typos or help us with, oh, this was wrong.

[00:05:52] I fixed it.

[00:05:53] So, that's amazing.

[00:05:55] So, how do you think about this?

[00:05:57] You're trying to combine a combination of your own commercial thought to this.

[00:06:01] Yes.

[00:06:01] In business, you're trying to apply commercial to with also community contribution with also the ability theoretically someone could go out and just start writing stuff, right?

[00:06:10] They could write a whole additional model.

[00:06:12] How do you think about making decisions about where the product is going?

[00:06:18] Yeah, because my extensive MSP experience and I still work in my MSP on my day-to-day business, Cyberdrain is a passion project that I do on the side.

[00:06:27] I still get a lot of feedback from my MSP saying this could be better and that could be better.

[00:06:32] And our MSP has been lucky enough to grow exponentially.

[00:06:34] So, we had the pleasure to be introduced to a lot of different views inside of our MSP.

[00:06:41] Right.

[00:06:41] So, our helpless guys are saying, oh, this little feature needs to be a little bit better.

[00:06:45] This needs to change.

[00:06:47] Autopilot could use some tweaking and our service engineer go like, I could use it for a project if we implement this feature.

[00:06:53] Okay.

[00:06:54] So, it helps a lot in finding our core base thanks to my own MSP.

[00:06:58] Okay.

[00:06:59] And then getting the feedback from other MSPs saying, yeah, we also like this feature or we don't like this feature.

[00:07:03] And we sort of balance that a little.

[00:07:05] Gotcha.

[00:07:06] How do you think about this?

[00:07:07] Because you talk about it as a side project and it is, and I get that philosophically, but at the same time, it is a commercial thing that you have made and built into a business.

[00:07:15] How do you think about that dynamic?

[00:07:18] It is actually very funny.

[00:07:19] About two years ago, when SIP really lifted off, I think we spoke about it back then on one of the podcasts.

[00:07:27] And I actually gave my best friend a call saying, dang it, I think I started another business.

[00:07:34] Right.

[00:07:34] And he came to me and he's our CEO, Dustin Bollander.

[00:07:37] And he was like, yeah, you know what?

[00:07:38] I'll pick up the business side of it and I'm going to take care of it because this is something you should treasure.

[00:07:43] So it was something I didn't plan for.

[00:07:46] Okay.

[00:07:46] But it naturally evolved that way.

[00:07:49] And of course, I want to run a good business.

[00:07:50] So I also took measure of what I want to invest myself and what others could invest and give them the ability to help us grow.

[00:07:59] How separate are the two businesses?

[00:08:01] CyberDrain and Lime Networks are completely separate.

[00:08:04] I'm saying that now, if you would have asked me that six months ago, I would have said not exactly because our Lime Networks employees helped with some help desk and support side.

[00:08:13] But we now have that completely handled in house.

[00:08:15] So it was an active choice to make that conversion?

[00:08:17] Yeah.

[00:08:18] I didn't want the two businesses to be too intertwined.

[00:08:21] Also, because it's kind of a little bit of a conflict of interest when you look at it.

[00:08:25] Like my MSP might have a competing MSP that's also using SIP and I don't ever want those tracks to sort of merge.

[00:08:31] I want to keep it completely separate.

[00:08:33] So it's clean for everyone.

[00:08:35] Okay.

[00:08:35] I'll even say for listeners to dive in on my interview with Abraham Garver, because actually one of the other choices you've done is you actually improved your valuation by keeping them separate.

[00:08:43] Yeah.

[00:08:44] So interestingly, that's another note of detail about that.

[00:08:46] But I want to also talk a little bit.

[00:08:48] I want to get your sense of the integration framework because it's interesting that we're having a really interesting time.

[00:08:54] The theme of IT Nation is a lot of platform discussion.

[00:08:57] But if we think about this in a classic sense, we've often times about integrations.

[00:09:02] SIP is one of those areas where integration is a key part of what it does.

[00:09:06] You've been very focused about it.

[00:09:08] Tell me how you think about the approach to integration to make the product potentially expand or go deeper.

[00:09:15] How are you framing that out?

[00:09:16] So we actually had a lot of discussions with my team and myself with this.

[00:09:20] And actually from the start, we always wanted to say when we integrate with another company, it has to be completely useful, but it also has to be good for our entire community.

[00:09:27] It shouldn't be a single point where we, oh, now you're able to retrieve some data from another point and you're able to use that in a report or you're able to see.

[00:09:36] It has to be actionable.

