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 Channel Futures

Sales & Marketing


ConnectWise IT Nation: 13 Key Takeaways for MSPs

  • Written by Joe Panettieri 1
  • November 9, 2010
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.

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 www.LabTechCloud.com 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.

Sign up for MSPmentor’s Weekly Enewsletter, Webcasts and Resource Center. Follow us via RSS, Facebook, Identi.ca and Twitter. Check out more MSP voices at www.MSPtweet.com. Read our editorial disclosure here.

Tags: Cloud Service Providers Digital Service Providers MSPs VARs/SIs Business Models Cloud Data Centers MSP 501 RMM/PSA Sales & Marketing Videos

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4 comments

  1. Avatar Todd November 10, 2010 @ 2:46 am
    Reply

    Good summary of the event Joe. The CW event is the top event for our industry, too bad most non CW customers don’t get to experience it, The event is a huge value add you receive w/ ConnectWise PSA.
    Did there seem to be alot of backup vendors present? Zenith has led the charge in the BDR appliance since 2007 but there are a bunch of viable options available that have attractive price points that MSP’s can resell and still obtain good margins right at the get go. Cornerstone and Axcient were the most compelling offerings as they covered the basics w/ the promise of no acquisition costs and the promise of better manageability. Other vendors seem to be largely copying the Zenith offering w/ different price points and management features. Zenith also has an additional backup offering out soon called Mirror Cloud that holds much promise (I don’t know why anyone would buy another BDR after the Mirror Cloud comes to market) and transitions into a SmartSuite node if need be. Very well thought out for the most part. The pricing model is still a bit out of sync w/ most MSP’s desires. Should be available in the next couple of months.

    Of the RMM tools, Labtech drew huge 3 and 4 person deep crowds continually. We’ll be evaluating their offering in the coming weeks to see how it compares to our current rmm tool and other offerings out there. They promise and easy transition off of our current rmm tool. I think as MSP’s hit their license limits and big charges to add a chunk of licenses they may not be ready to deploy just yet, LabTech is going to grab even more market share. Kaseya making me buy even 200 additional cal’s so i can add some devices still sounds like buying shelfware, LabTech is making it simpler for MSP’s to buy tools we can immediately generate revenue with, not buy a bunch and hope to install “soon”.

  2. Avatar Joe Panettieri November 10, 2010 @ 12:36 pm
    Reply

    Hi Todd,

    Generally speaking I think online backup and managed security are the two pieces of low hanging fruit that MSPs are grabbing first in the SaaS market. So yes, there were plenty of “new” backup players at the event plus established client-server vendors that are now targeting MSPs (example: CA Technologies). Just a reminder: MSPmentor doesn’t actually test or run the solutions, so readers should act like car buyers: Go out and take the solution for a test drive on your own.

    On the RMM front I heard momentum stories from all of the players at the conference. Yes, LabTech has growing its installed base quickly this year but I also keep reminding myself “growth ain’t easy.” With growth comes service and support requirements. I know LabTech is investing in that area and we’ll be watching to see how those efforts play out.

    But a reminder: LabTech is still a relatively small player compared to the established RMM companies. There are a lot of horses to watch in this race…

    On the Zenith InfoTech front, I’m also watching their Telepresence cousin (Vu Telepresence). Recurring video conferencing revenue sounds like a natural for MSPs. But will customers push beyond free skype and free Internet video to pay for true Telepresence experience? We’re watching…
    -jp

  3. Avatar Bruce November 10, 2010 @ 6:26 pm
    Reply

    This was a good read on the 2010 IT Nation Summit. This event is getting better every year and if your company is a ConnectWise user and you are not attending this event you are missing out. I was at the event this year and we send at least 1-2 people every year because there is just so much to learn. Between the dozens of break out sessions, the relationships you make with other partners and the ability to build stronger relations ships with vendors, it is an amazing event. Plus the after parties are not bad either.

    One item that I would like to add to this article that I feel you did not mention in your article is the soon to be released Level Platforms 2011. I was lucky enough to be able to attend the Level Platform all day event that took place before the IT Nation. I really feel that this new version is going to be amazing for any Level Platforms user. The new features that are in this release are groundbreaking. The fact that they are coming out with this release and the majority of the new features are coming directly from their current users, I feel is huge. I am impressed that they listen to their current users and take what they have to say so seriously. Level Platforms has been around for awhile now and they continue to be a leader. With so many RMM companies that are out there and the fact that all of them have their own little feature that makes them stand out over the rest it is very hard to pick one. I had the luxury of talking to some ConnectWise partners that have used 3-4 RMM tools in the last 4-6 years. I personally do not know how anyone can really implement and master a RMM tool in a year or two. I am always finding new things to do with our RMM tool. First we wanted to monitor every piece of hardware that we sold our clients. Then we wanted to monitor every piece of hardware that was connected to the network or that could be connected to the network. Next it was monitoring all the software that is on all networks. Now we are starting to write proprietary monitors that are client specific so we can monitor their specific line of business software. That is why when it comes to picking a RMM tool I tell people to pick a company you like working with and who you think you can build a strong relationship with because we learned that in order to keep growing our business to the next level we needed a RMM Vendor that was willing to listen to us and what we needed out of the tool in order to grow our business and in turn help grow their business.

    One of the things I mentioned above and Arnie Bellini mentioned in one of Joe’s interviews with him is how important vendor relationships are now and how improving those relations are going to be an important thing. My company actually made this one of our important goals for 2010. We have done things like limit the number of vendors we work with. We make a greater effort to send as many staff members as we can to their sales and training events. Finally, we talk to our vendors and try and get involved with them. Ultimately we have learned that vendor relations are almost like partnerships. If we tell them what we are trying to do with our business and the direction it is going it allows them to understand us and work with us so that when our business grows their business grows with us. Building our vendor relations has helped us a lot:

    •One thing is always price and helping you with better margins and helping you compete with companies that have no clue and are just trying to low ball a client with price. The IT industry has gotten to the point where you make next to nothing on hardware. With such low margins on hardware every point you get can make or break a deal.

    •Improved the quality of our networks because we are standardizing everything we do. Standardizing our networks has allowed us to use automation more than we ever could before. It has improved our quality because we know all the equipment we sell or recommend it to a client.
    •The biggest thing is when your vendors know that you are serious about them they are going to be serious about you. Companies like SonicWall will give out marketing dollars to really help your business with getting new clients and educating your current clients. We have been with NTR support since the beginning. They contacted us asking what they could do to make their product better and easier for us. We told them to get involved with one of our other vendors ConnectWise. We told them about ConnectWise’s open API system. The next thing we know NTR Support is integrated into ConnectWise and they are now developing more ways that their support tool can work with ConnectWise. Level Platforms and ConnectWise are two other vendors that have shown they value the relationships with their users. How many companies actually send their CEO to a summit to talk and listen to their current users and prospects? I got the honor to talk with Arnie Bellini from ConnectWise and Peter Sandiford from Level Platforms. The way they talked I could tell that they cared about what I had to say and that I was just not another number in their CRM system. They were able to show and prove to me that my company and the success of it is very important to them and the success of their multi-million dollar companies.

    I hope this will help some of you with some ideas on what I have learned, done, and gathered from attending the IT Nation Summit.

  4. Avatar Joe Panettieri November 10, 2010 @ 7:22 pm
    Reply

    Bruce: Thanks so much for showing your passion for the industry in our comment area. We’ll certainly be watching Managed Workplace 2011. And we’re also watching potential Level Platforms distribution moves in North America and Japan. Stay tuned, and thanks again for sharing so much info with MSPmentor’s readership.
    -jp

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