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SolarWinds 3 Big Priorities: MSP, ITSM, Application Management

Credit: Joe Panettieri

SolarWinds' key priorities for the second half of 2019 include MSP, service desk and cloud-based application management software initiatives, CEO Kevin Thompson and CFO Bart Kalsu told Wall Street analysts during an August 1 earnings call.

SolarWinds CFO Bart Kalsu
SolarWinds CFO Bart Kalsu
Kevin Thompson, CEO, SolarWinds

All three of those focus areas paid dividends during the company's Q2 of 2019, Kalsu pointed out. The company's growth, Kalsu said, was led by:

  • The SolarWinds MSP product line;
  • a solid contribution from cloud-based application management products; and
  • a contribution from the Samanage acquisition that closed during the second quarter. Samanage, now rebranded as SolarWinds Service Desk, is an IT service management (ITSM) alternative to ServiceNow.

"Our success at landing, and expanding, and retaining customers translated into a solid increase in monthly recurring revenue in the second quarter of 2019, driven primarily by our MSP business," Kalsu added.

Total revenue for the second quarter of 2019 was $228.7 million, up 13.4 percent compared to the second quarter of last year, the company disclosed. The figure beat Wall Street's expectations by about $4.1 million, according to SeekingAlpha.

SolarWinds MSP: Cross Sell and Up Sell

The effort included focusing on more mature MSPs that can consume a cross-set of SolarWinds offerings -- including RMM (remote monitoring and management), backup and disaster recovery (BDR), cybersecurity and password management services, Thompson said.

Moreover, SolarWinds increased its MSP software pricing in certain areas -- and the "increases have been accepted pretty much the way we thought they would. There has been very little noise. No real impact on churn at all," Thompson said.

On the ITSM front, SolarWinds Service Desk (SSD) has already closed "several transactions" following its May 2019 launch, Thompson said.

SolarWinds Application Management

Over in the application management market, SolarWinds has started to "connect our on-premise-based products with our cloud-based products much more tightly."

SolarWinds is now preparing to launch its application management products into international markets during the second half of 2019, he added.

Numerous rivals, meanwhile, have momentum in the application performance management (APM) and infrastructure management markets. The offerings typically focus on improving customer experiences (CXs). Key moves include:

Those companies along with SolarWinds typically compete with Cisco AppDynamics and New Relic, among other cloud-based monitoring tool providers.

SolarWinds Mergers and Acquisitions

SolarWinds also is exploring potential M&A deals that involve "modern technologies." The technologies must be easy for customers to try; deliver value quickly; and scale up or down for organizations of all sizes, the company said on the earnings call.

SolarWinds could also explore larger M&A deals if they "add meaningful growth engines" to the business.

Rival Acquisitions: Still, several of SolarWinds rivals are pursuing potential M&A deals on a range of front. Among the potential moves to note:

  • ConnectWise, owned by private equity firm Thoma Bravo, is rumored to be evaluating  ITBoost, an MSP documentation and password management software company that competes with Kaseya’s IT Glue and SolarWinds Passportal. Neither ConnectWise nor ITBoost have publicly commented about recent M&A chatter involving the companies.
  • Continuum, also owned by Thoma Bravo, could be up for sale, according to reports in the private equity industry. ChannelE2E is listening closely for rumors as Continuum partner conferences in Pittsburgh and Las Vegas approach.
  • Kaseya has reached out to multiple companies, seeking silent acquisitions that may mirror buyouts of IT Glue and ID Agent, ChannelE2E believes.
  • And Datto also poking around for potential acquisitions.

SolarWinds Artificial Intelligence (AI): The Early Days

Meanwhile, SolarWinds is closely tracking emerging artificial intelligence technologies in the enterprise, while layering some AI technologies into its IT management and MSP software.

Still, Thompson is careful not to hype the AI opportunities. "We will wait and make sure that we really understand, and more importantly, that the users really understand exactly what they want , and exactly what they need, and they can tell us very clearly what that is," he said. "If I try to guess and I try to build in advance, and I try to convince you what you need -- that's a whole different value proposition." SolarWinds, he said, won't pursue that AI guessing game.

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.