ConnectWise IT Nation: 13 Key Takeaways for MSPs

When the ConnectWise IT Nation conference wrapped up on November 7 with a golf tournament, I began to think about key themes, trends and takeaways for managed services providers (MSPs) that missed the event. So what did you miss, and where is ConnectWise CEO Arnie Bellini taking "IT Nation" (his term for SMB solutions providers) next? Here are 13 key wrap-up observations from MSPmentor.

1. Healthy, Wealthy and Wise?: During most of 2009, negative economic talk overwhelmed most MSP-centric conferences. But starting somewhere in early- to mid-2010, the economy generated less and less chatter at MSP gatherings. Sure, the economy continues to face turbulence. But it's no longer the "top" item on MSP minds. In fact, quite a few MSPs seem to be enjoying strong growth -- double-digits and beyond -- so far in 2010, according to conversations I had at IT Nation. And early submissions to our latest MSPmentor 100 survey -- underway now -- seem to confirm MSP-centric growth in 2010.

2. Don't Fear the Cloud: On the one hand, plenty of MSPs are worried about Microsoft's billing and pricing strategy for BPOS (Business Productivity Online Suite) and its forthcoming successor, Office 365. During a cloud panel, MSPs specifically said attendees should avoid cloud providers that directly bill end-customers. In some cases I don't agree -- some MSPs and VARs prefer to have vendors directly bill customers because it eases day-to-day management. But plenty of MSPs want to own the billing relationship.

Either way, the cloud discussion is far bigger than a Microsoft-centric discussion. Plenty of MSPs at the conference described how they're already profiting from the cloud, moving virtualized systems into their own data centers or third-party data centers.

Instead of fearing the cloud, Bellini said MSPs should fear the day when technology stops evolving. After all, a stagnant technology market means zero new opportunity for VARs and MSPs. But continued innovation -- from the mainframe to minicomputers to PC LANs to client-server to Internet to Web and now cloud computing -- creates new waves that smart solutions providers can ride.

3. What Exactly Do They Do?: Speaking of the cloud, a solutions provider called Channel Cloud was on hand to discuss where MSPs and VARs should head next. Founder Kent Erickson wants to help MSPs transition from traditional managed services to cloud integrator. Erickson is a sharp guy who has trained scores of MSPs over the years, while working closely with companies like Zenith Infotech. But what exactly does Channel Cloud do? Erickson is a master at describing industry trends without fully pulling back the curtain on Channel Cloud's strategy. My best guess: He sees virtual desktop integration (VDI) as a huge opportunity and disruptive force... We'll keep watching Channel Cloud for more clues.

4. Big Crowd, Bigger Discussions: I nearly forgot to mention: Roughly 1,200 MSPs and IT service providers attended the IT Nation conference. I think the conference is evolving beyond ConnectWise to be a broader gathering place for MSPs and VARs to discuss go-to-market strategies. Similar to the way VMware built the VMworld conference and RSA built the RSA Security conference, it looks like ConnectWise wants the IT Nation conference to be multi-vendor, multi-conversational. But that requires a careful balancing act. Throughout the IT Nation conference, RMM vendors were extra attentive to conference programming and booth locations. The reason: ConnectWise Capital has an investment in LabTech Software, an RMM competitor.

Still, the managed services market is more than PSA and RMM software. And that increasingly seems to be the point of the IT Nation conference.

5. Watching, Learning and Listening: Some very influential folks quietly attended IT Nation. Two prime examples: Members of the Microsoft Windows Intune team quietly met with selected media (hint, hint...), coaches and MSPs to discuss long-term remote monitoring and management trends. Windows Intune, as you may recall, is a SaaS-based service for remotely managing Windows systems. It's in beta now with an official launch expected sometime in 2011.

Meanwhile, the Windows Phone 7 team was on hand to describe how Windows Phone 7 integrates with the Web. I must admit: I was impressed with the Phone 7 demonstrations I saw... but I continue to wonder if Microsoft can really battle back in the smart phone market.

