SMB Nation Blog

SMB Nation has been serving the Bainbridge Island area since 2001, providing IT Support such as technical helpdesk support, computer support, and consulting to small and medium-sized businesses.

JEALOUS – Spiceworks IT Report for 2018 Forecasts

First of all, just to be clear, I’m very jealous of Spiceworks. Always have been; always will be. They have successfully scaled an enthusiastic and engaged community of IT Pros over the past 10+ years to dwarf anything in the SMB MSP channel. It’s an interesting company history here.

Full disclosure. I recently attended
the well-regarded SpiceWorld conference in Austin Texas (Spiceworks HQ town) and beyond enjoyed myself. This conference has a couple dimensions and at its core is focused on its technology tools used by IT Pros (SpiceHeads) followed by an unusually strong party culture. Folks were wearing costumes making this the “ComicCon of IT” (a term coined by the The Register – a UK-based publication). In the spirit of Yelping – I will repeat and you should do this at least once. Mark your calendars for October 2018.

Now the good stuff. The 2018 State of IT report was released at SpiceWorld 2017. The logical question is this: what’s in it for me, the SMB Nation MSP? The interactive chart below shows one view for small business (customers) in North America in the context of Managed services budget breakout for 2018.

spiceworks msp chart

Figure 1: Look closely and join me in being surprised that Managed Hosting is a category leader. Seriously?

Other MSP insights (we’ll get to the other stuff later) include:

“The smallest of the small are the biggest procrastinators.” Shared Peter Tsai, senior technology analyst at Spiceworks and someone I consider to be a friend over the years. This was in reference to small business customers that an SMB Nation MSP would serve. I concur.

Peter Tsai at SpiceWorld 2017

Figure 2: Hanging with Peter Tsai at SpiceWorld 2017 in Austin, TX (October 2017)

Tsai found that there are three drivers for an MSP to be engaged by a small business. It’s something we already inherently know at SMB Nation but the validation from Spiceworks was worth the price of admission alone (these are listed in order of study findings):

  1. Price. Extreme price sensitivity in SMB.
  2. Existing relationships\
  3. Trust

I expressed my exasperation to Tsai that I wish these findings were exactly reversed with TRUST being number one and he understood but this is what his research found.

Tsai concluded the MSP conversation with the insights that “MSP constraints for the small service provider are lack of budget, lack of time and lack of knowledge. The smaller MSP can’t be expected to know everything about every single technology.”

Other Stuff
In all fairness, the report covered many more topics. Highlights include:

  • IT budgets are expected to stabilize in 2018, and in many cases grow, as many businesses are feeling optimistic about the state of the economy. As a result, many organizations plan to increase their IT staff in 2018 to help manage new hardware, software, and services.
  • 44% of companies expect their IT budgets to increase in 2018, and they expect a 19% increase, on average; 43% expect budgets to remain flat and only 11% of companies expect IT budgets to decrease.
  • 45% of companies plan to hire more IT staff in 2018.
    • Adoption of emerging technology in the workplace is on the rise. As budgets stabilize, many organizations are also planning to increase their adoption of emerging tech like IoT, VR, and AI.
  • Currently, 29% of organizations have adopted IoT while 18% have adopted VR and 13% have adopted AI technology. In the next 12 months, adoption of emerging technologies is expected to increase significantly to 48%, 32%, and 30% for IoT, VR, and AI, respectively.
  • Budgets for cloud-based services are on the rise, and nearly tied with software spend. In fact, among hardware, software, cloud services, and managed services, the highest percentage of businesses (55%) reported an increase in cloud budgets.
  • In 2018, 31% of IT budgets have been allocated for hardware, 26% for software, 21% for hosted/cloud-based services, and 15% for managed IT services.
  • In terms of what’s driving more companies to the cloud, the results show 42% are moving to the cloud to provide access to data anywhere, while 38% are looking to enhance their disaster recovery capabilities and 37% want to enable better flexibility and scalability.
  • Despite the rebound in IT budgets, few companies are budgeting for GDPR. 57% of IT departments still haven’t allocated budget for GDPR, or are unclear if GDPR budget exists.
  • Companies in North America are even less prepared. 69% of NA companies haven’t allocated budget for GDPR, or are unclear if it exists, compared to 44% in Europe.
  • Many companies say they’re not preparing for GDPR because it’s not a priority at their organization or because the steps to comply with GDPR are not clear. Additionally, many US companies assume GDPR doesn’t apply to them, but many still aren’t informed on GDPR’s larger impact on businesses worldwide.

