Consolidation Trends in the IT MSP space

[email protected] | 212.731.4230 | Book an Appointment Here (34) Madhur Duggar | LinkedInThe consolidation of smaller sized managed service providers (MSPs) by platform MSPs started in the immediate aftermath of Covid and will accelerate even after rates have normalized because of key secular trends in the MSP industry. While the first phase of MSP consolidation is being driven by the need for acquirors to grow their platforms, the second phase of consolidation will be driven by smaller MSPs looking to exit an increasingly competitive environment with greater regulatory scrutiny. In this second phase, operational size, the strength and diversity of client relationships and attractiveness of geographic locations will be key competitive differentiators amongst target MSPs. As MSP platforms become larger, the revenue threshold below which MSPs will be too small to “move the needle” will likely rise over time. Owners of smaller MSPs, looking to exit, may find their buyer pool has shrunk, especially if their businesses are in slower growing towns. They should bake this potential outcome into their current thinking process.www.linkedin.com/in/madhur-duggar