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Introducing the 2014 RCP/Rocket Award Winners

For the second year, Redmond Channel Partner magazine has teamed with Revenue Rocket Consulting Group to award IT services companies with unique business strategies that are resulting in sustained growth.

Today we're pleased to announce the three winners of our second annual award: Concurrency Inc., a multi-competency Microsoft infrastructure solution provider based in Milwaukee, Wis.; HMB Inc., a business technology services firm in Columbus, Ohio; and PowerObjects, a Microsoft Dynamics CRM specialist based in Minneapolis, Minn.

The award recognizes the companies for their innovative business strategies that resulted in sustained growth over a three-year period, from 2011 through 2013.

The award sought applications from U.S.-based IT services firms with annual revenues between $5 and $75 million.

Stay tuned for the October issue of RCP when we'll profile the winners and tell their inspiring growth stories.

Posted by Scott Bekker on July 11, 2014 at 11:09 AM0 comments

Four Quotes on Partners from the Nadella Memo

We'll be watching Satya Nadella closely next week in his first Microsoft Worldwide Partner Conference (WPC) keynote as CEO of the company, but he surely previewed some of his themes in the major employee memo released to the public Thursday.

In addition to redefining Microsoft's mission statement and telegraphing upcoming organizational and engineering changes, Nadella also made a few comments about where partners fit in the new Microsoft in the 3,000-plus-word memo.

Here are four partner-related quotes from the Nadella memo (emphasis mine):

1) Dual Users and a Platform Mindset
"Microsoft will push into all corners of the globe to empower every individual as a dual user -- starting with the soon to be 3 billion people with Internet-connected devices. And we will do so with a platform mindset. Developers and partners will thrive by creatively extending Microsoft experiences for every individual and business on the planet."

Dual user is a major priority for Nadella. His memo repeatedly uses the phrase, which means people who expect to use their devices and an array of cloud services for both work or school and play or personal. (I hope someone is sending his memo to the Microsoft licensing team. Case in point: You can't legally use Office apps on the Surface RT for business.) Nadella's quote suggests that he believes partner buy-in to this dual user concept is critical for its success.

That platform mindset is an allusion to Microsoft's new core vision, which Nadella stated earlier in the memo: "Microsoft is the productivity and platform company for the mobile-first and cloud-first world." Platform, of course, is a good word to partner ears.

2) Customize and Extend
"Our cloud OS will also run all of Microsoft's digital work and life experiences, and we will continue to grow our datacenter footprint globally. Every Microsoft digital work and life experience will also provide third-party extensibility and enable a rich developer ecosystem around our cloud OS. This will enable customers and partners to further customize and extend our solutions, achieving even more value."

If you look closely, the first quote mentions extending, too. It's a theme. Nadella hasn't spent a lot of time in his tenure so far talking about implementers, resellers or licensing partners. This former engineer's attention seems reserved for those partners who can make Microsoft products do more than work, even if it sometimes takes substantial skill to get Microsoft products working effectively in a customer environment.

3) Stimulate Demand and Make the Market
"Our first-party devices will light up digital work and life. Surface Pro 3 is a great example -- it is the world's best productivity tablet. In addition, we will build first-party hardware to stimulate more demand for the entire Windows ecosystem. That means at times we'll develop new categories like we did with Surface. It also means we will responsibly make the market for Windows Phone, which is our goal with the Nokia devices and services acquisition."

This dog whistle goes out to the OEM community, one of Microsoft's longest-standing partner categories. The Surface launch, along with the tepid market response to Windows 8 and overall declines in PC sales, caused tension to come out into the open between Microsoft and some major OEMs. Nadella, who cut the word "devices" out of the new company mission statement, is further clarifying here for OEMs that products like Surface are really about stimulating demand for everyone's PCs. The sentiment is similar for smartphone manufacturers.

4) New Partnerships
"New partnerships will be formed."

