LogicMonitor CEO On Rapid Growth Initiatives, Channel Expansion And Why An IPO Is 'Still On The Table' After Private Equity Firm Purchase
The New LogicMonitor
Red-hot Software-as-a-Service provider LogicMonitor has massive channel expansion and technology innovation plans in store after private equity firm Vista Equity Partners acquired a majority stake in the performance monitoring company.
"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," said Kevin McGibben, president and CEO of LogicMonitor, in an interview with CRN. "This is an investment in growth opportunity, it's not an optimization play."
McGibben, whose company was named to CRN's recent 2018 Software-Defined Data Center 50 list, talks to CRN about LogicMonitor's global and channel expansion plans as well as a potential initial public offering in the future.
Why did you decide to go with a private equity firm compared to an IPO?
When you make a decision like this, you have to determine what's best for the business and best for your customers. I'm actually thrilled about it. I feel like it's the right partner at the right time for LogicMonitor to get to our ultimate outcome. I also believe strongly that this partnership does not preclude us from going public in a few years' time. It's absolutely still on the table. We've been able to build the business in a highly capital efficient way over time with some really great financial partners. I see Vista Equity as a premier partner for us to work with now to be able to help get us to our ultimate market potential. So whether that includes an IPO or not is actually less important than our goal of market leadership.
What is the ultimate goal with Vista Equity Partners?
They really will allow us to grow even faster. 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 . With a partner like Vista, it allows us to accelerate some investments so we can get into that market position even faster than we would have on our own. 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. We'll continue to add innovation and a long-term view of adding a suite of capabilities to add more value to our customers.
Where exactly are you looking to rapidly grow? Is it onboarding new MSPs or expanding geographically?
Both actually. So market expansion in terms of penetration as well as market expansion geographically. The North American market alone is a large market, we have several hundred service providers as partners worldwide today. As you know, that is only a very small percentage of the overall service provider market. With how important service providers are increasingly becoming to deliver technology to enterprises, we recognize that as largely untapped for us. We're looking for those service providers to bring LogicMonitor in and provide value to their service offerings. It's penetrating the current markets more and expanding into new markets.
Should LogicMonitor MSP partners expect any major changes to your channel strategy?
Absolutely. We're continuing to make accelerated investments in the service provider space. 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. So surrounding that experience with more of a partnership approach and continuing to expand the investments there. So definitely more direct investments in those programs will come of this.
They'll also be a couple other resource aspects, like working with our service providers to help build awareness of their own service offerings as it pertains to our partnership. The third is geographic and market expansion opportunity in terms of investing in our service provider business. Last but not least, ongoing focus on the product elements that provide value to the service provider business.
Are you expecting any job cuts after Vista Equity acquires a majority stake in you?
I'm not expecting any cuts. Conversely, we're growing incredibly fast. We're about 240 employees worldwide. We're hiring smart, talented people as fast as we can for key roles. You're going to see pretty significant expansion in our Austin office operations where we have our Global Center of Customer Excellence facility. We're going to continue to build that out in all aspects of the business. We're a growth company. 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. This is an investment in growth opportunity, it's not an optimization play.
Are there going to be any changes to LogicMonitor's executive team?
I'm committed to this business. Both Steve [Francis, founder and chief evangelist of LogicMonitor] and I are remaining with LogicMonitor. The remainder of the executive team is also staying on board. Vista doesn't just see us as a product opportunity. They love the business that we're building. They're partnering with us to build that out. There's going to be continuity in terms of the service quality we deliver. … [Partners] will see more resources brought to bear to build out that service provider business as a result of this partnership.
Why did you select Vista Equity?
I would suggest that there's no better private equity firm in either the service provider or software space that is more experienced than Vista Equity. We've selected each other to be a valued business partner, to be able to build the business out. Imagine with over 50 current portfolio companies and over $30 billion deployed in those companies and 55,000 employees and tens-of-thousands of enterprise customers and channel [partners] -- the kind of network and knowhow we get to plug into as part of this transaction. It's significant for our business. I expect, across a number of vectors, for them to be able to help catapult the business to our ultimate outcome even faster than we previously envisioned. We're eager to see how it will provide value to our business.
Why should solution providers partner with LogicMonitor?
As the world of technologies become more complex for enterprises to manage, service providers become more important. The service provider business is hugely important to LM. 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, not just from a product standpoint, but making sure we're providing a great level of service and experience to be relevant in that space.
The channel opportunity for LogicMonitor only grows in relative importance over time. So whether the service provider is a system integrator or a cloud provider or they're a managed IT service provider -- they are getting exposed to new and different technologies. For us, we really are an agnostic platform where we allow partners to bring in any type of technology into our platform. We're a great technology platform for those modern service providers that are managing complex infrastructures today and trying to understand how to deliver service benefits for enterprises in the future.