Publicly, ConnectWise and Kaseya continue to cooperate in the managed services market. But privately, a war between LabTech Software (funded by ConnectWise Capital) and Kaseya has started to intensify, according to MSPs who are witnessing the action first-hand. To understand the high-stakes managed services showdown, turn your attention to a recent HTG CEO Forum meeting in Tampa, Fla. Here’s the scoop.
First, a little background for those who are new to the managed services market.
- Kaseya develops RMM (remote monitoring and management) software.
- ConnectWise develops PSA (professional services automation) software.
- RMM and PSA are like the Microsoft Word and Excel of the managed services market; integrating with one another and providing critically important business management capabilities.
- Kaseya is gradually developing PSA capabilities and making acquisitions that may wind up competing with ConnectWise. On the flip side, ConnectWise Capital — a ConnectWise investment arm – last year invested in LabTech Software, a fledgling Kaseya rival.
Over the past 12 months, LabTech — backed by ConnectWise Capital dollars — has accelerated its R&D and launched pricing pressure against Kaseya. A few days ago, ConnectWise CEO Arnie Bellini and President David Bellini described LabTech’s momentum to MSPmentor. But that MSPmentor report overlooked a potential inflection point involving the HTG CEO Forum, which I learned about over the past 24 hours.
Industry Influencers
HTG is a very influential peer group within the managed services market. Members include VARs and MSPs from across North America, and newer members from Europe and Australia. Within the RMM software market, HTG remains vendor-neutral… meaning members are free to select any RMM software they prefer. Kaseya is certainly active within HTG, though ConnectWise has emerged as HTG’s dominant PSA platform.
CEO Inflection Point?
Meanwhile, the HTG CEO Forum is a sub-set of HTG, involving CEOs who focus squarely on MSP business issues. Sources say HTG CEO Forum members increasingly are selecting LabTech’s software. A prime example: Sources say roughly 20 VARs and MSPs attended the recent HTG CEO Forum meeting in Tampa, Fla. Of that group, roughly 10 of the attendees have embraced LabTech’s software or are kicking the tires now, the sources say. “It shocked me,” said one source. “The 20 VARs and MSPs who attended are pretty sharp. To hear about so many VARs and MSPs shifting from Kaseya to LabTech shocked me.”
What’s driving the alleged shift? According to a source familiar with HTG CEO Forum, it’s all about LabTech’s price, features and integration with ConnectWise. One source says he’s currently paying about $75,000 annually for Kaseya’s software. But over the next year or so, the source expects to pay less than $30,000 annually — either by switching to LabTech or negotiating a better price with Kaseya.
As part of the HTG CEO Forum meeting in Tampa, sources say, forum members were able to learn more about the LabTech-ConnectWise integration effort. (ConnectWise is based in Tampa.)
“I’m surprised by how quickly LabTech has been able to add functions,” said one source who’s learning about LabTech. “Kaseya is in a dog fight. Arnie [Bellini, ConnectWise's CEO] played this hand just about as well as anyone could have played it.” For its part, ConnectWise has vowed to keep its APIs open for continued relationships with all RMM software providers.
The Bigger Picture: Kaseya Remains A Giant
Of course, it’s important to keep things in perspective. ConnectWise and Kaseya continue to integrate with one another, and there are no signs of that ending. And the HTG CEO Forum is only one tiny piece of a much bigger IT channel. And LabTech is a relatively small player — revenues under $10 million, perhaps? — compared to Kaseya, where revenues expected to reach or exceed $100 million or so in 2010.
Also of note: Kaseya has global reach, with long-established offices across North America, EMEA (Europe, the Middle East and Africa) and Australia, plus emerging business activities in Asia. Plus, Kaseya has a very deep bench, with seasoned executives worldwide. Over the past year, Kaseya has pushed beyond its on-premises heritage to introduce a range of SaaS and cloud services globally. (LabTech remains an on-premise solution, deferring SaaS opportunities to emerging hosting partners like TechLabCloud.)
Generally speaking, Kaseya is the most widely adopted RMM tool among MSPmentor 100 companies. Plus, Kaseya is pushing beyond RMM to introduce some PSA capabilities, online backup, endpoint security and a range of new software modules. And Kaseya also has a growing following within corporate IT departments.
David vs. Goliath?
In stark contrast, LabTech was a relatively unknown, tiny, fledgling software company in Ohio roughly a year ago — until a very big brother (ConnectWise Capital) arrived with money. LabTech has since waged a war against Kaseya in the U.S. And just like ConnectWise, it’s a safe bet LabTech will extend its efforts to Europe and Australia.