This statement comes in a paragraph of similarly phrased, blunt statements intended to knock any complacency out of Microsoft employees. In some ways, it's an acknowledgment of things that have already happened. The decision under Nadella's watch to move ahead with the Office on iPad is effectively a partnership with Apple. Then there's the recent deal with longtime flame war foe Salesforce.com. It serves as an additional heads-up to partners selling non-market-leading Microsoft products that Nadella's Microsoft might not be as willing to sacrifice strategic platform revenues and positioning for tactical product advantages.

Stay tuned for RCP's Twitter (@scottbekker), blog and in-depth coverage of WPC all next week, including Nadella's keynote Monday morning.


Posted by Scott Bekker on July 10, 2014 at 12:48 PM0 comments

Nadella Demotes 'Devices' in Microsoft Vision Statement

Microsoft CEO Satya Nadella issued a massive public memo this morning outlining a refined vision for the company he took over five months ago.

The 3,000-plus-word memo, titled "Starting FY15 -- Bold Ambition & Our Core," hones the redefinition of Microsoft started by his predecessor Steve Ballmer, who in an Oct. 9, 2012 letter told shareholders that "we see ourselves -- as a devices and services company."

Nadella's memo communicates the new vision and organizing principle for Microsoft as this: "At our core, Microsoft is the productivity and platform company for the mobile-first and cloud-first world. We will reinvent productivity to empower every person and every organization on the planet to do more and achieve more."

The vision includes Nadella's common refrain since assuming the job that Microsoft is a cloud-first and mobile-first company. But it takes the word "devices," the first word in Ballmer's reframing of the company and one that has confused investors, partners and customers ever since, and removes it from the vision statement entirely.

Nadella called the devices and services company description "helpful in starting our transformation," but said it was time for a new vision statement that expressed what Microsoft can uniquely deliver.

"Across Microsoft, we will obsess over reinventing productivity and platforms. We will relentlessly focus on and build great digital work and life experiences with specific focus on dual use."

Satya Nadella, CEO, Microsoft Corp.

He contends that the vision is large, touching nearly 3 billion people with Internet-connected devices, which, although he doesn't say it, includes mostly non-Microsoft devices. He also argues the vision represents a massive growth opportunity because increasing digitization means technology spending will increase as a percentage of GDP.

Nadella called on company employees to think of what Microsoft does best for customers, rather than the specific tools it sells right now, and build on those concepts.

"Microsoft has a unique ability to harmonize the world's devices, apps, docs, data and social networks in digital work and life experiences so that people are at the center and are empowered to do more and achieve more with what is becoming an increasingly scarce commodity -- time!" he wrote. "Productivity for us goes well beyond documents, spreadsheets and slides. We will reinvent productivity for people who are swimming in a growing sea of devices, apps, data and social networks. We will build the solutions that address the productivity needs of groups and entire organizations as well as individuals by putting them at the center of their computing experiences. We will shift the meaning of productivity beyond solely producing something to include empowering people with new insights. We will build tools to be more predictive, personal and helpful. We will enable organizations to move from automated business processes to intelligent business processes."

A key concept in the memo is the "dual user," someone who uses technology for school or work and in their personal lives.

"They strive to get stuff done with technology, demanding new cloud-powered applications, extensively using time and calendar management, advanced expression, collaboration, meeting, search and research services, all with better security and privacy control. Microsoft will push into all corners of the globe to empower every individual as a dual user," Nadella said. "Across Microsoft, we will obsess over reinventing productivity and platforms. We will relentlessly focus on and build great digital work and life experiences with specific focus on dual use."

While demoting first-party devices from the mission statement, Nadella also made it clear that none of them was going away -- not Surface, not Nokia phones and not Xbox.

A graphical depiction included with the memo titled "Our Core," shows "Digital Work & Life Experiences" in the hole of a donut. The top half of the donut reads "Cloud OS" and the bottom half reads "Device OS & Hardware."

