Canalys research shows slowing growth in MSP tool vendors, indicating potential market shift

Jay McBain from Canalys shared some new data from their research on the growth of the MSP tool vendors.       I’ll share his post.

As a potential bellwether to the slowing MSP market, PSA and RMM platform vendors have dropped into high single-digit growth for the first time in memory. (Note: we still separate the Datto and Kaseya brands for purposes of y/y comparison).

Connectwise: 24.2% market share, 6.1% growth year over year

N-able: 16.2% market share, 6.6% growth year over year

Kaseya: 7.7% market share, 9.2% growth year over year

Datto: 7.6% market share, 9.4% growth year over year

Others: 44.3% market share, 10.1% growth year over year

TOTAL: 8.5% growth year over year

Other notable industry analysis by my colleague Robin Ody:

1. Cost cutting underway driven by PE-backed boards. 2023 Budgets reduced and key personnel layoffs.
2. End customer demand still robust across managed services and cybersecurity.
3. RMM 3.0 is high on the agenda, with ConnectWise’s integration of ChatGPT (OpenAI) into the Asio platform as one example of the automation possibilities.
4. N-able and Kaseya announced broader distribution agreements and global expansion initiatives.
5. Kaseya is losing (some) partners post-acquisition of Datto – although growth numbers remain best in class. We are hearing from partners moving to NinjaOne, Syncro, Atera and SuperOps.ai

Why do we care?

Jay is indicating this is a potential to slow in the MSP market – I’d argue it’s a slowdown in the MSP tools market.     Why?  Because the core product of these companies is a zombie – dead product walking.  

It’s not surprising that yesterday’s toolset driven by private equity investment strategies is not the wave of the future.     Instead, let’s consider a cluster of companies more like Acronis, with a security-focused management platform; or Nerdio, with a cloud-based management platform; Auvik, with a network-focused management platform; or ScalePad, with a configuration-based management platform.  And speaking of ScalePad…..