Subnet's 'cost neutral' managed services ambition

Subnet managing director Brett Lodge is looking ahead to what the MSP should look like by 2030.

Today, the 25-year-old Adelaide-headquartered firms’ work might look somewhat familiar to many MSPs, but the company is gradually reshaping how it operates and what it sells.

This includes internal automation and an ambition to make managed services “almost cost neutral” for customers by the end of the decade.

In 2017, the company set a long-term target that by 2030, much of the business’s activities should be automated or self-service.

“So basically, 90% of what we were doing in 2017 had to be gone, and we had to be doing something completely different,” Lodge told techpartner.news at the Kaseya Connect Asia Pacific event in late October in Sydney.

When we spoke with him, Lodge estimated that 35-40% of the business had been automated (using Pia and other tools).

Subnet had seen “massive” improvements from automating service tickets, he said. It has also focussed on new user onboarding.

“We saw a brand new user taking 44 minutes [to onboard] when we're doing it manually, drop to eight minutes. Now we've got tools where we can integrate that with smart forms to take it down to zero minutes” he said.

To do this, Subnet has used low-code tools and a team member with a keen interest in AI.

“Because we don't have coders, we're using things like UiPpath, which is much more of a WYSIWYG drag and drop kind of automation tool,” Lodge said.

When we spoke with Lodge, he was about to travel to Sri Lanka, where Subnet had started hiring.

“The reason we're moving a little bit into Sri Lanka is they've got a large pool of people doing AI type coding, and so that's what we're looking to add to our portfolio. Start with us internally, help us automate more of our business internally, and then when we learn more of that using agentic AI and other things, then switch that to customer based learnings.”

“Microsoft and everyone else has invested a ton over there [in Sri Lanka].”

Lodge expected a lot more level one service desk support to become “almost self-completed” by customers. “We are doing a ton on self-service and allowing customers to fix their own things,” he said.

He also expected a lot of that “low end stuff” would become “taken care of by the vendors” – using things like “self-healing” capabilities from Microsoft.

He wanted front-line staff to become “supremely customer focused”, handling the human interaction work while automation and agents take care of repetitive fixes in the background.

Moving up the ladder

As “low end” managed services are automated, Lodge is looking to the “next rung up” in “slightly larger environments” requiring agentic automation of other tasks.

“We can go to market and actually pitch those tasks of automation, whether it's a model for aged care or whether it happens to be for finance.”

Subnet is structuring its offer into three layers: operational support, a security layer, and a future third AI and automation tier.

The third tier will be aimed at customers wanting to run their own AI models and automation internally – and have their MSP support that.

It assumes some customers will not just consume cloud services, but will build their own “AI factory” on top.

“They're going to have an AI factory, effectively, with their large language model internal. So how do they manage that? How do they support that? What does that look like? Because that's very different to us putting a remote management tool on a device. It's actually having to manage their information.”

“So that's going to be the basis of where it starts. And this is kind of in the 2027 timeframe when that's kicking off. We've started to work through the bones of that.”

“We've got some clients with very large data sets and they're looking at buying their own infrastructure - in this case HPE Greenlake. So then buying that infrastructure internally, using that to start doing their own modelling, because they can't have that data go external.”

“I think, for us personally, that's going to be a little bit more niche, but what we're trying to drive to is kind of that next step, which is the agentic AI stuff.”

In practice, many smaller customers are still grappling with basic security governance, while mid-market and larger organisations “get it and really need help and support with it”. So Subnet often starts by auditing existing protections and putting “guardrails of governance” around security and AI use, giving clients clarity when it comes to tool selection.

From best-of-breed to “Subnet-first”

Subnet is also looking at the profitability of its software stack.

It has been moving from best-of-breed point products to what Lodge called “Subnet-based services powered by whatever the vendor happens to be”.

“We're getting to the stage now where it's less about the product and it's more about us as a vendor. That maturity is allowing us to pick tools that we can actually make more margin with.”

Subnet isn’t using Kaseya “across the board”, but Lodge saw merit in what he saw as the vendor’s “all-in-one” approach which he saw as lowering the cost of tooling – then “your focus is your profitability based on being able to deliver those services”.

Making the numbers work

“By the time we get to 2030, I want to make a managed service that's almost cost neutral to a client,” Lodge said.

His thinking is that a managed service might cost a customer, say, $15,000 a month, while the customer’s data and AI agents might generate closer to $50,000 of operational value.

“They're getting 50 grand of value for a 20 grand-a-month managed service – that's a position we really want to get to,” Lodge said.

“Then it’s far easier to have that conversation with a client – spend a small amount of money, get a large amount of return. That's very different to the model today, which is, ‘I'll support your thing, and there's 100 and something dollars a month.”

“That's our slightly longer-term plan. Obviously, there's a lot of work to do in between now and then, but that's what we're scaling up for, to be able to drive that.”

techpartner.news was a media partner of Kaseya Connect Asia Pacific 2025.