Buyout: MSP Services Network Acquired

msp-services-networkMSP Services Network, one of the industry's best-known master MSPs, is about to be acquired. A deal involving High Street Technology Ventures is expected to be announced today (December 9). Who will run MSPSN and what does this mean for the broader managed services market? Here's some analysis -- including an interview with MSPSN's incoming CEO, and some thoughts on the Master MSP sector.

The man behind High Street Technology Ventures' curtain is CompTIA veteran Gerard Kane. Going forward, Kane will become MSPSN's CEO, replacing Amy Luby. Kane says Luby will remain involved with MSPSN, assisting with company vision and serving on MSPSN's board of directors.

I've sent Luby an email requesting her perspective on the deal. Update 9/9/09: Here's a Q&A with Amy Luby about the deal.

Meanwhile, Kane shared his thoughts in this Dec. 8 video interview. (Beta note: The clip uses several technology components MSPmentor is still beta testing. So pardon the rough edges and overlays.)

The video covers:

0:00 - Intro
0:16  - Meet Gerard Kane, incoming MSPSN CEO
1:00 - MSPSN's business explained
1:30 - Committing to partnerships
1:46 - What attracted Kane to this deal and who's the ultimate buyer?
2:46 - Kane's channel experience
4:20  - Who's financing the deal?
4:40 - Will MSPSN Founder Amy Luby remain involved?
5:20 - Is MSPSN healthy and growing?
5:30 - What type of multiple or price premium did MSPSN fetch?
7:00 - More info
7:24 - Conclusion

Why This All Matters

The pending MSPSN buyout, expected to close in early 2010, reinforces an inflection point for the managed services market. Though some readers disagree with me, I believe the MSP industry is ripe for acquisition and consolidation -- vendors buying vendors, MSPs buying MSPs, some partners becoming rivals, and so forth.

Just last week Quest Software acquired PacketTrap. Plus, rumors of a closer ConnectWise-Chartec relationship surfaced -- with more ConnectWise strategic relationships expected in the next few weeks, MSPmentor believes.

Now comes word of the pending MSPSN buyout. MSPSN has twice landed on the MSPmentor 100, which tracks the world's most progressive MSPs. (The third-annual survey closes Dec. 11, 2009). MSPSN also blends a range of services -- industry educator, community builder and Master MSP -- under a single company umbrella.

MSPSN founder Amy Luby is a well-known community builder who has hosted her own events, plus workshops for CompTIA. MSPSN also is a Master MSP of sorts, hosting and maintaining a range of managed services options for VARs and peer MSPs. Along the way MSPSN has standardized on such tools as itControl Suite.

Still, it's clear that Luby -- and now Kane -- want to work with a range of industry partners. Luby spoke at the 2009 Autotask Community Live conference in April 2009 and she attended the ConnectWise Partner Summit in November 2009. And during my interview with Kane, he was quick to mention a need to maintain relations with both Autotask and ConnectWise, and many other companies.

The Role of Master MSP?

Somewhere in all this, I need to mention the evolving role of Master MSPs -- a catch-all term for companies that host services for peer VARs and MSPs.

In 2008, I was on the Master MSP bandwagon -- pointing to key players like MSPSN, Ingram Micro Seismic, Do IT Smarter and Virtual Administrator. But beyond those companies I haven't heard much from new or emerging Master MSPs. If you're out there please let me know...

I've also heard reports from some fledgling Master MSPs that it's too expensive and time consuming to engage VARs as customers. That chatter begged my question: Is MSPSN a growth company or a repair project for Kane? When asked, Kane said MSPSN is a growth story -- with "explosive growth" potential.

We'll be watching this pending deal. And those that I expect to follow... ...

