MSPmentor

Generally speaking, LabTech Software is an on-premise RMM (remote monitoring and management) tool. But that’s gradually changing thanks to partners like The IT Answer, which has launched LabtechCloud.com. More SaaS-centric partnerships from LabTech could be coming. But it’s important to note: LabTech and partners like LabtechCloud are essentially in catch-up mode, since most of the major RMM providers already offer hosted and SaaS versions of their software. Here’s the update.

For those who haven’t been following the story, LabTech was a little-know provider of RMM software until February 2010; that’s when ConnectWise Capital pumped money into the company. Since that time, LabTech’s installed base has grown from roughly 100 MSPs to roughly 1,000 MSPs, our staff has heard. Moreover, LabTech is nearing cash flow positive status, we’ve also heard.

Challenges for Growth

Still, LabTech faces multiple challenges. For starters, LabTech must continue to service and support a rapidly growing base of MSPs that use the on-premises LabTech Software. Moreover, LabTech must accelerate its cloud strategy because most of the major RMM providers — folks like Kaseya, N-able and Level Platforms — already offer SaaS-based RMM. More recently, companies like Nimsoft have introduced on-demand versions of their software. And diversified competitors like Zenith Infotech are pushing into multiple on-premise and cloud directions.

Plus, some RMM players focus purely on cloud offerings. Key examples include:

• GoToManage, a Citrix solution based on the Paglo Labs acquisition of February 2010;
• CentraStage, a European player that’s preparing more US-centric moves; and
• Microsoft’s Windows Intune, which is in beta test now.

SaaS Partners Emerge

Check in with LabTech and you’ll discover that the company does have a cloud strategy and a SaaS story in place. That’s where partners enter the picture. In a November 1 email to MSPmentor, LabTech CEO Matt Nachtrab noted:

“We have a hosted provider of LabTech in Scotland (T2 Solutions), we recently signed one up in South Africa, and a press release will be coming [soon] on North America.  They are well capitalized and have a lot of energy building. Notice a clear constant in our approach; we are leveraging the channel to deliver hosted LabTech.”

That North American press release involves The IT Answer and LabtechCloud.com. According to a prepared statement from The IT Answer’s Kevin Carlson:

“By utilizing Labtechcloud.com, startup and seasoned MSPs can revolutionize their service deliverables to create a recurring revenue model… LabtechCloud.com is long overdue in this industry; it is time to deliver MSP tools and services like they were meant to be.”

In some ways, LabtechCloud reminds me of Virtual Administrator, a Master MSP that got its start hosting Kaseya and gradually pushed into a range of third-party security and storage services. Also, Nachtrab’s strategy for the cloud reminds me of Open-Xchange and Zimbra (now owned by VMware). Both Open-Xchange and Zimbra are fast-growing email software providers. Instead of building hosted solutions on their own, Open-Xchange and Zimbra are deferring to channel partners for SaaS deployments.

Pros and Cons

On the upside, LabTech can move faster by depending on SaaS partners. The effort also ensures a pure channel strategy. But on the downside: If any of the regional SaaS partners stumble it could hurt LabTech’s overall cloud story vs. entrenched RMM providers. LabTech must also be careful to protect its corporate brand; for instance, some industry novices may erroneously assume that LabTech owns LabtechCloud.

Still, it sounds like LabTech’s SaaS engagements are non-exclusive. Translation: If a SaaS partner stumbles it sounds like LabTech is free to go recruit another SaaS partner.

We’ll be watching to see how each of the regional SaaS efforts perform.

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