[00:09:38] It has to be good.

[00:09:39] So all of our integrations are really focused on making sure that we work with the vendor.

[00:09:45] Microsoft being our biggest one, of course, I work directly with the Lighthouse team and they develop specific APIs just for us to be able to ingest into SIP because of our collaboration.

[00:09:56] Because we have so many MSPs using it, we're lucky enough to be able to have these discussions with Microsoft directly.

[00:10:01] We also have the same with most of our sponsors.

[00:10:05] Huntress is a sponsor and Allegiant more, Halo PSA.

[00:10:09] And we integrate with the products that have said, we want to give back to this community as well.

[00:10:14] We will either give you a monetary sponsorship or we will give you help with developing an integration or we will give you test and development environments.

[00:10:23] And we build based on that.

[00:10:25] So our integrations are a lot about relationship building instead of just blindlessly integrating data.

[00:10:32] Now I want to focus a little bit on the Microsoft one because, of course, they're critically important based on literally the premise of the product.

[00:10:39] There's obviously a little bit of tension there because they would prefer people to use their products, their management tools.

[00:10:45] They also, at the same time, are very open about embracing integrations of third party.

[00:10:49] I kind of want to get your sense of how you manage that tension about getting too close, getting too far away.

[00:10:56] How do you balance that when you think about their working with Microsoft?

[00:11:00] Yeah, so the product manager at Microsoft for Lighthouse, Chris Boyd, he and I had very good talks when Lighthouse started.

[00:11:08] And there were some hard discussions.

[00:11:10] There were some big questions on, are we doing the right thing?

[00:11:14] Should Lighthouse still be continuing in the same path?

[00:11:16] Should we diverge from SIP and Lighthouse?

[00:11:19] How are we going to collaborate together instead of work against each other?

[00:11:23] And Microsoft decided themselves, and that is also because I am a Microsoft MVP, so I have a lot of access to their internal workings already.

[00:11:30] Right.

[00:11:30] But Microsoft themselves decided we're going to utilize SIP as our playground for features.

[00:11:35] We're going to see what features work best.

[00:11:37] Okay.

[00:11:37] And then implement that for the greater MSP community in Lighthouse.

[00:11:41] Okay.

[00:11:41] So instead of butting heads and worrying about are we competing in some way, we actually started being much more collaborative than expected even though it's competing products.

[00:11:53] But inherent is that, it's the same thing.

[00:11:55] They're sucking up your ideas and integrating with the product.

[00:11:57] And then, again, how's the tension work there?

[00:12:00] I have to say that because of the constant communication we're in, it doesn't feel like tension.

[00:12:09] It feels like we're actually really focused on working together and delivering something for a greater community instead of focusing on each of our separate products.

[00:12:19] Okay.

[00:12:19] Because they've helped us at many occasions.

[00:12:22] Our lead developer at one point complained about something in our Discord.

[00:12:26] And Microsoft employees are in our Discord.

[00:12:30] And nine hours later, a fix was released.

[00:12:32] Okay.

[00:12:32] Because they didn't want us to feel bad about something they broke.

[00:12:36] So I guess the tension has just decreased thanks to very open lines of communication.

[00:12:43] Okay.

[00:12:43] So that's ultimately the key to that.

[00:12:45] Now, the other thing I wanted to say is like let's take a quick step back and think about it.

[00:12:49] You've taken a really, again, a really unique approach to open source and the way that you think about it, particularly in your MSP, using it and what providing the community.

[00:12:57] That's unique.

[00:12:58] What are the lessons that you've learned from like the open source approach that you think ought to be kind of applied more broadly to what MSPs are doing?

[00:13:07] Oh, there's a couple of things that I truly believe in.

[00:13:10] We didn't just decide let's open source.

[00:13:13] We decided a chain of things together of which one is community-led growth.

[00:13:17] We said we're not going to be giving demos.

[00:13:19] We're not going to be having a sales team call every MSP every day, every couple of hours to make sure that they start buying a product.

[00:13:27] We said no, we want our products to be led by the community and spread by the community.

[00:13:31] I think that by making that choice, it immensely helped our growth, but it is something that is a lot harder than the classical sales-led growth movements.

[00:13:44] Right.

[00:13:45] So, if anything that the market can extract from what I've done is if you are already very much ingrained in the community, your product can stand on its own using the community as a resource.

[00:13:58] But be prepared for the challenges to be harder than when you have a sales-based organization.

[00:14:03] Okay.