Nadella attempted to put Microsoft's billions in hardware investments into the context of the company's overall strategy: "Our first-party devices will light up digital work and life. Surface Pro 3 is a great example -- it is the world's best productivity tablet. In addition, we will build first-party hardware to stimulate more demand for the entire Windows ecosystem. That means at times we'll develop new categories like we did with Surface. It also means we will responsibly make the market for Windows Phone, which is our goal with the Nokia devices and services acquisition."

He acknowledged that Xbox wasn't at Microsoft's core but he called it a business "in which we can have fundamental impact and success" and promised continuing investments.

Moving away from specific devices, Nadella made clear that another type of Microsoft hardware investment would continue apace. "We will continue to grow our datacenter footprint globally," Nadella vowed.

He positioned Microsoft's datacenters as a fundamental asset powering the company's strategy overall, but called them out as especially important for the Cloud OS, itself especially important to Microsoft.

"Our cloud OS represents the largest opportunity given we are working from a position of strength. With Azure, we are one of very few cloud vendors that runs at hyper-scale. The combination of Azure and Windows Server makes us the only company with a public, private and hybrid cloud platform that can power modern business," Nadella said.

What Nadella's memo does, more than anything, is to try to better articulate what Microsoft can be with the pieces that were largely put in place during Ballmer's tenure -- massive investments in datacenter build-outs, Web 2.0 companies, the Nokia phone business and Surface development.

"Devices" may not be the headline word anymore. But at least for now, Microsoft won't be unwinding any acquisitions or selling off business units or datacenters. Nadella will go into the next phase of the technology wars with the company he has.


Posted by Scott Bekker on July 10, 2014 at 12:45 PM0 comments

Organizational Changes Coming to Microsoft

Microsoft CEO Satya Nadella says major organizational and engineering changes will be coming to Microsoft over the next month.

"Over the course of July, the Senior Leadership Team and I will share more on the engineering and organization changes we believe are needed," Nadella wrote today in a massive open company memo titled "Starting FY15 -- Bold Ambition & Our Core."

The memo focuses primarily on Nadella's new articulation of the company's core vision: "Microsoft is the productivity and platform company for the mobile-first and cloud-first world." (For more, see the related article, "Nadella Demotes 'Devices' in Microsoft Vision Statement.")

Nadella promised more detail on July 22 during Microsoft's next earnings call about what Microsoft will do in its fiscal year 2015 to focus on the core. That could be when senior Microsoft executives would discuss with financial analysts whether the organizational changes would or would not involve layoffs and would entail operating cost increases or decreases.

More detail would also emerge at upcoming company gatherings, he said. "At MGX and //oneweek, we'll come together to build on all of this, learn from each other and put our ideas into action," Nadella wrote.

Former CEO Steve Ballmer last set the top-level structure with a major "Devices and Services" reorganization in mid-July 2013 that put Nadella, Terry Myerson, Julie Larson-Green and Qi Lu in executive vice president roles atop four engineering groups, and made Tony Bates, Tami Reller and Eric Rudder executive vice presidents of other functions.

Events quickly outpaced that restructuring, with Ballmer announcing a month later that he'd retire. Nadella took over as CEO in February, bringing Scott Guthrie up to take his former post. Meanwhile, when Stephen Elop returned to Microsoft from Nokia, he stepped into Larson-Green's role and she moved over to a position reporting to Lu. Also, Reller and Bates both left the company, making room for Chris Capossela and Mark Penn.

Whether Nadella shuffles those positions or keeps the structure, he gave a stronger sense in the memo of his plans for middle management and for making the engineering organization more nimble. He talked about a flatter organization, leaner business processes, fewer people involved in decisions and increased emphasis on accountability. He signaled investments were coming both in using data for measuring effectiveness of products and predicting market trends, and for evolving software engineering to eliminate breakpoints in the development lifecycle.

He also promised more employee training and opportunities to test new ideas and incubate new projects.


