Memo From Arnie to Partners
In a world where IT vendors often try to move up market or down market, ConnectWise CEO Arnie Bellini offers this message for IT service providers: His company will remain focused on partners in the SMB sector, and ConnectWise won’t abandon them for the midmarket.
During his IT Nation 2015 keynote yesterday, Bellini mentioned massive SMB opportunities involving customers with 500 or fewer seats. In a follow-up conversation with ChannelE2E, Bellini took his points a few steps further.
Midmarket? No Thanks
Bellini alleges that ConnectWise’s rivals are losing focus by essentially stretching beyond the small business sector and heading up-market. His assertion:
“It’s a shame that our competition is setting their sights on the ‘greener’ pastures of mid-market. We have a different view. IT solution providers are the key to driving productivity in the SMB’s they service. SMBs account for half of the world’s economy. IT solution providers need our mentorship. We realize we can’t flip a switch and serve every one of them. And that’s why we need competition. But it’s a shame to see our competitors move upstream to chase easy money. They are leaving the mission field here in SMB.”
Which rivals? Bellini didn’t mention competitors by name — but you can guess the list, including those that have taken private equity dollars as part of their growth strategies. Founded by Arnie and David Bellini more than 30 years ago, ConnectWise is self-funded. President Matt Nachtrab, in an interview with ChannelE2E, said the company is essentially debt free.
Private Equity Dollars
In contrast, private equity dollars have been flowing into the IT channel — buying a range of software and cloud companies. When ChannelE2E asked Bellini about the trend, his answer pointed back to ConnectWise’s core mission:
“We will not abandon the mission field for more money. We don’t have to. At ConnectWise we get to call the shots, not a private equity firm. Does it always have to be about the money? My father was a 27-year IBM Branch Manager. He taught David, my brother, and I that if you do the right thing the money will follow. We still believe pa was right.”
Of course, there are multiple ways to growth a technology company. And many private equity deals can be quite successful for investors, vendors and their customers. Other deals involve shifts from small business to the midmarket sector. But Bellini vows ConnectWise will remain focused on partners — IT entrepreneurs, IT solutions providers, MSPs — that service small business customers.