ConnectWise is taking aggressive steps in the hosted software market. The PSA (professional services automation) software provider next week is expected to “officially” announce lower Hosted ConnectWise pricing. But word of the move is already spreading across Twitter. Here are the implications.
The ConnectWise Twitter feed leads readers to a landing page describing the new pricing. Until now, Hosted ConnectWise cost $45 per-user, per-month. ConnectWise is lowing the price to $39-per-user/per-month for a two-user minimum (or a $78-per-month total two-user price). And yes, the discount applies to existing customers — a rare move in the world of technology services.
But there’s a bigger story here. It involves:
- Architectures: The SaaS vs. Hosted vs. On Premise Debate
- Competition: Ultimately, I think ConnectWise is (A) rewarding loyal customers and (B) moving aggressively against Autotask Go!
Architectures and Perceptions
In recent months, software vendors have strongly debated whether managed services software will live on premise or in a cloud somewhere. Start-ups like Paglo and Severa, and more established firms like Autotask, articulate the simplicity of their SaaS business models.
In contrast, ConnectWise says it has adopted a Burger King-type strategy: Have it your way… On premise or hosted. But ConnectWise’s strong on-premise heritage means some folks don’t realize the company has a growing hosted business.
ConnectWise’s installed base is roughly 10 percent hosted and 90 percent on-premise, according to a conversation I had with ConnectWise CEO Arnie Bellini at the Kaseya User Conference in May 2009.
Added COO Santo Cannone in an email to me earlier this week:
“BTW, we’ve been offering our hosted model to partners for 3 years. We have 230 partners and over 900 users operating in our hosted environment.”
Competition
Read between the lines and the new Hosted ConnectWise pricing seems to be:
- A loyalty reward to existing ConnectWise customers;
- An open letter to MSPs that are mulling a hosted platform decision; and
- A declaration of war against Autotask Go!
Autotask Go costs $99 per month (total cost) for up to three SaaS users (so per-user can be as low as $33/month). Once you get beyond three users, you’ll need Autotask Pro. Autotask says it has 25,000 customers on its SaaS platforms (Go and Pro).
I don’t think we’ll see a multi-round PSA SaaS price war. But if a pricing battle does start, there are some key factors to consider:
- ConnectWise is privately held/privately owned, with no venture capitalist influence and I believe no debt. As a result, Bellini can adjust pricing quickly without upsetting outside advisors. As Bellini mentioned to me in an email: “We want our Partners to have More for Less.”
- Autotask and many other MSP-oriented software providers are privately held but venture funded. And venture capitalists generally don’t enjoy price wars. So pricing decisions may need to be more carefully weighed.
Beyond Pricing
Of course, price isn’t everything. You’ve got to test a range of tools — and speak directly with software providers to understand their product roadmaps — before you can really make an informed buying decision.
Ultimately, PSA software providers don’t want your buying decision to be about price. More importantly, it’s about driving loyalty through continued software enhancements — and even business education.
Asserted Bellini:
We want our Partners to have More for Less. We want to offer the entire market the world’s #1 PSA solution for the lowest price we can provide. We want to share our success with the IT solution providers of the world and we want to use our domain expertise to build their success. ConnectWise has got to be a champion for the independent IT Solution provider….no one else is stepping up to the plate. We believe if we give to the community it will benefit us in the long run….so it is a pay forward mentality for the companies that want to build their success on our success.
Once ConnectWise’s Tweet about the price change became public knowledge, I offered Autotask CEO Bob Godgart some time on the topic. His thoughts arrived in an email to me. And he drew a clear line between SaaS and hosted software:
Before making any purchasing decisions, do an apples to apples comparison and ensure what you’re looking at is a true SaaS model. Is there a true web connection or is it a Fat Client connection to the Data Center? What integrations are supported (really important for the MSP platform providers)? What about accounting and other back-office applications? Is the technology accessible anywhere? It won’t be unless it’s available thru a standard web browser (which Autotask is)… Are the upgrades pushed or pulled (downloaded)? In a true hosted version, they should be automatic and seamless (again, Autotask offers this). You also want to ensure there is live support and training available (you guessed it… we offer this too)… Bottom line, you have to really look at what your being sold and what’s included, what’s extra and what will make the most sense for your business needs…. Imagine a tech going on site and then with a fat client and having to download it to every machine that they use? Autotask is accessible anywhere through a standard web browser.
Boil down Godgart’s statement, and he’s asserting that true SaaS involves a Web browser and centrally managed software.
So, I asked ConnectWise if Hosted ConnectWise required a fat or thin client. COO Santo Cannone told me the application is delivered in both a browser and a .Net client.
I’m not a software tester, folks, so please: Do your own testing and draw your own conclusions.
Beyond Microsoft
Still, I will split hairs with Autotask’s Godgart on a key point: He mentions support for a “standard web browser.” But in Autotask’s world, that means only supporting Internet Explorer.
I think that’s a mistake. Thirty-two percent of MSPmentor.net visitors run Firefox, 6 percent run Google Chrome and 6 percent run Safari, according to our June 2009 traffic. Autotask Chief Marketing Officer Bob Vogel has posted comments on the web indicating that Autotask eventually will support additional browsers.
Loyalty Matters
Back to the central topic at hand: PSA software companies want your business and they’re working hard to earn/retain your loyalty.
At a time when Microsoft and so many other software companies are trying to raise prices, Hosted ConnectWise is heading in the opposite direction with a price cut.
Consider this: When was the last time your Cable Company, Broadband Provider or Cell Phone Service Provider emailed you, thanked you for your loyalty and said they were ready to give you a new, recurring discount on a monthly service you were already using?
Follow MSPmentor via RSS, Facebook, Identi.ca and Twitter. Subscribe to our Enewsletter, Webcasts and Resource Center.
