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ConnectWise Sale to Thoma Bravo Brings Concern About MSP Software Monopoly
With the sale of ConnectWise to the same equity firm that owns much of its competition, is concern about a monopoly in the MSP software space warranted? We say no.
This week Arnie Bellini, the cofounder and longtime CEO of ConnectWise, announced the sale of the software company to private equity firm Thoma Bravo. While terms of the deal were not disclosed, it is estimated to be worth over $270 million based on the payout received by employee-shareholders.
ConnectWise provides a full suite of products to managed service providers (MSPs), allowing them to monitor, manage, and control servers and desktops remotely, while also providing automation around the sales, marketing, and operation of IT service providers’ businesses.
While Bellini stated that Thoma Bravo was the “clear and obvious choice” because the technology giant’s mission, culture, and values were a fit, others are concerned that Thoma Bravo has a clear monopoly on the MSP software space. The equity firm also recently acquired Continuum (2017), Barracuda (2017), and shares ownership of SolarWinds, all of whom also provide a full suite of competitive products in the MSP software space. Consolidation of these solutions would limit options for MSPs and stifle innovation.
Our TakeConnectWise, Continuum, and SolarWinds will continue to operate as separate entities in the near future. Private equity firms are interested in wealth building, not in operational consolidation. Attempting to bring their assets together adds risk to each involved piece, whereas letting them run separately allows them to remain independently strong and to grow. This is not a story about three software giants coming together to form one mega-giant. Rather it is a story about an industry pioneer looking for an owner to carry on his legacy while he enjoys a well-earned retirement.
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