Growing the right way: how to scale profitably with DevoTeam’s Ronnie Bachmann

Local trust is a key differentiator. It’s also critical to what we see in the market today. It comes down to being present in the market. You have to be in front of the customer. You have to be there with them in terms of what’s moving and shaping their world. 

Global growth gives us lots of flexibility and muscle. But if you don’t have the local trust, it becomes irrelevant. And your credibility towards customers disappears rapidly if you’re not there with the customer and understanding the situation. You can do it remotely—you don’t have to be in the same city. But you do have to have this local trust mentality and engagement with the customers in order to actually be successful in the market today.

For DevoTeam, when we started doing managed services about eight years ago, we started from an SRE (site reliability engineering) and a cloud code concept, which means everybody writes code and is focused on resolving problems more than incidents, which has also given us the benefit of having a very SRE-heavy mentality.

But we’re also seeing that automation comes more naturally to us because we’re focused on an autonomous mindset in terms of code and developing and optimizing. It means that we’re much faster at adjusting to what’s required in terms of new cloud services or AI. For us, it’s a natural evolution.

But I think AI these days is muddying the picture. In the MSP sector, people should be more focused around maintaining control of data and building automation. For smaller MSPs, focus on automation rather than AI. AI is not this golden goose that’s going to solve your world. Automation is.

I have the mentality of a practical AI use-case basis. The challenge is we’re pitching AI as a solution to people who couldn’t write code before and didn’t get automation fixed. And now you’re giving them more complex tools and processes and then magically expecting the old function. And that’s not how people adopt technology.

An MIT report recently came out saying 95% of AI initiatives are failing to actually provide value. This is not surprising. This is emerging technology that has gotten a gigantic hype wave.

We use the AI module for example in ServiceNow to help better find knowledge-based articles for us faster, and in Sentinel and Chronicle to help our security operators be faster when going through a lot of data. And we also use Logicmonitor’s Edwin AI in order to enhance our observability. But these are very specific, practical use cases.

This is where the value is. And eight out of 10 times, it’s automation, not AI. I know it’s an unpopular opinion in some circles, but we’re an MSP. This is about providing value to customers. This is about solving problems.

In general, the market still operates with the idea that “the price is lower in India, so it’s better”. But we’re shifting that conversation! Long-term, we are significantly more cost-effective in most of the cases because we use automation and code to work smarter, instead of just throwing more and more people at a problem.

If you’re small, it’s really difficult to have this mentality. But I see it succeeding more and more. I think it’s a combination of local trust—but don’t do everything. Be focused on what it is you provide in terms of value and do that really well.

And yes, you are always going to meet somebody who will be cheaper because somebody is always willing to take a hit. But if you win 9 out of 10 times by being the right price for the right quality with the local presence, that’s where you actually make a difference.

You want to be the right partner for your local customer who can do the right technical solutions. But don’t reinvent the wheel.

Take what you’re getting from the big Cloud provider or from your hybrid stack and do that really well and then uplift on top of that. Don’t try and replace the big global and don’t invent your own ITSM platform. Take what’s there off the shelf and then add what’s not there on top of it. This is where you give value to the customers.

What we’ve seen work in terms of organizational growth and change has been creating really small teams that’s focused on what you want to change, whether it’s to go to Cloud or build AI services.

Build a really small core team and then start scaling based on that. Don’t take a new team and put 50 guys there. It’s going to fail because they’re going to get drowned in the same problems and way of working. So start with a clean slate with a small team and then scale from there.

For me, it’s clarity of vision. Set an objective, set a goal and don’t change it every other day. Make small changes every six and every 12 months. Don’t change the world every single time something small happens.

Have a set of people around you that you really trust and then give them room to breathe and execute it. Top-down micromanagement hasn’t solved anything for anybody ever.

The big part for us whenever we’re having these conversations is the leader that’s in front of us. Can they drive this on their own? And if they can, then let them do so. And then let the team figure it out. Because nobody is smart enough to predict where we are going to be 12 months later.

Get smart people around you. Give them an idea of what kind of what path you are walking and then try and help them get there. But don’t try and micromanage it once a year. Do a full revision every quarter. Do a minor revision. You don’t need to do more. If you do, then you haven’t got the right people.

I know I’m supposed to say AI, but I really don’t think so. It’s automation.

I’m also on a board of directors for a different company and 99% of the time I ask them, “Have you looked at how your ideas and process look? Have you optimized the basics of what you do?” Stop trying to look for this golden goose that’s going to solve your entire world. Automation is the solution.

Automate your way out of what you do today. Most people are sitting with burning platforms they don’t have time to automate. Therein lies your problem. You can’t do more with the same if you have a burning platform.

Do more with less. Get the right people in front of the customer in terms of trust and generating upsells. Getting an existing customer to stay is much more important than getting a new customer.