Posted by Scott Bekker on July 10, 2014 at 12:44 PM0 comments

Three Months After Support Deadline, Windows XP Still No. 2

A full three months after Microsoft cut support for Windows XP, the operating system remains the second most popular operating system throughout most of the world.

If current trendlines continue, Windows XP will hold the No. 2 position for a few more months and could remain a major presence on the Internet for years, according to Internet browsing data kept by the two leading OS share tracking outfits, StatCounter and Net Applications.

The Windows XP overhang looms largest in Net Applications' data, which has more than a quarter of all browsing done in June from the OS (Figure 1). Windows XP had been shedding a point of share or more per month since February, but plateaued from May to June. Net Applications puts Windows 7 share at 50.55 percent and Windows 8 share at 12.54 percent. (Windows 8 figures in this post combine Windows 8 and Windows 8.1, which both StatCounter and Net Applications track separately.)

Figure 1.

Data generated by StatCounter puts XP's global share much lower at 16 percent in June (Figure 2), but it's still good for second place. Windows 8 accounts for more than 14 percent share and could edge Windows XP for the No. 2 spot in the next few months.

[Click on image for larger view.] Figure 2.

In the United States, Windows 8 already surpassed Windows XP back in April and held that lead through June, when XP share was 14.13 percent and Windows 8 share stood at 14.94 percent, according to StatCounter. However, second place in the United States goes to Mac OS X, which accounts for nearly 16 percent of browsing traffic.

Globally, Mac OS X is much lower, with 8.5 percent of StatCounter share and 6.5 percent of Net Applications share. StatCounter tracks pageviews while Net Applications uses unique visitors, among other differences in their approaches.

Posted by Scott Bekker on July 07, 2014 at 11:07 AM0 comments

Okta Overhauls Partner Program

One year after launching a partner program, cloud-based identity and access management specialist Okta on Thursday is rolling out a more mature program for systems integrators and resellers.

Okta, founded by a former Salesforce.com executive in 2011 and backed by Andreessen Horowitz, Greylock Partners, Khosla Ventures and Sequoia Capital, initially developed the Okta Solution Providers (OSP) Program to separate systems integrators and resellers from ISVs.

Those ISVs are a key pillar of Okta's single-sign-on platform and the related Okta Technology Alliances Program provided a programmatic spot for the thousands of applications supported by Okta.

In the interim, channel partners like Slalom Consulting, Trace3, Agosto and SoftChoice were looking for more resources and a better-defined structure within the Solution Providers Program, according to Okta.

The updated OSP goes live Thursday with four tiers:

  • An entry-level Bronze tier requires a $100,000 annual revenue commitment and certifications for one consultant and one sales representative. Benefits include resale and referral margins, discounted product pricing for internal production use and escalated technical support via e-mail.

  • The Silver tier carries a $250,000 revenue commitment and requires certification of two consultants on implementations and a second sales rep. In addition to better margins, which increase with each tier, Silver partners also get a dedicated regional partner manager, access to beta programs and both phone and e-mail escalated technical support. Marketing development funds begin to kick in at this tier.

  • A Gold tier comes with $1 million in yearly revenue commitments and training for four sales reps, two technical consultants and two implementation consultants.

  • The highest tier, Platinum, has a $2 million revenue commitment and substantially higher employee certification requirements, with 10 sales reps, five technical consultants and four implementation consultants. Program benefits include a dedicated global partner manager.

All tiers include basic benefits such as access to the Okta Partner Community, sales and marketing tools, sales webinars, demo calls and a dedicated Okta "sandbox" for testing and proof of concept.

Posted by Scott Bekker on June 26, 2014 at 9:17 AM0 comments

OneDrive Boosts Make Microsoft the Deal To Beat in Cloud

This is more of a consumer play than a business one, but these days the two are intimately related. Microsoft on Monday unveiled plans to double the free storage in the OneDrive cloud storage platform, to ratchet the OneDrive storage for consumer versions of Office 365 by 50x, and to drastically cut the price for purchasing additional storage for those who might need it.

