SolarWinds N-able, LOGICnow Combine To Form SolarWinds MSP

In a deal that combines two of the biggest players in the managed service provider (MSP) tools market, SolarWinds has bought LOGICnow and will combine their product lines into a unit called SolarWinds MSP, the companies said Wednesday.

SolarWinds, an IT management software company that bought its way into the MSP market with the acquisition of N-able Technologies in 2013, positioned the new combination as adding LOGICnow's cloud capabilities and MSP-focused data analytics to SolarWinds' existing remote monitoring and management (RMM) and other MSP-focused technologies.

"SolarWinds is committed to the growing MSP market and has realized great success through the acquisition of N-able, making the acquisition of LOGICnow a natural next step for us," said Kevin B. Thompson, president and CEO of SolarWinds, in a statement.

"SolarWinds MSP, combining the capabilities of LOGICnow and SolarWinds N-able, will offer MSPs a complete set of IT service management solutions via the cloud and on-premises delivery models. SolarWinds MSP gives them everything they need to acquire and retain profitable clients, deliver outstanding levels of service, and maximize their internal efficiency through standardization of their toolsets and the use of automation," Thompson said.

SolarWinds was a public company when it bought N-able. However, the company went private last year when private equity technology investment firms Silver Lake Partners and Thomas Bravo bought SolarWinds for about $4.5 billion in cash. What SolarWinds paid for LOGICnow was not disclosed.

[Editor's Note: The original blog entry posted on Wednesday, June 1, has been updated from here on based on a telephone interview Thursday, June 2, with SolarWinds MSP Managing Director Alistair Forbes.]

According to the companies, SolarWinds MSP will have a huge base of MSP customers worldwide -- 18,000 MSP companies with 200,000 engineers managing more than 5 million end points and 1 million mailboxes. About 5,000 of those MSPs are SolarWinds customers, with the rest coming from LOGICnow.

The companies identified new titles for a few senior LOGICnow executives within the SolarWinds MSP organization. LOGICnow CEO Walter Scott is now executive vice president for SolarWinds MSP, reporting to Thompson. LOGICnow General Manager Alistair Forbes and JP Jauvin, who ran the SolarWinds N-able business, each now hold the title of managing director at SolarWinds MSP, reporting to Scott.

Competitors were already field testing the messaging that they'll be honing in the coming months as they attempt to exploit any uncertainty within the SolarWinds MSP customer base. "Their customers should be concerned about this M&A event not only because of the massive debt that SolarWinds is taking on in order to fund it -- which in itself will require massive cuts in R&D and support to service it -- but the uncertainty around which product will survive when they merge the two product lines," said Kaseya CEO Fred Voccola in a statement e-mailed to reporters shortly after the deal was announced.

In an interview the morning after the acquisition, SolarWinds' Forbes acknowledged that there are overlaps in components of the two companies' MSP tool platforms. However, he made a clear commitment that not only would neither platform be discontinued, but that development would continue on both product lines.

"Both platforms are at the heart of many MSPs. We are acutely aware of the fact that the products that we're providing are used to run their businesses. Any changes are going to be incremental and additive -- taking technology from one platform and adding it into the other platform," Forbes said. "For us to say that we're going to retire one of them would be absolutely contrary to what we're doing here."

Instead, he emphasized new opportunities for both groups of MSPs, such as the ability for an MSP using N-central to offer MAX Backup and Disaster Recovery for customers.

Geographically, the combination gives SolarWinds a much stronger presence in Germany, France and Italy due to LOGICnow's distribution relationships. Looking at the ability to service different-sized MSPs, Forbes said, "We're now the only company in the market that has the ability to go from the smallest MSPs of two to three people to some of the very biggest [telcos]," Forbes said. He said smaller partners will tend to be drawn to the LOGICnow cloud products, while the biggest MSPs use on-premise-based N-central products.

Forbes also pointed to the headcount numbers for the combined unit as a source of reassurance for SolarWinds and LOGICnow partners. About 450 employees from LOGICnow will join the 300 employees of the SolarWinds N-able unit, to create a SolarWinds MSP business that is 750 employees strong. Executives are "still looking at redundancies" in administrative areas, Forbes said, but he didn't expect those to significantly affect the size of the unit. A key takeaway for MSPs, Forbes argued, is that "we have something like 400 engineers in R&D now within the SolarWinds MSP business."

On a similar note, Forbes contends that LOGICnow partners shouldn't be concerned that the SolarWinds MSP effort might get lost in the larger agenda of the IT-focused SolarWinds. SolarWinds MSP is between a third and a quarter of the overall SolarWinds business, he said: "We're a very important part of SolarWinds."

Posted by Scott Bekker on June 01, 2016