The PSA Acquisition Tax: Why Your Tool Stack Keeps Getting More Expensive
Open last year's ConnectWise or Kaseya invoice. Now open this year's. The line items shifted, a couple of products got renamed, something got bundled into a "suite," your seat counts got "true-upped," and the total went up 18–35%. Nobody on your team can fully explain it. Your CSM has a tidy story. The story changes next year.
This is the acquisition tax. It's not a bug. It's the operating model of the MSP tool industry.
In the last decade, ConnectWise, Kaseya, N-able, and Datto have rolled up most of the MSP stack — PSA, RMM, documentation, backup, reporting, quoting, EDR, mail security, M365 management. Each acquisition follows the same arc: independent product → acquired → integrated into a bundle → repriced → made hard to leave. The end state, for the MSP, is a single vendor charging multiplying fees against a stack that used to be a la carte.
Frequently asked questions
Why does my ConnectWise or Kaseya bill keep going up even when I haven't added users?
Bundling, tiering, seat true-ups, and platform fees compound year over year. Standalone products get folded into suites priced higher than the sum of their parts, features migrate to higher tiers, and seat-count audits inflate billable users beyond your actual headcount. The total rises 15–30% YoY across the bundled stack before any new products are added.
Is it worth switching from ConnectWise to a different PSA to escape the acquisition tax?
Usually no. Most alternative vendors are running or will run the same roll-up playbook within a few years. Switching costs $50K–$200K in migration and lost institutional knowledge, and you usually trade one vendor's tax for another's. The leverage isn't switching the system of record — it's keeping the operational layer above the system of record outside any single vendor's bundle.
How much does the PSA acquisition tax actually cost a mid-sized MSP?
For a 25–50 tech MSP, the realistic annual cost — subscription creep, forced consolidations, seat overage, sunset migrations, integration rebuilds, and negotiation overhead — runs $80K–$300K/yr, and grows. The line-item invoice is the smallest part.
Can we negotiate the renewal down?
Some, sometimes. CSMs have discretion at the margin, especially around seat counts and multi-year commits. But the structural moves — bundling, tiering, integration deprecation — are not negotiable on a single renewal call. The negotiable surface shrinks every year as the bundle tightens.
What does 'insulating the operations layer' actually mean?
It means the screens your team uses to run the day, the intelligence layer that interprets PSA data, and the workflows that capture work signals all live outside the vendor's stack — connected to it, but not owned by it. When the bundle changes or an integration is deprecated, your operations don't break, because the vendor doesn't own the surface your team works on.