ConnectWise around January 25 is expected to launch ConnectWise Capital -- a $20 million initiative that seeks to "incubate innovation" across the IT channel. I've got a few dozen thoughts about the move, which will involve multiple companies. But let's start with the news...
Sources say ConnectWise Capital will involve multiple companies that have pure channel sales models. The goal is to incubate new, innovative, channel-exclusive products and services for IT Nation -- ConnectWise's term for next-generation MSPs, VARs and solutions providers.
I'm still nailing down a few details, but I believe ConnectWise will allocate roughly $20 million of its own money to ConnectWise Capital. The effort does not involve external venture capitalists, and I don't believe angel investors are involved. As part of the effort, it's safe to expect the ConnectWise Capital business unit to build financial relationships with a range of technology companies.
How soon? I'd expect a few of the ConnectWise Capital relationships to be announced within the next few weeks. Frequent MSPmentor readers can guess the names, but I hesitate to share any here because I haven't confirmed the details.
News of the ConnectWise Capital broke at a ConnectWise New England user group meeting, held today in Providence, Rhode Island. I think it's safe to expect an initial, big-picture ConnectWise Capital announcement around January 25, followed by a series of individual company announcements within a few weeks.
What Triggered the Move?In my opinion, I think multiple factors inspired the ConnectWise Capital business unit.
- First, there's a true motivation to assist and nurture technology companies that serve MSPs and VARs.
- Second, I think ConnectWise sees the competitive technology landscape shifting -- and the potential shift involves everyone from Dell to Kaseya to SaaS companies that sell direct to customers.
Growing IT Nation?Basic remote monitoring and ticket management is old news. Plus SaaS and cloud players are trying to sell direct to customers.
So what's next for MSPs and solutions providers? ConnectWise Capital will seek to find the answers. Hardware as a service. Alternatives to Dell. Pure channel-based clouds that VARs and MSPs can leverage without worrying about direct sales conflict. I believe ConnectWise Capital will work with some key companies to help incubate those (and other) innovations. The resulting solutions, in turn, will be designed for MSPs and VARs to leverage.
Early CluesConnectWise Capital should not come as a shock. ConnectWise CEO Arnie Bellini offered some financial clues back in July 2009 during the Microsoft Worldwide Partner Conference (WPC). And in September 2009, Bellini essentially wrote an open letter to the industry, stating that ConnectWise was looking to invest in innovation.
Fast forward to the ConnectWise Partner Summit in November 2009, and CEO Bellini spoke about the "last mile" of IT. His thesis: VARs and solutions providers have long dominated their local business markets (the last mile of IT). But SaaS and cloud vendors could eventually invade that last mile, pressuring ill-equipped solutions providers.
I think ConnectWise Capital will strive to empower VARs and MSPs with new ways to either defend or redefine the last mile of IT.
Challenges AheadStill, I can't ignore some key challenges. For starters, ConnectWise has a range of partnerships with hardware and software companies across the managed services ecosystem. The company will need to work hard to (A) maintain its existing partnerships, many of which depend on open APIs, even as (B) ConnectWise Capital strives to "incubate innovation" with some companies.
I'll be back at 4:00 p.m. eastern today (or sooner...) to Now, here's a blog discussing the changing competitive software landscape a bit more.