ConnectWise Acquires ScreenConnect, Filling Major Hole In LabTech Platform To Create Growth

LabTech said it has transformed its biggest weakness into one of its greatest strengths.

That's because ConnectWise has acquired Raleigh, N.C.-based ScreenConnect, a stand-alone remote control solution, ConnectWise said Wednesday.

ConnectWise, which owns an equity stake in LabTech Software, plans to integrate ScreenConnect with LabTech, its remote monitoring and management solution. LabTech said the deal addresses a major issue in the platform, and believes its customer base will grow because of it.

[Related: Passportal Takes Password Management Software To ConnectWise]

"We've had the [remote support] ability for a long time, but it was slow to connect," LabTech CEO Matt Nachtrab told CRN via phone. "The connections were a little unstable. The user experience was not very pleasant and wasn't very fast. We've struggled with it for a while, and that's the No. 1 used feature in LabTech, when the technician needs to jump in that computer and provide remote support, and we weren't very strong in that area. Despite that, we've been very successful the last few years. We're one of the leaders in our space despite not having very good remote control."

Nachtrab said that the remote support feature of LabTech has been the No. 1 complaint his company gets from its customer base. When customers terminate the relationship, the remote support feature has been the top reason cited by customers for not wanting to use the product anymore. He believes the acquisition of ScreenConnect by ConnectWise fills a hole in the LabTech platform and resolves a massive issue.

Nachtrab said that the ScreenConnect acquisition allows for the software to integrate seamlessly with the LabTech platform, working faster, eliminating lag time, and because of the strong connection, it results in a "delightful" remote control experience.

He added that he's been in contact with ScreenConnect for the past 18 months, and has been "massively impressed" with the product made by the nine-employee company, based in Raleigh, N.C., with more than 6,000 customers. Nachtrab said that now that the deal is finally done, he plans to maintain ScreenConnect and continue to innovate the product as a stand-alone remote control solution.

"I'm really excited," Nachtrab said. "We are giving this to our customers at no additional charge. It's a big deal. If we really nail this, it seems like it will really take us to the next level. We've been really successful without having a good technology here, and I think our growth rates will accelerate having ScreenConnect here."

Next: LabTech's Growth Potential

LabTech has been growing at an average rate of about 100 percent in revenue per year over the last five years, Nachtrab said, and has been one of the leaders in the RMM space. He admits that sustaining that kind of growth rate may be a challenge, but the growth potential after the ScreenConnect acquisition is high.

"I'm most excited to see the reaction from our customers," he said. "We put a lot of time and money and effort into this, and we are giving it to our customers at no additional charge. I think it could double our sales. It alone could double the rate we are bringing our customers from a LabTech standpoint. LabTech is an advanced product and you can do just about anything with it. It's a complex product, and I really like the idea of having an easy-to-use remote-control solution."

He added that the growth potential for this product alone can allow for his platform to compete with other remote-control software companies, such as LogMeIn.

Going forward, LabTech will launch next month, allowing customers to use the new platform with ScreenConnect's integration.

After the acquisition, ScreenConnect will remain in Raleigh, N.C., and will keep the same name. ScreenConnect will keep the same team, and LabTech will grow the team on the software development side.

"I think one of the saddest things when you're looking at technology acquisitions is when companies get absorbed by a new company and the spirit dies," Nachtrab said. "I look to [the management] of ScreenConnect to tell me what they want to do next. It's not for me to dictate to them. They have the voice. We'll be working as a team but I look to them for advising when making decisions in the future."

Partners are already applauding this deal as the weak remote support capabilities of LabTech were an issue.

"We've been a LabTech partner for quite a few years and we are quite excited about the deal," said Jeremy Jackson, president and CEO of Prattville, Ala.-based BWS Technologies. "We were looking at ScreenConnect for quite a while and had it on our radar to make a purchase into it. We were going to use ScreenConnect separately from LabTech, so this is a bonus for us."

Partners emphasize that they are excited about the deal, and are looking forward to how well ScreenConnect integrates into the LabTech platform as it resolves a major issue for MSPs.

"Screen Connect is a killer product from cross-platform connectivity," said Bill Youngblood, executive vice president and COO of BWS Technologies. "The feature in LabTech was not very elegant. Sometimes it wouldn't work right away and sometimes it wouldn't work at all. We know that ScreenConnect is a bulletproof application.

"I would imagine it was a huge resource burner for LabTech customers who've been constantly calling complaining about it," he added. For us, it's really exciting. We're fully integrated into LabTech, but it makes it so much easier for us as an MSP to have this feature. It's difficult to explain to a client why you can't remote connect. This will give us the highest efficiency as possible. It makes the client happier and gives us time efficiency."

"ConnectWise has an unmatched commitment to delivering its partners the most extraordinary solutions in the global marketplace and our acquisition of ScreenConnect is further proof of this,’ said Arnie Bellini, chief executive officer, ConnectWise, in a statement. ’Not only does ScreenConnect immediately boost our capabilities in the remote support space, but it is a game changer for the technology service provider market; we’re excited to be at the helm.’

PUBLISHED FEB. 12, 2015