SolarWinds (SWI), N-able M&A: Off to Strong Start?
So far, so good is an understatement. It sounds like SolarWinds‘ (SWI) buyout of N-able Technologies is off to a strong start with managed services providers (MSPs). In fact, MSPs attending N-able Global Partner Summit 2013 are now raving about the deal. Here’s why.
First, some disclaimers: This blog is not a SolarWinds earnings forecast. Nor am I suggesting that rival MSP software providers are somehow doomed by the SolarWinds/N-able business combination. Instead, my point is simply this: SolarWinds appears to be accelerating N-able’s momentum –which was already strong ahead of the M&A deal.
Why’s that? Here are five reasons:
1. Do No Harm: SolarWinds has taken a hands-off approach to managing N-able. GM JP Jauvin is driving N-able’s business. Senior VP of Sales Mike Cullen continues to drive new MSP engagements. VP of Marketing & Business Development Derik Belair continues to drive branding and lead generation. Translation: N-able has largely maintained its executive leadership amid the M&A deal.
2. Learn the Culture… And the Code: N-able also has a new secret weapon. His name is Brandon Shopp — a five-year SolarWinds veteran. He’s now on the N-able team, helping the acquired company to understand SolarWinds’ entire software portfolio and culture, and vice-versa. Think of it this way: N-able GM JP Jauvin runs the business division. But Shopp is a valuable lieutenant and digital scout who can help Jauvin and the rest of the N-able team to navigate SolarWinds’ technology and business.
3. Think User Experience: SolarWinds has a strong reputation for User Experience. N-able and the MSP software industry, generally speaking, aren’t as strong in this area. To address that reality, N-able plans to deliver major software upgrades less frequently. The idea is to deliver excellence even if it means slightly slower upgrade releases.
4. Extended Due Diligence: SolarWinds CEO Kevin Thomspon has been watching the MSP software market for several years. Studying. Waiting. Watching. And studying some more. He knew what he was buying when SolarWinds made the N-able acquisition.
5. Partner Synergies: Speaking on background, some really big MSPs at the conference (including telcos and ISPs) say they run both N-able and SolarWinds. N-able to monitor PC and server devices. SolarWinds for log, security, storage and virtualization management. Not all N-able MSPs will buy SolarWinds tools. And not all SolarWinds partners will become N-able MSPs. But for some really large players here, the mood is incredibly upbeat.
What About Growth Concerns?
I concede that I’m stepping onto some thin ice with this blog. Shareholders initially didn’t like SolarWinds’ buyout of N-able. And SolarWinds stock has been under pressure because top-line revenue growth has been slightly short of analyst expectations.
We’ll get our next reality check when SolarWinds announces Q3 2013 results on Oct. 29. I certainly can’t predict how the company’s top-line revenues and bottom-line earnings are performing. Nor can I predict how much revenue N-able will contribute to the SolarWinds results.
But I can say this for sure: So far, N-able’s partners sound very upbeat about SolarWinds owning the company. And N-able’s team seems genuinely happy about the SolarWinds synergies so far.
Perhaps it’s just a honeymoon period. But so far, the honeymoon — in terms business synergies and N-able execution — is looking good.