In the managed service market I’ve learned to never underestimate key leaders — whether its Kaseya CEO Gerald Blackie or ConnectWise CEO Arnie Bellini. So this story is just getting started…
…But here’s an interesting twist: Some current Kaseya customers are also taking notice of LabTech CEO Matt Nachtrab. “I like Matt,” said one MSP who currently runs Kaseya but is mulling LabTech. “He’s a sharp guy with big plans. And it doesn’t hurt to have Arnie funding and assisting those plans.”
Like is said: The competition is getting intense. But HTG CEO Forum represents only a small piece of the managed services industry. I’m poking around to see if there are broader RMM industry trends that MSPmentor overlooked…
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Posted In: North America | On Premise | Professional Services Automation (PSA) | Remote Monitoring & Management Software | Software as a Service and Hardware as a Service
Tags: Arnie Bellini | ConnectWise Capital | Gerald Blackie | HTG CEO Forum | HTG Peer Groups | Kaseya | LabTech Software | Matt Nachtrab | MSPmentor 100 | TechlabCloud
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Don’t make a war where none exists. We (at ConnectWise) are currently working on our integration to Kaseya. Two-way ticket integration and more… As you know, I want everyone to have the same opportunity to integrate. It is all about what is best for our mutual customers.
Hi Linda,
Thanks for taking the time to reinforce your commitment to open ConnectWise APIs, and Kaseya integration. I respect your work and efforts. I’m not suggesting those integration efforts will end.
Please let me explain the back story:
Earlier today (Feb. 1), I reached out to several MSPs who run Kaseya. I asked them for their views on some new modules Kaseya announced this week. Three of the MSPs who replied said they had a more important inflection point to discuss with me: Their potential or current migrations from Kaseya to LabTech, and their views involving a recent HTG CEO Forum meeting. They all viewed outcomes from that meeting as eye-opening.
All three MSPs used the word “war” when describing how intense the competition has become between LabTech and Kaseya, at least partly through ConnectWise Capital’s funding of LabTech.
To your point: I will continue to point out that ConnectWise integrates with Kaseya, and I know you’ve been vocal about ensuring open APIs for all partners (RMM and beyond). I also know partners like Level Platforms CEO Peter Sandiford have applauded ConnectWise’s commitment to open APIs.
All that said, the intense competition between LabTech and Kaseya is undeniable. Thanks again for your time. I do respect your thoughts.
-jp
Joe
Thanks for the comments regarding the HTG CEO Forum. This was our third meeting for this optional training opportunity targeting HTG members who are working to transition into the role of CEO from their current focus on day to day task oriented activities.
Consider our mission with CEO Forum as sort of the 12 step program for recovering tactically focused leaders. We are attempting to give some guidance to the transition from how many IT company leaders think – focused on the business today – and helping them begin to balance that with strategy and people oriented focus for the future. It is a tough transition for all of us to make as we are very comfortable doing things today.
So we focus on leadership, strategy and personal development. There is no focus on technology or vendors at all. In fact our second day was completely technology free – and it was a bit humorous watching people get reacquainted with a pen and paper. But Dr Larry Little quickly got us on task around the importance of truly understand our people and leading them effectively.
For the record HTG works with many of the RMM tool companies as you know – both Labtec and Kaseya are platinum sponsors as is Zenith, and we love them all. Our role is to make sure our member companies are being well led and well managed. We will let the RMM companies focus on giving us great tools to enable our well managed HTG member companies to thrive!
Arlin
Hey Arlin: Thanks for the broader info about HTG CEO Forum’s mission. I apologize if the blog entry suggested HTG CEO Forum shows any specific favoritism toward LabTech. I know HTG works with multiple RMM players. But it’s also interesting to hear the recent chatter from forum members who are testing/deploying LabTech. Thanks again.
-jp
While I wouldn’t call it a war, I do refer to folks who have made the switch from Kaseya to LabTech as “refugees”.
LabTech is developing a technological edge, and has a HUGE lead in customer service and technical support. It’s a night and day difference. You can have my LabTech agents when you pry them from my cold, dead fingers.
Joe,
I was one of the 20 who attended the HTG CEO forum last week. You may have talked with three people who gave their views who also happened to be there, but linking the HTG CEO forum event with your post here is off-base. ConnectWise was gracious enough to let us use their facility and provide a tour of their operations. Arnie gave of his time and experience to talk with us about what being a CEO means to him.
The “war” that you speak of may or may not exist, but it didn’t have anything to do with the HTG CEO forum.
For the record we use ConnectWise and Kaseya and are not looking to switch. We have seen a demo of LabTech and it does appear that they have a lot of things going for them. Kaseya is making a lot of improvements in their product though and has a new pricing model which is more competitive.
Jay
Bobby@5: Thanks for taking the time to weigh in. Please keep us posted on your biz milestones for 2011, etc.
