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News & Articles

November 9, 2022 |

ConnectWise Signs Distribution Alliance with Arrow Electronics

Announced at the vendor’s IT Nation Connect conference alongside a joint tech apprenticeship program with CompTIA, the pact gives MSPs access to Arrow’s quoting, procurement, billing, and other services from directly inside the ConnectWise platform.

ConnectWise has formed a strategic pact with Arrow Electronics to build the distributor’s quoting, procurement, subscription management, and client billing services directly into the ConnectWise platform.

The managed services heavyweight announced the agreement, along with a joint initiative with CompTIA aimed at easing the current shortage of tech workers, on the opening day of its IT Nation Connect event in Orlando. 

The distribution alliance, which gives Arrow pride of place among ConnectWise’s distribution partners, will streamline what is now a complicated, labor-intensive set of processes for most channel pros, according to Mark Taylor, Arrow’s president of enterprise computing solutions.

“As a ConnectWise partner, you now have access to a near seamless PSA experience that includes automated pricing, procurement, provisioning, billing, reconciliation, and tracking and purchasing through Arrow,” he said during a general session appearance today. “This will eliminate several manual, time-consuming tasks while giving you access to more products, more vendors, more efficiencies, and all in the ConnectWise platform.”

Arrow will also give ConnectWise partners a dedicated account development rep, Taylor added, and fast access to credit. “You can get an Arrow account set up and credit line authorization within 48 hours.”

As a promotional incentive to drive interest in the new alliance, Arrow is offering an immediate $10,000 line of credit to any ConnectWise partner who sets up an account in the next 90 days.

According to ConnectWise CEO Jason Magee, today’s announcements are a down payment on more ambitious, long-term plans between the two companies. “We’re not talking about a one-time thing,” he said during a keynote presentation. “We’re talking about an alliance where we continually look at how to improve and support this space.”

The joint initiative with CompTIA, called Ticket to Tech, is designed to create a pipeline of badly needed new IT employees. Enrollees will receive 17 weeks of instruction aimed at preparing them for CompTIA’s A+ certification exam. Career readiness skills, including LinkedIn and social media lessons, mock interviews, and resume assistance, are included in the curriculum as well.

“We are offering training, education, and employment opportunities in some of the most high-demand tech occupations, from tech support to cybersecurity,” Magee said today. “More importantly, these trainings are based on national guideline standards created by CompTIA and approved by the U.S. Department of Labor, which means these apprentices will leave the program with the technical and employability skills needed to immediately join the IT workforce.”

Entry-level tech workers are in desperately short supply at present, Magee continued, noting that there are currently over 10 million IT job vacancies in the U.S. alone. 

“This is one of the most challenging times in history regarding attracting and retaining your people,” Magee said, adding that it will only get worse in the future. “This is going be a problem that we need to solve for years to come.”

Research from Service Leadership, the managed services consultancy ConnectWise acquired last year, illustrates just how big a problem the skills gap is for MSPs at present. Revenue and profit were both up for service providers on average during this year’s third quarter, the data shows, but would not have been if organic sales growth and inflation-inspired price increases hadn’t outweighed the skyrocketing cost of labor. 

“Every one of these folks is paying 10, 15, 20 percent more in some cases for equivalent positions than they were a year or two ago,” says Service Leadership Vice President Peter Kujawa.

The managed services landscape more generally is marked by that same mix of promise and peril, Magee argued during his keynote. On the plus side, he said, most MSPs have an upbeat outlook on the future.

“Our partners are telling us that they’re doing well and still expect to be growing in 2023,” Magee said, adding that they have more SMBs to sell to than ever before too.

“There are over 140 million small and medium-size businesses globally, 8 million approximately here in the U.S. alone,” he said. Add one- and two-person “microbusinesses” into the picture and that latter figure rises to roughly 33 million.

Yet an economy possibly in or approaching a recession, a wave of mergers and acquisitions fueled heavily by private equity dollars, and the challenges of building, maintaining, and especially securing increasingly complex technology stacks, Magee observed, all pose significant threats.

“For everyone out there, here’s the question you need to be asking yourself: Are you going to allow this all to be a headwind or a tailwind?” Magee said, in words reminiscent of a presentation by N-able CEO John Pagliuca last month. “If you’re prepared, these threats can become opportunities, as I’ve said over and over again.”

MSPs who automate relentlessly, leverage artificial intelligence to search client data for needs and opportunities, prioritize customer experience, and rigorously enforce security best practices will outgrow their peers, Magee continued. Those who don’t will suffer the consequences.

Further data from Service Leadership reveals just how severe those consequences can be. MSP profits in aggregate, it shows, were up 11% in Q3. Yet while profits rose 17% on average for MSPs in the top quartile, they fell by an average of 10% for those in the bottom quartile, and by a minimum of 3.8%.

“Every one of them is losing money,” says Kujawa of that bottom 25%. And that’s during relatively good times economically, he notes

“If you’re struggling now, you’re going to really struggle soon if the economy tanks,” observes Kujawa, who urges poor-performing MSPs to hunt down and eliminate the mistakes holding them back immediately.

“Don’t wait,” he says. “Don’t hope it’s going to get better. You’ve got to start really benchmarking and looking at where you’re leaking money.”

Service Leadership is currently collecting compensation data from channel pros in a bid to help them better understand how the wages they pay compare to what peers are offering. Those who participate in the research study by December 16th will receive a free copy of the final report in March.

IT Nation Connect continues through Friday, assuming Tropical Storm Nicole, which was bearing down on the Florida coast Wednesday, doesn’t disrupt the conference. According to ConnectWise, there are some 4,700 people attending the show.

“This is our biggest IT Nation yet,” Magee said today.

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