By the numbers, OneDrive will come with 15GB of storage, more than double the previous limit of 7GB. The thinking behind the new limit has to do with Microsoft's consumer research. The new limit for Office 365 Home and Office 365 Personal subscriptions, meanwhile, bounces way up to 1TB, from a previous limit of 20GB. Buying additional storage will cost $1.99 for 100GB, a 73 percent price cut, and $3.99 for 200GB, a 65 percent price drop.

Omar Shahine, group program manager for OneDrive.com at Microsoft, shared the thinking on the base OneDrive increase in a blog post announcing the changes.

"Our data tells us that 3 out of 4 people have less than 15 GB of files stored on their PC. Factoring in what they may also have stored on other devices, we believe providing 15 GB for free right out of the gate -- with no hoops to jump through -- will make it much easier for people to have their documents, videos, and photos available in one place," Shahine wrote, suggesting the size increase is neither random nor determined by Microsoft's current datacenter infrastructure configuration.

On the Office 365 side, the massive storage increase to 1TB greatly improves the cost profile of the consumer subscriptions. The Personal edition at $6.99 a month (that's the subscription made famous by its Office for iPad linkage) becomes a better deal. Meanwhile, the 1TB limit on the $9.99 a month Home edition is per user. With up to five users allowed on a Home subscription, that's up to 5TB of storage -- a nearly insane amount.

None of these pertain exactly to partner's businesses. The Home and Personal versions of Office 365 aren't supposed to be used for work. Instead, the business-focused news came back in April when Microsoft bumped the storage limits for Office 365 ProPlus to 1TB. Nonetheless, Microsoft is establishing itself as the gold standard in cloud storage.

Being able to land 1TB of cloud storage that's portable to many device types (not just Windows-based ones) and the Office suite makes Microsoft's an easy deal to choose over the competition for personal devices. The more the Microsoft platform is top of mind, the better for Microsoft partners.

Posted by Scott Bekker on June 23, 2014 at 12:13 PM0 comments

Anatomy of the Microsoft-L.A. County Office 365 Deal

Microsoft unveiled a mega-deal with the county of Los Angeles this week that covers Office 365 seats for 100,000 employees of the most populous county in the United States. Here are some key channel takeaways from this five-year deal worth $72 million.

MCS Out Front: Microsoft Consulting Services (MCS) is a source of controversy for the channel. Partners who represent Microsoft products in the enterprise often come up against MCS in deals and sometimes complain that Microsoft swoops in on projects that its partners could credibly deliver. While there is a partner on this deal, the partner is on the licensing side. MCS will do the deployment.

It's not surprising that MCS is out front on this deal, and it doesn't mean by itself that MCS is going through one of its more aggressive phases. Over the years, Microsoft has frequently talked about the framework it uses when deciding whether MCS should be involved in a project. This deal seems to fit two major criteria, either one of which would be enough for Microsoft to justify putting its own people in the deal. One is if a project is what Microsoft calls a "lighthouse" project. This clearly is, first for its size but also for its sensitive security and privacy requirements for law enforcement departments and for health-related departments.

The other criterion is whether the customer wants "skin in the game" from Microsoft. Given the considerable public relations problems that attended the rollout of Google Apps in the city of Los Angeles, there is every reason for county officials to want only Microsoft throats around if someone needs to be choked for quicker progress.

An LSP Win for En Pointe Technologies: The named partner in this deal is En Pointe Technologies. Although En Pointe does systems integration work, Microsoft's news release on the deal is clear that it's the licensing solution provider (LSP) side that will be involved here. "Microsoft Consulting Services will begin the migration to Office 365 in July, and Microsoft partner En Pointe Technologies will manage the agreement," the release stated.

Even absent systems integration work, it's a big win for En Pointe. The company was previously managing Microsoft Enterprise Agreements (EAs) for several L.A. County departments. Now En Pointe manages a consolidated EA for all 15 departments. It's not clear what LSPs may have gotten boxed out in the consolidation.

