2023 Channel Futures' NextGen 101 Winners Embrace Innovation

Innovation means different things to different companies. For some, it’s about implementing cutting-edge technologies or upending a stale business model.  For others, it means doing more with what you have or less with the things that distract from a core focus. Whatever their version, the Channel Futures NextGen 101 winners embraced innovation as they strengthened their companies in the wake of COVID to deliver the solutions clients needed to succeed far into the future. (Click here to see this year’s NextGen 101.)

TaylorWorks’ Tim Taylor

“In 2022, we had to rebuild from the pandemic. Nobody wanted to spend money; there was a lot of shrinkage,” said Tim Taylor, CEO of TaylorWorks, an MSP in the Orlando area, where tourism and the money it generated ground to a halt. “But we’re coming back, and this year we’ll do more than we did before the pandemic.”

The NextGen 101 Class of 2023 all did more than their competitors to land on this year’s list. Nominees for the NextGen 101 were collected from those who applied for the Channel Futures MSP 501 but did not qualify based on their organization’s overall revenue. Given the large number of applicants for the MSP 501, a baseline is established by an organizations’ overall revenue. We then evaluate companies that have high-growth potential for the Next Gen 101 list, which showcases the future of the channel partner market.

Strong Business Practices Equal Great Financials for the NextGen 101

They proved their worth not only through their business practices and technology stacks, but with their numbers. For first time in the history of the awards, Channel Futures captured the profitability of the MSP market by collecting earnings before interest, taxes, depreciation and amortization — better known as EBITDA, a widely used measure of corporate profitability. In the past, applicants provided gross profit or gross profit margins. With EBITDA being the currency of M&A and considered the most important measurement of bottom-line performance, Channel Futures added it to this year’s application form — the first for any technology publication.

This year’s survey, like every Channel Futures MSP 501 and NextGen 101 before it, continues to evolve into much more than a ranking. It uses key data on the state of the MSP market during 2022 to highlight the solutions, sales and marketing strategies; operational improvements; and customer trends that are driving growth today.  In the coming months, Channel Futures will continue mining that data to give the IT industry deeper insights and a better understanding of the current and future states of the channel. Here’s a look at a few of the NextGen101 topline numbers. Stay tuned for more.

NextGen 101: Reinvention Ruled in 2022

Behind every number is a story with reinvention, best practices, and innovative strategies and technologies driving the plot. The Channel Futures NextGen 101ers have their share. TaylorWorks, No. 6 on the list, was about being more flexible in 2022 to rebuild the business and win more clients, even if they were …

… smaller than the MSP typically worked with in the past.

“There are a lot more smaller clients out there than bigger ones,” said Taylor, who also wrote a book, “How to Start and Run a Successful IT Company.” “Ten small clients equal one big one,” he said.

Taylor’s main strategy was to simplify pricing based on four pillars of service: essential IT services; award-winning help desk; managed cybersecurity; and backup and disaster and recovery. Taylor includes clear explanations of the services and a simple breakdown of fees in a brochure titled “TAYLORWORKS: It’s amazing how simple IT can be.” Every stakeholder within the clients can get one.

“It makes everything extremely easy for the customer to understand,” he said. “It makes it easier for people to do business with us.”

ProdigyTeks’ Paco Lebron

Making technology and pricing easier for customers to understand – especially with cybersecurity and AI – is a major theme among this year’s Channel Futures NextGen 101ers. Paco Lebron, CEO of ProdigyTeks in Chicago, said one of the most innovative things his company did was adopt the CIS framework and developing three cybersecurity offerings around it. The packages, in many ways, are all-inclusive. That makes it easier to offer clients more protection than they were willing to pay for in the past, charge them for it, and upsell additional services.

“The customer gets all of these services I normally would have to argue with them to take on,” Lebron said. “We kind of flow from there.”

ProdigyTeks, No. 74 on the list, is one of many NextGen101ers that have embraced the innovations mentioned above. During the last year, the company went “all in” with Microsoft, especially with its Defender security solutions. The challenge ProdigyTek then faced was helping its team, made up of members who live in Mexico and Latin America, understand the complexity of the offerings and communicate it to a multilingual customer base. ProdigyTeks turned to Microsoft’s AI-enhanced tools, including Bing, to generate reports and other communications in multiple languages.

“Not only has it greatly improved our coordination with one another, but it also helps them with the end client. It helps them communicate in conversational English that improves the overall customer experience,” Lebron said. “We’ve been very big on customer experience the last few years. AI helps us get a little bit better with our clients.”

Consulting Clients on Benefits of AI

Lebron also started to host webcasts, webinars and other events to teach fellow MSPs and end users about the benefits of AI. Ashu Bhoot, owner of Orion Network Solutions in the Washington D.C., area, and No. 2 on the NextGen 101 list, also began using ChatGPT and other AI tools last year to improve and speed up basic communications and marketing tasks. The Orion team is now using the tools for increasingly complex tasks, like creating much more customized marketing content than it could in the past.

Orion Network Solutions’ Ashu Bhoot

“It’s that versus a peanut butter spread,” Bhoot said. “We could only generate so much content and it was very time-consuming.”

Orion now holds training sessions with clients to show how they too can use AI to improve efficiencies and effectiveness. Bhoot doesn’t charge his clients for the service. That could change soon.

“We show how they can unleash the power of AI,” he said. “We’re testing the waters in terms of how much value add there is. But it really brings out the customers who realize the value of it.”

Creating efficiencies – both in-house and for clients – continues to be a major theme among the NextGen 101. That’s one of the most important things Stanley Louissaint, CEO of Fluid Designs in New Jersey and No. 8 on the list, continues to focus on.

Fluid Designs’ Stanley Louissaint

“We’re always trying to find a bigger, better, faster way in which to do it. That applies for us and for our clients, while still delivering a higher level of service,” said Louissaint, who runs an incredibly lean shop.  “If I tell you the things I was able to do 20 years ago solo versus what I’m able to do now, it’s just mind-boggling. The more efficient I can be, the more money I can make, while keeping everybody happy at the same time.”

Whether it’s MSP 501ers or NextGen 101ers, making customers happier than they were yesterday is an innovation unto itself. Joshua Liberman, owner of Net Sciences in Albuquerque, New Mexico, and No. 80 on the list, often talks about how bad internet service is in the Albuquerque area. His clients do too. As of last Friday, he had transitioned more than half of his client sites to fiber.

Net Sciences’ Joshua Liberman

“Cable service here is spectacularly inefficient and unreliable,” he said, noting that it had limited the types of solutions and technology he could integrate. “This change has now revamped the landscape for us. We can do all kinds of things that we couldn’t.”

Innovation has always come in different forms, whether it’s a new idea, business practice or technology solution. The Channel Futures NextGen 101 will continue to add to that definition. Keeping watching them.