SolarWinds Buying LogicNow: What It Really Means

It's been slightly more than a week since SolarWinds acquired LogicNow and merged it with N-able to form the SolarWinds MSP division. During my travels this week to HP Enterprise Discover and TruMethods Schnizzfest, plenty of MSPs have asked me for my deeper opinions about the deal.

Well, here they are.

Conventional Wisdom: Some executives believe SolarWinds essentially is "responding" to M&A deals across the MSP software industry. On the one hand, there's some merit to that thesis. The first game-changing deal came in 2010, when ConnectWise invested in LabTech Software. The relationship put PSA (professional services automation) and RMM (remote monitoring and management) under a single roof. It essentially was the shot heard around the world, forcing all PSA and RMM players to carefully think about their APIs, strategic alliances and M&A practices.

Midmarket Enterprise IT Tools Coming to MSPs: Fast forward to present day. I view the SolarWinds-LogicNow deal differently. Instead of worrying about classic MSP product alignments (things like PSA, RMM and BDR), the new SolarWinds MSP business is all about economies of scale, and potentially unlocking SolarWinds' massive vault of midmarket corporate IT solutions into the MSP market.

SolarWinds acquired N-able Technologies in 2013. That business combination has been one of the best-performing MSP software acquisitions ever. If you poke around hard enough, you can find some SEC filings describing N-able's momentum before SolarWinds took steps to go private in 2015.

But here's the thing: SolarWinds has a massive midmarket enterprise IT portfolio that it has yet to unleash on MSPs. Why's that? Perhaps because the N-able partner base -- while large and growing nicely -- wasn't large enough to warrant closer work between SolarWinds' corporate and MSP software teams.

I believe that's about to change.

Data and APM (Application Performance Management)

Generally speaking, the N-able and LogicNow revenue bases are roughly the same size, I believe. SolarWinds, by acquiring LogicNow, essentially doubles its MSP-oriented revenue base overnight.

With that big footprint of 20,000 MSPs in mind, it's time for SolarWinds to more aggressively bring its midmarket enterprise IT tools into the MSP market. The overall portfolio includes:

Dig down into each one of those links and you'll see numerous products that could be heading for the MSP market. In some cases they may need to be reworked into multi-tenant solutions. In other cases single-tenant solutions will be just fine.

SolarWinds MSP Executive VP Walter Scott hinted to me last week that MSPs should keep an eye on Librato (real-time cloud monitoring), Pingdom (application performance monitoring) and Papertrail (log management). Take a closer look at those offerings. They have little to do with the traditional RMM-PSA-BDR conversation.

LogicNow's Big Data, Machine Learning Technology

On the flip side, it's easy to imagine LogicNow's big data and machine learning system -- called LogicCards -- reaching the N-able installed base.

Although many MSPs are late to the big data conversation, LogicNow was an early mover. LogicCards, launched last year, gather data from MSP customer networks, and then help MSPs to identify upsell and cross-sell opportunities.

As I've previously pointed out, I think SolarWinds MSP will need to sort out some product overall (particularly in the RMM space). That's an important detail. But the bigger picture is coming into focus. An MSP move beyond PC and server management toward Application Performance Management (APM) and effective data management is on the way...

Will SolarWinds MSP execute in that journey toward APM and data monetization? That's a blog for another day...