What's Up with The Exodus of ConnectWise Senior Management? It appears that ConnectWise is disconnecting from many of its senior leaders. Is this a sign that ConnectWise is losing its grip on market share?
All legacy organizations are facing the realities of human capital realignments, especially legacy technology platforms, with the advancements in AI.
Spending over 35 years in the office print services industry has afforded me many lessons in the industry's transition from MPS to MSP.
My passion for the industry's transition fuels my outspoken criticism of what I see as dysfunctional. Of course, my vocalism is usually the opposite of what many of those pandering to industry continue promoting. This clash always causes conflict with the status quo. A conflict I accept!
Now I ask, has ConnectWise run its course? In both the office equipment group and the broader MSP community?
I believe that soon, when determining the pivotal moment that started the MSP community reevaluating the relevance of ConnectWise, will trace back to the announcement of the ConnectWise acquisition of Continuum.
Is the 2019, dream of ConnectWise to incorporate Continuum's SOC, NOC, and Help Desk into the ConnectWise platform today awakening in a nightmare. I am thinking yes!
Back in 2019, I suggested in an article that ConnectWise would buy Continuum around nine months before they did. In my vision, I saw the combined ConnectWise Continuum platform as a platform Thoma Bravo could sell to a global entity that could use the platform of MSPs to participate in national and international IT service delivery, one where the global IT service provider would control the end-user contact from birth to death and local MSP would simply be a mechanism in the deliverable. Thereby ensuring that end-user customer profiles match and standard stacks were delivered. My vision was not anything close to that of ConnectWise.
About 12 years ago, I realized, based on my experience with two NOC and Help Desk platforms, that the model was flawed. Those MSPs who were delivering best-in-class services to their end users would never benefit from being part of an ecosystem where all types of customer profiles and MSP maturity levels are funneling customers through the same ecosystem.
It has been nearly six years since ConnectWise and Continuum came together, and I still believe the NOC, SOC, and help desk model is long overdue for significant disruption. I don't believe that disruption will come from ConnectWise. That disruption is coming from AI and progressive mindsets.
Considering the nearly six years since ConnectWise acquired Continuum, wouldn't it have been more sensible for ConnectWise to invest in modernizing its software platform rather than incurring the significant expense of Continuum's newly formed SOC, along with a legacy NOC, and Helpdesk?
It appears that ConnectWise had a plan to continue with a business model that was already in decline when they acquired Continuum. I have also always believed that Continuum was a financially nonperforming master services provider business when Thoma Bravo spun them off to ConnectWise.
Perhaps Thoma Bravo assumed that all MSPs using Continuum and not already using ConnectWise PSA would migrate to ConnectWise. Or they thought the ConnectWise MSP partners who were not using the Continuum services would quickly employ ConnectWise as a master service provider.
What are the actual numbers regarding ConnectWise and Continuum users pre-acquisition and today, nearly six years later? Also, what was the real cost to integrate, manage, and maintain the Continuum infrastructure? Another question is. What was the cost of any distractions caused by ConnectWise becoming a Master Service Provider?
I would not be surprised if the Continuum acquisition is proven to be a complete waste of time and a significant distraction at a time when ConnectWise should have been perfecting its software platform and not adding extremely expensive, invaluable noise.
The print industry recently saw GreatAmerica Financial Services divest of Collabrance, its attempt at providing NOC and Help Desk services to the dealers of the office equipment sector. This was something else I have been very vocal about.
Early on, I complimented GreatAmerica for its good intentions when they started Collabrance 15 years ago. However, over the last decade plus, I never believed Collabrance was a financially performing business and predicted GreatAmerica would divest of it. Of course, GreatAmerica denied my point of view right up to the day they divested Collabrance earlier this year.
The divestiture of Collabrance by GreatAmerica should have woken up the print industry to the realities of Master Service Providers or outsourced NOC and Help Desk Services.
Today I believe the competitors to ConnectWise are taking great advantage of what I see a distracted ConnectWise.
The young progressive RMM/PSA players we see taking away market share from ConnectWise are 100% focused on developing automation and simplification, especially as AI becomes more mainstream in the MSP space.
As one of my Rayisms says,
"A company becomes obsolete when its focus is delivering the past to the future instead of delivering the future to the present."
ConnectWise competitive RMM/PSA organizations are betting on the demise of the 2015 era SOC, NOC, and Help Desk business. A bet they are and will continue to win by focusing on delivering the future to the present as the legacy competition attempts to continue promoting the past to the future.
Looking back, the MSP community's transition from IT service break-fix models to recurring revenue streams made outsourcing to organizations like Continuum sensible. However, in the last half-decade, so much has changed. MSPs have nearly lost all revenues once tied to building out infrastructure, as cloud services have grown faster than most were prepared for.
Today's MSPs must capitalize more on their intellect over infrastructure building. The low ticket selling mom-and-pop managed IT service provider is going to disappear from the scene as the TV repairman once did. Or any other relevance that fell victim to how technology advances eliminated human intervention.
