Buyout: MSP Services Network Acquired

MSP 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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