Standalone RMM Managed Services Software Is Dead

Standalone RMM (remote monitoring and management) software is dead. Skeptical? Kaseya, Level Platforms and N-able Technologies have each been acquired in recent weeks as part as an accelerating trend toward platform diversification. MSP software suites are proliferating.

Radical change won’t end there. For MSPs and their software providers, the glory days of managing Windows-based PCs and servers are over. The cloud and mobility now dominate small, midsize and large enterprise IT spending plans. It’s time for MSPs to respond — fast.

Skepical? Take a look at all the recent moves:

1. Insight Venture Partners Acquires Kaseya: That deal, announced today, will focus heavily on cloud computing and BYOD opportunities, according to new Kaseya CEO Yogesh Gupta. Kaseya has long branded itself as an IT automation and management company, rather than an RMM software provider. The company has successfully pushed into corporate IT departments. That push lifted revenues dramatically, but it also left Kaseya open to hungry rivals in the MSP software market in recent years. Now, Gupta will seek to accelerate Kaseya’s cloud- and mobile-oriented software subscription revenues.

To the best of my knowledge, Kaseya was approaching $100 million in annual revenues in 2012 but it’s difficult to pin down exact results since the company is privately held and also shifted to subscription pricing from traditional licensing last year.

2. AVG Technologies Acquires Level Platforms: This deal, announced in early June 2013, combines an SMB software security company with an RMM company. Is that entirely unique? Nope. Panda Security and CentraStage have been building a similar solution, though the companies have not merged, and AVG-Level Platforms brings a much larger installed base to the table. Meanwhile, Level Platforms CEO Peter Sandiford has vowed to make sure his company’s platform remains open to third-party security companies like Symantec and McAfee. 

3. SolarWinds Buys N-able Technologies: Wall Street, at least initially, didn’t like this $120 million deal because it won’t lift SolarWinds’ near-term profits. But SolarWinds understands the freemium software market. And the company has a range of software — including help desk solutions — that it can sell into the MSP software base. 

4. ConnectWise, LabTech and Quosal Pitch the ModernOffice Suite: Combine business automation, IT automation and sales proposal automation and you get complete managed IT lifecycle services. That’s the ModernOffice Suite. In some ways, you can say ConnectWise triggered rival M&A deals by investing in LabTech and Quosal roughly three years ago. Some pundits now think ConnectWise is gearing up for its own exit. MSPmentor believes otherwise. Instead of preparing all or parts of the business for IPOs, I suspect ConnectWise will make at least one more strategic investment within the next six to 12 months… 

5. Summit Partners Acquires Continuum: This September 2011 deal involved Zenith Infotech’s RMM business, which was sold to Summit Partners. Fast forward to the present, and Continuum has strengthened its core RMM and NOC services, while also introducing marketing, BDR (backup and disaster recovery) and mobile device management services. I get the sense CEO Michael George has been studying the market for potential acquisitions, too…

6. GFI Buys Backup Software: Thousands of MSPs run the  GFI Max platform (formerly HoundDog Technology, acquired in 2009). The company’s latest move: Buying backup software to launch GFI Max Backup for MSPs. Plus, keep an eye on GFI Monitis, a cloud monitoring platform…

7. LogMeIn Makes Hires, Launching MSP Suites?: I don’t know if suites are officially coming but have you checked out LogMeIn’s growing portfolio of cloud-based solutions for IT service providers?

8. Dell Buys Quest (And PacketTrap PSA, RMM): PacketTrap was one of the first companies to officially put PSA and RMM entirely under one roof. Buzz about the strategy died down a bit when Dell acquired Quest (PacketTrap’s parent). But it sounds like sales of the PSA and RMM suite continue to grow — with a greater cloud integration emphasis coming. 

9. CA Technologies Buys Nimsoft: This deal, completed in early 2010, was a biggie. I think it valued Nimsoft at about $350 million — or 10 times revenues. Fast forward to the present and Nimsoft is still growing, having pushed beyond monitoring software to offer IT service desk solutions. I keep waiting for more synergies between Nimsoft and other CA offerings to emerge (ARCserve among them). I suspect new CEO Michael Gregoire is working on those integration plans now.

Where Are the IPOs?

Amid all those deals did you notice a common trait? The answer: No IPOs (initial public offerings). While successful, most MSP-focused software companies have not grown quickly enough to justify big valuations or potential IPO status. 

Where Do We Go From Here?

It’s time for MSPs to stop talking tools and start talking long-term strategy. Amid all this M&A activity, it’s an ideal time for MSPs to decide what types of services they want (make that: NEED) to offer in 2014 and beyond. If you’re not monetizing mobility, cloud, Big Data and social services right now then you’re trailing the corporate market. 

Recent M&A and partnership activity suggests traditional RMM approaches are dead. MSPs must evolve or they’ll die, too.