"Our relationship and credibility with both Los Angeles County and Microsoft is cited as the reason such a large deal was placed in our hands," En Pointe President Michael Rapp said in a statement. (En Pointe did not immediately respond to a series of specific questions about the deal.)

A Blow for Google Apps: When Google won a contract in 2009 to move 30,000 employees of the city of Los Angeles from on-premises e-mail to its cloud services, it was a clear shot across Microsoft's bow (even though most of the e-mail servers involved were GroupWise). There was another big player in the cloud space with the ability to sell major customers on its service. That deal ran into trouble when Google was unable to comply with FBI requirements for police department e-mail that meant the L.A. Police Department (LAPD) couldn't move to Google Apps.

To be clear, the Google deal was the city, the Microsoft deal is the county, so we're looking at different entities. Nonetheless, Microsoft's win relates to Google's in three ways.

First, Microsoft makes a point of noting in the first sentence of its release that the Office 365 for Government deal includes "roughly 20,000 law enforcement personnel." Without mentioning Google by name, Microsoft is going out of its way to highlight its ability to comply with the Criminal Justice Information Services (CJIS) standard that posed a problem for Google and the LAPD.

Second, part of the Google contract involved incentives if Google and its partner Computer Sciences Corp. (CSC) could get L.A. County departments onto the system, as well. Microsoft's ability to wrap up a deal for all county departments suggests that crossover never occurred.

Third, Microsoft's deal with the county is much bigger than Google's deal with the city -- covering 100,000 employees rather than the originally announced 30,000. The deal literally surrounds and dwarfs Google's foothold in the city of Los Angeles.

Reasons for the Win: Most of the reasons Microsoft won the deal involve money, with the cloud driving expenses out of IT. En Pointe's news release says the deal will save the county $2.5 million annually after the first year. According to Microsoft, cost savings will come from consolidating EAs, decreased collaboration costs across departments due to a unified platform, the ability to pay only for services used by existing employees and the avoidance of upfront capital expenditures.

The county's CIO Richard Sanchez also says the move to Office 365 will help the county's employees become more mobile. Microsoft also cited the CJIS and HIPAA compliance as factors.

It was not clear whether Google or anyone else was competing for the contract, and clearly Microsoft's deep presence due to the existing 15 EAs played a role.

Crazy Q4 Office 365 Deals: Microsoft always pushes hard to close business in its fourth quarter, which ends this month. Partners are seeing a lot of extra incentives on Office 365 right now. Some sort of extreme discounting, beyond the usual deal size discounts, was probably a factor here. In any case, it's a good time for partners to be closing Office 365 deals across the board.

Don't Mess It Up! This week the L.A. County deal counts as a victory for Microsoft. One or two missteps and it will be an embarrassment (see Google and the city of Los Angeles). You can bet there will be Google and CSC reps eagerly waiting to pounce on any delays or problems. There will also be officials who got into trouble over the Google problems and politicians looking to score points keeping a close eye on Microsoft's progress. The stakes are very high in a politically-fraught environment. Yet another reason for Microsoft to keep this deal in house with MCS (see above).


Posted by Scott Bekker on June 19, 2014 at 11:36 AM0 comments

Asigra's Next Attempt To Upend Backup and Recovery Pricing

Asigra Inc. is seeking to cut expensive, proprietary secondary storage arrays from the backup-and-recovery equation.

At the backup and recovery specialist's partner conference this week, the company introduced Asigra Software-Defined Data Protection, defined as an architecture to turn commodity infrastructure into scalable cloud backup storage.

Asigra compiled its code onto FreeBSD and provides it for free to service provider partners as an ISO image. "It's the first Software-Defined Data Protection platform," said Eran Farajun, executive vice president at Asigra. "It's the entire stack. It's not just the backup software, it's also the file system and the monitoring. We disintermediated the software that comes with these expensive storage arrays from HP, EMC and NetApp."

