Channel Watch

N-Able and LPI Deals Signal an MSP Milestone

Besides shaking up the RMM landscape, the acquisitions -- just weeks apart -- are a sign that IT heavyweights are starting to pay closer attention to the MSP market.

For years, N-Able technologies and Level Platforms Inc. (LPI) together formed a node in the remote monitoring and management (RMM) tools corner of the managed services provider (MSP) world.

The companies stood less than 1.5 kilometers apart by car (fewer as the crow flies) from each other in Ottawa, Ontario, Canada. Both were founded around the turn of the millennium.

With that much in common, it's fitting that both companies should share a similar fate. Each company was sold to a larger technology company within a month of the other this spring.

N-Able went first on May 21, when the enterprise IT management company, Austin, Texas-based SolarWinds, announced plans for a $120 million acquisition. A few weeks later, on June 12, Czech Republic-based Internet and mobile security provider AVG Technologies snapped up Level Platforms for an undisclosed amount.

For the companies' MSP partners, some things will stay the same, while others will change.

Kevin Thompson, president and CEO of SolarWinds, said his company likes to get into markets where it can cause major disruptions, and Thompson sees RMM as that type of market.

"The market really is served by a fragmented set of [small] companies," Thompson said in an investor call about the acquisition. He contended that N-Able's cloud-based and lightweight technologies make it the type of company that can lead a disruption with the right investment from SolarWinds.

Some things about the new arrangement will be easy for N-Able's existing 2,600 MSP partners to adjust to -- a continuation of the MSP go-to-market model and the maintenance of nearly all of N-Able's staff. Others could be more difficult: an accelerated shift away from perpetual licensing to subscription licensing, and the post-sale retirement of N-Able's charismatic CEO Gavin Garbutt.

LPI's 1,500 MSP partners will have much the same team, including CEO Peter Sandiford, who will stay with AVG as a vice president. Cloud-based Managed Workplace is LPI's flagship RMM offering, and the product will be incorporated into AVG's CloudCare, a free or paid remote service for managing network security. AVG has about 10,000 partners, and 1,000 of them currently resell CloudCare.

In both cases, the deals signal more attention for the MSP market from bigger IT players. In the SolarWinds case, for example, the company had about $200 million in annual revenues in 2011, while N-Able's revenues were $24 million in 2012.

Thompson laid out clearly why N-Able was an interesting opportunity for SolarWinds. He said the RMM business would open the "S" in SMB to SolarWinds for the first time and estimated the size of the market as $2 billion in the United States and $2 billion internationally.

What effect do you see SolarWinds and AVG having on the MSP market? Let me know at [email protected] or leave a comment below.

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About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.