Benchmark 365 CEO James Vickery offers his take on the Connectwise acquisition of Continuum and the shape of the industry going forward.
Last week saw one of the biggest announcements in the MSP industry in recent memory. At the IT Nation conference in Florida, Connectwise CEO, Jason Magee, confirmed media speculation that they are acquiring, competing RMM software platform, Continuum. The news comes amidst a flurry of merger and acquisition activity in the managed services industry – all of which may have wide reaching consequences for the industry as we know it.
James, tell us your initial thoughts when you heard about the merger?
First off, I want to congratulate Michael George and the Continuum team as well as Jason and the Connectwise group. Having built an outsourced helpdesk solution for managed service providers and understanding the sheer complexity and unique challenges we all face in this sector, I commend Michael on his leadership and I wish both organizations well.
What does this acquisition mean for the industry?
I think that’s a loaded question. In one respect it demonstrates just how much potential this industry has. For one, venture capital firms are paying attention and investing heavily in the managed services sector. But more importantly, the IT and managed services is $1 trillion worldwide industry and big acquisitions like this one, and the several we’ve seen in the past years, are indicative of how much opportunity exists for our partners and the channel.
On the other hand, consolidation in any industry can be a cause for concern for many providers who want choice and options to choose from when determining what tools they use and how to best support their customers.
So do you think this means less choice for MSPs?
Possibly. This could go well for Connectwise and potentially benefit many MSPs – but it will ultimately come down to execution. As an early Connectwise adopter, I signed up for their PSA product when Arnie Bellini was CEO. ConnectWise was privately held and Arnie was obsessed with the channel and the community – perhaps nearly as obsessed as I am with our Benchmark 365 partners – which helped both our businesses build strong customer relationships.
Sometimes when companies are acquired by VCs the objectives might change from community to a philosophy of ‘profit first’. Often this is lost when vendors are only focused on their product sales and VC is only focused on the bottom line.
Rolling up more and more privately held community-oriented companies can mean less choice and more aggressive selling of tools rather than really listening to the unique needs of MSPs.
For the smaller MSP, it will come down to how much of a priority they remain for these giant conglomerates. If these large groups fail to offer economical solutions for all sizes of MSPs , I think we’ll see more software players enter the market to fill the void.
Why does choice matter?
The short answer is that there is no one size fits all. At Benchmark 365 we service small/mid/large MSPs every day and each has their own distinct base of customers and requirements.
We designed our service to be agnostic, acknowledging that our partners know best when it comes to putting together a product stack that serves their clients effectively whilst meeting their own economic needs.
When MSPs are forced to choose between 2 or 3 mainstream players I think that represents a problem for the many MSP entrepreneurs out there who want to think and look different to their competitors
So it’s about delivery?
Yes, and it’s ultimately about finding the right tool for the job which isn’t always a mainstream player.
If we’ve learnt anything here at Benchmark 365 and through our group Benchmark Peers it is that our MSP leaders are focused on delivering solutions to their clients and they aren’t hung up on which tools they use to do it. What they do want is a vendor who will listen to them and adapt to their unique business and customer requirements.
It’s why we see so many different product stacks amongst our Partners and why we support them no matter what tools they choose to use.
Do MSPs see any economic benefits from acquisitions like these?
I’m sceptical that MSPs will see a bottom-line benefit here. We continue to hear from MSPs who are spending more and more on tools yet are unable to pass the costs on to customers who, in todays marketplace, are far more price sensitive than ever before.
By limiting choice and ring-fencing options for MSPs it will be interesting to see if small providers can continue to create value as more and more addons and functionality are moved behind paywalls. Less competition may mean vendors don’t feel the need to “give away” as much – which could hit the bottom-line of smaller MSPs.
Do acquisitions like this one impact the way Benchmark 365 works?
Not at all. In fact, it reaffirms our strategy and commitment to our Partners. Our role is to help MSPs be more profitable and we do this by providing 24×7 helpdesk services, running highly effective Peer groups and creating new business opportunities for our Partners.
We aren’t focused on the tools we are focused on profitable outcomes for everyone we work with.
Our Partners choose how they wish to run their business and are growing faster than their competitors. Our focus is entirely on their prosperity and we will continue to stay the course while the big boys battle it out. Let’s hope that battle ultimately benefits everyone and that the industry continues to grow and thrive.
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