ConnectWise and Autotask: Evaluating Acquisitions (And Each Other?)

ConnectWise CEO Arnie Bellini and Autotask CEO Bob Godgart are scouring the software market for potential acquisitions. And each CEO says they’d consider buying the other company. To be clear: I think this is more talk than action. But the talk provides clues about where the MSP and PSA (professional services automation) markets are heading. Here’s the scoop and some analysis for managed service providers.

The acquisition chatter started yesterday, when word leaked about ConnectWise working with CoreConnex to transition CoreConnex’s PSA customers to ConnectWise’s platform. ConnectWise CEO Arnie Bellini and CoreConnex CEO Frank Coker will address CoreConnex’s PSA customer base during a Web video conference today.

Autotask has countered by offering a special message to the CoreConnex PSA installed base.

Round Two

Now for the latest twist. And it’s a significant one. In a Sept. 15 press release about the ConnectWise-CoreConnex deal, ConnectWise’s Bellini said his company is considering additional acquisitions — including the potential buyout of Autotask.

Here’s the complete quote:

That’s quite a statement for a press release.

Still, Autotask CEO Bob Godgart and ConnectWise COO Santo Cannone both say there have been no acquisition talks between the two companies. But here’s another twist: Instead of selling out to ConnectWise, Godgart says Autotask would consider buying ConnectWise. “And we’ve got the financial backing to do it,” added Godgart.

I don’t have access to the Autotask or ConnectWise financial statements; both companies are privately held and appear to be well financed. Autotask has venture backing while ConnectWise is self-funded.

Reality Check

Will ConnectWise buy Autotask? Will Autotask buy ConnectWise? Near term, I doubt it.

I think both Bellini and Godgart are stating that consolidation is coming to the automation and managed services markets. Godgart says Autotask is looking at a number of potential acquisitions and it sounds to me like Autotask is close to pulling the trigger on something. And certainly, ConnectWise’s Bellini has made it clear his company has the financial muscle to make acquisitions as well.

In some ways, this is a blog post about nothing: Today, ConnectWise isn’t buying Autotask and Autotask isn’t buying ConnectWise. Also of note: Autotask’s Godgart and ConnectWise’s Bellini both have repeatedly stated to me in recent months that competition between the two companies results in better solutions for MSPs.

Still, the competitive posturing has started. And Bellini’s press statement essentially is an open letter to Autotask’s venture capitalists.

I’ve left a bunch of thoughts out of this article, including:

That’s enough from me. What are your thoughts?

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