A week ago at Autotask Live, Autotask reported it was being acquired by Vista Partners, an $11.5B private equity firm. The short press release, specifically brief and lacking details, roared across the MSP community. As I researched this topic over the past week, it was apparent that everyone has an opinion ranging the full spectrum. I’ll start with my own:
I was already scheduled for an MSP TV session, which was to be filmed at Continuum’s Boston offices (see photo), so that was a natural forum to discuss the Autotask acquisition. I offered that:
- Natural Market Maturity: I and other analysts have suggested that we are in a maturing market for the current SMB IT Pro channel partner. In that scenario, it’s both expected and accepted that you would witness consolidations. The Autotask acquisition, while not a consolidation with a direct competitor, does reflect a mature merger.
- Competition Needed: What we can’t have is only one PSA product in the market. Such a strategy hasn’t traditionally worked well in other arenas, and this is one place in which our own IT community is no different. We need competition, so if the Vista acquisition strengthens Autotask’s place, then it is good.
- Unknowns: Will there be layoffs at Autotask as Vista tries to increase profitability and then flips it? Or will Vista do a roll-up of similar or complimentary technologies making for a bigger is better conglomerate, effectively increasing its spend in the SMB IT channel? It could go either way, to be honest!
- Love or Hate: Will the SMB IT Pro fall in love with a private equity firm? Such firms are not typically known as warm-and-fuzzy teddy bears. Will there be a public personality at Autotask that we can fall in love with? All valid questions, and I look forward to seeing how this plays out.
Michael George, Continuum’s CEO, opined “The Autotask community was excited to learn about the acquisition, or better described - the investment by Vista Equity. Very different from being acquired by an independent company with products and an agenda of their own, when a private equity firm like Vista acquires Autotask it means the company is now funded to accelerate its product, services and support plans which are all great things for their customers and the market as a whole. We are really impressed with what Mark and the entire management team has been able to accomplish over the past few years and really excited to be closely aligned with them as they deepen their relationship with their partners to improve their partner's growth and profitability. “
I made several calls to SMB influencers and heard the range of opinions I alluded to that all amounted to “uncertainty.” Part of the uncertainty has been caused by Autotask itself, which certainly hasn’t over communicated its strategy on a post-merger life. Can’t blame ‘em, as the deal isn’t expected to close until later in the summer and both parties will stay somewhat coy for a while.
Two industry experts see an IPO ahead as private equity funds have to get their money “out” after a certain investment horizon. However one well-placed source in Manhattan said NO WAY and views the Autotask code base as archaic in a stalled market. Some see hiring while others see firings.
Bottom line? Vista’s acquisition of Autotask has sparked a wide range of conversation, none of which are conclusive. What do you think? Do you have “the answer” to Autotask’s future? Lemme know!