Why Cloud Computing Didn’t Kill Continuum
Rewind to when Summit Partners acquired Continuum in 2011. Some pundits at the time predicated cloud computing would simplify and commoditize IT — thereby destroying MSPs and the software companies that served them.
Instead of embracing that mindset and running for the exit, Continuum CEO Michael George stayed the course and focused the company on several core themes. They included:
- IT would become more — not less — complex as cloud, on-premises and mobile offerings evolved and intertwined with one another.
- Locality would remain incredibly important, meaning that small business customers would prefer local, personalized MSP relationships rather than faceless enterprise cloud providers.
- Ubiquity of IT would become the norm, meaning that MSPs would need to support anywhere, anytime computing for their customers.
- Labor/Talent would be the most pressing issue facing MSPs.
That last point explains how Continuum differentiates in the MSP market. The company’s core offerings include RMM (remote monitoring and management), BDR (backup and disaster recovery), help desk and NOC (network operations center) services.
But here’s the twist. MSPs that run rival offerings typically have to hire IT talent to run and manage the tools. In Continuum’s case, the company manages the tools and platforms for the MSPs. In essence, Continuum is like a mini IBM Global Services to which MSPs can outsource a range of IT tasks. The approach allows MSPs to focus on sales while Continuum manages the back-end MSP tools.
Continuum Progress Report
No doubt, Continuum was in rough business shape when Summit acquired the company in 2011. But a laser-like focus on software deadlines, hiring deadlines, analytics-driven deadlines and build-out deadlines turn the company around and triggered healthy growth.
The latest example: Continuum will have roughly 1350 employees by year’s end — a net new headcount of roughly 265 people, George told ChannelE2E during the Navigate 2016 conference in Boston yesterday. Key focus areas include engineering, where the BDR team has grown from 20 to 80 people in a bid to compete more aggressively against Datto and others in the sector.
Recent arrivals include Senior VP of HR Ai-Li Lim (see July 14, item 22) and Chief Revenue Officer Robert Kocis. Upon Lim’s arrival, HR became more of a “strategic partner to the business” and a direct report to George. As for Kocis, his background includes global sales, recurring revenue and channel positions that stretched from the U.S. to Latin America, Europe, Asia and Australia.
Continuum already has eight employees in the UK. George notes that 80 percent of Europe’s gross domestic product involves the UK, Germany and France. Other areas of interest include the Nordics region, Benelux and Germany. Also, George has strong interest in Australia because outsourcing to Asia (particularly to India) is part of the country’s cultural fabric.
It’s too soon to say which geographies Continuum will pursue first. But George says each new location will benefit from “operationalized” expansion. In other words, each new office will have a dedicated team of technology, sales and support professionals — much in the way that cloud providers activate standardized data centers around the world.
Growth vs. Competition
Continuum is privately held, so I don’t know their top-line revenues or bottom-line profits. Still, it’s a safe bet the company is far more profitable today than on buyout day in 2011.
Still, competition looms on multiple fronts. Among the names to know:
- Autotask, which is expanding beyond its unified PSA-RMM platform to promote endpoint backup.
- ConnectWise, which may be exploring a NOC or help desk offering of its own, according to industry chatter. The company already has PSA, RMM, remote control and sales proposal software.
- Kaseya, which has stabilized its business in the past year though I don’t know if a push into PSA has gained critical mass.
- SolarWinds MSP, which gained new leadership this week amid a reorganization that will ensure LogicNow and N-able R&D work more closely with the company’s corporate technology leader.
Continuum’s Next Moves
So where does Continuum go from here? The short answers include developing a SOC (security operations center) for MSPs as well as a more aggressive international push. It sounds like SOC details will emerge late this year or perhaps in early 2017. On the international front, CRO Robert Kocis officially joins the company next week. Then, he’ll begin to formulate a global plan for George and the Continuum board’s consideration.
The Summit Partners-Continuum relationship is now five years into its journey. I don’t get the sense that Summit is looking to exit Continuum anytime soon. Instead, Continuum seems poised to double down on its IT outsourcing model for MSPs.