From acquisitions to strategic pivots, every company faces unique challenges when pursuing growth in the MSP space.
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The story of growth has been a frequent topic on MSPmentor this year.
We decided to pull together a few recent tales about companies acting boldly in the pursuit of scale.
From acquisitions and strategic pivots, to capital investors, following are some unique perspectives from various firms looking for growth in the MSP space.
Vology Charts Path From Reseller to Growing MSP
Founder and CEO Barry Shevlin used equal parts acquisition and organic growth to help Tampa, Fla.-based Vology Inc. solidify a foothold in the managed services space.
The former reseller, previously known as Network Liquidators, adapted to shrinking hardware margins near the end of the last decade by moving aggressively into managed services.
The shift paid off.
Revenue grew from $70 million in 2010, to a projected $200 million this year. The firm projects the share of revenue coming from managed services to reach 50 percent by 2020.
MSP Offers Lesson in ‘Growth by Acquisition’
Seattle-area MSP Arterian made three strategic acquisitions in recent years.
Ultimately, Arterian itself was purchased this year and now serves as the cloud services arm of MSP Aldridge.
Along the way, CEO Jamison West learned some important lessons about the complexity of executing on a strategy of growth by acquisition
Healthcare Market Offers Opportunity, Challenges For MSPs
Perhaps the hottest vertical in the space, healthcare offers both opportunity and peril for the MSP in search of growth.
Irvine, Calif.-based Synoptek grew 300 percent since its founding in 2005, with roughly a quarter of the revenue coming from a lucrative and growing market: Medical providers seeking to outsource their information technology needs.
Recent, year-over-year growth has hovered around 18-22 percent.
But MSPs need to beware that the healthcare opportunity carries substantial risk.
Compliance with Health Insurance Portability and Accountability Act (HIPAA) standards requires significant sophistication.
An enforcement crackdown has resulted in HIPAA breach fines totaling $22.84 million so far this year, up sharply from $6.2 million in all of 2015.
MSP Goes From Worst Year to Best Year
CEO Michael Cook knew he wanted big changes in the focus of his Norwood, Mass. MSP, Corporate IT Solutions.
Not one to engage consultants during his 17 years in business, Cook made an exception last year when shrinking profits turned to deepening losses.
The company reworked its sales force, reduced its reliance on revenue from hardware sales and fostered a new culture fully dedicated to cloud and managed services.
This year, monthly recurring revenue is up 33 percent, while EBIDTA grew 300 percent.
Fund Partner Offers Glimpse Into Capital Investing in MSPs
The best run MSPs can often find investment to fuel growth – assuming the service provider feels ready to part with equity.
A quality balance sheet and clear market differentiation can mean suitors lining up around the block, anxious to offer financial capital and expertise in exchange for a piece of the upside.
LLR Partners of Philadelphia, Pa., is among myriad capital investors constantly on the hunt for the next great company, placing major bets in recent years on several MSSPs.
Not surprisingly, cybersecurity firms are particularly attractive days.
After Big Cash Out, MSP Founder Misses ‘Tough, Tough Business’
For those looking for a soup to nuts case study of how to grow an MSP, there’s Tommy Wald and Riata Technology.
It was 1993 when Wald founded Riata as a data backup shop in a back bedroom of his Austin, Texas home.
He relied on operational excellence to turn his fledgling outfit into one of the area’s top resellers and, later, into one of the earliest true managed services providers.
Three years ago, Wald cashed in on that successful run and sold the company to Ricoh’s Mindshift.