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ConnectWise Acquires HTG, Sees Channel Growth in Digital Transformation

Small and midsized channel companies need to think like big companies to take advantage of the digital transformation opportunity.

It’s time for HTG channel members to swim upstream and bump noses with the big fish.

At least that’s the thinking behind business management software vendor ConnectWise announcing today its acquisition of consulting, coaching and peer group organization HTG. Terms of the deal were not disclosed.

With companies opening their wallets to digital transformation projects, HTG’s small and midsized solution provider members need to move quickly to seize this opportunity, grow revenue, and operate as bigger businesses. ConnectWise’s enterprise channel customers give them a model to emulate.

“One of the challenges that we’ve wrestled with historically in HTG is people have felt they’ve grown out of our program,” says Arlin Sorensen, CEO of HTG, who will head the new HTG business unit at ConnectWise. “As they grew their businesses, they felt like we didn’t go far enough around some of these more strategic and consulting areas.”

HTG, which began at the turn of the millennium, has grown to a little over 500 company members. Most have 50 or less employees and post $10 million or less in annual revenue. The average channel company in this industry has 20 employees and posts anywhere from $3 million to $4 million.

But all of this is changing, thanks to the rapid rise of digital transformation projects.

“The demand for technology workers and for technology solutions and services is just going through the roof,” says ConnectWise CEO Arnie Bellini. “As the demand curve shifts out, we need to do whatever we can to help mature companies so they can actually provide those services. What’s happening is many companies are having the opportunity to grow.”

Among ConnectWise channel customers are large companies, while 95 percent of HTG members use ConnectWise Manager to run their business. The idea is for HTG members to learn not just best practices but prescriptive steps on how large companies use the ConnectWise platform.

HTG also has more resources and global reach as a ConnectWise business unit, allowing it to launch programs and services quickly. For instance, HTG will roll out a new offering specifically aimed at larger companies, which involves HTG’s StratOp program for driving alignment in strategy, operations and finance, in the first quarter of this year – an accelerated timeline thanks to the acquisition.

“We’re taking our program and putting it on steroids,” Sorensen says.

While many HTG members responded positively to the acquisition, mostly excited by the prospect of growth, others worried about potential changes to existing programs, Sorensen says. To this end, Sorensen says current HTG offerings, including peer groups, vendor members, and coaching and consulting programs will remain unchanged.

One of the critical areas that will go unchanged is the handling of sensitive financial data. HTG provides financial benchmarking that depends on members submitting accounting records to a third-party company, Service Leadership, to maintain and secure the data. HTG doesn’t have access to this data – and neither will ConnectWise, says Bellini.

“We’ve looked for those neutrality issues,” Bellini says.

It also helps that ConnectWise and HTG have been working together for nearly a decade. Bellini has regularly attended HTG events and knows many members. Their familiarity will help them navigate an acquisition’s rough waters and toward the digital transformation opportunity.

“We’ve gone, really, as far as we could with the [ConnectWise] relationship the way it’s been,” Sorensen says. “We really felt that it was time to take it to the next level to provide even more services to a global audience of the entire ecosystem of technology solution providers out there.”

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