Asigra will support the stack, but doesn't plan to make money from it directly. "Our strategy is to help our partners free up dollars to generate more demand and win in the marketplace," Farajun said.

It's not the first time Toronto-based Asigra has tried to rock the boat in order to build market share. A year ago, Asigra decoupled backup pricing from recovery pricing -- offering very low prices for backing up data and charging considerably more for recovery. The company's bet was that the current pricing models are unsustainable given the exponential growth in data storage.

Farajun admits that Asigra expected to take a revenue hit at first from effectively lowering prices by 40 percent or more, but he said the company was pleasantly surprised: "Our revenues grew out of volume. We picked up new customers and our existing customers [increased] their existing licenses."

According to Farajun, some partners are turning that pricing model into additional business. "This is performance-based backup because the less recovery you do, the cheaper it is. The analytics about the recoveries is given to the customer and the partner can then help the customer improve their IT infrastructure," Farajun said.

Posted by Scott Bekker on June 18, 2014 at 12:07 PM0 comments

Q&A with ConnectWise CEO Arnie Bellini

Days after its professional services automation rival Autotask announced its acquisition by a private equity firm, ConnectWise came out swinging with a statement to the market that it intends to remain a significant player.

The big question is whether privately held ConnectWise will be able to keep up. The investment by Vista Equity Partners in Autotask is aimed, according to Autotask CEO Mark Cattini, at investing in innovation and growth. Serious money has also recently been flowing into the adjacent remote monitoring and management market -- with new owners promising or demonstrating investments in product development at Kaseya, Continuum, N-Able Technologies and Level Platforms Inc.

ConnectWise had been picking up the pace already, with an investment in December in BizDox, a tool for documenting business IT systems, and a quicker release cycle announced in March. Last week, however, ConnectWise seemed to feel the need to respond more directly.

In a statement with the headline, "ConnectWise Reaches 90,000 Users, Continues Innovation," CEO Arnie Bellini of Tampa, Fla.-based ConnectWise declared, "While many other companies are exiting the market, ConnectWise is more committed to the technology solution provider space than ever before."

We caught up with Bellini by e-mail with some follow-up questions.

Arnie Bellini

Is ConnectWise looking for investors of its own? 
ConnectWise is debt-free and has no venture capital. Because we remain focused on the technology provider space, we have grown organically, consistently and significantly over the past several years. We are extremely profitable and want to control our own destiny, focus on the market we love: technology and IT solution providers. In fact we continue looking for investment opportunities, such as our recent investment in BizDox.

Many of the longtime vendors in the MSP industry have taken infusions of cash via private equity investments or through acquisitions by larger tech companies. They say they are using it to invest in their platforms. Will ConnectWise be able to keep up as the industry's R&D pockets get deeper? 
As I stated above, we have enough capital to continue to be the investor [emphasis Bellini's] in the channel, building or acquiring solutions that benefit our partners. We are consistent in that. We like to say we continue on a 20-mile march (see Great by Choice by Jim Collins), which means keep your head down and continue on the path you have established, be aware of what's happening but don't get distracted, either. In other words, we don't want to continuously pivot or change our plan -- that's not a path to long-term success. We invest, we innovate and we always focus on our partners' success -- and that's the big difference in our business philosophy.

Does ConnectWise see any downsides for the competition, especially Autotask, as they take on private equity?
If I were the Autotask CEO, I would be concerned about losing control and losing focus on my customers, all while trying to hold on to my key employees. At ConnectWise we enable technology providers to make the most of their investment through peer networking, education, consulting and a ton of other best-practice tools, including our events, which bring together more than 5,000 business owners annually. Our model of bringing partners together is atypical of what you learn in business school which is really where private equity comes from. That would be my concern.

Posted by Scott Bekker on June 16, 2014 at 9:47 AM0 comments

Broader Channel Availability for Cloud-to-Cloud Backup

Cloud-to-cloud backup of major SaaS services will soon be available to a broader base of MSPs due to the acquisition this week of Swedish startup Cloudfinder by Atlanta-based eFolder.

