And we win there really because the product and technology is differentiated. We don’t require an appliance. A lot of the other folks do required appliance. Ours is directly to the cloud. The algorithm that we have in Cove really drives a better TCO. Up to 5x to 6x less storage, up to 5x to 6x less time required for technicians to backup because we use this TrueDelta technology, where we’re taking a snapshot of the image and then we’re only really updating and pushing through the cloud changes on either the virtual machine or the server or the workstation or the M365 a bit. And so that technology is a differentiator. Again, it saves the technician’s time. It also allows us to price the offering at a disruptive bit. So the technology is ahead.
The pricing is disruptive. And the validation points are there, as I mentioned in the prepared remarks, with Canalys. We’ve now — we’re now in that category of leading the data protection offering, in particular for the mid-market and definitely for the MSP. So it’s a very much a powerful story with the technology and the price point and the overall TCO for our customers is just disruptive.
Keith Bachman: Excellent. Any comments on how that business is growing?
John Pagliuca: Sure. The demand remains quite strong. I’d say overall Cove is growing at a faster clip than N-able as a whole.
Keith Bachman: Okay. Many thanks.
Operator: Our next question comes from Brian Essex with JPMorgan. Your line is open. Please go ahead.
Brian Essex: Hi, good morning and thank you for taking the question. I was wondering if you could talk a little bit about the launch of MDR. Is there — do you see a substantial amount of pent-up demand? How has the traction been so far? And kind of what are the expectations given the lift in price for contribution in 2024?
John Pagliuca: Sure. Thanks for the question. With MDR, when we survey our MSPs and small shops or large shops, there’s always two areas of demand that pop up. One is cloud management. The second is cybersecurity services. And what we’re seeing with MSPs is the need to service their customers. The reason why security demand remains high, has a lot to do with compliance and regulatory bodies, right? And so now small, medium enterprises are looking to making sure that they’re compliant with whatever regulatory body that they’re servicing, whether it be a government or a particular vertical. And they’re turning to MSPs to help them be compliant. And a lot of that requires a deeper level of protection and detection and response.
And so that’s where MDR really comes into play. So we’re seeing it as probably the number one or two area of demand for managed service providers. The interesting thing or the exciting thing in my view is that that’s not just for the large MSPs, it’s also for the small MSPs. And if you’re faced with this demand from your customers, you have two choices. You can go build a SOC, a security operations center, which is going to cost you millions of dollars, and you might not have the personnel to do so. Or you can partner or augment and leverage technology like the N-able MDR offering and allow our teams and the technology to do some of that work for you and help you focus on servicing your customer or making sure that their customers are secure and running their businesses.
So it’s early days. You asked about — we’ve only really gotten to market in January. We did a couple of pre-things in Q4. But we’ve started a really good market in earlier this quarter. And so far so good. The pipeline has been growing. The demand, the story is resonating, the technology. It is in that spirit of making technology simple for our MSPs and they appreciate the transparency in the technology. So early days and look to give you more updates in the future on how that offering is tracking.
Brian Essex: Excellent. Thank you for that. And then maybe to follow up on your response, I think it was the last question about the white space within the MSPs. How should we think about where the points of friction are for incremental adoption? Is it MSPs penetrating the Cove installed base and where there’s already potentially some, I guess, I guess, potential for right adoption with existing customers? Or is it this long tail of unpenetrated customers that they’re focusing on penetrating? And how are their incentives aligned with your ability for incremental penetration into the installed base?
