MSPs On ... The ConnectWise Buyout
Partners react to Thoma Bravo's acquisition of ConnectWise.
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At the end of the day, most ConnectWise partners are happy about the deal. CEO Arnie Bellini has successfully built the company from a local IT services provider into an industry-leading juggernaut with a large, fiercely loyal partner community.
“A ConnectWise customer since 2009, all of us at Digital Boardwalk have watched them grow and dominate the PSA space,” says Tim Shoop, CEO of Digital Boardwalk. “Their software has enabled Digital Boardwalk to grow far beyond our expectations. I applaud your success and look forward to the next chapter!”
Many longtime channel partners will tell you that the golden age of the channel has passed. A couple of decades ago, when the market was new and still a wide open opportunity, VARs could write their own rules and make money hand over fist without a ton of effort. But is the channel entering another golden age?
“With all the PE (private equity) money coming into the channel, this reinforces why it is a great time to be an MSP,” says Kevin Damghani, Chief Partner Experience Engineer at IT Partners. “Investors are seeing the potential of the channel and are paying multiples to be a part of it.”
Not everyone is enamored with ConnectWise. While many MSPs are worried about possible negative impacts on the provider’s products, features, services and support, a lot of others are hopeful that Thoma Bravo will bring some much needed improvements.
“I’m hoping the service and support gets better,” says John Schoff of Reality Bytes Inc. “The product is very good, but the support is nonexistent.”
There’s always a big question mark over the tone that the new owners will set. When Datto was acquired by Vista, many partners worried that the company’s close-knit partner community and founder Austin McChord’s passion would disappear. Will the same thing happen with ConnectWise?
“Whenever there is consolidation at this level, there is a high risk for complacency in the new company,” says René Miller, CEO of Ener Systems. “The passion that previously drove the former leader is often not shared by the new owners. We don’t know what drives the new owners besides profit — they are a VC firm …”
ConnectWise, like its competitors, has been pushing a message of open platforms and easy integrations with other providers in recent years. Will its purview continue to grow past its legacy offerings, or will it go back to its roots?
“Over the past few years ConnectWise has attempted to grow beyond software to create a community for MSP’s globally, aligning software, products, and third-party partnerships with best practices and mentoring,” says Darren L. Crane, President of DLC Technology. “It will be very interesting to see if this direction will continue under new ownership, or if the company may refocus back to its software core. My hope would be to see a merging of best practices and service excellence with the other companies in Thoma Bravo’s portfolio.”
ConnectWise being the last major provider in this market to accept private equity, most MSPs have been through this process before with other vendors. They know it isn’t always the smoothest ride.
“There’s always a bit of trepidation when something like this happens,” says Thomas Fox, President of Tech Experts. “I’ve been a ConnectWise partner for over a decade, and while there have been some growing pains, it is really awesome to see how they’ve grown the business. This is the next logical step for them.”
Many managed service providers (MSPs) are excited by the possible functionalities a cash infusion may provide.
“Any IT CxO will tell you that the biggest challenge in IT operations is the need for software automation; unfortunately, in the IT MSP space, products have traditionally taken us just short of the goal line,” says -Sebastian Abbinanti, president of The Isidore Group. “Over the past few years, ConnectWise has added value by acquiring complimentary products and creating a unified package to get us past the goal line. I am optimistic that this capital injection will help ConnectWise further down the path of creating a single unified system that meets all the operational needs of an IT MSP.”
Many managed service providers (MSPs) are excited by the possible functionalities a cash infusion may provide.
“Any IT CxO will tell you that the biggest challenge in IT operations is the need for software automation; unfortunately, in the IT MSP space, products have traditionally taken us just short of the goal line,” says -Sebastian Abbinanti, president of The Isidore Group. “Over the past few years, ConnectWise has added value by acquiring complimentary products and creating a unified package to get us past the goal line. I am optimistic that this capital injection will help ConnectWise further down the path of creating a single unified system that meets all the operational needs of an IT MSP.”
On Monday, MSP management software provider ConnectWise announced it had accepted a buyout offer from private equity firm Thoma Bravo.
ConnectWise, among the first and certainly the largest provider of professional services automation (PSA) solutions, has found itself in increasingly lonely territory in its refusal to date to accept institutional capital. It’s the last among the PSA/RMM market leaders to do so, joining Continuum and SolarWinds in the Thoma Bravo portfolio. Vista Equity Partners acquired Datto in 2017 and merged it with ConnectWise competitor Autotask, and RMM provider Kaseya was bought by Insight Venture Partners in 2013.
Partners showed a range of reactions to the news. Some worried about the institutional changes the deal would bring, others were excited about prospects of improved products and support, and many raised a metaphorical glass to CEO Arnie Bellini, who surely cleaned up. (Terms of the deal were not disclosed, but general estimates place the buyout figure above $1 billion.)
Click through the slides above to see what managed service providers had to say about the ConnectWise announcement.
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