Bellini Flattered Competitors Adopting ConnectWise Business Model Courtesy of ConnectWise

Bellini: ‘Flattered’ Competitors Adopting ConnectWise Business Model

The CEO says recent consolidation among makers of services management software validates all-in-one RMM solutions, like the ConnectWise Business Suite.  

There’s been no shortage of opinion about the spate of mergers and acquisitions sweeping the remote monitoring and management (RMM) vendor space.

Some of the most pointed commentary has come from leaders of the industry’s biggest players, who offered a range of views on the implications of SolarWinds’ recent acquisition of LOGICnow.

It was just the latest major M&A move by companies that make tools for managed services providers (MSPs).

In recent days, ConnectWise co-founder Arnie Bellini discussed the state of the market with MSPmentor, asserting that the consolidation validates his firm’s all-in-one RMM technologies, and that the company is poised to be a leader in helping MSPs profit from a boon in cloud services.

“It’s a little flattering to see everyone follow our business model,” he said. "The rest of our competitors have now recognized what we’ve known for a number of years, and that is that IT solution providers need an entire platform to run their business.”

Accelerating M&A

Bellini pointed to several mergers and takeovers intended to unlock technological synergies, dating back to SolarWinds’ 2013 acquisition of N-able.

The following year, Autotask Corp., announced a deal to buy CentraStage, a move aimed at acquiring the U.K. vendor’s cloud-based RMM platform.

In February, RMM vendor Kaseya Corp. revealed a purchase of professional services automation (PSA) platform maker Vorex.

Their combined technologies enable MSPs to streamline marketing, selling, billing, staff scheduling, and deploying and support of new services, Kaseya said at the time.

When SolarWinds said it completed an acquisition of RMM vendor LOGICnow on June 1, CEO Kevin Thompson told MSPmentor that the combined firm – SolarWinds MSP – gained the ability to meet the demands of any manager of IT environments, regardless of its size or the size of its customer base.

MSPs Need ‘Complete Solution’

Aside from being a services management platform vendor, ConnectWise evolved as an IT solution provider and still has a growing business in related practice areas, Bellini said.

As a result, ConnectWise has long embraced the notion that MSPs and other technology solutions providers need a robust, all-in-one tool from which to run their entire business, he said.

“Yes, it is the right model and we’ve got a six-year head-start on everybody,” Bellini said.

A complete solution, the CEO argued, must enable management of the many practice areas, including physical security, break-fix, resell, consulting, software development, managed services and cloud services.

“Technology solutions providers will typically have two, three, four different practice areas,” he said.

“(Our competitors are) all keying in on managed services but that’s not really the customer; that’s a portion of the customer,” Bellini said. “They need a platform that can accommodate all of their practice areas, not just managed services.”

By that measure, ConnectWise is far ahead of its competition, its leader said.

“They have figured out that managed services and professional services need to be put together,” Bellini said. “What they haven’t figured out is that you’ve got to accommodate all the practice areas...So that’s where they’re missing the boat and that’s where it’s going to take years for them to catch up with us.”

Differing Market Strategies

Completion of the SolarWinds MSP deal highlighted sharp differences in how industry leaders view the market for services management tools.

Within hours of the SolarWinds announcement, Kaseya CEO Fred Voccola issued a scathing critique of the deal, offering a strategic vision that contrasts sharply with the approach of firms like ConnectWise.

“The challenges that Autotask and ConnectWise have is that their customers spend a disproportionate amount of their expense dollars on internal ‘below-the-line’ functions, such as (customer relationship management), billing and service desk,” Voccola’s statement said. “These functions do not help their customers grow their business.”

“Even if they had the products to address MSP 2.0 functionality (which they don’t), their customers are unable to free the expense dollars required to invest in the build-out and launch of these advanced services,” Voccola said. “That is why Kaseya invested heavily in our PSA, but priced it aggressively to help our MSP partners devote their precious capital to meeting their expanded customer needs.”

Bellini sees the opportunity differently.

“Fred doesn’t understand our industry,” the ConnectWise CEO said. “He’s taking a very myopic view of his customer.”

“The customer needs a platform to run their entire business, and he’ll find that out,” Bellini said. “Kaseya has bought a very light professional service automation solution and, of course, he’s going to position it such that it is all that anybody needs; but it’s not.”

“It doesn’t accommodate a real technology solution provider and it doesn’t accommodate all of their practice areas,” he said. “It’s a partial solution.”

ConnectWise is again doubling-down on the more-is-more strategy, with the addition of a cloud console module. The addition is expected to pay dividends as solutions providers offer more cloud services in search of new revenue.

“That allows us to bill, monitor, manage and support Office 365 and also Azure,” Bellini said. “The new and growing monetization and revenue stream is going to come from the cloud, and only the ConnectWise Business Suite addresses that.”

 

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