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ConnectWise Acquires HTG: What It Means for IT Service Providers, MSPs Worldwide

ConnectWise VP Arlin Sorensen
Arlin Sorensen
ConnectWise Founder Arnie Bellini

ConnectWise has acquired HTG, an executive training, coaching and peer group organization that serves roughly 500 MSP and technology service provider companies worldwide. The deal solidifies ConnectWise CEO Arnie Bellini's emphasis on ecosystem building, while providing HTG with more global resources beyond its roots as an Iowa-based organization. Financial terms were not disclosed.

HTG Founder and CEO Arlin Sorensen joins ConnectWise as senior VP of the newly minted HTG business unit. Current HTG offerings, including the peer groups, vendor member, and coaching and consulting programs, will remain unchanged, the two companies said.

I suspect the vast majority of HTG members and ConnectWise partners will applaud the deal. I also suspect most hardware, software and cloud companies that work with HTG and ConnectWise also will applaud the combination. There are real synergies here, folks.

There's no denying that a handful of companies -- those that compete with ConnectWise but partner with HTG -- will likely (and rightfully) raise questions about the deal. Similarly, some training and education organizations that compete with HTG but partner with ConnectWise may raise a skeptical eye.  Updated, 3:37 p.m. ET, January 5, 2018: Perspectives from Auvik Networks, Datto, eFolder and TruMethods executives are now added at the bottom of this report.

Still, there's no denying the potential upside here for ConnectWise, HTG and thousands of IT service providers worldwide. The deal isn't necessarily a game changer. Instead, it's a solidifier and a potential accelerator. It reinforces existing ConnectWise and HTG DNA, and then potentially extends that DNA worldwide.

The DNA looks something like this: Rather than focusing purely on product features and functions, both organizations are passionate about training MSP and TSP executives to build successful businesses.

ConnectWise & HTG: Finding Common Ground

HTG and ConnectWise have had a strategic relationship since 2008. But Bellini and Sorensen have known each other since at least 1998, when the duo met in a peer group, and ConnectWise pushed beyond its own IT services business and launched a PSA platform for partners.

Bellini in 1998 personally flew to Sorensen's IT services business in Iowa (known affectionately across the IT channel as "the farm"). The journey involved Bellini installing ConnectWise's PSA platform for Sorensen's company. The two became fast friends. I'm sure there have been heated business debates at times. But they always came back to a common focus involving business and personal outcomes.

The first Big Bang moment in the HTG-ConnectWise relationship arrived around 2009, when HTG announced its members would essentially standardize on ConnectWise Manage. Admittedly, the news alienated PSA rivals like Autotask -- which was working with HTG at the time. But a bigger blueprint was unfolding. The strategic move gave HTG members a common platform upon which to compare their business performance at quarterly peer group meetings. Today, roughly 95 percent of HTG members run ConnectWise Manage.

So, will ConnectWise and HTG force members to embrace additional ConnectWise offerings (Automate for RMM, Sell for Sales Quoting and Proposals, etc.)? The answer is no, according to both Bellini and Sorensen. ConnectWise Manage is an important common fabric to help HTG members compare business performance, Bellini notes. But there's no requirement to run other ConnectWise tools, especially since ConnectWise Manage integrates with third-party offerings, Bellini notes.

Still, I'll be curious to see how other HTG vendor members -- particularly Datto (which now owns Autotask) and Continuum (an RMM rival) -- react to the ConnectWise-HTG combo. Update: Some sources have weighed in further below.

ConnectWise and HTG: Always Seeing The Bigger Picture

Meanwhile, the bigger picture for ConnectWise and HTG is clear. HTG has evolved beyond its peer group roots to offer executive training, coaching and legacy services. The concept: Train business owners to maximize the performance of their companies, while ensuring those companies survive from one generation of ownership to the next.

In recent years, ConnectWise has engaged HTG coaches to work with ConnectWise's own management team to perform leadership training, alignment and an organizational review. "The results in the company have been fantastic," Bellini notes -- while pointing to ConnectWise's financial performance in 2017. For instance, ConnectWise grew its top line about 25 percent and added 15 percent to its bottom line during the year, Bellini asserts.

By combining ConnectWise and HTG, the duo intends to serve partners worldwide with "transformative" consulting, leadership, training and peer group services. The duo intends to move both upstream and downstream from a current partner base that generally includes customers with $500,000 to $100 million in revenues, Bellini adds.

The key opportunity? If ConnectWise and HTG make their member organizations more successful, those organizations can consume more business management, automation and monitoring software. And ConnectWise is more than happy to provide that software.

More Upside -- IT Nation and HTG Q4: ConnectWise and HTG, over the long haul, will likely coordinate the annual ConnectWise IT Nation and HTG Q4 peer meetings in Orlando, Florida. The two events had been coordinated for several years, but are now separated by a week or two from each year. I don't know each company's contractual commitment to hotels and dates in the Orlando area over the next few years. But it's a safe bet HTG Q4 and IT Nation members can expect a blended, coordinated experience -- or at least a smooth same-week/same location transition from one event to the other -- at some point within the next couple of years.

That move ensures HTG members and IT Nation attendees can make a single, one-week trip to Orlando each year for business and technology guidance. The other big wildcard: Just how open will IT Nation and HTG Q4 meetings be to all technology vendors worldwide -- including ConnectWise rivals? I don't know anything firm. But I think there are some potential upside surprises here that the entire IT industry should monitor closely...

