Channel Futures MSP 501 Winners Triumph in Pivotal Year

For MSPs around the world, 2022 was one of the most pivotal years in the last decade. As the worst of the pandemic ebbed, SMB technology spending flowed. The new legion of hybrid workers embraced the benefits of cloud computing, while their bosses gained a greater appreciation for security solutions. Automation and AI technologies emerged. M&A activity burned white-hot. MSPs who proved their value as essential frontline workers grew even more important to clients as trusted business and technology advisors.

The 2023 Channel Futures MSP 501 ranking of the best managed service providers in the world celebrates the strengths of those MSPs and their abilities to thrive in a tumultuous economy and uncertain business environment.

How the MSP 501 Winners Qualified

For first time, Channel Futures was able to capture just how profitable it is to deliver managed services through the collection of earnings before interest, taxes, depreciation and amortization — better known as EBITDA, a widely used measure of corporate profitability. It is the first time in the history of the Channel Futures MSP 501 such information was collected as past applicants provided gross profit or gross profit margins. With EBITDA being the currency of M&A and considered the most important measurement of bottom-line performance, we added it to this year’s application form — the first for any technology publication.

This year’s survey, like every Channel Futures MSP 501 before it, continues to evolve into much more than a ranking. It uses key data on the state of the MSP market during 2022 to highlight the solutions, sales and marketing strategies; operational improvements; and customer trends that are driving growth today. The following dissection of the results shows how important the last 18 months will be for the future of the IT industry and the monumental role MSPs have in shaping it.

Let us be the first to congratulate this year’s Channel Futures MSP 501 winners and for all they did to make 2022 the technology solutions steppingstone that is launching their clients into the future.

Ensono’s Brian Klingbeil

“2022 was absolutely a pivotal year for that,” said Brian Klingbeil, chief strategy officer at Ensono, which ranked very high again on this year’s Channel Futures MSP 501. “When confronted with extreme circumstances, people will shift. That’s when change takes hold.”

The impact of those changes pushed a constant trend in the channel to new levels.

Meriplex’s Neil Medwed

“In many ways, it forced MSPs to run a better business,” said Neil Medwed, vice president of corporate development and M&A at Meriplex, which jumped into the top 50, from No. 91 last year. “2022 was pivotal in a few different ways. During COVID, the MSP marketplace was relied heavily upon to navigate this new normal. All of a sudden it’s, ‘What do we do? How do we adjust quickly from the in-office workspace to a hybrid workspace?’ That brought a lot of benefits to many MSPs.”

MSPs on this year’s Channel Futures MSP 501 list prove they learned their lessons well.  In its 17^th year, the list ranks companies on annual revenue, which was weighted heavily toward managed and professional services. Judging was also based on EBITDA, recurring revenue and revenue per employee. None of those numbers would exist without the hard work, business acumen, market savvy and technological innovation of every team member that makes up the MSP 501 Class of 2023.

The numbers prove congratulations are in order. Here’s a rundown of the key findings:

• Aggregate Revenue of the 501ers: $13.8 billion.
• Average Revenue Per MSP 501er: $27.5 million for a 25% year-over-year increase; Median: $6.67 million for a 17% increase.
• Average Total Recurring Revenue from Managed Services: $16.7 million, a 33% increase; Median: $4 million, a 21% increase.
• Average EBITDA Profit Margin: 13%.
• EBITDA Growth Year Over Year: 35%.
• Total Employment: 100,571; Median of 32 employees per company
• Business ownership type remains consistent with last year: Minority-owned, women-owned and millennial-owned, 8%; Veteran-owned, 5%.
• 369 of this year’s 501ers are repeat winners from last year.

That’s just scratching the surface of data collected from the survey. During the next several months, Channel Futures will post derivative lists that include top-performing 501ers in security and cloud; women-, veteran- and minority-owned MSPs; breakdowns of the regional players; and a reveal of the NextGen 101ers. Those are the up-and-coming MSPs scoring big with …