 

 

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Thoma Bravo Acquires Continuum, A Leading Remote Monitoring and Management (RMM) Company

Firm’s Mid-Market Discover Fund Wraps Up Active Week of Deal Making  


BOSTON, MA and SAN FRANCISCO, CA – June 14, 2017 – Thoma Bravo LLC, a leading private equity investment firm, today announced that it has acquired Continuum, a premier global IT management platform for Managed IT Service thoma bravoProviders (MSPs), from Summit Partners. Financial details of the deal were not disclosed.  

Continuum, headquartered in Boston, is an international firm that provides MSPs with the platform, services and processes needed to simplify IT management and deliver high quality Remote Monitoring and Management (RMM), backup and disaster recovery and security offerings to small- and medium-sized businesses (SMBs). Its vertically integrated service delivery model combines a SaaS-based technology suite with a best-in-class Network Operations Center (NOC) and Help Desk, and allows MSPs to remotely administer, backup and secure their clients’ IT environments from a single screen and to scale quickly and cost-effectively. Continuum employs more than 1,400 professionals worldwide and monitors more than 1 million endpoints for its 5,800 partners, including MSPs servicing more than 60,000 SMB customers.

“Continuum sets the industry standard with its turn-key approach in the Remote Monitoring and Management market for MSPs,” said A.J. Rohde, a Partner at Thoma Bravo. “We know this market well, and have followed the company for a long time.  What Michael George and his team have delivered on in terms of an innovative product suite and full software and services model has been very impressive, and we can’t wait to work with them to accelerate the world-class offering they deliver to MSPs, both organically and through add-on acquisitions.”

“The company has a smart and proven business model which solves a well-understood skills gap in the MSP market,” added AJ Jangalapalli, a Vice President at Thoma Bravo.  “With its strong growth and high customer retention, Continuum is a great fit with the Thoma Bravo portfolio.”

“Thoma Bravo is the perfect financial and strategic partner for us at this important stage of our company’s growth,” said Michael George, CEO at Continuum. “This investment will enable us to continue to capitalize on our core value propositions and increase critical investments in product development as well as sales and marketing tools for our MSP partners to help accelerate their growth. We are incredibly grateful for the partnership and support we have received from Summit Partners, and are confident that Thoma Bravo’s operational expertise, knowledge of the space and strategic support will be invaluable to us as we focus ambitiously on our company’s future.”

The acquisition of Continuum was made through Thoma Bravo’s Discover Fund, which debuted in early 2016, and comes on the heels of its acquisition of Riskonnect, an integrated risk management provider, announced last week. The Discover Fund enables Thoma Bravo to expand its investment reach by focusing on growth-oriented technology companies in the lower middle market. Previous Discover Fund investments include Bomgar, a cybersecurity provider; Elemica, a supply chain operating network; Infogix, an analytics company; and T2 Systems, a parking management software firm.

Kirkland & Ellis is serving as counsel for Thoma Bravo. Goldman Sachs and the Carlyle Group provided the debt financing for this transaction. Lazard acted as financial advisor and Goodwin as legal counsel to Continuum.

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Channel Check-In: Atera’s YTD Report Card

Everyone loves a success story. So hang on fast as Atera, a seasoned start-up, is making fast moves in the SMB channel. You’ll recall we extensively covered it’s “Hello 2016” launch at the start of the year. There is ample evidence suggesting nine out of ten start-ups fail (of course) but I’m more interested in learning what makes the ten percent successful like this Forbes article did. Needless to say I count Atera in this top ten percent. So what’s it’s secret to success as an all-in-one SMB RMM/PSA/Remote Access ISV?

First – the word is out. Atera has enjoyed outsized publicity and coverage because of its market timing to provide a right-sized all-in-one RMM Software, PSA and Remote access SaaS solution for the SMB channel partner. “Our target market are the smaller VARs and MSPs.” Gil Pekelman, Atera CEO, shared during a far reaching interview. aterasept“Our pricing model of $89 per technician is both a fraction of the cost of an existing RMM player (not to mention PSA) and the fact that it is not Agent based pricing makes it totally disruptive.” As a privately-held company, Atera doesn’t release financial information but I can attest that its growth rate is significantly ahead of plan, having reviewed some internal information.

Second – Continuous Innovation. “We launched The Benchmark: This is an industry first – utilizing big data analysis we provide our users with Data (KPI’s) that can guide them if its business is on the right track. For example, we just released within our new billing module a comparison between the contracts the MSP has with his customer and the industry median hourly price.” Pekelman added. In a future contribution about Atera’s SMB channel journey, I will dig much deeper into the analytics topic.

