First, let's set the scene: Autotask and ConnectWise compete fiercely in the PSA (professional services automation) software market. While Autotask is a hosted and cloud play, most ConnectWise users deploy on-premises. Over the past year or so, both companies have been diversifying beyond their PSA heritage.
- ConnectWise launched ConnectWise Capital and invested in LabTech Software (a remote monitoring and management specialist) and CharTec (a hardware as a service firm).
- And Autotask acquired VARStreet in March 2010.
Potential Upside and Potential DownsideThe Autotask-VARStreet combo involved risks and rewards. For more than a decade, some VARs had been using VARStreet to manage product price quotes and source products from a range of distributors. But VARStreet never quite fulfilled its promise. The back-end technology appeared to be sound, but the front-end was aging and marketing support around VARStreet was non-existent.
All that started to change in late 2009, when Autotask began takeover negotiations of VARStreet. By March 2010, the deal was announced. By May 2010, VARStreet had doubled its user base.
Reality CheckBut how is the system performing now and where is Autotask taking VARStreet next? Here are some anecdotes from Godgart, which he shared during CompTIA Breakaway, held earlier this month in San Antonio, Texas:
- VARStreet now manages 10 times the product volume and twice the user base vs. before the Autotask buyout.
- Autotask has doubled VARStreet's development staff and tripled VARStreet's support staff, though Godgart didn't disclose exact headcount figures.
- The entire VARStreet infrastructure will have been rebuilt, modernized and/or replaced within one year of the acquisition announcement.
How will VARStreet scale its business to reach -- and retain -- such a mass channel audience? Hmmm... Stay tuned for a more exact answer. But here's part of the answer: It involves convergence and total solutions selling. A prime example: Cabling specialists are now using VARStreet to source switches, routers and firewalls, then they use Autotask to manage the related customer projects, Godgart asserts.
Next MovesIt's a safe bet Godgart will discuss more of the VARStreet strategy during -- or sometime before -- the third-annual Autotask Community Live conference (April 18-20, Miami, Fla.).
In the meantime, The VAR Guy is reaching out to VARStreet users to learn how the system has evolved since Autotask acquired it. Plus, our resident blogger is keeping tabs on potential VARStreet rivals such as Quotewerks and Quosal, both of which seem to have strong channel followings.
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