RMM Meets PSA Software: Quest-PacketTrap MSP Buys BlueFolder

Quest Software has acquired BlueFolder, a cloud-based provider of PSA (professional services automation) software. Quest will integrate BlueFolder with PacketTrap MSP, a remote monitoring and management (RMM) software platform. For managed services providers, this is the latest example of PSA and RMM software coming together under one vendor roof -- somewhat similar to the ConnectWise-LabTech Software effort and Kaseya's potential PSA ambitions. Here's the analysis.

Quest (Nasdaq: QSFT) is an $850 million software company that offers a range of virtualization and management software to IT administrators and IT service providers. Quest Software in 2009 acquired PacketTrap MSP, which offers on-premises RMM software to MSPs. PacketTrap MSP has since delivered strong continued growth.

Now, Quest Software is buying BlueFolder, which offers a cloud-based service management platform. Yes, VARs and MSPs can use BlueFolder. But it also has a following in non-IT markets. BlueFolder's SaaS platform allows service providers to manage customers, technicians, service requests, billing and invoicing, scheduling, dispatch and more.

Updated, 8:15am ET, Feb. 16: Quest Software has confirmed the BlueFolder acquisition. Financial terms were not disclosed.

Quest Software's Strategy

I think Quest Software is embarking on a multi-chapter channel software strategy.

1. Near Term: Watch for Quest Software to integrate PacketTrap MSP (on-premises software) with BlueFolder (cloud-based software) for MSPs and VARs.
2. Mid Term: Watch for PacketTrap MSP to also emerge with a SaaS-based option.
3. Long Term: I wonder if the lines between BlueFolder and PacketTrap MSP will eventually disappear in the cloud, essentially giving VARs and MSPs a single, comprehensive IT service management platform.

Overall, it's clear that the BlueFolder deal is "more" than a PSA and MSP software move. Quest Software wants PacketTrap MSP and BlueFolder (to be rebranded as PacketTrap PSA) to push far beyond MSPs and to engage all types of channel partners as customers -- resellers, VARs, integrators, consultants, etc.

This Sounds Familiar

The worlds of PSA and RMM software have been on a collision course for several years. A few examples:

• Sources say several RMM software providers have considered using or investing in SugarCRM as a potential PSA platform over the past decade.
• Kaseya has spent the past two to three years adding PSA-like capabilities to its RMM and IT automation software platform, but I believe most of Kaseya's MSPs continue to opt for third-party PSA platforms like Autotask, ConnectWise and Tigerpaw.
• ConnectWise Capital invested in LabTech in 2010. Since that time, the lines between ConnectWise's PSA platform and LabTech's RMM software have gradually blurred as both companies focused intensely on integration.

Now, Quest Software is building on the PSA-RMM integration trend.

Competing and Cooperating

The strategy certainly has potential upside for Quest Software and its channel partner customers. But there also are challenges ahead:

• The PacketTrap MSP team must continue to offer tight integration to third-party PSA offerings.
• The BlueFolder team must accelerate its integration efforts with third-party RMM offerings.

Matt Bolton, division VP at Quest Software, has told me that Quest Software will definitely maintain and strengthen those third-party PSA and RMM vendor relationships. Mike Byrne, director of MSP at Quest Software, echoed those sentiments. Bolton and Byrne noted a lengthy list of Quest Software employees who are tasked with maintaining and building those RMM and PSA relationships.

Still, Quest Software -- much like ConnectWise and Kaseya -- must maintain a careful balancing act. Even as software vendors merger or buy one another, MSPs want open APIs and continued third-party integrations. Quest, ConnectWise and Kaseya have each vowed to offer those open platform options -- even as each company seeks to build its own, end-to-end management platform for IT service providers.

Big Ambitions

There's another story angle here to consider as well: Big software companies continue to pay more and more attention to MSPs. Recent examples include:

• Microsoft working with TruMethods to educate MSPs about Windows Intune.
• Cisco Systems introducing the Cisco OnPlus Service for MSPs.
• CA Technologies continuing to expand its Nimsoft business, which includes IT management and service desk software for MSPs.
• Symantec announcing a range of MSP software integrations.

Now, Quest Software -- an $850 million company -- is showing its MSP software and channel software ambitions. Buying PacketTrap MSP was step one. Acquiring BlueFolder was step two. The ultimate goal: Integrating both software platforms into a cloud service for VARs, MSPs and IT service providers over the long haul.