 

Third – Community Feedback. A day doesn’t pass where I’m not promoting the authenticity of the SMB Nation community based on our geek roots dating back to the beginning of time (the release of the Small Business Server product in the late 1990s). Money and time haven’t changed us as we remain a bona fide grass roots community still committed to changing the world. Here’s the good news. Atera thinks like us too! Pekelman proudly “peacocked” his open feedback approach. “It’s an open/transparent/Internet model – You know what we have, what you will pay and what we are working one…. http://ideas.atera.com/?sort=popular” Loosely translated, Pekelman is saying that Atera’s innovation is based on community feedback.

This transparent community paradigm has allowed Atera to gleam insights into its VAR/MSP customers. “For the small guy what did we do? We changed his life.” Pekelman declared. “He can now afford an all-in-one MSP Software platform (or save a lot of money on the system he has). The system is so easy and automated that he can actually use it without hiring PSA/RMM implementation consultants. He has a unique Offering – Unlimited Agents vs. all those MSPs that are stilling using an agent based product. We are giving him a compass to run his business and guide him to a healthy one.”

Finally – design. I can attest to the simplicity of the Atera solution. I reviewed that aspect earlier this year .

Over the next couple of months, I’ll continue to track Atera’s success. It’s one to watch.

PS – If you downloaded and used Atera in a trial several months ago, DO IT AGAIN! It’s rate of innovation is amazing so the version you worked with a few months ago is different today!

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Dazed and Amazed: Atera’s Disruptive PSA and RMM Pricing Model

Once in a great while, disruptive financial models are created. Take derivate trading in the financial markets and how that led to high speed trading an amazing disruption. Atera is out to do the same by essentially offering a futures contract where you lock in your PSA/RMM pricing based on the number of technicians you employ, not the number of device. It’s a brilliant strategy and makes sense with the commoditization of IT at SMB customer sites.

Why the "paying per device" model is killing the growth of your MSP business

If you avoid Atera’s attractive pricing offer, you do so at your own peril. That’s because you subjective you and your family’s financial welfare to the diminishing returns of IT management. Allow me to assert my argument.

  1. Penalized for growing – when you grow, your traditional PSA and RMM supplier grows on your expense, since new customer will require you to spend more money on monitoring of new servers & workstations. Loosely translated, there is no upside financial leverage. Your RMM and PSA costs are essentially variable costs and that makes it tough to increase profitability margins.
  2. Makes you uncompetitive – you need to charge your customer for every PC, laptop and server added. Remember I made mention of the oft accepted theory of IT commoditization? In such a marketplace, it’s essential you control if not lower your costs. A market that is being commoditized doesn’t support a cost-plus inflationary strategy. You can’t pass on your costs easily and thus you become uncompetitive to more efficient operators.
  3. Hurting your customer growth & relationship – when your customer grows (and needs more PC, laptops and servers), you have to charge more, and the customer most likely will not care about the fact that this money isn't going to your pocket at all. It’s going to fat cat PSA ISV owners and RMM executive’s wallets!

Atera to the rescue: per technician pricing

So I’ve saved the best for last. Atera is asserting an optimistic investment approach that reduces risk and increase profitability with maybe a bit of fun thrown in. Atera’s PSA and RMM solution has three pillars.

  1. Predictably – you know how much you pay each month. That’s your hedge strategy facilitated by buying Atera’s solution set. By analogy, think of it this way. Each and every day, corn farmers in Iowa sell futures on the Chicago Board of Trade. Big Ag (large agriculture companies and distributors) buy those futures as part of a financial strategy to lock in its corn commodity prices. Right or wrong, Big Ag knows what it’s be paying.
  2. Competiveness – You can charge less and provide better service because all devices will be monitored. Smart idea in a cloud world and facilitated by Atera, a born-in-the-cloud ISV.
  3. Relationship with customer- you avoid the tension of the whole “I need to charge you more for your growth” conversation. Whereas in the financial community, I’d offer personal friendships are minimized because “they” are not nice people. It’s just the opposite in SMB. MSPs are often personal friends with customers. So expectation management is paramount to a long-term relationship!
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Continuum Strengthens Leadership Team with Additions on Technology, Marketing Fronts

continuum logoContinuum said today that it has hired two new industry experts to its executive management team: Paiman Nodoushani, vice president, engineering and chief technology officer; and Jeanne Hopkins, senior vice president and chief marketing officer. The moves deepen Continuum’s strengths in product engineering and development, as well as all aspects of partner and acquisition marketing programs.

