Expanding IT Services with Jolera’s Alex Shan

This is Textron tv. Hey guys, thanks for the throw. We're here with Alex Shannon, who's CEO for Jira, and they just acquired another IT service provider called well IT center.

And we're talking about just how much responsibility for IT is being shifted over to service providers these days. As things become more automated and with AI on the horizon, things are a change in Alex, welcome to channel. Thank you for having me.

Thanks for having me. It's good to be here. I, I don't think everybody knows exactly who RO is.

So maybe a little bit of a description of what you guys provide and where does this acquisition fit? Yeah, so look, Jair has been, uh, we've been around for 20, I'd say 24, 25 years now. A long time.

We've been kind of behind the scenes a lot because the last seven, eight years of that journey, uh, have been as a, an MS P four MSPs. So as opposed to, you know, our first iteration of the company, we were a public go-to market MSP. So we had clients in the us, Canada, all over the world.

And then we, we decided, you know, we realized quickly after, you know, servicing a few partners that were already MSPs and BMRs and resellers and telcos that hey, we're really good at delivery and what we do and, uh, client acquisition is all good and fine, uh, and, and fine and all that, but we really wanna focus on the technology aspect of things. So we kind of transformed the business a bit to focus more on working with other providers and MSBs, uh, to basically bring high tech products and services to market for them. And so that's kind of what we do Now, we've taken it a step further with, with, with our GSI concept where we move from being a master MSB into being a global systems integrator.

That redefinition happened this year with the acquisition that we're talking about today of IT center, uh, you know, and, uh, it basically, it allowed us and positioned us to now have a much deeper and wider skillset in the enterprise sector and the telco sector, and go after, you know, much bigger clients and in a more programmatic fashion, right? And as opposed to in the past, we would try and solve for technical problems, which were point in place problems. We can now look at a bigger scope and a much higher, larger, uh, volume of work and a bite off a bigger chunk, uh, of a problem a customer has and come to a solution for that.

So, just a different positioning really, Historically, there's always been some tension between external IT service providers and internal teams, and a lot of organizations still lean heavily on the internal team. Is that changing? Is the dynamics different?

I mean, how are we getting just a little more mature about all this? Well, look, I mean, I find that we've been at this a long time and I've seen trends go, you know, there's been periods of time where it's been outsourcing periods of time, of insourcing, and a lot of it that dictates that has been a market conditions, but also technology landscapes, right? So if you look at the technology landscape today, in the last two, three years, we've seen the real advent, but also more important, the implementation more there of, of automation, uh, tools, AI tools, and a ton of other things.

So if you're busy running your business like you're supposed to be, and you're the CIO or you're the, the leader of a, of a business that does whatever it is that they do, an airline or a manufacturer, whatever it is, then your real expertise and what you are doing should be centric to the purpose of the outcome of that business, right? Not a generic kind of, uh, service offering when it comes to technology. It should be very specific to your business.

What we're able to do these days, especially with the AI becoming more prominent and and automation becoming a requirement to stay in business these days, is we're able to come to these organizations that have, you know, really massive the art of running their own business, but now help them to discover how we can bring in this new tech that they haven't had time to discover, learn, upskill their teams on because they've been busy running their business, what they're supposed to be doing, uh, and, you know, augment our expertise into their environments, which is, you know, which is where we've seen the real wins lately, whether it been in the legal sector, in the carrier sector, uh, any kind of enterprise environment where they're looking to modernize. Uh, we are experts in modernization. That's all we do.

We don't play with the legacy stuff that they are, they're bogged down dealing with that runs their businesses. We're always playing with the, the future stuff. So it's been an amazing kind of, uh, I guess a fit from that perspective where we can bring in new tech in these organizations.

It seems to be a subtle thing at work here as we move down the AI path, where in order to make the models work, I have to be able to collect enough data at scale to train the model and then deploy the model and then have enough expertise and automation and make sure that the model's doing what it's supposed to do. Will that eventually push us more towards relying on external services providers that kind of do that for a living? 'cause I'm not sure that the internal IT team's gonna be able to keep pace with that.

So, like I said a minute ago, it's, it's, it's a journey. So I think right now with the, the, at the phase in the AI revolution, evolution, whatever you wanna call it, that is gonna rely on external contractors or external resources to be able to facilitate some of the, the, the very quick tactical moves that are required to adopt the technology this year and next year to come, but as another technologies over the long term, over the next 2, 3, 4, 5 years, I, I think it's imperative that, you know, enterprises absorb and figure out how to use this stuff to run it internally because it's gonna be so key in core to their operation that, uh, like not understanding how your automation stack and your AI stack is working is gonna be, I would say a huge, uh, gap in your visibility and the value business operates. If we look at the way things have transverse even right now are trans, uh, you know, kind of transpired it, you know, 15 years ago, you know, we were just stuck.

