Blue Alliance Balances Integration, Independence with M&A

MSP acquisitions are an increasingly common sight in the channel. Either a company will absorb another's assets into its larger operation or it will partner with them and allow them to operate independently.

One larger MSP portfolio claims to seek the best of both worlds. Blue Alliance CEO Nick Recker claims that his company is trying to balance both of these approaches in how it provides resources to its acquisitions.

Blue Alliance earlier this month brought MSP Total Networks under its umbrella. It's the collective's fifth acquisition.

Recker sat down with Channel Futures to discuss Blue Alliance's history, its acquisition strategy and what makes it stand out in the market.

Blue Alliance's Nick Recker

Channel Futures: What's the story behind Blue Alliance?

Nick Recker: I started my journey back in 2002, when I had the privilege of founding an MSP. I didn't know it was an MSP at the time, by the way, didn't know what I was doing, but I later was told I had founded an MSP with a focus on health care needs. In 2013 I launched another business, which was a patient contact center, so not an MSP. That business grew quite a bit. And then in 2017 I started a software company called Patients Inc.

I was getting calls from private equity groups during all of this that wanted to buy my various businesses, and found myself connecting more with the channel. I started approaching friends and colleagues that I'd met over the years about building a portfolio of MSPs. I made our first acquisition in 2021. We've made eight additional acquisitions since, although we've merged a few together that had common interests. We're currently at five MSPs within Blue Alliance's portfolio.

CF: So what exactly is Blue Alliance?

NR: I describe Blue Alliance as an evolution of the MSP acquisition model. There are two models most companies use when it comes to acquisitions. One is totally integrated, where the business that does the acquisition assimilates the business it's buying. The acquired business' brand name becomes affiliated with the master company. The employees all integrate into that business model. On the other end are those with a more disintegrated platform, where the brands operate within an ecosystem but are still independent. This model includes some very well known and respected names like Evergreen and New Charter.

Blue Alliance is an evolution of that model, where our brand operate independently, but there's a lot more collaboration. So we operate with one central back office team, one finance and accounting team and one human resource team. We standardize data governance-wise, so all the MSPs have comparable configurations in their professional services systems. The goal is to have a tighter integration model than has typically been present in platforms where companies keep their brands.

CF: You mentioned merging acquisitions. What does that entail?

NR: MSP acquirers typically merge with a company or let it operate independently. Blue Alliance tries to do both. So it's a little different for us. For example, we recently acquired Total Networks. They came in as a full partner, meaning that their brand will stay the same. Their employees are still Total Networks employees, their customers are going to still do business with Total Networks, but Blue Alliance is going to put horsepower, resources and other elements behind their operations. So I view them as a full partner, but still count them as an acquisition.

CF: Does Blue Alliance specialize in any particular markets?

NR: My personal journey as an entrepreneur was very much health care, and one of our first MSPs was completely focused on health care. But we've partnered with new MSPs, which each have their own origin story and specialization. For example, one of our more recent acquisitions specializes in K-12 content.

CF: What are some of the barriers that you or your portfolio have run into in recent months?

NR: I think the barriers in adopting new technology are pretty universal, and I don't know that it's changed. The barrier there is just helping the customer navigate how many new technologies there are, and I feel like it's been like that for a while. We feel a tremendous responsibility to help be a thought partner with our customers. All of the MSPs in the Blue Alliance family try not to lead with a very sales-focused approach, but we want to lead with sort of a thought-partner approach. By doing that, we first have to understand our clients really, really well to then be able to nurture them along their technological journey. For us, the barrier is always going to be education and getting enough time and access to our customers, to learn about their needs. In the end, we can help them grow their businesses by making sure they're making the right IT investments.