Private Equity Firm Acquires Majority Stake In LogicMonitor, Plans To 'Double Down' On Channel Investment And 'Accelerate' Innovation
Vista Equity Partners has acquired a majority stake in the fast-growing Software-as-a-Service provider LogicMonitor with plans to speed up the innovation engine and boost channel resources.
"Our company is growing incredibly fast, it has been for years, but what's clear is we have a total addressable market that is several billion dollars and it's global," said Kevin McGibben, president and CEO of LogicMonitor, in an interview with CRN. "This allows us a different level of acceleration and market expansion -- both geographically as well as in terms of making additional investments in our market-leading platform and channel partners."
McGibben said the Santa Barbara, Calif.-based company will leverage Vista Equity's resources to make immediate investments in its managed service provider business. "We'll start to organizationally specialize more in terms of how we support, sell to, provide service to and then help provide program and implementation support of the service provider business model," he said. "I see the growing importance of providing services and the channel market in the long-term technology landscape. For us, we're going to double down on those investments."
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LogicMonitor provides a SaaS-based performance monitoring system for on-premises and cloud IT systems -- everything from data center servers to cloud applications running on Amazon Web Services and Microsoft Azure. LogicMonitor includes out-of-the-box coverage for thousands of technologies across the IT stack including from Cisco, NetApp and VMware. Its platform can predict when problems might occur while providing a single-pane-of-glass view for customers.
Channel partners are leveraging LogicMonitor technology to provide customers with an array of solutions including monitoring "just about anything" as-a-service and in a variety of Internet of Things use cases. Last year, the company rolled out new performance monitoring tools specifically customized for the channel.
Scott Pelletier, chief technology officer of Denver-based Lewan Technology, a LogicMonitor partner, said the vendor's channel strategy is still relatively new as the company only began allowing solution providers to resell the technology in the past few years.
"As great of a job that they've done, getting an injection of some cash and some more investment can only accelerate the great track that they're already on," said Pelletier, whose company was named on CRN's 2018 Managed Service Provider 500 list, in part thanks to LogicMonitor. "There's some immaturity there from a channel perspective, but they've definitely been building it out as of late. So this should help accelerate all those efforts, which gets me excited."
The transaction is expected to close in the second quarter of 2018. Financial terms were not disclosed.
Vista Equity Partners is focused on software, data and technology-enabled businesses with more than $31 billion in capital commitments. Its portfolio includes approximately 50 companies including Datto, Marketo and Infoblox.
"LogicMonitor's differentiated and high ROI solution is uniquely positioned to support complex corporate IT environments," said Alan Cline, principal at Vista Equity Partners and co-head of the Vista Foundation Fund, in a statement. "We are thrilled to be partnering with the LogicMonitor team to further accelerate its product investment and its rapid growth trajectory as it supports companies that monitor increasingly complicated cloud and hybrid environments."
McGibben said he plans to leverage the private equity firm's expertise and resources to expand its channel presence geographically while on-boarding net-new channel partners in underserved markets. LogicMonitor is also planning to hire more internal staff and expand its office in Austin, Texas, where the company houses its Global Center of Customer Excellence facility.
The company's top executive team, including McGibben and founder and chief evangelist Steve Francis, plan to stay on board following the Vista Equity purchase.
"This is an investment in growth opportunity," said McGibben. "LogicMonitor and Vista are partnering because we have a fantastic opportunity for really significant growth over the next several years with the total addressable market we're going after. … When there's big news like this, it's important for the market and our customers to understand what the impact is going to be, and from my perspective, our intention is to make this only positive for them."