Building A Local MSP With An Enterprise Touch
The managed service provider business has become a key part of the IT channel as business customers look to managed services as a way to grow their business without a large capital investment.
And MSPs, for their part, find the recurring revenue from managed services to be a way to grow their business over time without a reliance on signing a customer up for the next deal.
However, the MSP business is part of a very fragmented IT services market. IT consultant McKinsey early this month reported that the global IT services market is fragmented, and estimated that 40 percent of the market is controlled by 15 providers.
[Related: Thinking Of Buying Or Selling An MSP? Here Are 6 Tips From Experts]
“Our analysis suggests that the industry will likely see some consolidation because niche players may struggle to scale and large providers may seek ways to broaden and strengthen their capabilities,” McKinsey wrote.
That idea of a fragmented IT services business matches the view that Chris Pace, CEO of Houston-based MSP Centre Technologies.
“I don’t believe that the smaller MSPs are going to be able to survive,” Pace told CRN. “Costs are getting too high. The amount of layered security that we have to put in customers’ environments today to make sure they’re protected is high. And the fact that customers have to choose an IT partner with enterprise experience, I think it’s going to erode the smaller MSPs.”
Centre Technologies, with the help of its investor, Houston-based Main Street Capital, is looking to build an MSP that provides that enterprise touch. The company, which previously acquired a couple of smaller Texas-based MSPs, early this month acquired NetLink Solutions, based in the Tulsa, OK suburb of Broken Arrow.
That does not mean the start of a move to build a national MSP, but instead one to build a strong local MSP with enterprise capabilities, Pace said.
“We’re not looking to spread our wings across the United States,” he said. “We’re looking to really focus in an area, really go deep and wide within the area become the IT partner that small businesses look towards. We want to be the best IT partner in the area. And so in doing that, we want to focus on right now on Texas and Oklahoma.”
Here’s more of CRN’s interview with Pace.
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Joseph F. Kovar is a senior editor and reporter for the storage and the non-tech-focused channel beats for CRN. He keeps readers abreast of the latest issues related to such areas as data life-cycle, business continuity and disaster recovery, and data centers, along with related services and software, while highlighting some of the key trends that impact the IT channel overall. He can be reached at [email protected].
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