ConnectWise, Continuum: 10 Potential Next Moves

The ConnectWise buyout of Continuum, backed by private equity firm Thoma Bravo, certainly has some major synergies for MSPs (managed IT service providers) and technology partners. But the deal also involves some product and talent overlap.

Jason Magee, CEO, ConnectWise

How will ConnectWise CEO Jason Magee organize the acquired Continuum assets — and what are the potential implications for MSPs? Here are some educated guess from ChannelE2E, based on our team’s extended coverage of both companies.

1. Executive Leadership: This much is known. Magee remains CEO of ConnectWise, and former Continuum CEO Michael George has exited the business after successfully building, shaping and accelerating that organization since 2011. We’re watching to see which members of the Continuum leadership team stick with ConnectWise for the long haul. Among the potential positions to watch: Chief technology officer (CTO) and/or president of ConnectWise. To the best of my knowledge, both of those titles were vacant ahead of the deal…

2. Unified Product Roadmap: If I had to guess, I suspect ConnectWise will deliver a unified product roadmap for the various ConnectWise and Continuum products and services around the time of the ConnectWise IT Nation Explore 2020 conference, which is set for June in Orlando, Florida.

3. RMM Software: Some folks wonder if ConnectWise will phase out Continuum Command RMM (remote monitoring and management) software, and shift all MSPs to the ConnectWise Automate alternative. I don’t think that’s the case. Instead, it’s a safe bet Continuum Command will be positioned for MSPs that largely want to outsource their RMM functions, and ConnectWise Automate will be positioned for MSPs that want to keep their RMM capabilities in-house. Also, watch for a potential upgrade path and tools that simplify migrations from Command to Automate.

4. NOC Platform: Continuum Assist is the crown jewel of this buyout deal. The Assist offering starts with outsourced NOC (network operations center) and help desk services, and extends to the company’s more recent SOC (security operations center) expansion.

To the best of my knowledge: No other company in the MSP market besides Continuum has built an outsourced NOC business of this size for partners — though rivals like Collabrance and IT By Design, among others, certainly have momentum. The big wildcard: Will ConnectWise integrate its various software with the Continuum NOC, much in the way that Continuum’s own software supports such integrations?

5. Managed Security Services: This portion of the deal has some overlapping products and services. For instance, Continuum’s SOC and security efforts leverage software from such companies as Fortinet, Netsurion, SentinelOne and Webroot. ConnectWise also has relationships with Fortinet, Netsurion and Webroot. Plus, ConnectWise has an investment in Perch Security — which has its own home-grown security software and co-managed services. Perch, I believe, competes in some ways against the Continuum SOC services on some fronts. We’ll be watching for potential ConnectWise updates during the PerchyCon 2020 conference in January.

6. Backup and Disaster Recovery: ConnectWise now owns the Continuum BDR platform — branded as Continuum Recover. Here again, the software is tightly integrated with Continuum’s NOC — allowing MSPs to outsource much of the associated work to the software company. Still, Continuum’s BDR offering has a niche following, I believe. As a result, we have a sneaky suspicion that ConnectWise may still be in the market for a more mainstream BDR offering to compete more effectively against Datto on that front. Rival platform providers such as Kaseya and SolarWinds MSP also have their own BDR offerings. Hypothetically speaking, companies such as Axcient or MSP360 might be a fit here for ConnectWise…

LinkedIn: MJ Shoer, former MSP, leads the TSP-ISAO

7. TSP-ISAO: ConnectWise has essentially spun off a Technology Solution Provider ISAO (information sharing and analysis organization).

The TSP-ISAO, led by MSP veteran MJ Shoer, is seeking to:

  • gather and share proactive threat intelligence;
  • deliver coordinated cyber response;
  • promote best practices; and
  • support research, training and education in the cyber market.

The TSP-ISAO is seeking additional vendor members. But some third-party organizations, particularly ConnectWise rivals, have been slow to join the effort because they want to make sure the TSP-ISAO will truly act and perform independently of ConnectWise. Funding the TSP-ISAO as an independent organization, led by Shoer, are solid initial steps. We’ll be watching to see if Shoer is able to recruit some more key backers into the organization.

8. Partner Relationship Management (PRM):  ConnectWise recently unveiled a relationship Webinfinity, a key player in partner relationship management (PRM). We’re curious to see exactly how that deal helps partners and other channel ecosystem members to speed, manage and monetize their business engagements.

9. ConnectWise Revenue Model: Some pundits are wondering if ConnectWise is set to evolve its business model — perhaps to emulate Salesforce and other enterprise-class SaaS companies.

Consider this reality in the CRM world: The fee to list a third-party application on the Salesforce AppExchange, and license an application to Salesforce customers involves:

  • an initial security review fee of $2700 (then renewed annually for $150); and
  • 15 percent of the app’s revenue. That is known as the Standardized partner program.

Rumor has it similar fees may surface in the ConnectWise ISV partner community.

10. What did we miss? If you have thoughts or tips on where ConnectWise might be heading next please email me: [email protected].

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    Jay McBain:

    Expanding on #9, other platform companies are building out their marketplaces and adding consultants, SIs, and MSPs in addition to the ISVs. Forrester is predicting 17% of B2B dollars will flow this way by 2023, and I think it isn’t far fetched to think that the 15% tax may extend to services companies too. Stay tuned.

    Joe Panettieri:

    Hey Jay: Thanks for the additional context. We’re curious to see how ISV business models will evolve for consultants, systems integrators, MSPs, etc. It’s one thing for big SIs and consulting firms (i.e., Accenture, Deloitte, DXC, and the like) to navigate these changes. It’s quite another for SMB partners. To be continued…

    Chris Day:

    I can tell you that ISVs will be unlikely to accept a 15% commission on their revenue. That would be a very divisive development, and I suspect be met with broad outrage. Unlike Salesforce, the TAM simply isn’t big enough in that ecosystem to be attractive. More likely, the ecosystem will become closed which will trigger a fight or flight response for ISVs with any kind of scale.

    My two bits,

    Dimitris Miaoulis:

    From a naive perspective, Mr. Magee promised to put the partners first in the IT Nation key note speech. From a practical perspective, that idea usually gets lost in the PE reality of return on investment. Have been a ConnectWise partner for 8+ years….. so far. Thank you Joe for keeping us updated on what’s happening in the busy world of MSP.

    Joe Panettieri:

    Dimitris, Chris: We’ll be watching all the developments closely. Stay tuned for updates, and thanks for reaching ChannelE2E.

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