SolarWinds, an Austin, Texas-based management software company, announced on Tuesday an agreement to acquire privately held N-able Technologies, a cloud-based remote monitoring and management (RMM) and service automation software company focused on managed service providers targeting small-to-medium businesses.
The agreement is based on a cash payment of $120 million and is expected to close before the end of the month.
Through the acquisition, SolarWinds will broaden its portfolio to include a variety of services that are particularly important to SMBs that cannot afford in-house IT teams. Aside from remote monitoring and management, N-able's key functions include security, backup, patch management, automation and reporting.
[Related: MSPs: Where The Money Is]
"Today we serve the high end of the MSP market, or those MSPs who are really managing one big customer with their technology, and we are very successful in that market space," said SolarWinds CEO Kevin Thompson in a conference call following the announcement. "We are not very successful in that part of the MSP market where relatively small companies are providing services to a bunch of small businesses around the world. N-able gives us the ability to do that. So this opens up a market we have not been serving directly in the past, a market that has not been included in our view of the addressable market because we haven't had a good way to get there in the past.
"N-able has created a set of products that have differentiated their ability to meet the needs of MSPs," Thompson continued. "We don't have to retrofit it. We can take what they have and accelerate it."
Thompson added that MSPs want to buy from one vendor that can give them all the things they need to address the customer environment.
That perspective makes sense to Jonathan Sharp, vice president of marketing at Latisys, an Ashburn, Va.-based managed service provider.
"I think we're at the beginning of a period of consolidation," Sharp told CRN. "Ultimately CIOs are looking for hybrid solutions that span complex requirements across multiple components of their IT infrastructure as well as services and support. Given that level of complexity, they are looking for one-stop shop providers who can do multiple things for them, as opposed to sourcing different components from multiple providers. Customers don't want to buy in silos anymore."
PUBLISHED MAY 21, 2013