Autotask: Profitable, Growing, And…
Several major updates from Autotask Corp. surfaced today. They involve upstream expansion — competing against the likes of BMC and ServiceNow. And they include another major PSA-RMM product integration that’s coming soon. In an exclusive interview, Autotask CEO Mark Cattini and VP of Product Management Pat Burns shared the company’s financial milestones, priorities and next moves with ChannelE2E.
First, a bit of a rewind: Vista Equity Partners has owned Autotask since June 2014. The private equity firm has funded Autotask to evolve beyond its PSA heritage. The expanded lineup now includes Autotask Endpoint Management (RMM based on the CentraStage buyout of September 2014) and Autotask File Synchronization and Sharing (based on the SoonR buyout of July 2015).
“[Vista] has done everything they promised in terms of investing in us and looking for acquisitions that fuel growth,” Cattini says. “[The Vista buyout] was a watershed in terms of our next level of growth. Vista is the best software investor in the world. For us to get through [due] diligence with Vista, it talks about the depth and quality of Autotask — the company, the people, the products, the customers and the vision.”
Autotask Business Metrics and Milestones
I must concede: ChannelE2E has wondered if Autotask can generate meaningful profits as the company extends its business footprint and software portfolio globally. The overall answer from Cattini: Yes, the company is profitable. But that’s not all. Without quite revealing actual revenue and profit figures, Cattini pulled back the curtain on several key business metrics. They include:
1. Revenues: Over the past five years — from January 2011 to January 2016, Autotask’s revenues will have grown more than 4X. “We’ll be close to five times the company we were about five years ago,” Cattini asserts.
2. Employees: Autotask will end 2015 with about 450 employees, up from about 195 five years ago. The takeaway from Cattini: Proper software design and automation have allowed the company to grow revenues faster than headcount, though he stresses that Autotask has invested heavily in sales and engineering talent.
3. Footprint: The company’s Albany, N.Y. area headquarters just added 4,200 square feet. The UK office just gained another 7,000 square feet for customer training and presentations. Then there’s 6,000 square feet of space in Australia. “Our business is truly global now,” Cattini asserts.
4. RMM: Autotask’s endpoint management revenues are four times larger today than they were a year ago. ChannelE2E’s question: But Is the percentage growth rate misleading because CentraStage had a small user base a year ago? “It’s a significant business in terms of revenue,” responds Burns. “If you look at individual deals, we’ve gotten some of the biggest, most prominent MSPs switching from competitors” — though Autotask didn’t name specific switch outs.
5. File Sync: It’s only been a few months since the SoonR acquisition, but the platform has attracted “several hundred partners” since the deal closed.
6. Revenue Mix: International revenues now generate more than 50 percent of Autoask’s new sales, although the U.S. market remains larger in terms of established recurring revenues because of the company’s history in that market, Cattini says.
7. Profits: The big question: Is Autotask growing in a profitable manner — or growing just for the sake of growth? “You have my word,” Cattini responds. “We’re profitable. We’re continuing to invest in product and infrastructure. But it’s a measured, thoughtful, responsible approach to growth.”
R&D for Upstream Moves
Yes, Autotask still competes in the traditional MSP software market. But multiple times during today’s conversation, Cattini mentioned growing competition with BMC and ServiceNow on larger installs.
On the engineering front, Autotask recently unveiled a major GUI overhaul. Burns calls it a “high-risk/high reward” move by the company. Here again, Autotask points to key metrics that reveal key adoption trends.
So far, Autotask’s user base has created:
- Over 25,000 custom dashboards. The upgrade shipped with 12 templates that were role-based. Users have also built 75,000 custom widgets — each essentially is an individual reporting object. Users can drill down to the records behind the data.
- SLAs: Since the GUI launched, Autotask believes its partners have improved their end-customer SLAs by about 23 percent.
Following, Then Leading?
In some ways, Autotask was a follower to the PSA-RMM integration trend. Several years ago, Kaseya started building a ticketing system into its RMM platform. And ConnectWise (originally PSA) acquired LabTech Software (RMM) in 2010.
During the early days of those integration trends, Autotask vowed to remain vendor-neutral on the RMM front — a Switzerland of sorts in the MSP software world. But amid waves of M&A, Autotask ultimately pivoted and adopted the PSA-RMM “under one roof” strategy.
Cattini insists Autotask’s buyout of CentraStage wasn’t a “me too” move. “The priority there was to innovate,” he says. “To provide value that doesn’t exist in the integrations we’ve seen. And we’ll deliver that in a couple of months. We will be blurring the [lines between the] platforms in multiple ways. It will make the concept of standalone RMM and standalone PSA look obsolete, quite frankly. We have a half-dozen disruptive innovations or so in the pipeline.”
Among the additional enhancements: Watch for a new service ticket experience in the first half of 2016, Burns says. And watch for some mobile-first initiatives that simply aren’t present in the desktop world, Burns said.
While Autotask intends to compete fiercely with its integrated PSA-RMM platform, the company will continue to offer APIs for third-party integration, Cattini and Burns add.
“We are not going to penalize good customers of ours who want to use another RMM,” says Cattini. “Our job is to innovate and build a better [RMM] product than they are currently using. Are we head-on rivals [with third-party RMM]? Absolutely. Do we cooperate? Yes. The APIs are there for other RMMs to integrate with Autotask.”
Companies like eFolder are striving maintain strong relations with both Autotask and ConnectWise. “eFolder’s mission is to serve our growing community of 2,900 MSP partners well,” says eFolder VP of Marketing Ted Hulsy. “Many of our partners leverage Autotask in their businesses and eFolder has numerous integrations with Autotask across product lines, including eFolder Backup, BDR, and Anchor. PSA integration is a foundational feature for MSP focused solutions and we intend to further deepen and broaden our integration with Autotask and ConnectWise.”
Execute, Execute, Execute (And Acquire?)
Overall, Autotask’s strategy is to execute on further platform integration. But is there room for additional acquisitions? Cattini says money is not an issue.
“For the right opportunity, we have the funds available,” says Cattini. “I won’t say there’s a limit that would inhibit us from buying anyone in this space. If you think about our track record [on M&A], Vista can’t wait to write another check. And not just potential add-ons to Autotask. But also add-ons for RMM and file sync and sharing.”
Still, Cattini doesn’t want to hype the potential for more Autotask M&A deals. Instead, he wants to reinforce Autotask’s current focus and execution on product integration.
Burns, meanwhile, sounds like he’s heads down on that R&D effort. “We’re about to ship very advanced, very unique, compelling integration.” It sounds like delivery day will arrive sometime in January 2016.
Amid Autotask’s growth story, there lurks plenty of competition.
Among the examples: Thousands of ConnectWise partners are set for the IT Nation 2015 conference this week in Orlando. Continuum Managed Services will grow nearly 40 percent this year, according to sources close to that company. Kaseya has returned to growth. Emerging players like LogicMonitor may redefine how infrastructure is managed. LOGICnow is launching a range of big data tools to help MSPs predict future customer needs. And Tigerpaw Software, with Bob Godgart coaching CEO James Foxall, has some new tricks up its sleeve.
Still, Cattini doesn’t seem all that distracted by rivals. His focus comes down to execution, integration, and responsible, profitable growth while expanding upstream against BMC and ServiceNow.
Don’t look for more M&A just yet… Unless, of course, the right deal happens to come along.