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AVG Launches RMM Toolset for MAC Environments

AVG logoAVG Technologies is now offering enhanced support for Apple’s Mac operating system (OS) environments within its AVG Managed Workplace 2013 remote monitoring & management (RMM) platform. At the same time AVG Managed Workplace becomes the first RMM tool to offer agentless iOS management of Mac OS X devices including iPads and iPhones. 

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AVG Integrates LPI’s Managed Workplace Platform into AVG Cloud Care

AVGMWLogoToday at a launch event in New York City, AVG Technologies today announced the first AVG CloudCare service module will be integrated within AVG Managed WorkPlace since AVG acquired the business of LPI Level Platforms in June.

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AVG Offering Special RMM Promo for Existing packetTrap Users

AVGMWLogoAVG Technologies is now offering MSPs (for a limited time) an RMM swap promo for partners that had previously been using packetTrap, the platform acquired by Dell from Quest Software last year.

The promo, which is available from now through November 2013, offers AVG Managed Workplace RMM platform at no charge to businesses with existing packetTrap RMM licenses.

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VaultLogix Announces Integration With LabTech Software

vaultlogix logoThis morning, VaultLogix announced and integration partnership with LabTech Software that will allow LabTech’s RMM solution to actively monitor Vaultlogix’s Advantage Cloud Backup and Recovery Service.

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Naverisk Appoints New VP of Sales to Lead US Market Efforts

Mike-Inzerillo-NaveriskEarlier this week, Unified RMM software developer, Naverisk, named Michael Inzerillo as the new Vice President of Sales, US Markets. Inzerillo previously served as Director of Worldwide Sales at LabTech, and is a well-regarded member of the MSP community.

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Kaseya Appoints Former Oracle, NetSuite Execs to Leadership Roles

Kaseya logoKaseya said this morning that it has appointed a new CMO and CSO. The appointment of the company’s new CMO comes just a week after its former CMO, Bob Davis, parted ways with the company.

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N-able Report Manager 4.1 Aims to Efficiently Combine Daily MSP Business Practices

n-able logoWe heard from N-able today that the recently acquired RMM has launched Report Manager 4.1, designed to deliver business reporting to N-able MSPs worldwide. Highlighting the new release is a new executive summary report designed to transform and simplify the way MSPs quantify, communicate and visually demonstrate the business and technical value of their services to customers, prospects and other influencers such as line of business owners and board of directors.

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What's Next for Zenith Infotech?

Zenith Infotech logoFor the last two years, it has been no secret that Zenith Infotech has experienced its share of headlines discussing its current financial situations. It was first noted in October 2011 that the company had defaulted on $85 million in foreign currency convertible bonds. Now, just last week, The Economic Times of India (Zenith is based in Mumbai, but has U.S. headquarters outside of Pittsburgh, PA) reported that the “Bombay High Court has admitted the winding-up petition (meaning an order has been sought to put a company into compulsory liquidation) filed by foreign lenders. In addition, the article said that the court has appointed an advocate as a provisional liquidator.

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Former N-able Staffer Joins AVG as Channel Chief

AVG logoAVG seems to be staying true to its word of maintaining its commitment to the channel via its acquisition of LPI Level Platforms last month. The company said earlier this week that it has hired a former N-able staffer away as its new VP Channels North America. Marco La Vecchia, is set to begin his AVG tenure on August 15.

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Naverisk Opens First US Office in Tampa Bay, FL

RMM company Naverisk, which has offices in New Zealand and Europe, said that it has opened its first U.S.-based office in Tampa Bay, FL.

Another milestone in Naverisk’s global expansion program, the US office opening follows on from the successful opening of Naverisk offices in the United Kingdom at the end of 2012.

Built as a complete “all in one” package from the ground up, Naverisk positions itself as “the only solution that offers RMM (Remote Monitoring and Management) and a complete Service Desk at an affordable and fair price for SMB focused MSPs and IT Service Providers.”

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The Tables are Turned: Kaseya now Acquires Biz Service Management Company Zyrion

Just a few weeks ago, Kaseya announced that it had been acquired by Insight Venture partners, a NYC-based venture capitalist firm. In addition, the company said that CEO Gerald Blackie and his co-founders would step down to make way for a new CEO—Yogesh Gupta.

Now, today, the tables have been turned with the RMM acquiring Zyrion, a provider of cloud and IT service monitoring software solutions. Like the Kaseya/Insight Venture Partners acquisition, the terms of this deal were also not disclosed.

