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Acer America Corp. is a computer manufacturer of business and consumer PCs, notebooks, ultrabooks, projectors, servers, and storage products.

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April 20, 2020 |

ConnectWise Optimistic Despite Tough Times Ahead

Speaking with ChannelPro today, CEO Jason Magee (pictured) described spending cuts and roadmap adjustments designed to help both ConnectWise and its partners make it past economic stagnation to the growth that will follow.

No one, it seems, is immune from the economic effects of the COVID-19 crisis.

That includes ConnectWise. Even at a time when IT services and IT service providers are more essential than ever, the managed services software maker has seen its top line suffer in recent weeks as MSPs conserve cash in anticipation of tough times ahead.

“There’s been an immediate impact,” said CEO Jason Magee in a conversation with ChannelPro. Though he declined to quantify the scale of that impact, Magee called it “meaningful.”

“The impact’s real,” Magee says. “ConnectWise has definitely felt it.”

ConnectWise partners are feeling the effects of the COVID-19 outbreak too, adds Magee, who speaks with MSPs about 15 at a time every other day. A majority of the people in those meetings believe the worst of their pain is yet to come.

“Most of them feel like the impact will really hit them in the late May, early June timeframe,” Magee notes, adding that many partners are borrowing money or tapping into a line of credit to brace themselves for that hit.

ConnectWise, too, has been preparing for leaner market conditions. The company began formulating a response to the pandemic, in fact, back in February when early reports about health impacts started trickling in from a satellite office in Seattle, where both the first confirmed infection in the U.S. and the first death from COVID-19 in this country were recorded. 

The plan formalized since then revolves around three core goals: making sure ConnectWise remains healthy and solvent, making sure the company’s 2,400 employees stay healthy and productive, and making sure as many of ConnectWise’s partners as possible come through the unfolding recession intact too. Looking after the company’s own balance sheet is, of necessity, the most immediate priority in that list, according to Magee, who likens the logic behind that thinking to the emergency instructions airlines recite before every flight.

“The first thing they say is ‘secure that air mask on you first,'” he notes, so you can then help others. “That’s kind of the approach that we started out on, was [being] secure in our air mask first, making sure that ConnectWise was going to be able to sustain and be healthy and have the cash flow and everything that we would need in case the worst scenario came about.”

Meeting that objective has entailed pausing or eliminating spending across the company, Magee adds, noting that the company is evaluating its plans for conferences in particular. At present, ConnectWise is scheduled to host its annual IT Nation Explore event in Orlando two months from now. Those plans, needless to say, are still very much subject to change.

“We’re keeping an eye on federal, state, and local governments and what they say we can and can’t do,” explains Magee, who expects to announce a final decision on whether to hold the conference live or present it online within the next two weeks. Either way, he notes, attendees can expect to see the challenges of staging a large show amid a public health emergency reflected in the format and agenda.

“We’ll be doing something,” he says. “It’s just that something will likely be different.”

Other cost reduction measures have included pay cuts by the ConnectWise executive team. Through roughly the next six weeks, furthermore, Magee personally is donating 40% of his salary to the ConnectWise Foundation, an organization that offers financial assistance to MSPs in need. 

Helping partners with cash flow problems more programmatically, by extending invoice due dates for example, is more of a balancing act though, according to Magee. “Their health and our health are interconnected,” he says. “We’re trying to help them out the best way we can knowing that, hey, ConnectWise needs to remain healthy and solvent as well.” 

Magee urges struggling partners to be understanding of those sometimes conflicting priorities, and to ask for assistance only if it’s needed. “We do find that people do reach out for the sake of reaching out, just to see what they could potentially get,” he says. Flexibility is important too, he continues.

“Be willing to get on the phone with us and discuss things, versus just say ‘I’m not paying,'” Magee asks.

In addition to providing direct financial aid, ConnectWise is rolling out webinars on topics like managing a remote workforce, applying for federal loans, serving customers with work-from-home employees, and securing remote connections. Those last two topics, Magee notes, are both immediate challenges for channel pros and long-term growth opportunities when the economy begins rebounding. ConnectWise is adjusting its product roadmap accordingly.

“I would expect over the next month or so that we will identify some changes to that roadmap,” Magee says, “to help our partners capitalize on the opportunity to solve for their pain points and challenges.” The ConnectWise Control remote access solution, ConnectWise Automate RMM platform, and BrightGauge reporting system could all figure in those adjustments, he adds, along with the security solutions and NOC services that ConnectWise acquired last October when it bought Continuum.

In parallel with those changes, ConnectWise will also delay some product updates to avoid overwhelming MSPs busy keeping themselves and their customers afloat, according to CTO Steve Cochran, who joined the company last December. “We’re being very careful about what we’re deploying out into the market now,” he says. “Even though we may have new things to release, it may not be the right time because the partners are definitely distracted with the things that are going on.”

That said, integration efforts continue in relation to the other company ConnectWise bought last fall, documentation vendor ITBOOST. At present, according to Magee, most of that work involves rolling development responsibilities into the company’s core product teams. “We’re expecting to have that work completed by the end of this quarter, as well as continuing to do additional releases on that platform,” he says. Tighter connections between ITBOOST and other ConnectWise solutions will begin arriving in the next few months as well, he adds.

MSPs have more than just that to look forward to, though, despite the plunging economy, Magee emphasizes. The coming months will be difficult for vendors and partners alike, Magee concedes, but better times await after they’ve passed.

“I’m pretty optimistic about the go forward potential,” he says. “Some MSPs are going to take a little bit of time to recover, but there is opportunity across the board for sure.”


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