AVG: Where Level Platforms Managed Workplace Heads Next

AVG Technologies has integrated a CloudCare Service Module with Managed Workplace — the MSP software platform acquired in the Level Platforms buyout. At first glance, this isn’t earth shattering news. But take a closer look and you might see the next-generation Managed Workplace story unfolding.

AVG acquired Level Platforms in June 2013. Over the past few weeks, Level Platforms has had some staff cuts and management changes. The Level Platforms name has gone away and the MSP platform is now called AVG Managed Workplace. Some MSPs are nervous about all the rapid-fire changes. But I think you also have to keep AVG’s long-term goals in mind.

Think of it this way: Level Platforms was an independent company for more than a decade, and I believe revenues grew to about $11 million. The company also helped to shape and educate the MSP industry. Most entrepreneurs in the MSP community (including me, as an observer) have never built an $11 million company so generally speaking that’s an impressive figure. But in the software market, it’s a small sum. And AVG definitely believes it can grow the Managed Workplace business much larger.

The Bigger Picture

Indeed, AVG is a growth story. For its Q2 2013 ended June 30, revenue rose 22 percent to $100.4 million, and net income rose 95 percent to $11 million. Let me emphasize some numbers for impact:

AVG’s Q2 revenue revenue grew $17.9 million — a QUARTERLY growth figure that’s 63 percent larger than Level Platforms’ ANNUAL revenues as an independent company. 

Surely, AVG wants the Managed Workplace business to enjoy similar growth rates and profit margins.

Hence, all the changes. In addition to some staff cuts and management exits at Level Platforms, AVG recently hired a North America Channel Chief — Marco La Vecchia. His previous employer was N-able Technologies, which means La Vecchia should be able to help meld the Managed Workplace business with AVG’s core security and mobile businesses.

Integrations Start

That integration, thanks to the developer teams, has already started. For instance, AVG today announced a CloudCare service module integration with Managed Workplace — the first such integration since AVG purchased Level Platforms. MSPs running Managed Workplace can now gain a range of security updates, reports and real-time information from CloudCare.

You can bet more, tighter integrations between AVG’s core technology and Managed Workplace is coming. And you can also safely bet that AVG will try to repeat its freemium business strategy with Managed Workplace.

I’m not suggesting change is easy. I know some MSPs were perfectly content with the existing Level Platforms code and management team. But times change. Owners change. Growth goals change. Some MSPs will move to other platforms amid the M&A land grab.

It’s All About Execution

My personal feeling? If AVG delivers solid code enhancements, integrations and customer support to MSPs, then partners will gradually focus more on long-term outcomes rather than short-term changes.

That very scenario already unfolded at Continuum, which was acquired in 2011. Continuum worked overtime to solidify its code base while reassuring its MSP base that positive changes were coming. The result, I believe, has been a return to growth.

M&A isn’t easy. But today’s AVG milestone — the CloudCare service module integration with Managed Workplace — could be a sign of positive things to come.