CRN Exclusive: ConnectWise CEO Bellini On Co-Opetition With Datto, Better Integration Of Services, And Bringing Cloud To MSPs
Making A Play For The Hearts Of The MSP Community
ConnectWise, the Tampa, Fla.-based provider of technology to help MSPs better run their own businesses and multi-endor technology to offer their clients, in early November held its annual IT Nation conference. At the conference, the company introduced a number of new managed services, including a new unified console that will bring management of Cisco, Amazon Web Services, Microsoft Azure and Google Cloud environments into a unified console.
ConnectWise also introduced a new developer kit to help vendors easily hook their applications to the ConnectWise platform, and said it has set aside up to $25 million to invest in developing those hooks and maybe even invest in some of those vendors.
This is happening even as ConnectWise faces new potential challenges from one of its primary competitors, Autotask, which in October said it will merge with Datto, a longtime ConnectWise partner in storage, networking and other services.
ConnectWise CEO Arnie Bellini told CRN in a wide-ranging conversation that his company is more than ready to meet the challenges facing its huge community of MSPs. Here are excerpts of the interview.
Autotask and Datto in late October said they would merge, creating a potentially new and large competitor to ConnectWise. Datto has been a longtime partner of ConnectWise. How does the merger of these two companies impact ConnectWise?
I guess we'll see how it affects us. But we welcome the competition. We will always be open to integration with Datto. We have great integration with them today. There's no reason that will ever change.
I think they are pursuing a different strategy than us. They certainly are going to be offering one disaster recovery solution. We currently have seven that are integrated to the ConnectWise platform. And six of these, we sell. We are offering our partners six choices. They will be offering their partners one choice. That might not work out well for them. But we do welcome the competition.
So how does that acquisition impact ConnectWise's relationship with Datto, which is a top sponsor of the ConnectWise IT Nation conference?
Yeah, well, you [saw them at our conference].
Yes, but that was decided before the acquisition was announced…
Well, it will be interesting, I guess, to see how things progress. But I will say that we will always be integrated to Datto because they are a viable solution out there in the marketplace.
Does ConnectWise end partnerships with vendors that get acquired by competitors?
Our strategy is to provide a line of business solutions for our partners. Where we draw the line is, we don't make acquisitions of disaster recovery solutions or backup solutions. We want choices and solutions where we think it makes perfectly good sense to have on a business platform that customers select. Our mission is to have the strongest and best business platform with lots of choices of solutions. That's really where our strategy differs.
We'll see how it works out. It will be interesting.
What is ConnectWise's acquisition strategy?
We started off with our product Manage, which we created ourselves. Then we made an acquisition of the automate piece, which is remote monitoring and management, [which was] LabTech, and is now called ConnectWise Automate. We made an acquisition of a company called Quosal. That is now ConnectWise Sell, our quote and proposal solution. And we also, about two years ago, made an acquisition of a beautiful remote control solution which is now ConnectWise Control, formerly ScreenConnect.
Our acquisition strategy is totally on track. We wanted to take a breather from acquisitions to get all of those software titles integrated into a seamless integration and consistent user interface. We've done that, so we're back on the acquisition trail.
So, you just mentioned a couple minutes ago that ConnectWise does not acquire the kind of companies that bring technology to MSPs through the ConnectWise platform …
It's solutions. A backup solution. A disaster recovery solution. There's lots of them out there. You need to let people have choices. [But] when it comes to the line of business applications that they use to run their businesses, it doesn't really make sense to have a lot of choice there. It's not going to be highly integrated.
An example would be Microsoft Office. Yeah, I could use Microsoft Office, and I could use Microsoft Excel, and PowerPoint, and SharePoint. But what if I don't want to use Word? I could use Word Perfect. But how much sense does that make? Is that making me more productive or less productive? My answer is, it's gonna make me less productive. ...
So it's fair to say that, going forward, your acquisition strategy will continue to be focused on the management side?
So where does that $10 million, soon to be $25 million, fund fit into your acquisition strategy?
That's not an acquisition fund. We've got a separate fund for acquisitions. That's really, if you will, our 'invent' fund. It's really about uniting and connecting the ecosystem. This is where we're going to be offering investment in ideas to connect the ecosystem together.