Okay, we got it. It's not really a part of the operating budget. It kind of is, but it's not that important.

But look at the evolution now. Now, it, I would say is a big part of your operating budget. If you're in any business, whether it's the e-commerce, whether it's your logistics and supply chain, all runs around technology.

And now we're automating that. We're running, you know, implementing LLM and AI into this stuff, which is, I mean, the, the data is there, but you need to get a grasp of this. This is core to the business.

Every business today is an IT business. I mean, even, even in the medical sector, right? Every business today is an IT business.

I can't think of a single practice that we work with that doesn't revolve around the technology. So as we kind of look at what's going on in the world, and maybe it's just me, but I feel like almost every week now I read about some merger between various IT services providers and, but I'm not close enough to figure out whether or not that's an accelerated pace or is it just a regular pace, or maybe it's even slower than it used to be. But what is your sense of what's going on here?

It seems like there's a lot of roll-ups of different service providers and, and You're asking your question, you're answering your question because ab absolutely. I mean, look, I've been in this for a long time. Uh, you know, 25 years, we've done not as many acquisitions as we should have probably two or three acquisitions over that time of any significance.

And I can tell you that the activity in the last three years, four years, has been very robust in the sense that in, at least in the Canadian marketplace and the European, and I've seen in the US as well, there's been a lot of consolidation in your VAR community. So whether you're an MSP, whether you're a reseller, whether you're a service provider of any sort, I-I-S-V-R, all of these organizations are now being ac uh, acquired and or consolidating into larger organizations, right? And, and there's a lot of things driving this ic uh, technology being one, the, the need to keep up with the current pace of that innovation and evolution in the technology space is faster today than it was two years ago, which was then faster than four years ago and faster than five years ago.

So it's like they've taken this time that we have a, the average 62nd minute, and that 62nd minute somehow has become even shorter, right? Still maintaining the 60 seconds, but it feels like it goes by. So it's forced people to have to consolidate with it.

'cause to keep ahead of all the changes. I mean, the retooling the reinvestments required are monumental as a business of our size. You know, we, we, we employ approximately 500 people worldwide.

Most of them are on delivery. 'cause we're heavily channel led right now, right? Um, just the cost of of of building security practice for our teams and for our customers.

And we've spent millions and millions of dollars, unless you have the scale and the capacity to make these investments other service providers have seen. And rightfully so, that this is a very capital intensive time in the technology evolution where you, in order to stay ahead of it, you need to invest, invest, invest and the outcome and the fu hopefully the future will pay off those investments. But it's, it's a, you know, and so then the private equity firms, a lot of the, the big, uh, uh, telcos or big DMR that are consolidating and acquiring these companies, they have the money to invest and that's why they should invest.

And that's what they're doing right now. So it's not like it's unseen or unheard, it's being done. There is still no shortage of various IT service providers out there.

If you're sitting on the other side of the table and your, uh, IT executive or business executive, what should they be looking for to evaluate which IT services provider to go with versus another? Well, that's another good question. So you, I mean, you and I both know security today is probably one of the most important things out there right now because you could have the greatest IT provider in the world, but if they're not security centric and you don't have a good security posture, all their work is basically gone to vain.

Because if you get a a compromised, your business is shut down. What's the point? So I would say that right now, if for today's kind of flavor is if you have not invested in security or some type of security architecture for your business, this is the time to do so.

And pick a provider that is centric to that, right? Because you have a lot of providers that maybe only security or only infrastructure, um, I find sometimes there's, 'cause we work in, in both spaces. And I see that when we're working with someone that's only security as another provider at the same customer, in many cases, the security provider doesn't have the understanding or the insights on the infrastructure that the security's protecting in order to effectively bring it up and or protect it.

So I find when we partner with organizations, the best ones that provide that type of, you know, uh, true carbon are those that actually have an understanding of security, cybersecurity as well as infrastructure. And they know how to bring those two together and make them work in, in harmonious glory. 'cause you can, an overly secure environment doesn't allow any business to get done.

'cause nothing works. That's too secure. An insecure environment is, is unsafe.

So you gotta find a medium balance in between that allows you to do your work and function as a business while remaining secure. And there's a handful of providers that can do that. Is security becoming a feature?

And I'm asking this question because, uh, on a certain level we keep selling security, but it's almost like we're selling IT solutions and then asking people to pay extra for the security around it, on it after the fact. And it seems a little odd. Well, because we come from a world where we were, you, you bought this stuff and you expected it, it, it had everything covered, right?

But look, I don't, I don't hold the industry against that particular, and I see where you're coming from as a consumer of these products. It would seem to you obviously that wait a minute, I used, I bought this stuff for years and all of a sudden now I gotta pay more. 'cause and I thought that was included, right?

