MSP Software: This Is The End (And A New Beginning)

Kaseya, Level Platforms, N-able and Zyrion — four key providers of managed services software — have each been acquired since June. What do the M&A deals mean for the future of MSPs and their customer services? It’s time for MSPmentor to weigh in with a few educated guesses. Here are 10 predictions, viewpoints and opinions based on recent trends plus our coverage of the MSP market since 2008.

1. ConnectWise was Right: CEO Arnie Bellini three years ago began the industry convergence and consolidation process. In 2010 and 2011, his ConnectWise Capital arm invested in LabTech Software, Quosal and CharTec.

I’m not saying PSA and RMM software “must” be developed under a single roof. But Bellini was about a year or two ahead of most competitors when he started making investments and thinking about (A) product extensions (B) product integrations and (C) software suites.

Bellini took some heat for competing with some of ConnectWise’s software partners. But ironically, he was playing offense AND defense at the same time. I believe he had real concerns about Kaseya moving into the PSA market (hence, the ConnectWise-LabTech deal); and concerns about the brief Autotask–VARStreet combo (hence, ConnectWise-Quosal). The result is a promising software suite for MSPs that delivers more and more integration.

2. Device Management Will Lose Its Luster: N-able VP Mike Cullen is obsessed about end-user experience conversations. That’s a great focus area. MSPs must shift to a holistic mindset — away from commodity PC and server management discussions — to monetize the end-user experience to the max. More on that soon…

3. MSP Software Will Go Enterprise: Yes, a lengthy list of MSP software companies will increasingly focus on enterprises as customers. Kaseya, ManageEngine, Nimsoft and others already sell into enterprise and corporate IT accounts. More MSP software companies will be forced to do so as new owners seek to maximize the valuation of their investments.

A long list of MSP software companies say they will never, ever sell to corporate IT or bypass the channel. But I wonder how many will keep their word as profit and growth pressures mount over the next two years or so.

4. MSPs Must Ride Public Clouds Instead of Building Them: Still skeptical? Look at this MSP reality check involving Amazon Web Services. Even if you “want” to compete with Amazon, Google App Engine, Windows Azure or Rackspace Cloud, there’s absolutely no reason to do so. Ride those clouds instead.

5. And Manage Public SaaS Services: It’s not enough to sign customers up for Office 365 or Google Apps. You need MSP-centric tools that reach into those SaaS platforms and truly manage them. Really. Two examples are Exoprise CloudReady Monitor for Office 365 and 365 Command. More tools are coming. Many more.

6. Standalone RMM Software Is Dead: For those who missed it, here’s why.

7. Talent Will Churn Like Never Before:  The MSP market has created plenty of industry pundits. But the long hours, heavy conference travel and M&A deals will accelerate executive changes and career moves.

• Dan Wensley and Rob Rae are exiting Level Platforms;
• N-able CEO Gavin Garbutt left when SolarWinds acquired the company;
• Kaseya CEO Gerald Blackie exited when Insight purchased his stake; and
• More names will come and go as the M&A deal dust settles.

8. New Experts Will Emerge: Over the past three weeks, new Kaseya CEO Yogesh Gupta has put a massive spotlight on his company. First, describing Insight’s takeover of the company. Next, positioning Kaseya to buy Zyrion. I get the feeling parent Insight Venture Partners is willing to make more buys…

9. Wearable Computing Will Rival Smartphones, Tablets: Google Glass is for real. MSPs will demand hands-free apps as they navigate data centers, customer meetings and business commutes. More later.

10. Next Two Waves: After most MSPs master mobile and cloud, a few will dabble in social and Big Data. There’s where bigger partners like IBM will enter the conversation.

Bonus: 11. Some Challenges Will Never Change: The four biggest issues facing MSPs in 2015 will be the same as 2005. They are:

• Developing and productizing your services portfolio.
• Developing standard operating procedures (SOPs) for onboarding and managing customers.
• Developing, maintaining and refining compensation models for your sales team.
• Finding, retaining and rewarding the right talent.
• Bonus: Marketing.

What did I miss? Oh, and who will get acquired next? I’m listening.