Channel Futures Unveils 2024 MSPs to Watch, an MSP 501 List

When putting together our 2024 MSP 501 list, we found many impressive smaller managed service providers that failed to meet our revenue cutoff to qualify but nevertheless showed great potential and growth.

Therefore, we've created a new list called Channel Futures' "MSPs to Watch," which consists of 55 MSPs we think have a great shot at cracking the MSP 501 in the future. These 55 companies gain most of their revenue from managed services, are high performers in terms of percentage of revenue from recurring revenue, and boast impressive growth forecasts for 2024.

This is different than our MSP Next Generation list, which we’ve modified this year to honor the most innovative MSPs, whether they're on the 501 or not. There is overlap between the MSPs to Watch and Next Generation lists. We will reveal the Next Generation list in September.

What kind of managed service providers make up this MSPs to Watch list? Some of these have made the MSP 501 in the past and are on a trajectory to return. Some are also 2024 Next Generation MSPs. You can find the entire list of MSPs to Watch here.

We’ve highlighted a few examples that show the success and spirit of our MSPs to Watch.

MSPs to Watch: NetOne Technologies

After two decades in the civil engineering industry, Richard Bova launched NetOne Technologies in 2000 as a break-fix IT support company. In 2006, the company transitioned into providing managed services. NetOne achieved recognition by making it onto the MSP 501 list in 2018. However, the COVID-19 pandemic posed significant challenges for the Boca Raton, Florida-based MSP. Despite the setback, Bova is confident that his company is now on the rebound and stronger than ever.

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“COVID certainly put a little damper on us," said Bova, NetOne’s CEO and Technical Director. "Clients were scrambling, unsure of what to expect or how they would survive. That period fundamentally changed how we all operate. Today, most businesses are either hybrid or fully remote, which has transformed how we manage and protect our clients."

NetOne's Richard Bova

This shift has driven increased demand for cloud services and cybersecurity, areas where NetOne has successfully met client needs.

"The biggest push has been towards the cloud," Bova explained. "We’ve handled more migrations in the past couple of years than ever before. Customers are going serverless, reducing capital expenditures by eliminating the need for on-premise servers and backup systems. Some have transitioned to SharePoint with SaaS backup, which is more cost-effective and provides the flexibility to work from anywhere at any time."

On the security front, NetOne has encouraged clients to adopt its comprehensive security package, which includes patch management, managed detection and response, endpoint protection, email filtering, cybersecurity awareness training, and backup/disaster recovery. Bova expects security services to be a significant driver of NetOne's growth in the coming year.

"These layers of security are essential for keeping our clients protected while allowing us to increase our monthly recurring revenue and profit margins," he said.

Bova also emphasized NetOne’s unwavering commitment to customer service, something he feels is diminishing among competitors.

"I think a lot of companies have forgotten how important customer service is," he said. "Many businesses that have merged or been acquired seem to have lost touch with their clients. For us, customer service has and will always be a top priority."

Looking ahead, Bova’s primary concern is the economic challenges faced by customers.

"The cost of everything is rising, and that's where the real struggle lies," he said. "I don't think most small and medium-sized businesses are doing as well as they were in previous years. Everyone is feeling the pinch from increasing costs for rent, employees, insurance, and shrinking budgets."

MSPs to Watch: Plus1 Technology

Marc Umstead started Philadelphia-based Plus1 Technology in 2005, and it serves as a single point of contact for tech support for SMBs. Umstead said Plus1’s practice has grown considerably the past few years around CRM consulting and helping companies with IT consolidation.

Plus1 Technology's Marc Umstead

“If a company says, ‘Hey, we want to go find a new CRM or ERP software,’ we know how to do the process,” said Umstead, Plus 1’s president. “We walk the clients through things you want, things you need, things you absolutely have to have, and then present the options. We go through pricing, scheduling, demos, and then ultimately design, and implement a package to make it successful.”

He said accounting firms – one of its two big verticals along with dental practices – are prime candidates for consolidation projects.

