MSP Software: The New Competitive Landscape

The writing has been on the wall since early 2009. The traditional managed services software landscape — pioneered by several PSA (professional services automation) and RMM (remote monitoring and management) companies — is changing. Imminent moves by ConnectWise and Kaseya, in particular, offer clues about where we’re heading next.

First, let’s set some expectations. I’m not suggesting a “war” is brewing between major MSP software companies. Sure, PSA players will continue to compete against one another. And RMM players will continue to compete against one another.

But some gray areas are emerging, too.

As MSPmentor mentioned earlier today, ConnectWise is set to launch ConnectWise Capital — a $20 million effort to incubate innovation that empowers MSPs and VARs. I believe ConnectWise has the right motives: ConnectWise Capital could help VARs and MSPs leverage new, pure-channel solutions.

But there are also some competitive considerations to keep in mind. Even as ConnectWise Capital helps to incubate some companies, ConnectWise itself must maintain an open API set and healthy relations with its established software and hardware partner ecosystem. That will require careful balance.

Meanwhile, Kaseya is introducing some new competitive considerations. Rewind to the Kaseya User Conference 2009, where Kaseya CEO Gerald Blackie told me:

Fast forward to the present, and Kaseya around February 2 (a one-week delay from our previous report) expects to launch Kaseya 2, a SaaS and on-premise platform that will include some PSA functions.

Oracle vs. Microsoft, Revisited?

In some ways, the Kaseya and ConnectWise moves remind me of Oracle vs. Microsoft — though on a much, much smaller scale.

My key points:

Certainly, my bullet points above over-simplify the situation. For instance: Kaseya has a healthy software partner ecosystem. But speak to Kaseya’s executive team and they talk about their ERP (enterprise resource planning) experience — which suggests to me they have grand goals to push Kaseya 2 into multiple markets… …

I’m pressed for time, which means this blog entry is filled with plenty of blanks that need to be filled in. For starters: The MSP software industry is not a two-company industry. Multiple PSA and RMM companies are growing and innovating. Online backup, security, HaaS and other players are plugging into many of those systems. I’ll strive to keep giving all of those companies equal time on MSPmentor.

But I do believe the imminent Kaseya 2 launch and ConnectWise Capital efforts are key industry inflection points. Will Kaseya 2 work as advertised? I have no idea. Will ConnectWise Capital really incubate innovation? I have no idea.

Still, I’m intrigued. I think the rules of the MSP software game are changing.