[00:14:04] But again, there's a dynamic there because we've got to power growth if it's a commercial entity.

[00:14:10] You've done that.

[00:14:10] You've taken a side project and you have made a commercial entity that has measurement.

[00:14:14] Again, how do you think about framing that to achieve what success is and how do you define it?

[00:14:20] Oh, how do you define success?

[00:14:22] Yes.

[00:14:22] That is actually one of the most challenging questions for me because as a technical mind, I will always have my eye out on the next big thing.

[00:14:31] Okay.

[00:14:32] Commercially defining success for Cyberdrain is giving all MSPs the ability for a reasonable price, the ability to manage M365 without having to worry about all the side aspects of it.

[00:14:47] If they want to focus on helping people, that is what should happen.

[00:14:51] Just like you actually said it yourself a lot in your enabled days,

[00:14:57] IT or MSPs need to actually be completely commoditized.

[00:15:02] It needs to be a simple thing that you just purchased somewhere and are able to use.

[00:15:08] And that's commercial success for Cyberdrain.

[00:15:13] It is a plug and play, ready to use, commoditized application that you can just deploy and no longer have to worry.

[00:15:20] Okay.

[00:15:21] So the last, as I sort of wrap this up, I'm really curious, particularly because your approach in business here is different.

[00:15:27] And I like understanding the way people make decisions in order to do this.

[00:15:32] Tell me a little bit about the way that you've sort of structured the organization around, like the advice you get and who you get and how you frame decision making.

[00:15:39] Yeah.

[00:15:40] So I have two or three amazing partners.

[00:15:43] Our lead developer is actually also a partner in the company and I did that on purpose.

[00:15:46] I want to technically be challenged by someone on the same level as me as opposed to, I am your boss, you need to execute what I'm saying.

[00:15:53] I want to have the feeling that when my lead developer is saying this is a bad idea, it is a direct peer.

[00:16:01] It is not a subordinate, it is not a person I am managing, it is someone that is thinking of the product and the company in the exact same way that I am.

[00:16:10] We must achieve growth and we want to achieve growth, so how are we going to get that?

[00:16:15] That is up to our team.

[00:16:17] My management team, Ashley Cooper, our chief operating officer, we butt hats a lot.

[00:16:23] Because I am a, oh cool, this is innovative, let's do it now.

[00:16:27] And she is very much, let's make a plan now.

[00:16:31] And then there's some conflict there, but that conflict is actually what helps us achieve more synergy inside of the market.

[00:16:37] Because I am not just randomly going to implement my ideas, we actually think and process things a lot.

[00:16:44] And same goes for my CEO, Dustin, he handles all of the contracts, all of the major sponsorships.

[00:16:50] He very much has a business mindset to everything.

[00:16:53] And I do myself too as a MSP business owner, but I am always technical mind, so my thinking always goes out to fix first, charge later.

[00:17:03] And he is very much more charge first, and fix later.

[00:17:06] Okay, last question, because my listeners love hearing insights like this.

[00:17:10] For next year, we are all at the end of 2024, we've got an eye on 2025.

[00:17:14] Like what is the one big thing you are keeping an eye on?

[00:17:17] To see is like, I am looking for, there is a thing to happen, like what is the thing you are keeping an eye on?

[00:17:24] I am pretty sure everyone says AI.

[00:17:26] But it means something different, what does it mean for you?

[00:17:29] Exactly.

[00:17:30] I want to say that we are at the precipice of using LMMs for more useful things than we are right now.

[00:17:40] Currently, it's, oh hey, generate a shopping list for me, or create a recipe, or create a pretty image that I can put on my Facebook.

[00:17:49] Yeah, that's all amazing, but we don't want that side of AI.

[00:17:52] I don't want AI to be the one focused on making art or music or that kind of stuff.

[00:17:57] That's stuff that we are better at.

[00:17:59] I think that in the next year, the most interesting thing for all of us in the MSP space to look at is how well LMM gets implemented in the product.

[00:18:09] And it's not just another add-on in, oh yeah, now you can have a natural language question in your help desk ticket.

[00:18:15] Fantastic, no one cares.

[00:18:17] It has to be useful to engineers, to people, and I think that is the one thing that we are going to mostly be looking out for.

[00:18:25] Useful applications of large language models.

[00:18:28] Well, I think that's a key question and in particular one that service providers and IT service providers, MSPs can all help solve.

[00:18:34] Calvin, this has been a great conversation.

[00:18:36] Thanks for joining me today.

[00:18:37] No problem. Thank you.

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