ConnectWise’s former and new CEOs spoke with ChannelE2E a day after the blockbuster announcement that Jason Magee would step down from the role after five-and-a-half years. Manny Rivelo will lead ConnectWise for the next phase of the company.
What will that mean for ConnectWise going forward? Will Rivelo take the company in any new directions? What are his charters and plans in the months ahead?
Will there be more acquisitions? Personnel changes? An answer to Kaseya 365? An exit strategy for ConnectWise's private equity owner Thoma Bravo?
Here are excerpts of the questions and answers from ChannelE2E’s interview.
Why this change, and why now?
Magee: The time was right for me, for both personal and professional reasons. Not only that, but we have the right vision and mission. We have the number-one community within the IT Nation. The platform is in much better shape.
Rivelo: There’s so much potential for this company. The timing was good to join…I’ve formed some thoughts around the business, and there are things we’ve got to continue to improve, but we’re in great shape, right? To do that, we’ll continue to work together over the next month, and then I’ll continue to design and leverage this capability and where we need to drive it forward.
Thoma Bravo Exit Strategy?
Thoma Bravo has reached the window where they are possibly looking for their exit strategy. Is your appointment the first phase of that? (Spoiler: nothing is imminent.)
Magee: It’s our job to build a healthy company that is doing the right things so when the time comes, whatever type of exit, we are prepared for it.
Rivelo: My job is to create value. If you build a great business, the exit takes care of itself. I’m not here on a time horizon by any means. I wasn’t asked to come here for a time horizon. I was asked to come here to help continue to grow and take this company to the next level.
Revenue growth plans?
What are your plans for building revenue?
Rivelo: Three things. Complete the thought of the Asio platform – there is still more to build. Second, continue the work of integrating the recent acquisitions around business recovery and continuity (Axcient and SkyKick). Third, build recurring revenue growth. That’s about the right product and different elements associated with the way we win new logos and the way we cross-sell a portfolio right into the heart of the community, and the way we manage losses inside that. There’s operational excellence that we can apply from the sales cycle to customer onboarding, the success cycle and advocacy components.
Those are all organic growth. Are you planning on more acquisitions, too?
Rivelo: We will always look at that. I wouldn’t say that’s my immediate priority, but I work with Thoma Bravo to look at that.
How much organic growth do you think is possible?
Rivelo: I think we can make an improvement from where we are today, which is in the neighborhood of 30-plus percent. That’s by addressing some elements of our operational capabilities as well as delivering on the platform and the work we are doing with BCDR. So I think that’s possible.
Magee: There’s still tremendous opportunity for managed service providers themselves to get new customers, to cross-sell new solutions to their customer base. When they win, we win, right? So that drives a lot of growth; we are just scratching the surface around all things cybersecurity and data protection and BCR and so on.
Is Cybersecurity an Acquisition Target?
Sounds like cybersecurity would be a target area for an acquisition.
Rivelo: Cyber is unique. I spent a lot of years in cyber in the sense that it may be more of a partnership strategy. The amount of innovation in cyber – it’s not that we can’t build certain things or buy certain things for our platform. But if you look at what we do through EDR -- we have three of the four major EDR vendors on our platform. To say that we will wake up tomorrow and be able to build a product that’s better than SentinelOne or Microsoft is a fallacy. Security might lend itself better to a partnership model where we integrate those through an open set of APIs into our platform, allowing us to provide value for those products getting deployed right in the MSP environment. There are components that are more commoditized potentially in the market that we could build or buy and take to market. But the leading-edge security – you are looking at investments made by companies that are just not in our wheelhouse, not unless we’re willing to open up a huge wallet.
Would you entertain the idea of a merger with one of those cybersecurity companies?
Rivelo: Yeah, I mean, if the right one, the right value proposition presented itself. But you can’t get distracted and follow security through a security enterprise company. It would have to be an MSP-focused cybersecurity company.
Do you have an answer to Kaseya 365 for MSPs in the market?
Will you have a response in the market to Kaseya 365?
Magee: Let’s just say good things happen at IT Nation.
Are you planning any personnel changes?
Rivelo: We will look at the organization structure and look for efficiencies, but Jason and the team – there’s a good set of leaders inside this business. I’m blessed with that. I mean, we may realign some stuff under them for a little clarity. But no, there’s nothing major.
Any plans to expand into a direct IT services market?
Rivelo: Not for me at the moment. That could maybe change, but I don’t think so. There are products we have – ScreenConnect being one of them – that we sell through digital sales and that’s an incredible product that every IT organization should have. It doesn’t matter the size of the company.
