https://www.channelfutures.com/wp-content/themes/channelfutures_child/assets/images/logo/footer-logo.png
  • Home
  • Technologies
    • Back
    • Analytics
    • Artificial Intelligence
    • Cloud
    • Data Centers
    • Desktop
    • IoT
    • Mobility
    • Networking
    • Open Source
    • RMM/PSA
    • Security
    • Virtualization
    • Voice/Connectivity
  • Strategy
    • Back
    • Best Practices
    • Business Models
    • Channel 101
    • Channel Programs
    • Channel Research
    • Digital Transformation
    • EMEA
    • Leadership
    • Mergers and Acquisitions
    • Sales & Marketing
    • Specialty Practices
  • MSSP Insider
    • Back
    • Business of Security
    • Cloud and Edge
    • Endpoint
    • Network
    • People and Careers
    • Training and Policies
  • MSP 501
    • Back
    • 501 Reports
    • MSPmentor Education
  • Intelligence
    • Back
    • Our Sponsors
    • From the Industry
    • Content Resources
    • Galleries
    • Podcasts
    • Reports
    • Videos
    • Webinars
    • White Papers
  • Awards
    • Back
    • European Partners 51 (EP 51) Awards
    • Excellence in Digital Services
    • MSP 501 Rankings
    • Top Gun 51
  • Events
    • Back
    • CP Conference & Expo
    • Channel Partners Evolution
    • Channel Evolution Europe
    • Industry Events
    • Webinars
  • More
    • Back
    • About Us
    • Advertise on Channel Futures
    • Contact Us
Channel Futures
  • NEWSLETTER
  • Home
  • Technologies
    • Back
    • Analytics
    • Artificial Intelligence
    • Cloud
    • Data Centers
    • Desktop
    • IoT
    • Mobility
    • Networking
    • Open Source
    • RMM/PSA
    • Security
    • Virtualization
    • Voice/Connectivity
  • Strategy
    • Back
    • Best Practices
    • Business Models
    • Channel 101
    • Channel Programs
    • Channel Research
    • Digital Transformation
    • EMEA
    • Leadership
    • Mergers and Acquisitions
    • Sales & Marketing
    • Specialty Practices
  • MSSP Insider
    • Back
    • Business of Security
    • Cloud and Edge
    • Endpoint
    • Network
    • People and Careers
    • Training and Policies
  • MSP 501
    • Back
    • 501 Reports
    • MSPmentor Education
  • Intelligence
    • Back
    • Our Sponsors
    • From the Industry
    • Content Resources
    • Galleries
    • Podcasts
    • Reports
    • Videos
    • Webinars
    • White Papers
  • Awards
    • Back
    • European Partners 51 (EP 51) Awards
    • Excellence in Digital Services
    • MSP 501 Rankings
    • Top Gun 51
  • Events
    • Back
    • CP Conference & Expo
    • Channel Partners Evolution
    • Channel Evolution Europe
    • Industry Events
    • Webinars
  • More
    • Back
    • About Us
    • Advertise on Channel Futures
    • Contact Us
    • Newsletter
  • REGISTER
  • MSPs
  • VARs / SIs
  • Digital Service Providers
  • Cloud Service Providers
  • CHANNEL PARTNERS ONLINE
 Channel Futures

Cloud


The MSP Software Industry: Following In Larry Ellison’s Footsteps?

  • Written by Joe Panettieri 1
  • October 12, 2009
This is going to be a strange week.

larry_ellison_oracle_ceoThis is going to be a strange week. I’m leaving a massive IT event (Oracle OpenWorld) and heading toward a smaller, highly targeted managed services conference (N-able Partner Summit). I can’t help but wonder: Is the next Larry Ellison (pictured) or Scott McNealy competing somewhere — right now — in the managed services software market? Here’s why I ask.

Sunday evening at Oracle OpenWorld, several thousand people (including me) listened to Sun co-founder Scott McNealy and Oracle CEO Larry Ellison claim the pending Oracle-Sun merger will crush IBM in the high-end server and data center markets.

But here’s the real lesson: Ellison has managed to keep Oracle at the forefront of the software industry — through Oracle’s own R&D but also through mergers and acquisitions. Major Oracle buyouts included PeopleSoft (and JD Edwards, by association), Siebel Systems and now potentially Sun (and MySQL, by association).

The key lesson: When markets mature, they consolidate around fewer players.

MSP Software Deals: Coming Soon?

The MSP software industry — though far younger and far smaller than the database, ERP and CRM markets — may soon consolidate as well.

A range of factors may trigger the consolidation.

  • Cloud Computing: A lot of competitive eyes are watching Kaseya’s forthcoming SaaS software launch. Already a major player in the RMM (remote monitoring and management) market, Kaseya’s SaaS offering will have some limited ticketing software. I’m not suggesting Kaseya is going to dive deep into the PSA (professional services automation) market. But plenty of people are wondering if CEO Gerald Blackie plans to both cooperate and compete (“coopetition”) with traditional Kaseya software partners.
  • Finances: The vast majority of MSP software providers are privately held. Many are venture funded. Those venture capitalists are going to want to cash out at some point — either through an IPO or a company sale.
  • Market Share Buys: Sometimes, the fastest way to gain market share is to buy it — especially if you’re well-funded and/or generating a lot of cash. ConnectWise has already announced its intention to consider potential acquisitions.