Founded in 2012, Cloudfinder identifies itself among only a handful of companies working on the problem of backing up data from online SaaS platforms like Google Apps, making it possible for customers to restore their data if something happens to it, either at the provider level or through inadvertent problems like users accidentally deleting e-mail. Beyond backup and restoration, Cloudfinder allows full-text search and includes reporting functionality.

The product now joins eFolder's business continuity products and the business-grade cloud file synch services eFolder got nine months ago with the acquisition of Anchor Box LLC. Terms of the Cloudfinder deal weren't disclosed, but the entire seven-person Cloudfinder team, including CEO Marcus Nyman, is joining eFolder, which now has about 120 employees.

Marcus Nyman

Nyman said in an interview that his company's technology stands out due to its platform-agnostic approach. The company launched in 2012 with a beta product focused on Google Apps, then added support for Salesforce.com and most recently Office 365.

His team suspected going platform-agnostic was a good approach, but even they were taken aback by how quickly the decision proved out. "Microsoft is really biting into that market faster than we had expected. In certain segments, already last year, we saw how Google Apps resellers started looking really pained. We were super happy that we had built Cloudfinder as a SaaS-agnostic platform rather than specifically for Google Apps or 365," Nyman said.

Nor does Nyman believe the market is stabilizing. "When the third and fourth service may enter into the battle, we'll be there, as well. It's hugely important to us and for customers and partners to avoid vendor lock-in," he said.

With that in mind, eFolder's Cloudfinder unit has a roadmap to start backing up other SaaS solutions. "We're coming for Dropbox, Box and Evernote before the end of the year, plus an additional number of services that we haven't disclosed yet," Nyman said.

While Cloudfinder brings new capabilities to eFolder, the company gets a lot of benefits from joining the eFolder organization.

On the technical side, the plan is to move Cloudfinder's backup from an Amazon Web Services back end into eFolder's petabyte-scale cloud. On the business side, Cloudfinder, which has been focused on technology rather than sales and marketing, will plug into eFolder's much more mature channel-focused sales engine.

Posted by Scott Bekker on June 12, 2014 at 10:03 AM0 comments

Vista Equity Partners Acquires Autotask

Autotask Corp., one of the most significant vendors for managed services providers, is being acquired by a private equity firm.

Vista Equity Partners is buying Autotask for an undisclosed sum. Vista's $11.5-billion portfolio includes Aptean, Websense and at least 20 vertically focused technology companies. The announcement came Monday during Autotask's Community Live! show in Miami.

Mark Cattini, president and CEO of Autotask, says the investment will allow the company to more aggressively improve Autotask's solutions for customers. "We are devoted to our clients' ongoing success and are confident that our partnership with Vista will drive innovation and growth and delivery dynamic solutions as the traditional IT landscape evolves," Cattini said in a statement.

The statement seems to leave room for Autotask to branch out from its origins in professional services automation (PSA) to a potentially broader mission as management of IT solutions increasingly moves to the cloud and other boundary lines blur.

At the same time, the firm's new private equity ownership indicated that Autotask's focus on IT service providers as core customers would continue. Alan Cline, principal at Vista Equity Partners, vowed in a statement to "work with the Autotask team to expand and enhance the company's solutions to help IT service providers more efficiently and effectively meet their clients' changing needs."

The private equity move on the PSA side comes after a wave of investment and consolidation in the adjacent market space of remote monitoring and management (RMM). Changes on that side got rolling with a growth equity firm backing the 2011 spinoff of what eventually became Continuum from Zenith Infotech, followed by 2013's private equity-funded acquisition and internal development spree at Kaseya, along with new owners for N-Able Technologies (SolarWinds) and Level Platforms Inc. (AVG Technologies).

Posted by Scott Bekker on June 09, 2014 at 9:48 AM0 comments