PSA and RMM Software: Market Consolidation or IT Convergence?
Within the managed services software market, sales of PSA (professional services automation) and RMM (remote monitoring and management) software continue to grow, as does cloud adoption of such tools. Amid the market growth, the industry is also consolidating a bit as some vendors (ConnectWise-LabTech Software, PacketTrap MSP and PSA, and Kaseya) attempt to juggle both offerings. But are we really talking about market consolidation — or IT convergence?
When I first spoke with ConnectWise CEO Arnie Bellini about the ConnectWise Capital investment LabTech Software, I mentioned the word “consolidation” over and over again. All IT markets, after all, eventually consolidate around a few market leaders. But Bellini continually reinforced the “convergence” theme rather than “consolidation.” His key point: Software needs to work together in order to accelerate market growth.
Apparently, Bellini is onto something. He took some heat from some MSPs when ConnectWise Capital first invested in LabTech Software. But the critics didn’t notice Kaseya was essentially taking a similar step, striving to build its own PSA capabilities directly into the Kaseya 2 IT automation platform. And more recently, Quest Software’s PacketTrap team has pushed beyond RMM software (PacketTrap MSP) to offer a PSA edition (PacketTrap PSA).
Whether you call it consolidation or convergence, few software vendors seem to be suffering. During recent calls with a range of RMM and PSA vendors, virtually every CEO told me about strong 2011 performance that continued in 1Q 2012. But I wonder:
- How many of those companies will continue to go it alone over the next 12 to 18 months
- And how many will ultimately pursue M&A deals to scale up and out?
Answers pending.
PSA/RMM/HD/NOC/BDR is the wild wild west of the MSP industry these days (for example – take a look at the right hand side of this new entry and count the number of flashing ads). There are so many vendors trying to chip away and take a chunk of that oh so sweet candy – MRR. So easy to spend, so hard to earn, as every MSP owner knows. Call it convergence, consolidation, or whatever – what it really is, from an MSP’s perspective, is an absolute PLETHORA of confusing choices. So many questions, so few easy answers.
O.
Osama: Difficult for an MSP, no doubt. And difficult for media, too. I respect a lot of the industry CEOs. And I do believe that a lot of the software companies and cloud companies (across PSA, RMM, HD, NOC, BDR) are growing). But it’s very difficult to pinpoint who is generating profitable, reliable, sustainable growth. And equally difficult to pinpoint which vendors will flame out…
Overall, good to see rising tide lifting many boats. But some boats have holes. Still trying to determine which ones may be taking on water…
-jp
I don’t know that we are at a point of consolidation yet as I don’t think we ever had that many RMM choices to begin with. I have seen quite a few come and go but there are still less than a dozen offerings that I know of.
I do think that the word convergence is a good one for this instance. For a long time there seemed to be a separation of the RMM and PSA tools. This never made any since to me as they are both absolutely required if you are going to run a successful MSP. For the longest time these two tools were not integrated by the vendors leaving the MSP to either develop the integration on their own or suffer.
With the acquisitions and integration that we are seeing now I think we are seeing just another step in the evolution of what MSP means. I am glad to see that they are finally starting to converge as our industry will not be able to grow without this.
Lane Smith
4 Profit
Lane,
I agree: Not really about consolidation yet… Perhaps 2013?
-jp
Finding the right PSA amp; RMM combo can feel like a daunting task and raises many questions for business owners and techies alike.
Do I go with a solution that licenses per site or per device.
Do I have to hire more techs?
Do I do it in-house and invest in the platforms or do I outsource the entire thing to an infrastructure management (NOC) company?
It was only a matter of time before the two solutions converged. However, the question still remains, which one do I pick?
Drew Ekes
Ingram Micro Service