SolarWinds Buys N-able: MSP On-premises vs. Cloud Update
When SolarWinds acquired N-able Technologies for $120 million yesterday, SolarWinds (SWI) described the deal as a cloud-based SMB play. That description raised concerns among some managed services providers (MSPs) that run N-able software on-premises rather than in N-able’s cloud. So what’s the reality?
Outgoing N-able CEO Gavin Garbutt says the company will continue to sell, support and enhance its on-premises offering (which runs in an MSP’s data center/cloud) while also offering N-able own cloud service to MSPs as well.
In an MSPmentor interview, Garbutt touched on these points:
Cloud vs. On-premises N-able software for MSPs: “We’ll absolutely continue to support both models. The application can run in our cloud or in the service provider’s cloud [that is, at the MSP’s office]. But the goal is to move to a pure subscription model [that is, having MSPs pay a recurring fee rather than a perpetual licenses]. We are aligning with how our MSPs bill their customers.”
The Dance With SolarWinds: “The process started a couple of quarters ago. Our revenues grew about 47 percent last year. And during the last two quarters revenues were up 50 percent year over year. We sat down as a board and said what are we going to do to continue to help partners grow their businesses while scaling our own business?”
“A number of parties proactively approached us with strategic discussions. Then we looked at a potential Toronto stock exchange listing. Then we weighed what would give the best value. Plus we wanted to continue to mature our product offerings.”
When Solarwinds stepped to the negotiating table, “We instantly meshed as a management team. They have the same working sense of humor that we do. We match well as a team. They have so many parts of their technology offerings that are complementary to our channel. They are great at web marketing, which we can help to bring to the channel partners.”
On Future Growth Opportunities and the Channel: “The SMB market is only at the early adoption stage of managed services, but it is going to early majority and a lot of SMBs are looking for full-source managed services. We want to help the partners with web marketing to help engage those customers going forward.”
“The [growth] trajectory is continuing. With a relationship like this it should augment our performance. SolarWinds is absolutely committed to maintaining N-able as a channel company. Our vision statement continues.”
On N-able President JP Jauvin running N-able under SolarWinds’ ownership: “He is a fantastic person at understanding and listening to the service providers, understanding their technical and business requirements. He’s great at ensuring we deliver on our technical commitments. He’s better at that stuff than I am. That’s why you’ve seen the product evolve so much in the past few years. Bringing in things like automation manager — that was completely JP’s baby.”
On his next moves: Garbutt will be advising SolarWinds and N-able as the deal closes, but he will ultimately exit the company and hand the leadership responsibilities to Jauvin.