Channel Chatter

Some folks are predicting at least one or two MSP software industry buyouts before the end of the year.

Nimsoft CEO Gary Read is quick to highlight Compuware’s recent buyout of Gomez, which makes Web optimization software.

Elsewhere, I’m hearing rumblings involving a small midwest software company that has some managed services expertise. The rumors started at SMB Nation Fall (Oct. 2-4, Las Vegas). Now, those same rumors are spilling over into my voicemail, though I’ve yet to confirm the speculation, and at least one source tells me I’m chasing a non-story.

Still, I sense consolidation is coming to the managed services software market. I wonder: Who will play the role of Larry Ellison?

Follow MSPmentor via RSS; Facebook; Identi.ca; and Twitter. And sign up for our Enewsletter; Webcasts and Resource Center.

Tags: Cloud Service Providers Digital Service Providers MSPs VARs/SIs Cloud Data Centers RMM/PSA Strategy

Related


  • Cloud Data Center
    HPE Hires Microsoft Veteran to Lead HPE GreenLake Business Unit
    Most recently he was vice president, intelligent cloud, worldwide commercial business.
  • Increasing Graph, growth
    Xerox Promises HP Shareholders Big Financial Gains Through Acquisition
    Xerox is requesting three weeks of mutual due diligence.
  • Transparent padlock over keyboard
    KeeperMSP Technical Whitepaper
    KeeperMSP combines proven password management functionality with flexible new capabilities to enable MSP’s to manage a large portfolio of MC’s secure and efficiently.
  • Top Gun 51 Logo
    Top Gun 51 Profile: Trustwave’s Suzanne Swanson on Growing Partner Relationships to Build Success
    When it comes to the channel, it’s all about people and fostering relationships to grow success, she says.

7 comments

  1. Avatar Tim Brewer October 12, 2009 @ 10:20 pm
    Reply

    Great observation Joe how many years do you think before we have MSP’s the size of Oracle-Sun? I don’t see any around now…. do you think someone big will move into the MSP space or will we see something amazing come from within?

    Tim

  2. Avatar Joe Panettieri October 13, 2009 @ 9:04 am
    Reply

    Tim: In some ways I guess we already have MSPs (like Verizon Business…) the size of Oracle-Sun.

  3. Avatar StuFinancesTech October 13, 2009 @ 11:02 am
    Reply

    Joe, I’m surprised a rollup hasn’t yet started in the MSP industry at all, not just in software. I thought for sure there would be a couple regional and maybe even a national MSP by now taking advantage of SAAS, cloud computing and remote tools to deliver from maybe one or a few strategically placed NOCs around the nation or region. Then again, thats the business side talking and integrating various technologies and platforms and such is something I dont really know much about. One thing I do notice is that the MSPs themselves seem to switch platforms often and dont seem married to any one, making me think maybe that integration isn’t as tough as I might think it is.

  4. Avatar Joe Panettieri October 13, 2009 @ 11:29 am
    Reply

    Hi Stu: I think we are seeing regional MSPs get acquired to form nation MSPs. Keep an eye on companies like Azaleos and mindSHIFT; both are good examples of buyers that are moving into new geographies and new technologies.

  5. Avatar LabTechSean October 13, 2009 @ 1:44 pm
    Reply

    Hi Joe,

    Great article. Just out of curiosity, why do you think some of the larger RMM and Serivce Delivery Platform companies have not started a mad rush on snatching up smaller but complimentary solutions to consolodate the market. We saw what we all thought was the begining of that with the GFI move, do you think that trend will continue?

  6. Avatar Joe Panettieri October 13, 2009 @ 4:31 pm
    Reply

    LabTechSean: Thanks for the note. Just to be clear I’m not suggesting that all MSP software companies should or need to pursue Mamp;As.

    Certainly, people are watching how GFI digests HoundDog (now called CFI Max). But remember, it can take years for a market to consolidate. In the enterprise space… PeopleSoft acquired JD Edwards in 2003; Oracle acquired PeopleSoft in 2004; Oracle acquired Siebel in 2005; and now the Oracle-Sun deal is pending. Big deals (and even small deals) take time.

    Plus, there are multiple scenarios facing software providers…

    1. Organic growth: some will certainly take this route. If you’re growing your top and bottom line, why potentially slow yourself down digesting an acquisition?
    2. The tweener: Imagine a scenario where you’re a growing, healthy software company. Do you buy up some smaller rivals for market share or a specific technology, or do you keep your wallet closed and potentially sell your own company to a software giant? In a way, you’re caught between two options… wondering if the big guys will ever ring your doorbell but also mulling some buyouts of your own…
    3. The seller: Perhaps motivated by cash flow issues or venture cap considerations.

