Managed Services: HoundDog Acquired, Who's Next?

msp-industry-acquisitions

First, some background on the GFI-HoundDog deal. According to a GFI press release:

GFI assists network administrators with network security, content security and messaging solutions. The company has offices in the US, Malta, UK, Hong Kong and Australia. The GFI ecosystem includes 200,000 installations worldwide and more than 10,000 channel partners, the company says.

Meanwhile, HoundDog Technology Ltd. was established in early 2003. The company’s customer base includes more than  1,700 VARs, Managed Service Providers (MSPs) and independent IT support companies.

I’m double-checking, but I don’t believe financial terms of the HoundDog-GFI deal were disclosed.

The Bigger Picture

I don’t believe the GFI-HoundDog deal is an isolated event. If you piece together a few independent nuggets of information you begin to see the bigger picture — which indicates that we’re poised for accelerated MSP software industry consolidation.

Let’s start with an industry titan. A well-placed source tells me Hewlett-Packard has been on an MSP software fishing expedition, trying to reel in potential acquisitions at deflated market prices. But HP’s efforts have cooled in recent weeks as the stock market has recovered.

Also of note:

Now, the clinchers: In May 2009, I heard from a venture capitalist looking to perhaps roll up several MSP software companies into a single entity. Fast forward to July 2009, and I’ve heard from three separate venture capitalists looking to make moves in the MSP markets.

Please note: I am NOT suggesting that all MSP software providers are performing well. Some may sell-out from a position of strength. Some may exit because of financial weakness.

Either way, get your financial records in order. Consolidation isn’t coming. It’s here.

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