MSPs Love Platforms

And everyone from CrowdStrike to Kaseya to HaloPSA, it seems, knows it. Plus: a venture capital unicorn and more discouraging data on tech industry diversity.

Note: I’ll be enjoying family, friends, food, and football next week rather than opining on all things channel. So no post next Friday. I’ll be back two weeks from now with my first post of 2025. Happy holidays to you all, and thanks for reading Channelholic!

CrowdStrike published research about “platform-based GenAI” this week. I think the genAI part was supposed to catch my attention. It’s the platform-based part that actually did.

Among other interesting findings, the study shows that 80% of cybersecurity professionals want genAI-powered security functionality delivered as part of a tightly integrated, multifunctional platform rather than as a standalone tool. Given how prominently it figures in the press release announcing the survey, CrowdStrike (which, as we know, makes a tightly integrated, multifunctional security platform) both likes that number a lot and assumes it will surprise people.

If it does, however, those people will not be Channelholic readers, because I’ve been writing for a while about the degree to which it’s all about platforms these days. It’s especially true in security, where integrated tools tend to work better and cost less while helping partners consolidate vendor relationships, something they very much want to do. Axcient and SkyKick are now part of ConnectWise—a big believer in platforms—partly because backup is an element of security and MSPs want security suites instead of products.

CrowdStrike’s survey wasn’t the one that most grabbed the channel’s attention this week, however. That title belongs to the latest RMM and PSA market report, and accompanying MSP landscape roundup, from Canalys, which showed Kaseya taking the lead in RMM/PSA market share from ConnectWise atop 55.1% year-over-year growth.

More on that development in a moment, but I want to focus first on the other headline-worthy developments highlighted in the Canalys study: NinjaOne has displaced N-able as number three on the leadership list thanks to 54.1% YOY growth, and HaloPSA is now number five behind N-able following (gulp) 102% growth.

On the face of it, those changes contradict the pro-platform trend. Unlike not just ConnectWise but Kaseya and N-able as well, NinjaOne mostly does RMM, while HaloPSA, as the name makes crystal clear, does PSA. If the future belongs to large, integrated platforms, why are point products so popular with MSPs at present?

Part of the answer is that Ninja and Halo both check a lot of boxes MSPs want checked in a vendor of any kind. “They’re incredibly community focused,” notes Canalys analyst Robin Ody (pictured). They also have strong relationships with their partners due partly to the fact that they have fewer partners than their larger rivals to maintain relationships with.

“It’s generally easier to manage the smaller number than the bigger number,” Ody says. In addition, he observes, there’s a difference between a broad preference for platforms and a universal insistence on them. “Point products will always be important for a lot of people who want specialists.”

That said, are NinjaOne and HaloPSA really point product vendors? Yes, in relation to Kaseya or ConnectWise but no—in their own eyes and perhaps those of many MSPs—since May, when the two companies announced an integration pact explicitly aimed (according to Halo CEO Tim Bowers in an interview with CRN some months later) at creating a “strong, unified platform.”

Ody, moreover, gives that alliance partial credit for the big market share spikes both companies recorded in the last year. “[They’re] becoming a de facto platform,” he says. “It’s a kind of cartel of vendors working together to build better integrations.”

Now, ConnectWise, N-able, and (especially) Kaseya would argue that some integrations are better than others, as are some platforms. A platform combining RMM, PSA, backup, and some security functions like the one Ninja and Halo are building isn’t the same as what the other three names on the top five list have assembled and continue to expand.

But it says something about how badly MSPs want platforms right now that two of the hottest makers of MSP software are building a de facto platform “almost as an answer to K365,” as Bowers told CRN in a reference to the extremely integrated platform Kaseya unveiled earlier this year.

And it’s not just MSPs. Contrary to what I said at the start of this post, 80% of the security professionals CrowdStrike polled didn’t merely say they want genAI as part of an integrated platform. They said that given the choice between genAI as part of an integrated platform and no genAI whatsoever, they’ll take the no genAI.

