On the first day of ConnectWise's IT Nation conference last week, CEO Arnie Bellini and his brother, president and COO David Bellini, spoke with ChannelPro-SMB about consolidation in the RMM market, ConnectWise's new Modern Office Communicator solution and Virtual Administrator service, its investment in visual network documentation vendor BizDox LLC, and much more. This transcript is excerpted from a longer conversation and lightly edited for readability.
ChannelPro-SMB: This summer there were a ton of RMM companies snapped up by other companies. What does that mean for LabTech and ConnectWise?
Arnie Bellini: What it means is they're selling and we're investing. They're selling off and we're actually investing in additional companies and growing the companies that we have. So we, ConnectWise, made an investment in LabTech, we made an investment in Quosal, we made an investment in CharTec, and now we've made an investment in BizDox. So we just continue to expand our product line, and so we're growing and they're selling.
"We're here for that small to midsize business company. We're here for the IT solution provider. We're not going anywhere." Arnie Bellini, CEO, ConnectWise
I think it also says we're here for that small to midsize business company. We're here for the IT solution provider. We're not going anywhere. And I think a lot of times when these companies sell, like N-able sells to SolarWinds, Kaseya does the Insight [Venture Partners] deal...You pay $120 million for N-able, you're going to take that company and start moving that thing up to an enterprise level, because there's no [other] way to recoup your investment. So I feel that what we're going to see is there's going to be fewer companies servicing the...IT solution provider market, and that these other companies that have sold are going to start moving those products up into mid-tier and enterprise type companies.
ChannelPro-SMB: Are you still growing the Modern Office [Suite], and if so, what direction are you going in? How big does it get?
Arnie: The only investments that we make is when we perceive that there's a problem with our partners' business model, and we need to come up with a solution for that problem, or when we see a problem that's looming out on the horizon a year or two from now...
And so what you saw today, the investment in BizDox, we know that [partners don't] really document their clients and we know that that causes so much pain and anguish...When your best technician who's been with you for 10 years leaves your company and all of the real knowledge about that client and the way that client is laid out is in their head, that becomes a going concern issue for a lot of these IT solution providers.
So someone had to come up with a way to make it simpler, because you can't just beat on them and make them do that, right? You've got to make it simple for them to get their documentation done. So we feel that was addressing a big problem and that's why we made that investment.
The other big problem that we see is the fact that the Internet and the proliferation of technology is making it possible for solution providers to take care of their clients from afar, and they're losing that face-to-face relationship. And so the real idea of Modern Office Communicator is to bring that relationship back and to take advantage of the fact that, hey, the Internet is there and we can open up a channel. You can talk directly to us. We can remote control directly to your computer. We can open up a video channel or an audio channel or chat with you. So all of the sudden the relationship comes back, even though it's virtual. That doesn't matter so much.
And then the other big thing is ... [a company's] real place of business is their website. But no one's there. You walk through the front doors of anyone's website and who are you greeted by? No one. So it's just information. It's just brochure-wear. The website has to become the place where as soon as I walk through the doors of your business, which is your website, I am greeted by someone...So what Modern Office Communicator is designed to do is to basically solve that problem.
ChannelPro-SMB: You talked about the Virtual Administrator service today. To me that feels like a move in a slightly different direction where in addition to providing training, certification, and software you're actually...
Arnie: We're serving them. We're doing the job for them.
ChannelPro-SMB: Right. Is that more of a future direction for you?
David Bellini: We're just giving more options, really. It's like a lot of these companies are smaller companies where they're two- or three-man shops and they're out and about fixing things, taking care of their customer base. So this is just a way for them to call in and say, hey, I need you to do this, that, and the other thing and we're taking care of it...We're good at it. We have expertise at it. Certainly we understand the software. We wrote it. So it's just another way that we can help them run their business.
Arnie: Anything that we can do to create a higher level of success, we're willing to invest in that. So these programs that we put out, a lot of them are just done at a break-even basis. This event itself, we think it's so important to create the community, to get partners working with each other, talking with each other. There's so much knowledge that happens there. But this event is a complete break-even event for us. We make no money on it.
And so the Virtual Administrator concept is we just figured out what would be our cost to provide that service. Let's charge them our cost to provide that service. It's just outsourcing. It's a way for them to grow their business without having to add an extra head or dedicate time to learning any product or, and this is what really happens, dedicate a lot of time trying to understand how they should run their business better...
Most of these folks are technologists and they're not business people, and that's OK. They all got into business because they love technology and so they're accidental entrepreneurs. When they wake up one day and they've got three or four employees and they've got to run the business and they've got to make payroll and they've got to understand cash flow. They've got to understand HR and they've got to understand how to run a business and the business processes, that's where they start to falter. And we don't think that they need to, and we don't want to see them falter there because the business side of it and the business operations side of it we understand. That's what our product does for them. So if they want us to go even further and help them run their business we think that's a great idea.