ConnectWise Training Experience

No doubt, ConnectWise offered training and mentoring services even before the HTG deal. ConnectWise has a partner-facing consulting team, runs the annual IT Nation events, and organizes quarterly user group meetings worldwide. Moreover, ConnectWise and CharTec -- another training organization -- launched a joint venture back in 2010. At the time, CharTec focused on hardware as a service, and there were signs it may evolve into a backup and disaster recovery (BDR) specialist. But ultimately, CharTec focused on business training -- sales, marketing and more -- for partners.

"One size doesn't fit all," Bellini notes, referring to ConnectWise's joint venture with CharTec and new ownership of HTG. "People learn in different ways," so both CharTec and HTG will continue to serve those various training approaches.

What's Your Legacy (And Everyone Else's Legacy)?

From Sorensen's viewpoint, the ConnectWise-HTG combo comes down to the realization that "we can do so much more together." Sorensen has no plans to retire. But he's also a realist. More than most folks, Sorensen realizes we all have finite time in this industry -- and on this planet. He's a man of deep faith. An educator. A tough negotiator. But most of all, like Bellini, he's determined to help entrepreneurs build better businesses and a better life for their families and employees. And he wants to ensure HTG sticks around and empowers IT service providers and MSPs for decades to come.

With those priorities in mind, it was extremely important for Sorensen to find a long-term home for HTG  -- a home that allows the organization to grow and scale globally. A home that would shepherd HTG and its members for long-term success, Sorensen says. "We want to take this to as many TSPs as possible. ConnectWise is the logical partner for this."

Bellini realizes some partners may worry about HTG becoming some sort of closed, ConnectWise-centric ecosystem. But he pushes back, respectfully, against such suggestions. "There's no downside for partners; there's tremendous upside," he asserts, while describing the deal. "We're uniting consulting, education services and knowledge" to help IT service providers and partners build better businesses, he says. "When we create peer groups worldwide we create maturity and accountability" among the business owner members and their employees.

That accountability, Bellini says, leads to stronger IT services business worldwide.

Updates: Third Parties Weigh In...

After the ConnectWise-HTG deal was confirmed today, ChannelE2E reached out to third-party sources for their perspectives. Among the companies we've heard from...

CPO Alex Hoff

Alex Hoff, VP of product and sales, Auvik Networks, which offers network RMM and partners with both ConnectWise and HTG:

“This move will be positive for both companies and the industry as a whole. HTG is a fantastic organization. We’ve worked very closely with many of the members and have witnessed the benefits of HTG’s support. It’s clear through this acquisition that ConnectWise is building a solid, supportive ecosystem for its partners. Congratulations to both companies.”

New VeriShip CEO Michael George

Michael George, CEO, Continuum, which works with HTG and also partners with ConnectWise on RMM-PSA integration -- while also competing on RMM and other fronts:

"Congratulations to HTG and ConnectWise, two very important strategic partners of Continuum. MSPs and vendors have long recognized HTG’s position as a best-in-class, independent advisor to service providers on the best practices toward running operationally efficient businesses. Arlin and his team have built something very special that has made a profound impact on this market.

We are delighted to further deepen our relationships and look forward to their efforts in helping our partners run their businesses better. Continuum has been a natural partner of HTG’s, thanks to our closely-aligned objectives and similar business models in providing business transformation for service providers. Our understanding is that today’s acquisition should not change HTG’s core values and objectives, and with that in mind we look forward to continuing that strong partnership with the group and its members. Maintaining a level of objective, independent coaching and advise will be important aspect of the success of this union, and we continue to forge ahead with both of our important strategic partners in this new configuration."

Rob Rae, VP of Business Development, Datto

Rob Rae, VP of business development at Datto, which works with HTG but competes against ConnectWise in the IT management software market:

“Today, HTG announced it is being acquired by ConnectWise. As a long time sponsor of HTG, we want to congratulate Arlin and the entire HTG community on this major milestone in their 17 year history. We also extend our congratulations to ConnectWise for investing in the strongest MSP Peer Group Community in the business. We know it’s difficult for MSPs to grow in a vacuum, which is why we spend time and resources helping our partners build their businesses. And HTG adds immense value for the MSP - providing a forum for honest, vendor agnostic conversations that help so many of our partners. This investment in the HTG community by ConnectWise proves what HTG members and sponsors have known for years - small and medium businesses are increasingly turning to Managed Service Providers for their IT needs. To meet these needs, MSPs are evolving their businesses. Open dialog amongst peers, benchmarks and best practices provide a solid platform for business transformation. Supported by open technology platforms, MSPs can choose the best tools for them to drive business growth. We look forward to many more years of continued partnership with both the HTG and ConnectWise communities.”

Matt Nachtrab

Matt Nachtrab, CEO of eFolder, which partners with both HTG and ConnectWise.

"I hold HTG in very high regard as a best-in-class peer group that cares deeply for its members and helps them in their businesses and lives. Arlin and the HTG team should be very proud of what they've built. eFolder is a large sponsor of HTG and will continue to partner in any way we can to help HTG and their members. eFolder, like ConnectWise, believes if we help the MSP community get stronger, we all benefit. It is a smart investment by ConnectWise and show how much they care about MSPs. Big congrats to HTG and ConnectWise."

Gary Pica, CEO, TruMethods

Gary Pica, CEO of TruMethods, which partners with ConnectWise and offers coaching services but doesn't necessarily compete head-on against HTG:

"Arlin is one of the people I admire and enjoy being in the same industry with so first and foremost I am happy for him and his team. I go back a long way with Arlin and Arnie, they both have done so much for the channel. I am sure they will help a lot more people as a team. TruMethods has had a great relationship with both organizations and I expect there could be even more synergies in the future."

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.