Five more nuggets from Canalys

What else noteworthy emerges from that Canalys report? Lots of things, actually, but I’ll give you five for now:

1. Kaseya’s good year is about more than Kaseya 365. Kaseya was closing in on ConnectWise even before K365 debuted at the very end of April. Just between Q3 and Q4 of last year, in fact, ConnectWise’s market share lead shrank from 9.9% to 3.6%.

Per Ody, it’s worth noting, NinjaOne and HaloPSA were gaining share at a rapid clip before their platform play too. “They’ve been growing at that rate for years before they had a specific marketing message around their partnership,” he notes.

2. That said, low pricing probably did factor into Kaseya’s recent success. According to Ody, K365’s affordability has attracted smaller, younger MSPs in particular to the vendor.

“Kaseya 365, I think, has done a good job of stemming some loss of not necessarily existing partners but new partners to NinjaOne and Halo and a couple of others,” he says. “For startup MSPs, one of the best things you can do is make sure that your cost base is low.”

Based on CompTIA’s recently published “IT Industry Outlook” report, lots of businesses prioritized cost control in 2024. “In this difficult year budget constraints have placed burdens on the number of customers able to invest, which in turn places a strain on some partners’ profits,” the study says. “Partners and vendors are trying to save costs to improve profits.”

If 2025 proves to be less difficult, Kaseya’s pricing edge could end up being less of an advantage than it’s been so far.

3. The gains notched by NinjaOne and HaloPSA, while impressive, are easy to overstate. Their combined market share, while up a lot in the last year, is still just over half of Kaseya’s share. Kaseya’s 55.1% growth rate, moreover, is higher than Ninja’s 54.1% growth against a much larger base.

4. Don’t worry about ConnectWise. It’s doing just fine, Ody points out, and is taking steps to keep it that way.

“It’s adding backup. It’s improving its investment and growing its investment in the Asio platform. It’s been cloud-first on RMM. It’s making sure that it invests in SOC as a service,” he says. All of those moves, not so much in response to Kaseya’s growing popularity with smaller MSPs but in parallel to it, position ConnectWise well to compete with IT service management vendors like ServiceNow for bigger partners with bigger customer rosters and bigger IT budgets, according to Ody.

“Realistically, where it should be is kind of challenging ITSM providers in certainly the mid-market and the low-end enterprise for essentially scaling up RMM and essentially being a risk management platform for larger MSPs,” he says.

5. Private equity is a wild card for the future. Kaseya, ConnectWise, and NinjaOne are all backed by private equity investors, and there are signs of life in the IPO market lately that make an exit from one or more of those vendors at least a bit more likely in 2025. N-able, meanwhile, is on Pitchbook’s short list of publicly traded companies ripe to be taken private. PE firms have been known to clean up a portfolio company’s books both before exits and after acquisitions, including in ways MSPs don’t appreciate. A change of ownership involving any of this year’s RMM/PSA leaders could shake up next year’s list in a manner that’s hard to forecast.

A VC unicorn

As long as we’re discussing tech investors … “Unicorn,” in the tech industry, describes that supposedly rarest of breeds: privately-held vendors worth $1 billion or more. 1,417 companies qualify for the designation at present though, according to Pitchbook, while the real rarity is investment firms like Top Down Ventures, a company that’s popped up in multiple posts this year that I finally got a chance to meet with recently.

For one thing, and unlike most of the VCs you’ve heard of before, Top Down focuses exclusively on SaaS vendors that sell to and through MSPs. For another, and unlike investors such as Channel Angels, it provides seed and Series A versus angel funding to companies already generating $1 million or more in ARR rather than the startiest of startups.

Furthermore, a large portion of its limited partners are themselves current or former MSPs, and its general partners are people I referred to in an earlier post about a Top Down portfolio company as “managed services royalty”: IT Glue founder Chris Day (now CEO of ScalePad, another portfolio member), N-able founder Mark Scott, Fully Managed CEO Joel Abramson, and Level Platforms exec Dan Wensley, who held Day’s job until very recently.

“We feel like we have a really strong level of knowledge around building companies in this space,” says Abramson (pictured), a managing partner at Top Down. “That’s a unique attribute to our fund.”