Let's just say we have a brand new company that's in disaster recovery. They're gonna want to connect to the ConnectWise platform. And we would want to fund that. We want to encourage them. And how do we encourage them? We have to make it as simple as possible with the Developer Kit, and then we fund it so they have no reason not to connect to ConnectWise.
So in this case you're funding the development of the technology so that it connects to the ConnectWise platform, and not necessarily funding the company itself.
Is ConnectWise making an actual equity investment in its partners, or just funding them to help develop their offerings?
It could turn into anything. The idea is to just get things connected. Let's just get everything connected. You'd be surprised at what people can do with small amounts of angel investment. We don't necessarily want to take an equity stake. That's not a necessity at all. But we know that that will probably happen. We'll probably have some people that will come up with ideas that will require more capital, and we may say, 'Well, here's cash, and we'd like some equity as well in your idea if it does take off. We want to be able to benefit from it.'
But the whole idea is not that. I'm sure it will happen. Just like any business arrangement, that could happen. But the idea is to get this ecosystem connected.
One of the biggest topics at IT Nation was the integration of Cisco technology into ConnectWise Unite. There's also talk of AWS coming into Unite. How far has that gone? Will it be at the same level as Cisco?
Cisco offers a very different set of solutions than Amazon Web Services. So they're going to look different. We are just getting started with Amazon Web Services. So we can connect to their disk space S3. We can connect to their EC2, which is their elastic compute solution for virtual machines. Those are the first two solutions that we put in place. We built some really great features and functionality around that. But we intend to go further with Amazon. We are doing the same thing with Google.
So think about it. You've got all the major cloud platforms integrated into one single pane of glass. You've got Amazon. You've got Google. And we already have Microsoft Azure [via Cloud Console]. There's your big three right there. Again, ConnectWise is offering choices, right? What cloud platform do you want to be in? It's already connected to ConnectWise, is the answer.
How about integration with other networking and security companies like you are doing with Cisco?
We are integrated to a lot of security solutions and a lot of networking solutions.
But what I mean is, at the same level as Cisco through ConnectWise Unite?
If someone approaches us with a great solution that our partners are saying, 'Hey, we really want this choice, this makes sense,' then we'll integrate them. I don't see anybody at Cisco's level, though. … If you think about security, that's the cool thing about Cisco. Where are you gonna stop a threat? Think about it. Everyone thinks about stopping a threat at a workstation or a server, or keep it from getting there. Why not stop it right on the network before it gets to anything, right? That's the advantage Cisco has with security. They are able to stop that threat on the network as it is happening. No one else can do that. Not yet. Not that I've seen.
Do you have any particular types of technologies you want to next bring into Unite?
Like I mentioned, Google Cloud. We'll also be bringing Cisco SmartNet into Unite to solve a complex billing and renewal problem for our joint Cisco-ConnectWise partners. We hope to be doing lots more with Cisco. We want to just get this first part right.
And then, quite honestly, I want to see what happens with the invent fund. I want to see what happens with our offer to have others connect to us. We aren't done. We're just started getting connected to things. I believe we did get the ConnectWise Developer Kit in a place that will make it easy for the rest of the ecosystem to connect to us. So we'll see.
How long does it take for a technology partner to connect to ConnectWise Unite with the new developer kit?
I would say days. Everything that you saw we did with ConnectWise Unite and Cisco was done with that developer kit. And we were able to finish that in only one-third of the normal time. We know we've got a real amazing solution there in the ConnectWise Developer Kit.
There are solution providers out there who have yet to embrace managed services. What would you say to convince them to embrace it?
I would use our strategy that we laid out [at IT Nation], which is to land, install, embed, manage, renew and expand. If they haven't embraced 'managed' in any [of what we call 'technology squares'], they're leaving that square open to the competition. You have to do the full life cycle, you have to go all the way through the whole life cycle to own a space. So what I would say to them is, pick what you want to manage, look at the technology canvas, pick the squares that you say you want to manage. Your strategy is going to have to change, and your people and your resources and your services will have to change.
I would encourage them, if they don't want to manage their square, someone else will. Because all technology wants to be managed today. All technology wants to be managed.