SolarWinds Buying N-Able, Plans To 'Disrupt' MSP Market

Enterprise IT management vendor SolarWinds on Tuesday announced plans to acquire MSP vendor N-Able Technologies for $120 million.

Executives for Austin, Texas-based SolarWinds said they expected the deal would close by the end of the month.

Kevin Thompson, president and CEO of SolarWinds, said that Ottawa, Canada-based N-Able's business would open the "S" in SMB to SolarWinds for the first time. Thompson estimated the size of that market as $2 billion in the United States and $2 billion internationally.

Praising N-Able's cloud-based and lightweight approach, Thompson said SolarWinds would be able to disrupt the market of remote monitoring and management (RMM) vendors. "The market really is served by a fragmented set of companies. For the most part, a number of small companies are serving that market. What we've seen with N-Able over the past 24 months or last 36 months is that they have emerged as that leader," Thompson said on a conference call about the deal.

The disruption will extend to N-Able's 2,600 current MSP customers, who will need to shift entirely to selling a subscription model. N-Able currently sells both perpetual and subscription licenses. Subscribers will still be able to choose between running N-Able's products in the cloud or installing them on-premises.

Thompson did say SolarWinds will continue to sell N-Able products through MSPs. "We don't see any need or reason to change that go-to-market approach. We think it's the right one," he said.

SolarWinds is bringing on all 180 N-Able employees. The SolarWinds executives praised N-Able CEO Gavin Garbutt's approach, although Garbutt was not on the call to discuss the deal. SolarWinds has about 700 employees.

SolarWinds had about $200 million in annual revenues in 2011. N-Able's revenues were $24 million in 2012, according to executives on the call.

Posted by Scott Bekker on May 22, 2013 at 11:58 AM