Service Automation Vendors See Dollar Signs In MSPs

The dominant rivals for MSP market share in the PSA space, Autotask and ConnectWise, soon will encounter aggressive competition from Tigerpaw Software and QuickArrow—two PSA vendors now recognizing the opportunity MSPs present. PSA tools track costs and streamline field service engagements, making them ideal for MSPs whose long-term revenue accrual models leave little room for dollars to slip through the cracks.

Moving a superior MSP-friendly PSA product quickly to market is everything to these vendors right now, said Amy Luby, CEO of Mobitech, an MSP in Omaha, Neb., that doubled its services revenue using Autotask. PSA is the next logical step for the VARs currently adding MSP platforms, and the pool of new MSPs is growing daily, she said. "It's really anyone's game right now," Luby said.

Autotask knows the market-share race is on and this week will unveil not only a new AutotaskExtend feature that links it to third-party Web services, but also a live reporting engine designed to help keep MSP contracts profitable, said Bob Godgart, CEO of Autotask, Rensselaer, N.Y. "We want to become the de facto standard," he said.

To counter Autotask, archrival ConnectWise at this week's Microsoft partner conference in Boston is introducing version 3.0 of its ConnectWise Mobile offering, which better tracks the billable activities of field services technicians. Realtime integration between ConnectWise and Microsoft's Small Business Accounting 2006 is another new feature, said ConnectWise President Arnie Bellini. Unlike Autotask's offering, customers can purchase ConnectWise straight out, as well as have the option to subscribe to a monthly hosted service, Bellini said, adding that either way, "Autotask is 60 percent more expensive than ConnectWise." He declined to give pricing examples.

Autotask's purely hosted service carries a list price of $50 per user per month, said Bob Vogel, chief marketing officer at Autotask. New customers pay a one-time setup fee of $500 plus a one-time charge of $100 per user for training. Microsoft Outlook integration costs $100 per month per account for unlimited users, as does a client access portal. Integration to the QuickBooks accounting platform carries a one-time cost of $995, he said.

What could ultimately determine the winner in the PSA market for MSPs is how well offerings integrate with back-end accounting systems such as QuickBooks and products from Microsoft, Sage Software and others, MSPs said.

The labor involved with moving data from Tigerpaw's PSA solution to a Peachtree accounting tool from Sage Software is the primary complaint with Tigerpaw, according to Robert Knochel, president of Quality Computer Services (QCS), an MSP in Pittsburgh. A lot of extra time goes into manually cutting and pasting data from the PSA solution to the accounting tool, Knochel said. Tigerpaw also still lacks tools to effectively track field service expenses, and because of this, QCS gives away field service time for which it should be billing, he said. For now, Knochel said he has his doubts that Autotask or ConnectWise will be able to do a better job than Tigerpaw at simplifying the handshake between PSA and accounting. He's checked out the two rivals and thought ConnectWise was too pricey, and he didn't feel comfortable using a hosted application like Autotask.

Tigerpaw recognizes its weaknesses and is quickly working to add tools that better serve MSPs, said Justin Cherry, an account executive at Tigerpaw. Currently, the Bellevue, Neb., company offers a non-hosted, modular PSA system with four a la carte tools that provide services management, accounting controls, inventory tracking and sales quoting for about $2,800, Cherry said. Traditionally, Tigerpaw's strength has been inventory tracking, "but a lot of inventory vendors are migrating over to the MSP side," Cherry said.

Upcoming integration with popular MSP platforms from LPI Level Platforms, N-able, SilverBack Technologies and others will allow service order generation and tighter billing controls, Cherry said. "We're going to have an interface that can suck all that data in."

It also has dawned on QuickArrow, Austin, Texas, that the MSP market is the next lucrative frontier for traditional PSA vendors. QuickArrow has had its sights on companies with internal services organizations, but an effort to target MSPs is now under way, said Elizabeth Davis, CEO of the company.

"The MSP market has a great deal of appeal," Davis said.

QuickArrow just released an upgrade to its PSA solution that improves reporting capabilities using an Advanced Analytics Excel plug-in that can combine data from Salesforce.com, Oracle Financials, Microsoft Dynamics GP (formerly Microsoft Business Solutions"Great Plains), and QuickBooks. And QuickArrow's price is a potentially disruptive $50 per user, she said.

That integration is key. Problems with integrating PSA and accounting drove Jack Dawson, vice president of operations at IQ Systems, a Reno, Nev., VAR, to leave Autotask for ConnectWise after just three months of use, he said.

Autotask quickly became too costly to tie in with Microsoft Dynamics GP, he said. "We had to hire another person to assist in accounting. Our workload increased using Autotask," Dawson said. ConnectWise integrates with GP perfectly, he said.

Autotask does have certain integration hooks into GP and other accounting systems, and has complete, realtime dynamic flow into QuickBooks, Godgart said. The way Autotask sees it, about 90 percent of Autotask's customers use QuickBooks anyway, he said.

But ConnectWise adds manhours to the accounting process, too, said Dave Moorman, president of the Roswell, Ga., MSP. DynaSis uses a Sage's MAS 500 accounting system, which accepts data from ConnectWise in batch form instead in separate entries for each customer. Moorman is cautious of any workaround, so DynaSis spends an extra eight to 10 hours a month transferring data from PSA to accounting manually, he said.