John Pagliuca: Sure. The — what we really achieved in 2023 was a pretty material uptick in our white space opportunity that we created, right? As I mentioned in the prepared remarks, not too long ago, we were in the mid-20s or low 20s per device. And now with the addition of a couple of key SKUs and really an opening of, I’d say, adjacent markets, we really ratcheted up that opportunity to $30-plus per device. And that’s significant, right? And so we’ll see and what we’re really focusing on is the ability to begin to realize that white space opportunity from a couple of different ways. And the increase in the white space opportunity also allows us now to go to market with a couple of more creative bundled type of packages that will help not just on the large end of the MSP market, but in the small side, and we’re starting to see small indicators of success in the early days on that.
So I’d say by far and away, the number one opportunity here is for us to begin to realize that enormous white space opportunity that is in our base. We have 25,000 MSPs, and they’re servicing well over $0.5 million — 0.5 million, excuse me, SMEs out there. And by giving them the opportunity in a platform way to leverage these multiple SKUs, helping them drive efficiency, helping them drive their top line. That’s where our focus is. And by — as a result, that will start driving that ASP per device up. And with 8 million devices, moving it even pennies or a dollar has a significant impact on our business.
Matt Hedberg: Got it. Thanks a lot. Best of luck guys.
John Pagliuca: Thanks, Ben.
Operator: We now turn to Keith Bachman with Bank of Montreal. Your line is open. Please go ahead.
Keith Bachman: Hi. Many thanks. I want to offer congratulations. The results look pretty solid in what is sort of a challenging area in security, I think, broadly speaking, which leads me to my first question. Is — I understand the pricing commentary, I actually want to go in a different direction. What is the risk that you’ll need to take prices lower on a like-for-like basis? And Paolo, the other night, sort of through cold water on the entire security market, including endpoint, and I understand Palo is an enterprise player, and you’re just the opposite. But certainly raise concerns about pricing being more aggressive across, a, the spectrum of customers; and b, a number of different security areas, including endpoint. And so just wanted to understand — how are you thinking about the risk on a like-for-like basis of having to be more aggressive in pricing? Or do you not see that a risk within the SMB unit?
John Pagliuca: Great question. And I will not pretend to be an expert on the Paolo results. But from my understanding and listening to the cash, he was clear, the demand for security and security services remains quite strong and quite robust. And my understanding was he more moving his business more toward a platform play as opposed to a point solution play. Well, we’re already a platform play. And so it’s the combination of those different offerings and not a point solution that gives us the strength in our packaging to our customers, right? And it also provides a technical, but also an economic moat around that offering. And so as an example, what we’re giving our MSPs is the ability to monitor and manage and provide endpoint security offerings in one platform and one view so they can manage their businesses effectively.
It’s that combination. And really, that’s why we exist. We really exist to allow our MSPs to monitor, manage and secure in a highly effective way. And that provides that, again, that economic and technical moat. So we’re mindful of what’s going on in the market, but we believe that the value that we bring in this combination was better together monitoring and management and security is a differentiator that allows us to price in a way that is very profitable for our MSPs. And we know that our MSPs and their growth algorithm are driving a lot of top line and bottom line results via this combination of monitoring and management and security. So we’re mindful of it. We’re always keeping an eye on what’s going on in the market, but it’s that killer combination that we believe gives us that moat and some of that protection.
Keith Bachman: Okay. Let me — I’m not sure demand is robust across the spectrum, but we’ll see how that plays out. But I wanted to transition to Cove for a second. And maybe if you could just address the competitive landscape there, how you guys are competing in Cove? How you’re winning? Do you ever see in your market segment, the Rubriks and Cohesity? Or is that just — are they targeting the larger customers, but just a little bit about kind of growth rates, competitive advantage, disadvantages, opportunities, that would be great. And that’s it for me. Many thanks.
John Pagliuca: Sure. So with our data protection offering and just a quick history lesson. Historically, we were really going to market with our backup offerings as a cross-sell motion. And then in 2022, we really rebranded our Cove offering and because of the investment we made and the expansion of that offering with our data protection offering. So we began to go to market, not just as a cross-sell, but also in new customer acquisition. And we win there. So we don’t necessarily bump into the Cohesity or Rubrik so much of the world. There was a little bit more enterprise. Cove does win at the mid-market. We have a team that’s dedicated in selling our data protection offering into the mid-market. But historically, where we see a lot of competition are companies like a [Veeam or Datto], potentially even like an [Accent] or a StorageCraft.