But the truth is that it, it is almost impossible now it to, you know, put products to market without considering the security angle of it. But at the same time, remember the way security, it's layered approach, right? It's not like you have security now, it's secure, there's layers of security.

So whether you have an a product that you buy that has a security forward kind of stance in the way they market the product to you, it doesn't indemnify you from the fact that you do need to invest in that layer approach to security because that provider or that product you're buying is a point place solution that offers security in a certain vector. But there are multiple vectors when it comes to how you protect your environment and invest. And so picking, you know, that a provider or a software package or whatnot, you need to consider that, yes, I'm buying this, but we do have to also add layers of protection on top of that to make sure it's all looked after.

Is there a bar for the type of customer that you are willing to support? Because some people have it environments that are uh, should we say messy and the supporting them is probably more than you might be making on it Or, you know, is, is no challenge too big? Well, We're, we're lucky in the sense that the way we've evolved, right?

So in, in the SMB space, you're gonna see a lot of what you just described Michael. You're gonna see a lot of underinvestment, you're gonna see a lot of messy environments because they've kind of grown from zero to hero over a period of time and they've gotta kind of just organically evolve that environment. And you see a lot of those left behind those customers.

A lot of them, uh, that work with us at least are, are, are working with us through our partners, so through local MSPs in their regions that, that service them on the ground. And we provide that, you know, all the kind of advanced level or cloud-based service delivery mechanisms for them. So those partners are already are working with great organizations that, you know, that are, that are looking after the mundane from in the enterprise space at least, or in this, in the, uh, mid-market enterprise space, which we are actively selling directly into, right?

'cause we don't sell directly in SM b 'cause it's all partner led. Uh, but in the, in that space there, you do come across, you know, obviously those environments where they are messy and they're under invested and is there a perfect customer that we would say is perfect for us? No, but we are looking for those customers that have problems because if it's a perfect customer, they don't need us, right?

They, they've already got it all undercover and they've, they've got it all looked after. They've got a good team. 'cause to maintain good postures, it wise, security wise, you, you need to have good people.

And you'll see we come into all kinds of environments where we see it, it's pretty good. And uh, our, my teams will come to me and say, look guys, thanks for bringing this big opportunity in for us. The customer has such a incredibly mature environment that is so robust.

I don't know how we can add a great deal of value here. Right? And I, I honestly, I actually take those moments with a bit of a sadness 'cause there's no opportunity for us, but also happiness.

'cause going to that executive member on the other side of the fence saying, Hey look, you brought us in to look at your infrastructure, look at your people, we looked at it and you're pretty darn good. No one ever tells you that, right? Consultants typically come in and try to pick holes at everything you do.

I'm of a different, you know, view of things. If the customer is doing a really good job and they, they need you to validate that, that that in itself is a service to come in there and validate the fact that they're doing a good job. So I have no problem, you know, having customers that come in with without infrastructure or with infrastructure that's up to date.

We are just happy to work with anyone and, and, and do what we do. It's our mission is to help improve in technology environments. So it still is a business that's driven by people and pe getting the people with the right skills is getting easier, harder.

What's your sense going on here? So this was a business driven by people for the last 20 plus years, a predominantly in the last five years, we've introduced a great deal of automation into our own business. We've introduced AI into our business.

And I would say that is now we are people and technology business more. We used to always be a people process tech business, but today we're even more so than we were in the past. So there is an impact, obviously technology on the people we need.

Having said that, because we're a geographically diversified organization, we operate in seven countries, we are different geographies and time zones. Our talent pool is just so much more wider and available, right? I found when we were isolated to put resources only in, for example, America or only in Canada, we had, uh, restrictions.

And you're absolutely right, especially two years ago, you couldn't hire a guy who could spell cybersecurity. Okay. If you remember that right?

It was, it was that, uh, uh, an in in demand market today, things have loosened up a bit more. And for us in this acquisition, and prior to that, you know, having, uh, facilities in Sri Lanka, in Portugal, uh, in Spain, uh, Portugal, uh, sorry, in uh, Poland and all over the world, it's allowed us to really bring in a diverse set of, you know, uh, talent lenzo. It's been a game changer for us.

Labor arbitrage. Another huge advantage of that as well where we're able to use, not offshore, but near shore resources, provide a very North American experience to North American clients, uh, while not transferring those typical North American costs over to them as well. Right?

So it's been a win-win I think for everyone involved in that sense. All right, folks, while you're heard it here, it still takes a village to manage it. It's just a, that village Spanish gold these days.

Yeah, exactly. Hey Alex, thanks. Hey Alex, thanks for being on the show.

Thank you so much. Look forward to talking to you again. Take care.

All right, back to you guys in the studio.