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Discuss this Video 11

Jim Van (not verified)
on Dec 27, 2009
Great interview! I've been wanting to get to it since you posted it, and just found time this evening. Amy: Congratulations, and best of luck moving forward. You developed a great service offering and leave it as a nice legacy. Hope to see you around on various boards, etc.... Gerald: Like everyone else, looking forward to see what MSPSN 2.0 turns out to be. Best of luck! Jim Van Logicomm, Inc.
Mark Crall (not verified)
on Dec 9, 2009
My congratulations to Amy (and team)! I would love to say the success of MSPSN was that is was founded on the most reliable and robust PSA in the cloud (Autotask) but I know the reality is that it was the hard work of amazing people like Chad, Steve, Nancy, Robin and Amy. I look forward to seeing what MSPSN V2.0 looks like. Mark
Joe Panettieri (not verified)
on Dec 9, 2009
Sorry for the group reply but deadlines call so here we go... Tim@3: Here's a follow-up interview with Amy Luby. Thomas@4: PacketTrap has a strong following among network-centric MSPs. Doug@5: I will keep asking the multiple question. Jason@6: Gerard did share some "clues" about his plans for MSPSN but YouTube has a 10-minute limit and some of his tidbits of info were left on the cutting room floor. We will be sure to offer some additional coverage soon. Let me know how the DC seminar goes, and what you hear. Thanks.
on Dec 9, 2009
What a way to end the year, and an interesting pre-cursor to 2010. Any thought on what Gerard's specific plans are? He made it quite clear that he has change and new directions on his agenda and I am very intruiged about what new things we may see from MSPSN. As luck would have it, I'm at the CompTIA seminar in DC today. This should be an interesting morning. Jason
Doug Geary (not verified)
on Dec 9, 2009
Interesting video Joe. I like the format, and particularly the timeline. Kane's perspective on price and due diligence was interesting, although I would still like to hear the answer to "how many multiples". Doug
Thomas Fox (not verified)
on Dec 9, 2009
Very interesting, particularly after last week's Quest/Packetrap deal. I think MSPSN's acquisition has a lot more day to day relevance to MSPs and our space than does Packetrap (I'd never heard of them before last week). 2010 will be a very interesting year. Tom
Tim Beard (not verified)
on Dec 8, 2009
Very interesting article, Joe. I just hope Amy got what she wanted out of the deal. Knowing her, she probably did. It's good to see her hard work and long hours have paid off (I hope). Tim Beard Networthy Systems
Joe Panettieri (not verified)
on Dec 8, 2009
Hey Lux: I hope all is well. A few follow-up thoughts... 1. Master MSPs: I just don't see that many of them. 2. Are VARs low-hanging fruit for Master MSPs? If that was true, VARs would also be low-hanging fruit for MSP software providers. But not all MSP software providers are doing well. I think certain regions are facing slowing growth because many VARs/MSPs don't know how to push beyond initial customers. There are examples of success, tho. Check in with the Master MSPs I mentioned in the blog entry and I bet they can give you some key nuggets of information about their business performance, etc. 3. Video rough edges: We use standard solutions (Skype, standard webcams, Apple iMovie, etc.). If you need more info just send me an email (joe [at] Best -jp
on Dec 8, 2009
Congratulations, Amy amp; MSPSN. And good wishes, Gerard. I'm also curious to know about other Master MSPs out there. We recently launched a version of our backup software - primarily for Master MSPs. While we're continuing to see a lot of interest from MSPs (who may simply not use the Master MSP features we have), we often wonder if there is really enough traction around the Master MSP space? As you've commented before, even some of the Master MSPs in your annual list(s) are 'claimed Master MSPs' I was also intrigued by your comment: "I’ve also heard reports from some fledgling Master MSPs that it’s too expensive and time consuming to engage VARs as customers". I'd have thought these (VARs becoming MSPs) are 'low hanging fruit' for Master MSPs? One would expect the more 'mature' MSPs to go on their own (rather than through a Master MSP)? Off topic: What rough edges? I thought the video was pretty well done - especially considering it was off a pair of webcams. If you can share what tool(s) you used to make the video; we were thinking of doing similar 'partner interviews'. Thanks Lux
Barbara Dove (not verified)
on Dec 25, 2009
Thanks, Joe, for a great interview. Contratulations to Amy and her team. She's built a great company providing good support and advice to MSPs. We learn much from seeing how MSPs work to build, and how the infrastructure and processes are key to focus and better quality. Working together with many MSPs allows a Master to understand the best practices and improved customer service. I'm finding this an exciting time to be a growing part of this industry.
Joe Panettieri (not verified)
on Dec 25, 2009
Barbara: Never a need to "thank" me for content. I enjoy scanning the reader comments (like yours) as much as I enjoy writing the blogs. -jp
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