It also positions the fund to provide deeper guidance in a wider range of areas than traditional venture capital firms. “It’s a different approach than just writing a check and attending board meetings,” Abramson says. “Chris, myself, Mark, we’re all involved hands-on with portfolio companies.”

Hands-on and face-to-face, which is how those portfolio holdings advise and assist each other too. Strictly speaking, Top Down isn’t a venture capital firm so much as a “venture studio” offering networking and collaboration opportunities in addition to raw funding.

“We have a big campus here where the companies cohabitate,” Abramson says.

Money to support more such companies has been available since October, when Top Down closed an initial $10 million of Founders Fund I, which will ultimately hold a projected $25 to $40 million.

“We intend to make anywhere from 8 to 12 investments depending on the total we raise,” Abramson says.

Each will buy a minority position, he continues, in a company destined for sale to a larger investor or strategic acquirer in as little as three to as many as seven years, typically, though potentially longer as well.

“There’s no fixed amount of time that we intend to hold these companies,” Abramson says. “We want to help them grow from their first million of ARR to their tenth million.”

Which could be the entry point for future investments. “We could see potentially doing a second fund, depending on how quickly this one gets raised and deployed, in the venture space or potentially more like a growth fund,” Abramson says. That one, if it materializes, will be worth more like $200 million, but still 100% dedicated to managed services.

“That’s the point of Top Down,” Abramson says.

Depressing data on diversity

A few more discouraging statistics, in case we needed more (sadly, we didn’t) about the tech industry’s continued lack of progress on racial and gender diversity:

• Though a massive 87% of IT professionals agree that gender diversity is a problem in the industry, according to ISACA, just 41% of businesses have programs in place to hire more. This despite the especially acute skills gap specifically in security.

• Also per ISACA, 43% of female IT professionals say the biggest reason they’re so underrepresented is that role models and managers in IT are mostly male. Just 21% of men agree. The second biggest issue, according to 42% of women but just 15% of men, is pay inequality.

• A quarterly survey of 300 companies by Dave Sobel, of the Business of Tech podcast, finds that 89% of IT leaders are white and 78.6% are male. “This data is essentially identical to the last quarter, the quarter before that, and the quarter before that,” Sobel says.

So true and so frustrating. And I’m not exactly part of the solution. I almost didn’t post this data because I’m tired of documenting how large and persistent a problem this is and then failing to suggest remedies. New Year’s resolution: I’m going to have something to say about that topic early in 2025.

Get right with the law in 2025

Speaking of New Year’s resolutions, the latest episode of the podcast I co-host includes five legal-related ones from attorney Brad Gross that every MSP—and ideally everyone else as well—should commit to adopting.

Also worth noting

• As we previewed last week, Salesforce has introduced Agentforce 2.0, the second major release of its agentic AI platform, just three months after launching version 1.0.

• Barracuda has added malware detection for cloud-to-cloud backup.

• Malwarebytes has hired a new SVP of marketing, not long after hiring a new CRO and SVP of customer and product too.

• ESET and Stellar Cyber have deepened existing integrations and rolled out new XDR-related workflows.

• Compliance-as-a-service vendor Compliance Scorecard has acquired PrivacyMSP to be its professional services arm.

• Autonomous (agentic?) email security detection and remediation functionality is just one of the enhancements in the winter 2024 release from IRONSCALES.

• Password management vendor Dashlane now has a partner program.

• So does spend and risk management vendor Flexera, specifically for MSPs.

• Bitdefender, meanwhile, now has a program for technology alliance partners.

• Esther Pinto is the new CISO at security vendor Guardz.

• Solutions from HackerOne, the pen testing vendor we’ve written about before, are now on AWS Marketplace.

• Speaking of marketplaces, looks like one of them is assembling an accompanying software stack for users. AppDirect has acquired IT asset management vendor Firstbase and signed an alliance agreement with observability vendor LogicMonitor.

• Granite’s low-code workflow editor isn’t just differentiated. It’s now patented.

• The Channel Marketing Association (which we told you about before) has named the winners of its Channel Marketing Excellence awards (which we also told you about before).