Here’s What To Know About The ‘Revolutionary’ Deal Bringing Together ConnectWise And Continuum

It’s a tectonic shift in the MSP landscape as ConnectWise and Continuum join forces. Here’s what you need to know about the deal, the plans for each company’s CEO, and what some MSPs think about the merger and the overall MSP landscape.

The ‘Dominant’ Platform

ConnectWise and Continuum Wednesday said that they have joined forces in a move that is seen as a tectonic shift in the MSP landscape, creating not only a platform juggernaut with nearly 35,000 global users but potentially changing how thousands of those MSPs do business.

“You look at the aggregate of this entity in revenue, in footprint, in number of MSPs and TSPs [technology solution providers], in product portfolio, in employees, in geography—this is by far the largest provider in the space,” said Continuum CEO Michael George, who is an investor in the new company but is not staying on board. “With size and scale come economies of scale, breadth of capability. This is the largest, now dominant platform in the market. Our collective MSPs benefit from having that as their empowerment platform to go to market. If I were in the MSP space today, I couldn’t imagine a better platform to go to than this one.”

ConnectWise CEO Jason Magee, who will be leading the combined company, said that with the merger, he hopes to bring the best products of both companies to bear in the market. These include ConnectWise’s dominant PSA tool and Continuum’s robust artificial intelligence/machine learning enhanced security, which itself is bolstered by four Security Operations Centers around the world.

“Whether it’s the growing pains of talent and skill shortages, it will help accelerate ConnectWise and push ConnectWise further into the cybersecurity realm,” Magee said. “This is something that Continuum has done extremely well over the last couple years and, quite arguably, [is] probably the most successful in the MSP, TSP space in doing so. You sprinkle in the managed offerings around SOC, NOC [Network Operations Centers] and help desk and bring that all together with the current ConnectWise platform, and this is going to be revolutionary.”

Magee said in addition to the merger news, ConnectWise is unveiling the purchase of IT Boost, a documentation tool, that will soon be available to partners.

How The ConnectWise, Continuum Deal Came Together

ConnectWise’s Magee and Continuum’s George said talks between the two companies have been going on for a number of years, with each company seeing its needs met by the products the other possessed. George said market forces seemed to push the two together, but there was no one specific moment when that happened.

“Both sides have always thought they needed to do an acquisition of someone like this,” Magee said. “Continuum thought they needed to do an acquisition of someone like ConnectWise or a business combination or merger. Same thing on the ConnectWise side. For the last few years, we’ve always been looking to solve the pain points of our partners that would bring us to this logical standpoint. We’ve entertained, on the ConnectWise side, different options in terms of solving these pain points for our partners. Both for the last couple years have been thinking about similar business combinations, mergers, new products being launched.”

Said George: “We were still owned by Summit Partners when we first had any level of meaningful discussion. These are two great companies that have been together for a long while. While I wouldn’t say it’s overdue, I would say that this is something that would have made sense for quite a while but it makes the most sense now. We had discussions as [few] as four years ago. I wish I had some fun pub story of us throwing darts at a dartboard together with different company names to merge with, but I think this is just a very natural progression that the market will clearly applaud but has been asking for in various forms for a long time now.”

A Win For Continuum Partners

Continuum’s George said the chance for partners to work with the largest player in the MSP platform space and reap the benefits of their combined forces, is a win for them.

“First of all, we have a number of partners we share in common with ConnectWise. ConnectWise PSA is absolutely, undeniably—and I don’t mean this in any disparaging way towards any of the other PSAs out there—but there is no comparison to ConnectWise’s PSA. We share an untold number of partners together that are in their PSA and in our service delivery platforms,” George said.

“We also, interestingly enough, share a number of partners who use ConnectWise’s RMM tools for those accounts [where] they want to maintain a level of control and ownership and want to have their own technicians in the service delivery model. And that same MSP would use our platform to do service delivery in the RMM sector for those clients that they want to put under a fully managed environment. Of course, as you know, in our world, we also have security and backup, which are two things that ConnectWise does not have,” he said.

“It’s two pieces of a puzzle that come together extraordinarily well and naturally,” George said. “Our partners will benefit, as I said, from now having one vendor, one partner relationship to manage and not two or more.”

Challenges Ahead For Magee

Magee, who has not been at the helm of ConnectWise for a full year yet, already has weathered the storm of ransomware attacks as well as being the first new leader of the company in more than 30 years. He now has the challenge of merging two rival MSP platforms.

