MSPs: Buy, Sell or Fold?

Instead of kicking back and relaxing for the holidays, managed service providers and integrators continue to discuss mergers, acquisitions and other potential business combinations. Two deals were announced on Jan. 2, and more are coming.

The latest moves: Only hours after ringing in the New Year, Managed Data Holdings acquired Data393, a leading MSP and data center specialist in Denver. Similarly, Minneapolis-based Corporate Technologies gobbled up Intermountain Technology Group (an offshoot of the former ComputerLand) of Idaho.

More buyouts are certainly coming. During recent managed services conferences hosted by the MSP Alliance, Kaseya, N-able and other industry players, numerous MSPs and VARs held exploratory merger discussions, notes a major Cisco solutions provider in New York.

"In the managed services space, the rich want to get richer by buying each other up," said the Cisco VAR. "And the break-fix VARs see the writing on the wall. Those that don't make the move to managed services are looking for an exit strategy in 2008."

How many MSP combos will occur in 2o08? Our crystal ball isn't that clear. But we'll be sure to track buyouts and combos that occur within the MSPmentor 100 list, which we'll unveil on January 28.

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