2013 may be known for the merger and acquisition tidal wave that has swept through the remote monitoring and managment (RMM) sector. Legacy RMM companies like Kaseya, N-able, and Level Platforms, have all succumbed to investors or buyers and are already we are seeing improvements and activity within these companies (and their respective MSP communities). But, 2013 could also be known for another M&A wave involving MSP enabling technologies…the Professional Services Automation (PSA) vendors. 
When it comes to making managed service providers successful, PSA vendors like Autotask, ConnectWise, TigerPaw, and others, have played a different but equally important role in conjunction to the RMM vendors. If the RMM technologies offered MSPs the ability to see and touch the objects they manage, the the PSA technologies provided MSPs with the capabilities to manage their back office operations with greater efficiency. Not just managing trouble tickets, PSA tools give MSPs the ability to invoice customers, deploy technicians, document policies and procedures, and many other tasks vital to the efficient and effective operations of a managed services provider.
While we were overdue for the M&A activity that hit the RMM companies this year, we may also be overdue for a similar M&A consolidation within the PSA vendors. Here are some of the reasons why.
- PSA tools are now somewhat mature and are not evolving at the same pace they used to. A similar period of innovation stagnation also preceded the RMM M&A wave
- As separate companies, PSA solutions are not as effective as they could be in the hands of a larger entity with greater resources
- The PSA solutions are somewhat limited when it comes to breaking into the mid-market and enterprise. As more MSPs become focused on those markets (or at least the upper SMB), the effectiveness of PSA solutions will become lessened
- RMM vendors may find it too tempting to leave the PSA vendors (and their respective MSP communities) alone. Acquiring a PSA vendor would now represent one of the easiest ways to recruit new MSPs.
The world of technologies supporting cloud and managed service providers is rapidly changing. As the RMM titans continue to expand their respective spheres of influence, security, storage, cloud, and PSA capabilities all represent viable M&A targets.
While this is not set in stone, my discussions with MSPs and vendors tell me the PSA vendors could be the next opportunities for eager technology companies looking to establish dominance in the cloud and managed services profession.
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