Big Vendors Eye Managed Services Acquisitions

Vendors of large, complex network management systems are watching the managed services market with a hungry eye, and it’s only a matter of time before one of them makes an acquisition, according to Kaseya International CEO Gerald Blackie.

CA, Hewlett-Packard and IBM, whose managements systems—Unicenter, OpenView and Tivoli, respectively—realize they can’t touch the SMB (small and medium business) market managed services space unless they buy their way into it, Blackie said.

So they are making overtures to Kaseya, of San Francisco, and its competitors, whose managed services platforms allow solution providers to remotely monitor and manage their clients’ computing environments.

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Kaseya has had talks with at least one of the large vendors, but the company at this point is not interested in being acquired, Blackie told the Channel Insider on April 2, during the company’s first-ever partner conference.

“I don’t see anything coming out of that,” he said.

However, Blackie added he wouldn’t be surprised if an acquisition takes place in the managed services vendor space sooner rather than later. Currently, the space is crowded, and consolidation is inevitable, he said.

“I think the industry will consolidate, and there will be a few players left,” Blackie said, drawing a parallel with the ERP (enterprise resource planning) and accounting software industry. That space used to be crowded with dozens of players, including Blackie’s former company, Platinum Software, but now only a few, such as SAP AG and Oracle, remain, he said.

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Blackie said Kaseya plans to stay not only an independent company but also private. A public stock offering is not in the cards.

“There’s absolutely zero need or want for our company to go public,” he said. “It will never happen.”

The company so far has grown without even seeking venture capital, and Blackie expressed confidence it will remain that way going forward.

Kaseya has about 1,500 partners and some 10,000 users all over the world. The company has a corporate presence in various countries, including Australia, Brazil and the United Kingdom. It is in the process of opening an office in Bangalore, India, but Blackie stressed the India location will be to serve customers there, not to offshore any of the company’s development or services.