Those MSPs without the ability to capitalize on their intellect will not survive, those small MSPs who still do not have the confidence to sell fee based assessments, those MSPs who give away intellect for the benefits of selling components of infrastructure and those MSPs who are chasing sub 8k a month IT service engagements will get run over by enterprise organizations who will scale much of the technology stack in ways a small ticket IT services company will ever be capable of.
There is a reason that the greatest majority of MSP providers are sub 5 Million in revenues. The reason is, you can't scale profitably with small ticket engagements.
AI technologies packaged with organizations doing billions in revenues will transform not only the MSPs themselves but will also establish a new competitive landscape. The local MSP for the small accounts will fade into history.
In the very near future, the NOC, SOC, and Helpdesk will not look anything like today. Those MSPs whose business model is putting end-users on a helpdesk platform and reselling 365 licenses will become as obsolete as the MSPs who once had a thriving break-fix business model.
It seems that ConnectWise believed that a platform built to babysit or groom lifestyle IT services companies would last forever. The MSP industry is now on the precipice of significant disruption. So when I hear employees from ConnectWise discuss IT services as if it's still 2010-15, I quickly understand why ConnectWise is losing market share.
Now I want to share some thoughts regarding ConnectWise and the print services channel, sometimes known as the (Office Equipment Group). As I still believe ConnectWise has missed the reality!
ConnectWise, like others who have been courting the print channel in hopes of capitalizing on their successful transition into IT services, has a significant flaw!
The print organizations have multiple millions in revenues, and nearly all managed IT services providers are under 4 million, maybe 5 million. So, these good-hearted folks are trying to help the print dealers build an IT services business as nearly all their other MSP clients who run 4 - 5-million-dollar lifestyle IT service businesses. This, of course, won't help the print channel dealer replace the tens of millions in declining print services. Do you see the flaw in this?
For instance, I recently listened to a conversation involving print providers selling and marketing IT services through the ConnectWise platform. I was horrified by the conversation! As it was a conversation, I would have heard 10 years ago!
ConnectWise has had great aspirations in helping the print sector transition to managed IT services. Over the past decade, I've been amazed by the revolving door of ConnectWise navigators assigned to support the print channel. This revolving door has given me reason to question the so-called successes of the transition.
I have brought this conversation up and have had pushback from those who benefit by selling perpetual hope to my friends in the industry. They're telling me that many of the top ConnectWise customers are from the print channel. Every time I hear that, I ask, "Are you talking about the revenue of the dealer organization or the revenues the dealers are bringing to ConnectWise through their end-users?" I would also add that ConnectWise revenues from print dealers do not necessarily indicate the success of print dealers in their IT services delivery or profitability.
I am also wondering how many of these print providers are only using the ConnectWise PSA/RMM? Not the NOC, Helpdesk, Or SOC? I would suggest all the successful print providers selling managed IT services who engage with ConnectWise are only using the ConnectWise RMM/PSA maybe some SOC services.
As I have always argued, nearly all successful MSPs do not outsource their NOC and Helpdesk services. The reason is that all MSPs have different end-user profiles and sell at various maturity levels. My longtime analogy is this: Successful MSPs don't want their Lamborghini client in line behind a Chevy customer!
Another observation is that ConnectWise allowed and continues to allow the print industry to take control of the narrative in the print dealer's diversification into IT services. Like a patient telling a doctor how to cure them! This reality is based on an obvious observation that many in the print industry are way more comfortable being pandered to than being told the painful realities.
As I think about ConnectWise, I can't help but remember what a great PSA/RMM tool they were. There was a time when ConnectWise ruled! However, today, it seems as many are now questioning how relevant ConnectWise still is.
ConnectWise should unload its helpdesk and NOC and focus on reinventing its RMM/PSA. The world of thousands of small MSPs is fading, along with the outdated NOC, and Help Desk, as well as level one and soon level two onsite support. AI and progressive platforms are redefining and completely disrupting the MSP ecosystem.
In Closing: It does appear to me that ConnectWise is looking for an exit as they eliminate senior leaders and procrastinate any real change. My question for ConnectWise is. What exactly would the buyer get?
Ray Stasieczko, Host of YouTube Series - The End Of The Day With Ray!
Those dealers who have built successful businesses selling, supplying, and servicing print equipment to businesses are most definitely at the intersection where innovation and disruption are demanding that the road ahead will have to be reconstructed.
Of course, everyone knows that is pure bullshit. As all People's Republic of China Companies are 100% controlled by the Chinese Communist Party.
The Lexmark story is valuable, and I hope the past fears of its leaders in speaking the realities connected to leading a subsidiary owned and controlled by the Chinese Communist Government end now, that all of Lexmark's leaders are no longer subjected to the (CCP) Chinese Communist Party policies of submission and silence.
ray stasieczko
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