“We see so much consolidation in various industries, including our own,” he said. “And it’s really big in the accounting industry. We know how to transition all the technology from one firm to another, whether it's social media, all the different licensing, all those types of things. We’ve created an offering around just doing that. We’re able to come in and say, ‘Here's everything we have to move and here's how we're going to do it, and how this process needs to take place.’ Because if you forget something, now the guy you need is retired on the beach somewhere. So it’s really something you need to get right the first time.”

Plus1 also offers a cybersecurity package that includes email security, pen testing, compliance, MDR and a SOC. Another area it frequently gets pulled into is AI.

“It seems like every other day now, somebody wants to talk about AI,” Umstead said. “Right now we see smaller use cases in the SMB space. I would say the biggest thing right now is marketing and creating content — sales content or blog post content, those types of things. It has made the ability to create content exponentially easier and faster.”

Whether it’s convincing his SMB customers they need to take cybersecurity seriously or the business impact of AI isn’t that great yet, Umstead said communication is the biggest key to his business.

“Just keeping that line of communication open to just let people know we're watching this or that, we know what’s going on,” he said. “We want to let people sleep at night. I think our major job sometimes is just letting people know that somebody's on top of their stuff.

“The hardest thing in our industry is just keeping up with new threats, AI, any new technology that comes out. So it's just making sure that you're staying ahead of that, making sure you're investing in education for your team. I want to make sure everybody in the company knows what's going on. Clients don't like to be surprised. So if they're emailing you, asking you about something that you haven't already told them, I view that as something we missed, that shouldn't happen.”

MSPs to Watch: CTS Computers

Tyler Wallace began working at CTS Computers as a 14-year-old in 1995, four years after his grandfather started the company. He has run the company as its CEO since 2002, but back then considered himself more of a techie than a businessman. That changed when the 2008 recession hit CTS hard.

“I started realizing, well maybe I have to actually run this thing and not just be a really good IT guy,” he said.

CTS' Tyler Wallace

He changed the business model from break-fix to MSP and made other changes in 2008. Wallace signed on with IT marketing specialist Robin Robins, began talking with other MSP leaders, and in 2018 partnered with The 20 MSP, a hyper aggressive M&A company that has acquired 35 MSPs in the past two years alone.

“I realized they had all the pieces that I need,” Wallace said of The 20 MSP. “Now we have the infrastructure, the SLAs, the tools, standardizations, documentation. Now we can charge people X amount a month, and actually provide them what they need.”

CTS’ managed IT services including advanced cybersecurity services such as pen testing, compliance as a service and other chief security officer (CISO) services.

“Pen testing has been a big thing for us to educate customers about risk,” Wallace said. “That's been a big driver for our growth; it allows us to easily communicate risk in organizations. We find the hidden weakness, and then that creates the blueprint to find what the customer needs. We can tell them, ‘You need compliance, you need cybersecurity.’”

He said he expects cybersecurity to continue to fuel growth in the near future, and CTS is incorporating AI to help automate the process.

“Anyone can come and fix your printer, but cybersecurity is this ever-moving animal that you have to keep in your sights, and we find that we're spending more time increasing people's security posture than we are replacing servers, doing projects, and moving to the cloud,” Wallace said. “The risk of not moving to the cloud is, maybe you just have to keep investing more on-premises. But the risk of not doing cybersecurity right is you have to close your doors.”

Like Bova and NetOne, Wallace said CTS benefits from industry consolidation when it is executed poorly.

“Consolidation of the MSP market is a big thing now,” he said. “So when you're a smaller business like us, you're having to compete against these behemoths. Luckily, we're in partnership with The 20.  I see that a lot of people aren't consolidating well. A lot of prospects are reaching out [to say] 'Hey, my MSP’s being acquired, and I'm scared about what's going to happen.’ And with other MSPs that have been acquired, the prospects are reaching out saying, ‘Hey, service sucks now. I used to love my MSP. Now I don't.’ There's a lot of turmoil.”

Download the complete list of Channel Futures' 2024 MSPs to Watch now.