    Again, I’m not suggesting all MSP software companies need to engage in Mamp;A activities. Many won’t. Some will. Potentially soon. How’s that for a blogger making a vague prediction?

    Thanks again for reading,
    -jp

  7. Avatar PacketTrap October 13, 2009 @ 11:50 pm
    Reply

    Joe –

    You’re two blocks from PacketTrap’s office. I bet you’ll find alot more interesting stuff over here than in that overhyped event that’s been losing attendance every year over the last three. Being in the MSP space and writing about it often, you should stop by. We have inside word that interesting stuff is on the consolidation / Mamp;A horizon in the MSP space. There’s some big players that will be in soon. It’s coming.

    Matt
    http://www.PacketTrap.com

Leave a Reply to Joe Panettieri Cancel reply

-or-

Log in with your Channel Futures account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related Content

  • Storage Software Vendor WekaIO Launches First-Ever Partner Program
  • 7 Signs It's Time to Break Up with Your Hardware Partner
  • Images: Channel Evolution Europe Featuring Avant, 8x8, Sophos, CenturyLink, More
  • Secrets to Sustainable Growth – for MSPs, by MSPs

Galleries

Images: Channel Evolution Europe Featuring Avant, 8×8, Sophos, CenturyLink, More

December 5, 2019
view all

From the Industry

The Importance of Strengthening Your Cyber Security Culture

December 4, 2019

Don’t Let Lack of HIPAA Compliance Make Your Business Sick

December 4, 2019

Using ADR to Help Secure Your Business First

December 4, 2019
view all

Webinars

Edge of Tomorrow: Network Security in the Age of Data-Driven Business

December 11, 2019

Why Business Value Should Be Your First Concern and How to Create More of It

December 12, 2019
view all

White Papers

Secrets to Sustainable Growth – for MSPs, by MSPs

December 4, 2019

Why Managed Security Presents A Golden Opportunity for MSPs

November 26, 2019

The Ultimate Guide to On-Site Managed Services

November 26, 2019
view all

Events

Channel Partners Conference & Expo

March 9, 2020 - March 12, 2020
view all

Videos

FASTCHAT: Why an MSP Needs to Extend Detection and Response Beyond Endpoint Security

October 22, 2019

Ingram Micro: It’s Up to Our MSP Partners to Keep Clients ‘Out of the Headlines’

October 14, 2019

Liongard: Here’s How We ‘Roar’ for the MSP Community

October 14, 2019
view all

Twitter

ChannelFutures

Understand the limitations of #NoSQL database storage, including drawbacks in security, data consistency, and lack… twitter.com/i/web/status/1…

December 10, 2019
ChannelFutures

bit.ly/348Y25i twitter.com/Craig_Galbrait…

December 10, 2019
ChannelFutures

A successful sales strategy leads to a profitable #MSP. Learn how to build sales expertise, select and train staff,… twitter.com/i/web/status/1…

December 10, 2019
ChannelFutures

With so many avenues to reach out to your prospective and current customer base, it's important that your company g… twitter.com/i/web/status/1…

December 10, 2019
ChannelFutures

.@HPE hires former #Microsoft exec Keith White to lead #GreenLake business unit. dlvr.it/RKywnr

December 9, 2019
ChannelFutures

.@HP shareholders receive direct pitch on @Xerox acquisition. #printers dlvr.it/RKyh9d

December 9, 2019
ChannelFutures

#KeeperMSP - increase revenue and security with #passwordmanagement as a service. @keepsecurity dlvr.it/RKyh9Z

December 9, 2019
ChannelFutures

Suzanne Swanson, @Trustwave global channel VP, talks about #infosec and #cybersecurity as a #TopGun51 winner.… twitter.com/i/web/status/1…

December 9, 2019

MSSP Insider

Newsletters and Updates

Sign up for The Channel Report, Channel Futures Update, MSP 501 Newsletter and more.

Live Channel Events

Get the latest information on the next industry-leading Channel Partners event.

Channel Partners Online

Want more? Find more channel news and analysis on our sister site, Channel Partners.

Media Kit And Advertising

Want to reach our audience? Access our media kit

DISCOVER MORE FROM INFORMA TECH

  • Channel Partners Online
  • Channel Partners Events
  • MSP 501
  • MSSP Insider
  • IoT World Today
  • Webhostingtalk

WORKING WITH US

  • Contact
  • About us
  • Advertise
  • Newsletter

FOLLOW Channel Futures ON SOCIAL

  • Cookie Policy
  • Privacy
  • Terms
Copyright ©2019 Informa PLC. Informa Telecoms & Media Limited is a company registered in England and Wales with company number 00991704 whose registered office is 5 Howick Place, London, SW1P 1WG. VAT GB365462636. Informa Telecoms & Media Limited is part of Informa PLC.
✕

channel futures Logo

Want to stay updated? Sign up for our Channel Futures newsletters today.

Websites are now required by law to gain your consent before applying cookies. We use cookies to improve your browsing experience. Parts of the website may not work as expected without them. By closing or ignoring this message, you are consenting to our use of cookies.
X