Building A Complete MSP Software Stack
While building the best tool for a specific IT purpose can help a company get off the ground, business requirements for ways to reduce the complexity of their IT deployments tend to favor developers which integrate multiple technologies onto a single stack.
NinjaOne, the Austin, Texas-based developer of an MSP platform, shows how expanding its reach led to success. The company was founded in 2013 as a developer of RMM, or remote monitoring and management, technology, and indeed started live known as NinjaRMM. However, tying its name to its primary product was limiting, and in 2021 NinjaRMM rebranded as NinjaOne.
As NinjaOne, the company has grown, and now includes endpoint security, endpoint and patch management, data protection, and other MSP-centered technologies as part of its platform, and is continually integrating third-party MSP tools to that platform.
[Related: The 2024 Managed Service Provider 500]
While NinjaOne remains a private company, and declines to talk about its financials, the company is heading towards bigger times. NinjaOne early last month closed its C round of funding to the tune of $231.5 million, giving it a valuation of about $1.9 billion. But despite the funding, control of the company remains firmly in the hands of its co-founders.ADVERTISEMENT
One of those founders, Sal Sferlazza, who also serves as the company CEO, told CRN in a recent conversation that the company is ramping up the development of its MSP platform with both its own IP and with integrations to the third-party tools that MSPs require.
“We offer the technologies to deliver value both to managed service providers and internal IT departments,” Sferlazza said. “One of the goals in ramping our engineering teams is to build our own products, but also to be part of the narrative that Ninja is part of the stack in every conversation, whether it’s a small MSP or big MSP or smaller IT department or a larger IT department.”
How do you describe NinjaOne?
We say it’s an endpoint management platform that automates and simplifies IT operations. In the MSP market, such a platform would be an acronym that’s incredibly well known: RMM, remote monitoring and management. And in internal IT departments, that’d be endpoint management.
And speaking of ‘RMM,’ the company used to be known as NinjaRMM, but rebranded as NinjaOne about two-and-a-half years ago. How has that changed the perception of the company?
I think it was timely because we were a single product company, but we were turning very quickly into a portfolio of products. So we wanted to pick a name that was everlasting. I think NinjaOne will hold us over for the life of the company. It just reflects the fact that we’re a platform for products. We do patching. We do remote support, monitoring, alerting, and traditional endpoint management. So that name has been really good to us.
Are you looking to build an MSP platform similar to what one might think of with ConnectWise or Kaseya?
Our strategy is to grow generally by building our own IP on a cloud-first stack with a next-generation user experience, and look for new opportunities to add value. But we want to be careful how we grow. We want to do it mindfully and thoughtfully. We’ve built a lot of trust and relationships over the years with our customers. So every product that goes gold is going to work incredibly well from day one. I can say assuredly that we are not focused on acquisitions. We’re going to be building and ramping engineering and supporting the things that our customers love.
Is the NinjaOne platform focused primarily on offering your own technologies to the MSP community? Or do you also look to connect to a lot of third-party technologies?
We offer the technologies to deliver value both to managed service providers and internal IT departments. One of the goals in ramping our engineering teams is to build our own products, but also to be part of the narrative that Ninja is part of the stack in every conversation, whether it’s a small MSP or big MSP or smaller IT department or a larger IT department. So when I have a conversation with a CIO or a very large MSP, and they say, ‘Hey, man, what’s your stack?’ The answer wants to be, ‘Well, I use this for my PSA, I use Ninja for these three things.’ For example, my stack might be CrowdStrike, ServiceNow, and Ninja. Well, to support that use case, we have to have integrations. So part of our roadmap is to dramatically scale, by an order of magnitude, the number of integrations that we support with third-party products.
In addition to RMM, what are some of the other big parts of your platform you’re working on?
Patching, monitoring, alerting. We have a backup product. We have a documentation product. And we have several other product development streams that are under wraps right now we’ll introduce later this year and through 2025. So there’s a well-orchestrated plan to continue to release a cadence of products over the next several years.
NinjaOne last month unveiled a big C round of funding for $321.5 million. What was behind that?
First of all, we wanted public communication. I think people get anxiety when there’s a random investment because customers say, ‘Okay, well support is gonna get worse, the best engineers I work with may not be there, they’re gonna raise prices.’ So there’s a couple clarifying things that we wanted to make sure we got in the communications. This is a minority investment. We found a partner, Iconiq Growth, an exceptional institutional investor that invests in some of the highest growth tech companies ever such as Datadog and Snowflake. So we feel really lucky to be in. They’ve been a great value-added partner for us.
