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 years as a civil engineer, Richard Bova started NetOne Technologies as an IT support company in 2002 and began providing managed services in 2006. NetOne made the MSP 501 in 2018 but COVID was a setback for the Boca Raton, Florida-based MSP. Now, Bova says his self-funded company is on the rebound.

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“COVID certainly put a little damper on us,” said Bova, NetOne’s CEO and technical director. “Clients were all scrambling, and they didn’t know what was next. But that period changed the way we operate and the way they operate. Everybody’s in a hybrid or remote environment, and it’s changed the landscape of the business and how we manage and protect our clients today.”

NetOne's Richard Bova

That change has led to a growth in cloud services and cybersecurity, and NetOne has filled those needs for clients.

“The biggest push really has been movement to the cloud. We’re seeing more and more of a push for that over the last couple of years,” Bova said. “Customers are going serverless. They’re seeing reduction in price as far as capex because they’re not having to replace the server every seven years. And they’re not having to back up like before. If they're up in SharePoint, we're using a SaaS backup, which is much cheaper, and that gives them the flexibility to work from anywhere on anything at any time.”

On the security front, Bova said OneNet has prompted customers to subscribe to its total secure package that includes a security operations center (SOC), cybersecurity awareness training, disaster recovery/backup and more. He expects security to fuel much of NetOne’s growth over the next year.

“Security in general is just going up and up and up, and that is allowing us to really increase our revenues on a monthly recurring revenue basis and our profit margins,” he said.

Bova said OneNet also benefits from what he calls its laser-focus on customer service, which he sees diminishing among competing MSPs.

“I think a lot of companies have lost that,” he said. “Companies that have merged and or been acquired have kind of lost touch with their clients. We hear from a lot of people out there about how fast we respond and resolve things versus some other people that may take days in getting back to customers. That just is something that's unacceptable in our business.”

He said his biggest concern over the next year is economic challenges faced by customers.

“The cost of the cost of everything is going up. That's where the battle is; I just don't think the majority of small and medium businesses are doing as well as they were years ago,” Bova said. “We feel the same way. Our cost of services, our cost of employees, our cost of insurance, our cost of everything, has gone up. We can only raise our prices so much. Our client’s profit margins are shrinking, and where are they cutting back? From their IT budget.”

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 was acquired by 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.