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PSA Software Market Set to Double By 2022

Think the PSA (professional services automation) software market is running out of momentum? Guess again. Indeed, annual PSA-related software revenues will reach about $12.88 billion by 2022, up from $6.26 billion in 2014, according to Grand View Research.

Within the IT services provider and MSP market, PSA players like Autotask and ConnectWise are well-known. Other competitors like Accelo, AteraHarmonyPSA,  Tigerpaw Software and Promys are in and around the market. And still more — names like Appirio, ChangePoint, FinancialForce.com, NetSuite OpenAir, Projector PSA and Tenrox also are on Grand View’s Radar.

But the PSA platform options for MSPs don’t end there. Kaseya recently acquired PSA technology, and SolarWinds N-able now has MSP Manager — sort of a “light” edition of PSA.

Defining PSA: The Basics

ConnectWise CEO Arnie Bellini

Arnie Bellini

For VARs and resellers that are just getting started, Grand View says PSA systems typically include:

“resource management, automated time & billing, and project management capabilities. Systems also provide consistent and powerful reports and dashboards giving management, the key information they need to make informed decisions. It also offers other benefits such as improved forecasting capability, project effectiveness, reduced revenue leakage, and improved customer satisfaction. These benefits of PSA software are anticipated to drive demand among service companies over the forecast period.”

Still, PSA’s appeal stretches far beyond VARs, MSPs and resellers. Technology companies — a superset of IT service providers — accounted for over 40% of the global revenue share in 2014 and are expected to continue their dominance in terms of market size by 2022, Grand View said. Not by coincidence, ConnectWise CEO Arnie Bellini has successfully positioned the company as a platform provider for call technology companies.

Mark Cattini

Mark Cattini

Other key adopters include consulting firms, legal firms, and marketing and communication industry. Over the past decade, players like Autotask considered moving into those verticals. But CEO Mark Cattini instead focused on global expansion, localization and diversification into RMM (remote monitoring and management) and file sync and sharing.

ConnectWise, in stark contrast, was born from an IT service provider and never really wavered from that heritage. The company was a “first mover” beyond the PSA market into RMM, quoting and sales proposals and more.

Regional PSA Trends

David Bellini

David Bellini

Hardly surprising, North America and Europe continue to dominate the PSA scene. Autotask made the early European push, and ConnectWise has been countering more recently — led by co-founder David Bellini’s shift to that region. Hint, hint: Keep an eye on the IT Nation conference…

To my surprise, Asia Pacific market represented nearly 18% of PSA’s overall revenue in 2014 and is expected to grow at a CAGR of over 10 percent from 2015 to 2016, according to Grand View. Still, I suspect that figure likely includes Australia, which was an early adopter of RMM and then extended into PSA, ChannelE2E believes.

Among Grand View’s industry conclusions: “Partnerships and strategic mergers and acquisitions are anticipated to be the most effective ways for industry players to gain quick access to emerging markets and enhance technological capabilities.”

We tend to agree.

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2 Comments

Comments

    Jim Barnet:

    Hi Joe:

    It makes sense that the PSA market potential would continue to expand as “everything as a service” becomes more prevalent. Quoting, delivering and supporting these service based solutions is an expanding opportunity for most technology solution providers. Physical Security and Audio Visual solutions have all become IP based and are now moving into the cloud as well. Manufacturers like Microsoft and Cisco are moving what used to be on premise solutions to the cloud and changing channel partner compensation programs to reflect that (compensation based on activation and adoption not just acquisition and deployment).

    Yet another brave new world and market transition/transformation for channel partners to successfully navigate.

    It will be very interesting in the next 24 months to see how the PSA vendor market shakes out. Yes, there will probably be further consolidation and yes there are some new and interesting players entering the PSA market, but if ever there was a market ripe for disruption, the PSA market is it. The PSA and even the RMM market, is largely based on selling, deploying and supporting/securing physical IP based devices (and software) deployed to a network. Whose network (customers or 3rd party) is only a slight change of the same model. It will be interesting to see how current PSA vendors respond to the “everything as a service” model.

    Promys is very much looking forward to seeing how that all plays out.

    Regards,
    Jim Barnet
    PROMYS
    Director Sales & Marketing
    Tel: 905-847-6539, ext. 2972
    Cell: 647-239-2942
    jbarnet@promys.com
    t: @PROMYS_PSA

      Joe Panettieri:

      Jim: Thanks for always bringing something extra to the conversation.
      -jp

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