Magee said ConnectWise remains committed to the “power of choice,” meaning partners will still be able to tap into the 260-plus vendors that integrate into its platform today. The deal, however, also will significantly boost the company’s capabilities around SOC, NOC, and help desk, in addition to offering customers a different delivery model, according to Magee.

“That’s a lot of complementary goodness, and a lot of cool stuff that we’ll be able to do for the broader ecosystem. What they’ve built is pretty amazing and transformational and could do quite a bit more from what they currently have. I only anticipate a lot of good stuff coming from bringing this all together.”

“This will also allow ConnectWise to cater to the two mind-sets out there. One mind-set is of the ‘do it yourselfer.’ ‘Hey, I want choice, I want to be able to do it myself. I’m going to make the investment of time, talent and treasure to bring solutions and offerings to their customers.’ And then those who have the mind-set of ‘Hey, I want to hire a general contractor and have someone manage that for me.’ It’s going to allow us to cater and appeal to both of those mind-sets,” he said.

“Bringing two companies of this size together, there will be change. It’s going to be a very positive transformational change for our partner base,” Magee said.

What’s Next For Continuum’s George?

George said he will be “chief cheerleader, fan and investor” but will not otherwise be involved in the running of the new organization. George—who took the troubled Zenith Infotech and over eight years transformed it into Continuum—is widely considered to be a thought leader in the technology space, not only in the MSP field, but in artificial intelligence and machine learning. Apart from a 10-day meditation silence at a location near Dharamsala, India, he has no plans once the merger is done.

“These are two great companies that have been together for a long while,” he said. “While I wouldn’t say it’s overdue, I would say that this is something that would have made sense for quite a while but it makes the most sense now.”

One MSP Sees Merger As Massive Win

Some MSPs believe that having ConnectWise and Continuum under the same umbrella will be key to easing any support and maintenance issues.

Mark Essayian, president of KME Systems, a Lake Forest, Calif., MSP, is a longtime ConnectWise partner and has been using Continuum’s RMM for about a year. He said he sees the merger as a massive win for his business.

“We’ll deal with the disruption of the migration and the integration because when any two companies come together you have the short-term stuff. So I am not worried about that. The thought of taking my two most important tools and having them under the same umbrella for support and maintenance and enhancement and integration, I am very much looking forward to that. I’m really happy with what Continuum has done on the security side. I’m really looking forward to how they’re going to align the toolsets. There’s a lot of things that go into it. I have to integrate it myself now and it’s poor at best. Now I’ve got major companies with major budgets to make these things work. I think the single most important thing is my two most important vendors—outside of Ingram Micro—are going to merge.”

Hands counting cash

‘Cautiously Optimistic’ About The Deal

The advantages that the integration of the two companies could bring has Zac Paulson, CEO of True IT, a ConnectWise partner in West Fargo, N.D., “cautiously optimistic.”

“I see advantages to them coming together because they can offer combined solutions and probably more integrations, but if I were to have a complaint about ConnectWise over the last few years it seems like they’ve kind of strayed from their core. They’ve focused a lot on everything else and how they can make money from being somewhat of a distributor, but being a user they’ve kind of neglected their core and I don’t feel like they’ve given the ConnectWise Manage and the ConnectWise Automate platforms the justice they deserve. Hopefully they improve that,” he said.

“I would say I’m cautiously optimistic that they’ll refocus their energies. The other thing that makes me nervous is that they’re owned by private equity. And private equity has one goal and that’s to increase profits and typically flip things in three to five years.”

‘Lack Of Choices For MSPs’

Not all MSPs are welcoming the new deal. Richard Delaney, chief technology officer of New York-based MSP Delaney Computer Services, which uses SolarWinds’ RMM tool, said in aggregate, the deal represents less choice for MSPs in a market that has already seen significant contraction to fewer options.

“All that’s happening here is big money is creating a lack of choices for MSPs,” he said. “This is getting serious. This is getting bad. Even the competition that is out there isn’t causing lower prices. Pricing is going up everywhere. Private equity has discovered a new playground. ... Look at what IT was. It was a bunch of benevolent IT nerds chugging away for 20 years making software that would improve the day- to-day life of other IT nerds. This whole managed services craze hits 10, 11 years ago, private equity gets involved, but you don’t see the products or the support behind them getting much better.”