Three things to know as you watch the CompTIA/Thoma Bravo deal unfold

As you might imagine, my inbox exploded yesterday with questions about the sale of CompTIA to Thoma Bravo and H.I.G. Capital. I don't know any more than anyone else about the deal, but I do have a different perspective.

I think there are three big things you need to focus on in this deal. But first, a bit of background. 

Please review the press release here: https://www.prnewswire.com/news-releases/hig-capital-and-thoma-bravo-to-acquire-CompTIA-brand-and-products-302294943.html

and MJ Shoer's clarification of what's actually going on, here: https://www.linkedin.com/posts/mshoer_comptiacommunity-activity-7259583517200732160-K3La

[Update: The additional press release clarifying what's going on, from CompTIA. https://www.comptia.org/newsroom/press-releases/sale-of-certification-business-allows-greater-focus-on-it-channel-membership-and-expanded-charitable-giving ]

and the 2022 Form 990 (non-for-profit) Federal tax filing here: https://projects.propublica.org/nonprofits/organizations/371712758/202313179349305336/full

Much of the confusion over the big announcement is that the CompTIA many of us love is the CompTIA community (the actual community-focused non-profit). But we also know that CompTIA has built their bank account by selling certification exams for about $200-$400 each. That's clearly not a non-profit venture, and goes a long way to paying their top three directors a total of just over $2.5 Million in salaries.

Please keep clear the two CompTIAs. I will refer to them as the certification arm and the community arm.

All non-profits try to create sources of revenue that allow them to operate their organization. Trust me, I know how hard this can be. CompTIA found certifications, and focused heavily (and successfully) on making them an industry standard. So, their money-raising arm grew from there. When it got to be much larger than can be justified by a non-profit, it made perfect sense for them to separate the two.

Based on comments online, it sounds like the community arm (the remaining non-profit) will probably get an endowment out of the deal, so they've have a solid base to move forward. We'll come back to this.

First thing to know: There are currently two CompTIA brands. One has been raising way more revenue than is justified for a non-profit status. This piece is going to the venture capital firms and is one of the tiniest investments among the almost 500 companies they own or control (see https://www.thomabravo.com/companies and https://hig.com/portfolio/).

Remember: Certification arm = for-profit. Community arm = non-profit.

The second thing to know is that this confusion of the brands will be a major piece of the struggle facing the Community arm going forward. Just in the last twenty-four hours, there has been massive confusion about what's being sold and what this means for the Community arm. 

Last year, I mentioned to several people that the two houses (arms) of CompTIA were moving apart and that the for-profit side has to be split off at some point. This is not bad, or scary, or even much of a shift. It seems to me that it's the most natural thing that has to happen. It allows the money-focused arm to focus on profit and the community arm to focus on community.

For about five years now, I've seen CompTIA's community arm lose its clarity of vision and purpose. The certification arm had become the tail wagging the dog. Every decision was about re-organizing and "cleaning house." Reorganize, reorganize, reorganize. That's the behavior of a company whose culture is struggling.

With massive turnover on the community front, they've lost some of the most committed and passionate people. But they've also lost a great deal of institutional memory. The organization has always been run from the top down. I've sat on communities and councils and other bodies that get reorganized year after year. Everyone has to constantly re-introduce themselves to everyone else. 

So, the second thing to remember is that the community arm is going to go through a major re-branding struggle in 2025 and beyond. Will they have any connection to the CompTIA name, or will they be like "X" - formerly known as Twitter. Twitter changed their name more than 18 months ago and almost no one calls it "X" except employees.

If the whispers are correct, the new community arm will start out with money in the bank. That's a very good thing for brand-rebuilding. And you can bet they'll spend time refocusing their mission and vision. Like it or not, they will also have to deal with the criticisms of "selling out" to private equity and the confusion over exactly what happened in the big transaction. See First Thing, above.

The community arm has also made a big deal of being vendor neutral. If their funding is a one-time starter boost, they should stay vendor neutral. If it depends on the profit of ConnectWise, N-Able, and other Thoma Bravo brands, that status may be harder to maintain.

Finally, the third big thing you need to pay attention to is the renewed focus you'll see on certifications. This is a very good thing. In the last several State of the Nation for SMB IT addresses I've given (see https://mspwebinar.com), I've mentioned the need for this industry to get back to education and certification.

Thirty years ago, almost everyone who wanted to be taken seriously in this industry took classes on Novell networks, and many were Novell Certified. Twenty-five years ago, when Microsoft took over the world of small business networks, all that attention moved to Microsoft certifications. Along the way, many people got certs in Cisco, HP, and other hardware.

CompTIA had success through all of that. The workhorses of their brand were A+ and Network+. Today they are Security+ and Advanced Security. They've grown with the times and thrived.

This move will allow the new CompTIA - the certification arm - to thrive going forward. And that may bolster other certification programs. The biggest void, in my opinion, is the actual business-focused side of our business. But today, CompTIA owns the technical training market and mindshare. Their opportunities to expand are wide open. 

Do expect prices to go up. That's the result of focusing on money without regard to mission.

The bottom line for me:

1) The split was inevitable. And it is potentially good for both sides. 

2) After a period of self-reflection and searching for clarity, the community arm could be an amazing and positive force in our industry.

3) The certification arm will make a lot of money, and might bring a greater focus on the need for certification and training in our industry. Yes, it will cost more. But the professionalization of the industry depends on all of us acknowledging and seeking higher standards.

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Disclaimers

The reason I got so many emails on this is probably because I run a training company, and I founded the National Society of IT Service Providers. This blog and commentary reflects my personal opinions and beliefs. It does not represent the NSITSP.

Having said that, here are two bonus comments on the two arms of CompTIA.

Since day one, people have asked why NSITSP is necessary and, specifically, "Why isn't CompTIA doing that?" Well, transforming the industry into a profession hasn't been CompTIA's mission. And they opted out of lobbying some time ago. We shall see what the future holds. I hope the two organizations can work well together on common goals.

As for certifications, one of the most important movements inside of NSITSP is Professional Development and the develop of "continuing education units" as a way to move this industry to a stronger focus on continuous education and improvement. Every legitimate profession has some form of this, and we should as well. I sincerely hope that the certification-focused CompTIA will be among our strongest partners to promote their education programs as industry continuing education for all of their IT partners. It is a great fit, and we'll be working make this happen.

All comments are welcome. 

:-)