MSPmentor

CoreConnex is getting out of the PSA (professional services automation) business, but the company doesn’t want to leave managed services providers (MSPs) and VARs stranded. The company has developed a strategy to transition PSA customers to ConnectWise. Here’s the scoop — and the bigger story about managed services industry consolidation.

First, the hard news:

• CoreConnex is “is going to transition out of the ConnexIT PSA business and is going to put its full attention on its emerging financial dashboard business,” according to an email sent to CoreConnex’s customers.
• The company has inked an agreement with ConnectWise to “transition ConnexIT users to the ConnectWise PSA system without any increase in monthly license fees.”
• ConnectWise is not acquiring the ConnexIT code base, but ConnectWise COO Santo Cannone tells me ConnectWise is taking a close look at the ConnexIT features/functions and will work hard to help transition ConnexIT users to ConnectWise.

I spoke wth CoreConnex President and CEO Frank Coker. He wanted to reiterate to customers that exiting the PSA market was not a decision he took lightly. While Coker values the PSA relationships CoreConnex has built, the company ultimately had to make an R&D decision in the crowded PSA market — where companies like ConnectWise, Autotask, TigerPaw and emerging rivals like Severa are jockeying for position.

Ultimately, Coker determined that CoreConnex’s best opportunities for growth involved the financial dashboard business. And in fact, he’ll be working to integrate the CoreConnex dashboard with a range of PSA and RMM (remote monitoring and management) tools. He’s also doing some work with Paul Dippell’s Service Leadership Inc. (stay tuned for more on that).

Back in the PSA market, Coker says he thinks ConnexIT’s customers will be better served if they benefit from ConnectWise’s R&D muscle — rather than having CoreConnex compete with ConnectWise R&D.

Coker and ConnectWise CEO Arnie Bellini will host a web-TV broadcast on Tuesday for all ConnexIT users.

The Bigger Picture

I suspect this is the first of many deals we’re going to see in the PSA and RMM markets over the next few months.

The reasons: I sense that some PSA and RMM software suppliers are pulling far ahead of their competitors. Plus, venture capitalists who have invested in RMM and PSA tool providers are going to want a return on their money as the recession eases and IT spending picks up. With those factors in mind, continued RMM and PSA consolidation is a safe bet.

In the meantime, we’ll be watching closely to see how the ConnexIT customer base reacts to the transition opportunity to ConnectWise. Plus, I still need to touch base with rival PSA vendors to see if they will make special competitive offers the ConnexIT customer base. Stay tuned.

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