The Doyle Report: Consolidation Continues as Two Top MSP 501 Companies Join Forces

The Doyle Report: Consolidation Continues as Two Top MSP 501 Companies Join Forces

Union between Thrive Networks and Corporate IT Solutions is another indication that process excellence, customer reach and technological expertise are keys to thriving in today’s fast-moving market

Two top MSP 501 companies are joining forces to improve their process excellence, customer reach and technological expertise. The two companies, Corporate IT Solutions of Norwood, Mass., and Thrive Networks of Tewksbury, Mass., are No.s 91 and 85 on the 2016 MSP 501 list, respectively. Funding the deal is M/C Partners of Boston, which is new the MSP market though has several investments in technology services companies including CoreLink and Ensono.

The combined companies will go to market under the direction of newly named CEO Rob Stephenson and, perhaps fittingly, under the “Thrive” brand.

The deal will create one of the most powerful and scalable MSPs serving the Northeast region of the United States. Insiders say the two companies complement one another in many ways. They have little customer overlap and similar customer satisfaction standards. What is more, both target mid-market customers, offer a broad array of managed services and have complementary technology portfolios and skillsets. Specifically, Corporate IT Solutions is a Cisco, Dell, Microsoft and Citrix partner that offers helpdesk support, managed server solutions, network monitoring and remote backup while Thrive is a Microsoft, Cisco and VMware partner that provides IT consulting, managed services, dedicated hosting and hosted file sharing.

The deal resembles other mergers that have occurred in 2016. Throughout the year, we have witnessed several mergers that have united similar-sized companies to achieve greater scale, improved operations and deeper expertise. What this means for other companies is this: sooner or later you’re going to come up against a regional powerhouse with deep sales experience, proven technological expertise and very aggressive pricing. (In addition to rampant consolidation, M&A activity throughout the year has also contributed to increased commoditization.)

In addition to aggressive pricing, these newly formed super regionals are also leading with assertive branding. While it will take some time (and considerable energy) to pry customers away from smaller, local providers, the latter will have to step up and provide more than local hand-holding to mid-market accounts if they want to hold onto them.

As for Thrive, it has new momentum, funding and talent. The combination offers tantalizing possibilities. While it may take some time for it to streamline operations, achieve economies of scale and hone its go-to-market strategy, it has the leadership to achieve these objectives. In addition to Stephenson, Thrive will also be led by Michael Cook, the president and CEO of Corporate IT Solutions. Cook has agreed to stay on and serve as a managing partner and board member at Thrive. As for Stephenson, he’s already familiar with the company after serving as an advisor on behalf of Thrive’s former owner, Manhattan Telecommunications Corporation (MetTel), which will remain as a wholesale partner for Thrive, according to the newly combined company.


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