SolarWinds's buyout of N-able Technologies raises key questions about cloud vs. on-premises software licensing for managed services providers (MSPs). Here are 7 questions N-able's MSPs must ask.
SolarWinds' (NYSE:SWI) $120 million N-able acquisition could create an extremely strong cloud-based IT management software company. But for managed services providers (MSPs) that run N-able's software, the deal also raises key questions -- especially when it comes to on-premises vs. cloud deployments. Here are seven MSP questions worth asking.
1. Transition Plan?: Will SolarWinds force N-able's on-premises MSPs to abandon that software and shift to N-able's cloud-based offering? If so, when will the transition occur? How long will on-premises software support continue?
2. Pricing and Payment Models: Under terms of the SolarWinds deal, N-able will stop selling perpetual software licenses and will only sell subscription licenses. How long will N-able's perpetual software customers have until they need to shift to subscription licensing?
3. Migration Plans: If/when MSPs need to shift from on-premises to cloud-based software, what type of migration tools and support will SolarWinds and N-able offer?
4. Direct vs. Indirect Sales: N-able's primary customer base will remain MSPs that support SMB customers. But what if some of those SMB customers are running SolarWinds' software in-house? Is there any overlap between N-able's MSP base and SolarWinds' end-customer base? If so, how will potential channel conflict be avoided?
5. Technology Partnerships: N-able has strong relationships with CA Technologies, independenceIT and other technology companies. Does SolarWinds ownership potentially strain any of N-able's technology relationships? If so, how those challenges be addressed?
6. Corporate Compliance: Some of N-able's MSPs run businesses in Europe and other highly regulated regions. Do N-able and SolarWinds have cloud coverage in all regions to make sure MSPs don't face compliance issues? Also, what about MSPs that have no plans -- at all -- to shift to the cloud because of ongoing compliance concerns?
7. Integrations: Some larger MSPs may already run N-able and SolarWinds in tandem. For those MSPs, what's the long-term product roadmap for potential synergies between the two product portfolios?
In a prepared statement from SolarWinds and N-able today, the two companies said: "SolarWinds plans to share additional details around future product direction, branding, positioning and pricing following the completion of the acquisition."
Translation: Stay tuned.
And for those MSPs that may be feeling a little nervous keep this in mind: N-able President JP Jauvin will run the organization for SolarWinds, and Jauvin will certainly work hard keep MSPs loyal to N-able.