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New Kaseya CEO Aims to Increase Customer Support, Higher Quality Products, Services

Earlier this week, Kaseya announced that Insight Venture Partners, a private equity investment firm in New York City, had made a significant investment in the RMM for an undisclosed amount of cash. Aside from Kaseya being the third RMM to be acquired in the last month, behind Level Platforms and N-able, the company also announced that its CEO Gerald Blackie, and his co-founders, were stepping down to pursue other opportunities. Yogesh Gupta has been named the new President and CEO of Kaseya, effective immediately.

(Pictured): Yogesh Gupta, Kaseya's new President and CEO.

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Continuum Doubles NOC Capacity with Move to 24/7 Facility in Mumbai, India

As many of our readers have observed, we have spoken with Continuum a few times in the last couple of months regarding the changes and expansions the RMM is undergoing. Today, the company announced another one of its initiatives, this time regarding its Network Operations Center (NOC).

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Insight Venture Partners Makes Investment in Kaseya; Gerald Blackie and Co-Founders to Pursue Other Opportunities

It seems as though there is no stopping acquisitions in the RMM world. Last month it was SolarWinds' acquisition of N-able, and then a couple of weeks back, Level Platforms shocked its partners when it announced that it was acquired by anti-virus giant AVG. The latest victim is Kaseya, which announced late today that it was acquired by Insight Venture Partners, which has made a significant investment in the RMM. According to a press release issued by Kaseya, terms of the agreement are undisclosed.

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AVG Purchases Level Platforms to Enhance its Cloud-Based Services Model

This morning, we heard another big news announcement, having just recovered from the announcement that SolarWinds acquired N-able last month: AVG Technologies said today that it plans to purchase (subject to closing) the business of LPI Level Platforms.

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N-able CEO Gavin Garbutt Talks Acquisition, Retirement, Future Plans

Earlier this week, we broke the news that N-able announced its intent to be acquired by SolarWinds for $120 million in cool cash by the end of the month. The news item also noted that N-able’s CEO, Gavin Garbutt, will be retiring, and JP Jauvin, the company’s GM will take the reins once Garbutt hangs his hat for the last time at N-able’s Ottawa, Canada, headquarters.

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Continuum State of the Union: We are Stronger than Ever, and Completely MSP-Focused

At this point, about 18 months later, you would have been living in a cave if you are involved in the SMB channel and had not heard that Zenith Infotech’s managed services business unit was spun off as a separate entity known as Continuum. Based in Boston, the company, in which VC firm Summit Partners has made a sizable investment, Continuum (formerly known as Zenith RMM), operates as a strong U.S.-based company that is continually focused on its MSPs and helping them to better their lives—both professionally and personally.

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VaultLogix Offering Free Two-Week Trial on Biz-Class End-Point Protection until June 30

vaultlogix logoVaultLogix is now offering a free trial of its business-class MobilePlus service, which provides backup, recovery and data protection for mobile workers’ Windows and Mac laptops and desktops.

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Level Platforms RMM Software and DOCUWISE Print Management Software Integrate

Yesterday, Level Platforms announced a technology integration between their Managed Workplace RMM software and DOCUWISE, LLC’s PESO software. This integration will allow MSPs to more fully manage print ecosystems.

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N-able Debuts MDM Module via N-central 9.1 IT Services Platform

N-able Technologies has made available N- central 9.1, an IT services platform that easily scales and supports hybrid IT environments and mobile devices, as well as Windows 8 and Windows Server 2012.

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LabTech Debuts Integration to Help MSPs Leverage Biz Workflow within their PSA

LabTech Software, which touts itself as the only RMM platform developed by an MSP for MSPs, today unveiled an integration platform revolutionizing partners’ ability to best unlock the full potential of their PSA platform for increased productivity, optimized customer service levels and maximized profitability.

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Datto Technology Now Integrated Into Level Platforms Solution

Datto Level Platforms logoThis morning, Datto, Inc., announced the release of deep product integration with the Level Platforms Managed Workplace platform. This integration will allow Datto partners to provide an improved end-user experience to their customers.

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Friday Afternoon Club with: Peter Sandiford, CEO, Level Platforms

We recently had the opportunity to chat with Peter Sandiford, CEO, Level Platforms, regarding the many accomplishments the company has achieved in the last year, as well as Sandiford’s outlook for 2013. With the year now in full swing, Sandiford offered how far LPI has come in the last year, and where the company is headed in the next year.

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LabTech Expands RMM Solution with Intel vPro Integration

LabTech-logoToday, LabTech Software announced that they have added Intel vPro integration into their Remote Monitoring and Management platform. This new integration will allow MSPs to better enable RMM recovery and decrease downtime.

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