Read More About This Topic
Share This Post
Posted In: PSA | Software as a Service and Hardware as a Service
Tags: Arnie Bellini | Autotask Go! | Autotask Pro | Bob Godgart | ConnectWise PSA | Hosted ConnectWise | Managed Software as a Service | Professional Services Automation | Santo Cannone
Interact: Add a Comment | Trackback Link | Permalink
Subscribe: RSS Feed
Get Started: Visit our new 
Connectwise REQUIRES Internet Explorer as well. And officially IE8 is not supported. (although it works)
I am a on-premisis customer of Connectwise. TBH I was a little annoyed to get the lower pricing email as my bill is about $375 / mon.
All in all I like CW a lot but it’s biggest failure is reliance on IE which means it wont work with Blackberry or Iphones.. Only the WM client they offer as an Add-on at additional cost.
Yan: Thanks for weighing in with deeper info. I must concede: I am NOT an expert on the technical requirements of either platform. But I continually encourage software companies to push, push, push toward cross-platform browser support.
Talking about technology – The PSA system we offer, CommitCRM, includes both a feature-rich Windows client as well as a Web interface for technicians and customers (a customer-portal).
I agree with Joe on the browsers support, different people use different browsers and a PSA system shouldn’t force them to use IE.
This is exactly why Commit’s Web interface officially works with Firefox,
Google Chrome and, of course, Internet Explorer. It means that it can be accessed and used from Windows PCs as well as from Apple’s Mac. It offers a pure HTML interface, it can be accessed from anywhere and no download is required.
As for pricing – it always plays an important role in buying a PSA system, or any other product. This is why we offer our system for a very affordable price with small business in mind. In addition to the direct license costs (perpetual or hosted) I believe that service providers should also look at indirect costs – How much time should be spent on learning and implementing it in their business? How much time does it take to train a new employee in using the system? Is it easy to use on a daily basis? etc.
So, with responses from Commit and probably soon to come from TigerPaw will there be a 4th site, PSAMentor.com
?
Seriously, though, we’re happy whenever we see people either trying to improve their value without raising prices. Kudos to Connectwise for, especially in this economy, trying to deliver more for less.
It does bring up an interesting point in terms of people doing cost comparisons between hosted SaaS solutions and RYO (Roll-your-own) solutions.
Since Virtualadministrator.com lives squarely in that conversation, we tend to have an opinion, which usually is that being able to start with SaaS and move to RYO is usually what benefits partners the most. It allows them to grow until they are confident enough to bring it in house.
I tell you, Joe, you always stir up interesting topics!
Rich Forsen
http://www.VirtualAdministrator.com
Accessing Connectwise through a browser interface provides a user a bare minimum of services. You cannot perform your job in virtually any capacity using the Connectwise IE interface. Autotask provides access to the full functionality of Autotask Pro or Autotask Go! via IE. You do not have to load a fat client to get access to the fully integrated Autotask solution, as you have to do with Connectwise. Imagine going onsite to a client, or anywhere, and having to access Connectwise (due to mobile limitations) and you let your client, or anyone, know you will be down loading a fat client on their machine. I don’t think so…
ConnectWise has a robust browser client and WILL soon run native on Macs and Linux machines. ConnectWise is rapidly moving toward browser independence. Our latest release supports IE 7.0 and 8.0 and by December 14th, 2009 ConnectWise will support Firefox, Safari, Chrome and iPhones and Blackberries. So again ConnectWise is about choices. We understand our Partners and their needs and we respond.
Joe you mentioned that we are a private company, correct….in fact we are 100% EMPLOYEE owned and most of our 100+ employees have stock! ConnectWise has $0 debt and plenty of cash in the bank. But mostly we have plenty of passion to make a difference for our Partners. Dropping our Hosted Price to $39/user/month for EXISTING and future partners is our way to say thanks for making us the industry leader.
Len, Arnie: I’m happy to see the fireworks didn’t end this weekend.
-jp
We use ConnectWise’s browser client at a number of client sites, and don’t have any problems getting our job done. We can access tickets, enter time, review configurations, etc. without issue. I’m not sure where the “You cannot perform your job in virtually any capacity using the Connectwise IE interface” comment comes from, or what basis in fact it has.
Additionally, version 8.1 of ConnectWise, in beta now, supports IE8. I’ve also tested it in Chrome (http://www.MyTechExperts.com/images/cwchrome.jpg) and on in Safari on an iPhone (http://www.MyTechExperts.com/images/cwsafari.jpg). Works great!
And, my ConnectWise server and my client information reside in my data center. That option isn’t available with some of the other solutions.
Finally… On the “fat client” comment. It’s a 678k download – almost all of the e-mails I receive are larger than that.
Tom
We use Connectwise at Zenith, as well as our NOC engineers have been entering tickets into our partners’ Connectwise for years now. We’ve not had problems with the web front-end and from our experience the web front-end gives pretty much all the functionality that we get from the windows client. Sure the windows client runs quicker than a web client but that is true for any software out there.
We’ve used CW for close to 3 years, and have found it to be a critical part of our ticketing and time tracking systems. We find them to be incredibly supportive, and their wealth of knowledge available to all partners is worth far more than the licensing fees alone. They just keep getting better and better, IMHO
Jim, Akash, Thomas: I’m “taking the high road” on this conversation since we cover all the vendors. Plus, I haven’t actually “used” the software.
Nevertheless, I do appreciate you offering your perspectives to MSPmentor’s readers.
I am based in Australia and Connectwise do not support their hosted service outside of Australia.
We really only need 2-3 users, hence I am looking at Autotask GO!. Does any one have comments on this?
dsp: I’ll check in with ConnectWise to learn more about their international hosting strategy. Stay tuned.
-jp