Jay@6: I respect your thoughts and will certainly keep your constructive criticism in mind here as we plan future coverage. I apologize if the article positioned HTG as a microcosm of a potentially broader industry shift. And I’m not criticizing Arnie for being a really smart business person: He opens his doors to all (including me) so that people can see, hear and learn about IT nation. Smart.
But I will hold firm on the following point: In recent days I’ve heard from numerous peer group members. And most indicated that the article was spot-on. And most of those peer group members have also provided clues that this is stretching beyond a US battle into Europe.
Still, I want to reiterate: Your constructive criticism of MSPmentor (and the blog entry) will always be welcome. We keep the criticism in mind as we plan future content. It’s sometimes dangerous for media (including me) to make blanket statements about companies, organizations and peer groups. You’ve raised your hand to state that you think our coverage was off base. I’ll definitely keep that in mind.
Thanks for taking the time to share that view.
-jp
I don’t see how Kaseya won’t soon be a competitor for ConnectWise in the PSA space. They surely understand that you don’t do business with competitors unless you have to. Right now they may have to, but how long will that be the case? That said, as Kaseya also competes with their own customers (MSP’s) to some extent…
I just have a couple of thoughts for the discussion. I know firsthand that Labtech is gunning for Kaseya clients. Joe – for me, the term “war” is as appropriate as any. Whether either side will admit it, they are definately setting their sights on one another. I attempted a transition to Labtech several months ago, and let’s just say it wasn’t for me. From what I understand, there are a lot of “refugees” realizing that the grass isn’t always greener on the otherside. I think that LabTech is actually growing too fast, and, as they were when I attempted the switch, are going to leave behind quality for quantity in their product. Just a thought.
Todd@7: I think ConnectWise and Kaseya will continue to integrate. More than 600 mutual partners, I hear… and the figure is probably far higher. ConnectWise and Kaseya will therefore meet MSPs’ existing integration needs. As for Kaseya in the PSA space… We’re watching for more details…
Josh@8 Thanks for sharing your perspectives. I’ve heard feedback from folks from within Kaseya and LabTech and hope to organize/share my thoughts in the next few days. Stay tuned. And thanks for reading.
-jp
In contrast to what Josh said, We made the switch from Kaseya to LabTech about a year ago. Not only did we save about $35K last year we wound up with a superior product in our opinion that doesnt provide us with hundreds of false positive alerts like our former vendor did.
I understand that some dont like what LabTech offers but the biggest challenge in switching is probably the learning curve and transisition phase. For that we and others offer Fast Track Implementations to get a new partner up and running quickly with a system that in my opinion is 10x more reliable when it comes to reporting than the former.
We are pulling the trigger on LabTech, after a painful season with another provider. Expect it to revolutionize our operations just like CW did. Hope the players keep quality and stability in mind, rather than pure-play profit and bragging rights. The livelihood of many folks depend upon the continued viability of these products. We are, after all, in the SERVICE business.
What a great blog Joe! It is defiantly a shifting market isn’t it. Kaseya has always been the leader in this space for to many reasons to describe here. Until now where recently Labtech comes out with a product that is open in so many ways to introduce innovation, and of course doesn’t hurt the bottom line. Many MSP’s are switching for the price yes.. Although I would encourage people to also look at this deeper and they will see it’s much more than just the price!
Hi Kevin,
Thanks for the feedback. I took a lot of heat over this article from some readers who thought I over-stated the situation. But I stand by the thoughts I had shared.
-jp
Joe – I enjoyed reading the article, it was a good read. I can understand why individuals try to indicate that “it isn’t a war” and that you overstated it. (It’s a PR thing…)
Despite the PR aspect of things ConnectWise pushes labtech heavily during their conferences and forums. While pushing it there is a great deal of focus on how it’s a much stronger product that integrates very well into ConnectWise.
We were a Zenith partner and switched to Labtech and would never switch back.
LabTech has not been better than Zenith for us – but it has been significantly less expensive. We unfortunately had an incredibly rough roll out with problem after problem.
Couldn’t get reporting, remote access, scripting, or even key monitors to function as advertised. We have gotten most of it cleaned up but we are still finding problems as we begin to utilize each additional piece.
LabTech is better than most RMMs but that’s only after it’s completely configured and utilized correctly. It takes a considerable time investment up front and some very analytical and intellgent engineers with the willingness to utilize it to its full potential.
Joshua,
Thanks for reading. I still stand by the article and insist that it is a competitive war. And an intense one at that. I’ve got zero experience “running” the various RMMs, but I’ve heard good and bad about every product on the market. Similar to operating systems (Mac, Linux, Windows), people seem to get somewhat religious about RMMs.
Please keep me posted as your business hits new milestones. And thanks for adding a new comment to this old thread. Everything old is new again… especially in the world of IT blogs.
-jp