The MSP software landscape is changing amid consolidation and new tools

The MSP software market is changing with platform consolidation, seemingly limitless product integrations, and emerging tool options for channel partners.

Software vendors aim to cover a wide range of functionality through in-house product development, acquisitions, and alliances with other technology companies. Software for MSPs two decades ago initially focused on remote monitoring and management (RMM) of systems. Since then, the scope has expanded to include quoting, invoicing, project management, backup and disaster recovery, and cybersecurity. Today, the demand for cloud management has opened the door for non-traditional software vendors to approach MSPs.

Vendor technology roadmaps are important for service providers, who rely on software to manage their business and support their customers. The developments of the past few weeks reflect the spirit of software evolution for MSPs:

  • In Platform Consolidation, MSP Software Provider Kaseya said it has completed 191 integrations between Kaseya and Datto products and modules since the companies merged. Miami-based Kaseya completed its $6.2 billion purchase of Datto in June 2022. Company officials discussed Datto integration and product strategy last week during DattoCon, a annual partner event.
  • ConnectWise, an MSP software provider headquartered in Tampa, Fla., last month acquired Wise-Sync, which offers a payment processing platform. Prior to the deal, Wise-Sync had integrated with ConnectWise Manage, a professional services automation (PSA). With the acquisition, Wise-Sync’s payment processing technology now integrates with ConnectWise Sell, an automated quote and proposal offering.
  • Atera, a Tel Aviv-based RMM and PSA vendor, last week unveiled integrations with Veeam Software, a data backup, recovery and management company; ThreatLocker, an endpoint security provider; and Domotz, which provides network monitoring software.
  • In the cloud management category, SaaS Alerts, based in Wilmington, North Carolina, secured a $22 million investment from venture capital firm Insight Partners earlier this month. SaaS alerts monitor SaaS applications including Microsoft 365, Google Workspace, Salesforce, and Dropbox.
  • OpsRamp, an AIOps vendor that offers multi-cloud management, continued its push into the MSP market. Last week, the San Jose, Calif. company listed Virtual Service Operations, LiquidIT, Pinnacle Technology Partners and WinWire as recent customer deployments.

Consolidation of MSP software: a mixed blessing

Mergers and acquisitions involving the biggest players in MSP software have been among the most visible trends in the industry. Mega deals such as Kaseya-Datto and smaller add-on deals, such as ConnectWise’s purchase of Wise-Sync, have expanded computing platforms for MSPs.

“MSP software consolidation is having a major impact on the landscape,” said Marty Flaherty, executive director of GP Bullhound, a technology consulting and investment firm specializing in software.

Building a software platform for MSPs has its advantages. Software customers, in general, are looking to consolidate the number of vendors they use, Flaherty said. “There are so many tools and they all have their unique abilities, unique quirks, and things you need to train yourself on,” he noted, adding that maintaining multiple tools becomes expensive.

Additionally, the consolidation gives users “access to a single window, where you can manage your operations, view alerts, and manage services,” Flaherty said.

MSP software, which emerged early in the industry, is expanding to include options from the cloud management realm.

Flaherty, however, also acknowledges that clients can experience uncertainty amid acquisitions. “There are certainly always concerns about whether or not the acquirer will run the business in the same way, whether it will focus on a particular end market in the same way, and whether or not it will invest to keep fresh produce on the leading edge,” he said.

Kaseya management announced plans to invest in Datto’s products, which commits the company to maintaining Datto and Kaseya as dual offerings.

The integration of tools as a selling point

In general, MSP software platform vendors see the breadth of capabilities and the extension of integration as benefits to their service provider customers.

Holly Pateman, senior vice president of product marketing at Kaseya, named the company’s IT Complete platform as a differentiator, noting that it enables workflow integration between software modules. IT Complete modules include RMM, PSA, Security, Compliance, Backup and Documentation.

Pateman distinguished between API integrations and workflow integrations. The latter, she said, are deeper links that provide a “more seamless experience” for users. The company is currently implementing workflow integrations between IT Glue (Kaseya’s documentation offering), Datto Networking and payment processing systems in Autotask PSA, she said. Datto bought Autotask in 2018.

A dozen new vendor and workflow integrations with Datto Commerce, a quoting and procurement system for MSPs, are also in the works.

The consolidation of MSP software is having a major impact on the landscape.

Marty FlahertyExecutive Director, GP Bullhound

Jake Varghese, executive vice president and general manager of business management at ConnectWise, said MSPs expect platform providers to deliver the key features they use every day, along with a unified user experience. and secure. ConnectWise’s Asio platform consolidates the company’s portfolio of MSP software.

“[MSPs] also expect a set of table stakes integrations to be available,” which tightly interweaves the ConnectWise platform with existing service provider technology stacks, he noted.

The multiplicity of products and the added costs associated with additional management and security surfaces have become an issue for MSPs, Varghese said.

“We hear from the majority of MSPs that they are frustrated with the proliferation of tools,” he said.

As Atera pursues its own set of integrations, it also cites IT automations as a feature attracting more MSPs. Business automations allow MSPs to create rules and set schedules to run repeated processes. Atera said the share of its customers applying automations in 2022 increased by 20% compared to last year.

“Working in an automated environment translates to greater efficiency,” said Gil Pekelman, CEO of Atera. MSPs that use IT automations manage 80% more customers on average than those that don’t, he noted, citing analysis from Atera.

Non-Traditional Tools Expand Options

Traditional MSP software players express their views on broad product sets, integration features and efficiency. But companies outside this market segment offer tools with a different focus.

SaaS management providers offer an example. Dave Sobel, host of The Business of Tech podcast and former owner of MSP, cited Augmentt, SaaS Alerts, Nuvolex, and Nerdio as promising companies in this market. “I expect them to become the tools of the future,” he said.

Indeed, the SMB market, where most MSPs make their living, revolves around the cloud in general and SaaS offerings in particular. SaaS management, monitoring and reporting are the most needed features in this market, according to Sobel, who has software experience with vendors such as Level Platforms and SolarWinds.

AIOps companies are also in the mix of new tools. OpsRamp has found success with MSPs who have moved into the market to work with larger customers.

“Most MSPs that use Kaseya, N-able [or] ConnectWise is fundamentally aimed at the SMB space, offering traditional desktop support and breakdown/repair models via RMM, PSA depending on the hours the teams spend,” said Varma Kunaparaju, co-founder and CEO of OpsRamp.

Mid-market and large-enterprise MSPs need to shift from a desktop orientation to distributed data centers and hybrid and multi-cloud approaches, he added. “The automation needs are completely different for this set of MSPs.”

Flaherty also sees room for software vendors—in addition to traditional vendors—that offer innovative licensing approaches, address specific MSP use cases, or focus on vertical markets. He cited RealVNC, Pax8, Vade Secure, Splashtop, and Huntress as examples.

“There’s a really interesting level of companies beyond the big consolidators that have pretty compelling business models, technologies, and use cases,” he said.

About Octavia A. Dorr

Check Also

Tools for Brokers opens an office in Singapore

“We are excited about the new office in Singapore. It is a very important financial …