autotask varstreet deal

No doubt, VARStreet has a loyal following among a few hundred VARs and solutions providers, who use the system for real-time distributor pricing, online storefronts, and other automation services. Several sources in the distribution industry say VARStreet’s technology works as advertised. And as Autotask CEO Bob Godgart says, VARStreet “gives us a complete e-commerce toolset for VARs.”

That’s why Autotask decided to acquire the company. On paper, the deal (explained more fully on MSPmentor) makes perfect sense: Autotask specializes in PSA (professional services automation software), which allows MSPs (managed services providers) to automate their internal business processes. By integrating VARStreet with Autotask, those MSPs potentially gain a single dashboard for product lifecycle management, as well as managing distributor relationships, business processes and customer engagements.

In other words, VARStreet potentially allows Autotask to push beyond the traditional MSP conversation, appealing to a broader audience of VARs, resellers and solutions providers.

Before: Good Technology, Missed Opportunities

Still, The VAR Guy can’t ignore VARStreet’s historic potholes. No doubt, VARStreet remains well-known among some solutions providers, but the company’s online platform never exactly became a “huge hit” with the channel.

Some of the problems stretch back to the dot-com era. VARStreet was launched in 1999 and allegedly consumed roughly $20 million in research and development. In its early days, VARStreet allowed “over 400 technology providers to serve 100,000 Corporate, Federal, State, and Local Government end customers.”

One hundred thousand customers? Hmmm… That’s a big, bold statement. VARStreet’s technology worked. But in many respects, VARStreet’s sales and marketing efforts never fulfilled the company’s early promise.

Anyone who checked VARStreet.com yesterday (March 16, 2010) would have noticed that the company’s corporate site hadn’t been updated since 2006. No news. No developments. No social media. Nothing. Elsewhere, a VARStreet relationship with Everything Channel, announced in 2008, launched and dissolved  with hardly a notice. It was as if VARStreet was stuck in a time capsule, gasping for fresh air and fresh ideas.

After: Time for an Overhaul

Autotask quietly unlocked that time capsule three months ago, acquiring VARStreet and overhauling the website. The overhauled site and new logo debuted today (March 17, 2010). Next up, Autotask plans to integrate VARStreet with the Autotask platform. More details should emerge during the Autotask Community Live conference, which starts April 18 in Miami.

Although VARStreet hadn’t done much marketing or branding in recent years, Autotask CEO Bob Godgart says VARStreet is profitable. And sources say Autotask’s buyout of VARStreet involved “millions” of dollars, and taking on the VARStreet staff. Godgart declines to discuss headcount for VARStreet, but he says the combined companies have about 175 employees.

Speaking of Opportunity

Godgart offers additional perspectives in this FastChat video:

The video discussion covers:

High Energy

Godgart sure sounds upbeat. And on paper, the Autotask-VARStreet combo sounds promising.

Still, The VAR Guy needs to provide some balance here: VARStreet has spent a decade trying to become the de-facto e-commerce system for the IT channel. A few hundred VARs jumped on the bandwagon, and many of them speak highly of VARStreet. But lack of sales and marketing prowess always held VARStreet back.

The VAR Guy will be watching to see if that changes under Autotask’s ownership.

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