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Channel Watch

Kaseya-ConnectWise Spat Means Interesting Times in MSP Tools Land

A lot of money in the pockets of the major MSP tools companies means investors see opportunity, and opportunity means winners and losers -- and open conflict.

Simmering tensions between Kaseya and ConnectWise are boiling over again.

The proximate cause involved a high-profile customer win. Kaseya landed a managed services provider (MSP) called The 20. Based in Plano, Texas, The 20 is something of a national aggregator of MSPs, which all agree to follow The 20's business development model and use its standardized technology.

That technology was formerly ConnectWise's and now it's Kaseya's. It's the kind of customer that's a big deal because not only is it a big MSP, it's a network of MSPs of the kind all the MSP tools vendors want -- the growth-focused kind.

Adding literal insult to injury, Kaseya's May press release about the win implied deficiencies in ConnectWise's products and pricing. Those insults were nothing new from Kaseya, but there they were in a public document, demanding a response from ConnectWise. Florida-based ConnectWise obliged with, among other responses, an open letter to the MSP community a few weeks later and a flurry of cease-and-desist letters to Kaseya.

Fueling this dispute are some fundamentally different approaches to the MSP opportunity.

The first move was from the professional services automation (PSA) side of the MSP market into the remote monitoring and management (RMM) side. The major PSA vendors, ConnectWise and Autotask, made this play several years ago. Both have worked assiduously to maintain strong partnerships with RMM players and keep their PSA products interoperable with competitive RMM tools. Nonetheless, all RMM players must watch the traditional PSA vendors' moves closely for threats to their RMM share.

Going the other direction is Kaseya, a pioneer of the RMM market that more recently moved into the PSA space. Kaseya's value proposition is different -- arguing that PSAs are only an expense for MSPs, not a business driver, and, therefore, the cost should be minimized.

Another approach is to focus exclusively on expanding the business opportunities for MSPs to cover much more than RMM, especially security. A recent example is Continuum, which was acquired in June by new private equity investors and is rolling out a new managed security service. Many of these traditional RMM companies, like Continuum, are looking to maintain their working relationships and integrations with as many PSA vendors as possible, and have no public designs on getting into the PSA field.

A lot of money is sloshing through the bank accounts of the major MSP tools companies. All that money means investors see opportunity and opportunity means winners and losers and open conflict. Stay tuned.

Thinking about shifting to a different MSP tool? Let me know why at sbekker@rcpmag.com.

More Columns by Scott Bekker:

About the Author

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