Also of note: Renee Bergeron, VP  of managed services and cloud computing at Ingram Micro North America,  was on hand to quietly preview the Ingram Micro Cloud strategy, which Ingram officially announced Nov. 7. In case you missed it here's what Bergeron had to say:

6. Advice for the Masses: Bellini rolled out his modern office strategy, which identified roughly 19 sales opportunities for VARs and MSPs. But his biggest message to attendees involved two trends: Use your help desk to maintain account control, and introduce vendor management services so that you're the doorway between MSPs and all incoming IT vendors/cloud services. Bellini drove home the vendor management and help desk opportunities in this FastChat video:

7. Multiple RMM Momentum Stories: LabTech Software, the RMM provider that attracted ConnectWise Capital money in early 2010, seems to be gaining traction. Multiple sources say the company is at break-even or will push into positive cash flow over the next few months. The company's user base has apparently grown from 100 MSPs to roughly 1,000 MSPs over the past year or so. Also, a new partnership will make LabTech available in the cloud in North America. Check out for details.

Meanwhile, there's talk of growth at Level Platforms. Rumor has it the RMM provider is about to embark on a big distributor relationship. The deal potentially involves as many as 1 million freemium managed devices. As soon as we confirm the details we'll share them.

Also, N-able remains in growth mode. Sources say the company grew ... yada, yada, yada ... percent in recent months. Some of the success can be traced to N-able's freemium strategy for endpoint security and backup/disaster recovery. Speaking of which, CA Technologies seems to be signing backup deals with most of the major RMM providers... And keep an eye on Doyenz, which signed a deal with LabTech and is making more moves soon...

8. Pricing Pressure: Two MSPs attending the IT Nation conference described how competition is helping to ensure RMM vendors are becoming more flexible on pricing and licensing. In separate conversations, the MSPs told me how they were about to max out on 1,000 license agreements with Kaseya. Rather than jumping up to 2,500 nodes -- which would mean some nodes would go unused for years to come -- the MSPs negotiated hard for 1,200-node agreements. And Kaseya engaged in the conversation because of pricing competition from LabTech Software, I'm told.

9. Financial Acquisition: Speaking of Kaseya, some MSPs at the conference are watching Kaseya's buyout of ObjAcct Inc., a developer of XML-based accounting software. The big question: Is this part of Kaseya's Business PSA Center tool or something different? I'm not sure... at least not yet. Some MSPs at the event say they don't want another accounting system. But on the other hand, quite a few Kaseya-centric MSPs at the event say they are curious to learn where CEO Gerald Blackie intends to take the ObjAcct technology next...

10. Bounced Checks: During the conference, I heard from two MSPs that were having a difficult time in the Hardware as a Service market. The two MSPs allegedly are working with an East Coast HaaS expert who hasn't been paying his bills. MSPmentor is still investigating the claims and double-checking the details. Stay tuned and be careful. HaaS sounds sexy but work with people you know and trust, and ask for plenty of references.

Separately, Alex Rogers continues to evangelize CharTec's three core areas of expertise: HaaS, VoIP and Backup/Disaster Recovery. While I'm not endorsing Rogers or CharTec, I want to point out that my investigation into bounced HaaS checks has nothing to do with CharTec.

11. Developer Network: During the conference, ConnectWise described how it's enhancing a developer network and continuing to offer open APIs for ISVs and integrators. As coopetition continues to grow in the MSP software market, open APIs will be the single most important factor for maintaining a level playing field, in my opinion. Jeannine Edwards, director of community for ConnectWise, shared more thoughts on the developer network and user group efforts:

12. Mergers and Acquisitions: There was plenty of M&A talk at the conference. A well-known MSP in Atlanta, for instance, is looking to expand up the US East Coast. And N-able VP of Sales Mike Cullen is hearing from MSPs that want to network up to discuss M&A strategies. Plus, the latest M&A deal -- involving PlumChoice buying Everon Technology Services -- generated strong buzz and debate at the event. In case you missed it, Everon's Michael Cooch describes the PlumChoice-Everon combo in this FastChat Video:

13. Bottom Line: Based on dozens of interviews at IT Nation, I believe MSPs are upbeat about 2011. Despite all the fear, uncertainty and doubt (FUD) tied to cloud computing, the best MSPs have already launched cloud practices. And that will surely accelerate as Microsoft begins to launch TV ads for Office 365 over the next few months. As Microsoft creates end-user demand for cloud services, MSPs will need to respond and get ahead of the conversation with their customers.

Plus, don't forget: Even as more and more services shift to the cloud don't lose site of all the equipment that will remain on-premise.

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