The reason we’re raising the money is basically to double down, put more fuel in the tanks. We want to do that while retaining control of the company. This minority investment just helps double down on product growth, maintaining and scaling our world-class support, and continue to follow our mission of building products that are easy to use, highly scalable, and secure.
How does the new funding improve the cadence of development you mentioned?
That’s the fuel that allows us to scale the engineering and the support departments. We want to grow efficiently, mindfully, and thoughtfully while scaling our infrastructure and maintaining our security and all the great reputation that we’ve had. For example, marketing – I didn’t have a communications team until five or six months ago. I won’t release products too early. And I want to sell with reckless abandon. I want to make sure the quality is always high, and the customers always enjoy the experience. So we take our time. People ask, ‘What’s the ship date?’ And I say, ‘When the product’s ready.’
I’m a product-centric CEO. They didn’t let me out of the cave for 17 years. I had a ball and chain keeping my hands on keyboards as a software engineer for 17 years. So I kind of stick to that mentality that great products win and the money will follow.
How involved are you still in product development?
I would say very. Like other successful entrepreneurs, I’m the head of product and I’m the CEO of the company. I have a partner who co-runs product together with me, so he frees me up from some of the day-to-day operational stuff, or else I would be buried. But I’m deeply invested in building products.
So you’re still coding?
I’m not coding. I’m retired from coding. I told my engineer friends that I’m officially ‘UBM,’ useless business management. I’ve been out of coding now for about 10 years, but I know enough to be dangerous and to bother the engineering department on a daily or weekly basis.
So here we are in early 2024. What are some of your strategic priorities for the year?
One of the most important strategic priorities for Ninja is to expand our channel. So we’re building lots of partnerships with all the channel folks that you would suspect, like SHI, Insight, and CDW, and building a trusted relationship with the VAR/reseller channel is a strategic priority. Building trusted relationships is not new to us. We’ve had wonderful relationships since day one with managed service providers. For us, MSPs are a channel, and VARs/resellers are a channel. We want to replicate our success, and take all the hard work and blood sweat and tears we put into building a vibrant MSP channel and replicate that with the VARs/resellers. That’s the job for Joe Lohmeier, who became our channel chief last April and was recognized last month by CRN as a 2024 Channel Chief.
I think building a channel is a strategic imperative. Supporting larger customers, which we’re really starting to do now, both large IT organizations and some of the largest MSP organizations in the country and the world, is where we’re headed. That’s a growth lever. VARs/resellers is a growth lever, as is continuing to release products that let us provide more value to our customers. Those are things we’re looking forward to in 2024.
What do you see as the biggest competition for what you do?
People ask me a question: What keeps you up at night? The only thing keeping me up overnight right now is hiring talented engineers as quickly as we can. Our competitors are the usual suspects you might imagine in the MSP market: ConnectWise, Kaseya, N-able. On the IT side it would include companies like ManageEngine.
Is NinjaOne a profitable organization?
NinjaOne is probably one of the most capital-efficient unicorns ever. We’ve raised less money than any of our peers at any level of our company. Being thoughtful and pragmatic about how we spend cash is a priority for NinjaOne. So when we’re growing, we don’t want to spend way ahead. When we find success, we want to put the pedal to the floor. And I think we’re at this industry inflection point now where it makes sense. And I think it’s recognizing the valuation and the fact that the recent investment is a minority investment, and me and my co-founder Chris Matarese control the company. We run a very capital efficient business, I would say.
You just called NinjaOne a ‘unicorn.’ Are you saying that NinjaOne has a market valuation of over $1 billion?
That $321.5 million raised was at a valuation of $1.9 billion .
Do you have any plans to do an IPO?
I have to plead the fifth. We are focused on building the company and continuing to scale right now. We’re keeping our heads down on that for the time being.
Anything else we need to know about NinjaOne?
Maybe one thing: the Ninja opportunity. One of the things we’ve talked about internally since I started the company, particularly after the pandemic, is that now is the decade of the endpoint. Organizations are managing more endpoints than ever with hybrid work environments. IoT devices, Linux, Mac, Windows, iPads, and POS systems, these endpoints are all a risk. There are huge control and security issues. There are tools for all those. And that means longer times for remediation with many different tools to log into. Customers might be running 15 or 20 tools. Sometimes just placing two or three of these tools in the IT stack, that’s a huge opportunity for us in the market with all these problems with endpoint sprawl. We no longer have all employees working in an office behind a large firewall. They’re all distributed, sometimes in the office, sometimes not. So that’s where we see huge opportunity generally.