Continuum CEO Says Consolidation Coming To MSP Platforms—And 'That’s A Good Thing'

'I think you're going to see over the next two or three years some of these tectonic shifts where some of these major platform providers will get consolidated and, frankly, I think that's a good thing for the market—not a bad thing,' Continuum CEO Michael George tells CRN.

Continuum CEO Michael George said a combination of ConnectWise, Continuum and Datto would be “wonderful” for MSPs and sees consolidation on the horizon for major MSP platform providers.

“When you have six major platform providers, it's a little complicated for people,” he said. “And they're still trying to price-optimize. So you get a little from this one, you get a little from that one, but if you have ConnectWise as PSA, Continuum’s RMM and security and Datto’s backup, I think it would probably be a pretty wonderful world you lived in.”

When Continuum’s private equity owner, Thoma Bravo, acquired rival ConnectWise in February, George said immediately after the announcement that there were no plans for the longtime rivals to merge.

Now, six months after the deal, speaking with CRN at Continuum’s Navigate 2019 show in Pittsburgh, George said he sees ways where combining forces would make sense, although he guesses it is two or three years away.

“The opportunity to do this has existed in lots of places for a long time,” George said. “They acquired us in June 2017, then they acquired ConnectWise in February of this year. I can tell you that it was not the investment thesis to go out and merge us with any of those companies or any of those companies with each other. They made independent economic investments around each and every one of them.”

With multiple players in the MSP platform market, and best-in-class products fragmented among them—with some offering better backup and others better PSA or RMM tools—George said it will likely shake out to the top two or three players.

“I think you're going to see over the next two or three years some of these tectonic shifts where some of these major platform providers will get consolidated and, frankly, I think that's a good thing for the market—not a bad thing,” he said.

At the Navigate show, Zen Piotrowski, president of CMIT Solutions of Pittsburgh South, said from a private equity standpoint, he could see the value in combining assets of two to make a more attractive whole.

“I think about the private equity companies and what their objective is. I know their objective is to increase revenue for their stakeholders,” he said. “They bought these companies to either sell them or maybe go public. I think there’s value in it for them to consolidate some of those pieces. ConnectWise has some pieces that Continuum could leverage. But if they do, then they’re not agnostic to those MSPs, so they have to think about that.”

From an MSP perspective, he would love the convenience of a single pane of glass to better manage his workload and avoid hopping between platforms. However, if the changes are forced on MSPs, it could backfire.

“If Continuum said, ‘If you work with us, you now have to use a PSA that has been incorporated into our company when we were acquired’ that would be an issue,” he said. “I don’t think they would do that, but there are maybe some advantages that they could bring if they bundled some things together to make your life a little easier. It comes as a package and if you buy it all together your costs are lower.”

Jason Cuthbert, senior system engineer at CMIT Solutions of Pittsburgh South, said he is concerned that a dearth of competition among vendors could equal higher costs for MSPs.

“It’s going to eliminate some of the competition and prices won’t be competitive in my eyes,” he said. “There’s no incentive in the market to get a better price.”

Randy Elliott, owner of Computer Trouble Shooters, a North Carolina-based MSP, said a merger between top platforms and products would help solution providers sort through what he described as the “confusion” of interconnected vendors.

“I would say it’s probably a good thing to consolidate,” he said. “It’s fairly confusing. I spend a fair amount of time walking around the vendor room going, are these people your competitors, or do you work with them? The default position for me, because I’m a Continuum partner, is just to use all Continuum stuff and whatever they recommend. But I know there are a number of alternatives.”