First, a little background for those who are new to the managed services market.
- Kaseya develops RMM (remote monitoring and management) software.
- ConnectWise develops PSA (professional services automation) software.
- RMM and PSA are like the Microsoft Word and Excel of the managed services market; integrating with one another and providing critically important business management capabilities.
- Kaseya is gradually developing PSA capabilities and making acquisitions that may wind up competing with ConnectWise. On the flip side, ConnectWise Capital -- a ConnectWise investment arm -- last year invested in LabTech Software, a fledgling Kaseya rival.
Industry InfluencersHTG is a very influential peer group within the managed services market. Members include VARs and MSPs from across North America, and newer members from Europe and Australia. Within the RMM software market, HTG remains vendor-neutral... meaning members are free to select any RMM software they prefer. Kaseya is certainly active within HTG, though ConnectWise has emerged as HTG's dominant PSA platform.
CEO Inflection Point?Meanwhile, the HTG CEO Forum is a sub-set of HTG, involving CEOs who focus squarely on MSP business issues. Sources say HTG CEO Forum members increasingly are selecting LabTech's software. A prime example: Sources say roughly 20 VARs and MSPs attended the recent HTG CEO Forum meeting in Tampa, Fla. Of that group, roughly 10 of the attendees have embraced LabTech's software or are kicking the tires now, the sources say. "It shocked me," said one source. "The 20 VARs and MSPs who attended are pretty sharp. To hear about so many VARs and MSPs shifting from Kaseya to LabTech shocked me."
What's driving the alleged shift? According to a source familiar with HTG CEO Forum, it's all about LabTech's price, features and integration with ConnectWise. One source says he's currently paying about $75,000 annually for Kaseya's software. But over the next year or so, the source expects to pay less than $30,000 annually -- either by switching to LabTech or negotiating a better price with Kaseya.
As part of the HTG CEO Forum meeting in Tampa, sources say, forum members were able to learn more about the LabTech-ConnectWise integration effort. (ConnectWise is based in Tampa.)
"I'm surprised by how quickly LabTech has been able to add functions," said one source who's learning about LabTech. "Kaseya is in a dog fight. Arnie [Bellini, ConnectWise's CEO] played this hand just about as well as anyone could have played it." For its part, ConnectWise has vowed to keep its APIs open for continued relationships with all RMM software providers.
The Bigger Picture: Kaseya Remains A GiantOf course, it's important to keep things in perspective. ConnectWise and Kaseya continue to integrate with one another, and there are no signs of that ending. And the HTG CEO Forum is only one tiny piece of a much bigger IT channel. And LabTech is a relatively small player -- revenues under $10 million, perhaps? -- compared to Kaseya, where revenues expected to reach or exceed $100 million or so in 2010.
Also of note: Kaseya has global reach, with long-established offices across North America, EMEA (Europe, the Middle East and Africa) and Australia, plus emerging business activities in Asia. Plus, Kaseya has a very deep bench, with seasoned executives worldwide. Over the past year, Kaseya has pushed beyond its on-premises heritage to introduce a range of SaaS and cloud services globally. (LabTech remains an on-premise solution, deferring SaaS opportunities to emerging hosting partners like TechLabCloud.)
Generally speaking, Kaseya is the most widely adopted RMM tool among MSPmentor 100 companies. Plus, Kaseya is pushing beyond RMM to introduce some PSA capabilities, online backup, endpoint security and a range of new software modules. And Kaseya also has a growing following within corporate IT departments.
David vs. Goliath?In stark contrast, LabTech was a relatively unknown, tiny, fledgling software company in Ohio roughly a year ago -- until a very big brother (ConnectWise Capital) arrived with money. LabTech has since waged a war against Kaseya in the U.S. And just like ConnectWise, it's a safe bet LabTech will extend its efforts to Europe and Australia.
In the managed service market I've learned to never underestimate key leaders -- whether its Kaseya CEO Gerald Blackie or ConnectWise CEO Arnie Bellini. So this story is just getting started...
...But here's an interesting twist: Some current Kaseya customers are also taking notice of LabTech CEO Matt Nachtrab. "I like Matt," said one MSP who currently runs Kaseya but is mulling LabTech. "He's a sharp guy with big plans. And it doesn't hurt to have Arnie funding and assisting those plans."
Like is said: The competition is getting intense. But HTG CEO Forum represents only a small piece of the managed services industry. I'm poking around to see if there are broader RMM industry trends that MSPmentor overlooked...
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