Evergreen’s Mission to Create Regional MSP Powerhouses Is Redefining Managed Services
… 15-20 percent.
“If I had to summarize what we saw it was this: a shift toward recurring revenue, the size and fragmentation of the industry and the ability of somewhat larger players to outperform their peers, and an unending value proposition for millions of end customers,” says Sahyoun.
Upside Aplenty, But Challenges Too
In any investment you make, there are going to be risks, says Sahyoun. There are existential and risks and real-time downsides, he adds.
In the near term, the cost of talent acquisition is holding back a number of growing MSPs. Long-term challenges, including AI or vendor plans to offer desktop-as-a-service threaten MSPs. But for now, Sahyoun thinks MSPs are great investment opportunities.
What sets Evergreen apart, in addition to building a permanent home for its MSP investments, is its preference for regional providers. Six of the 13 acquisitions that Evergreen has made are “platform” providers in that they operate independently within their own regions. They grow their businesses both organically and via acquisition.
“We are not creating a single, national platform like what some other folks have tried to do,” says Sahyoun. That decision was inspired by Evergreen’s parent, Alpine, which made a series of successful investments in regional HVAC and plumbing service providers that had strong local brands and excellent geographic penetration. Forcing them to adopt one national brand or one set of go-to-market processes would not have been the right way to go, Sahyoun says.
“Our thesis is, we want to have 10 – but no more than 10 – different platforms, spread geographically across the United States. There may be a play in a given vertical (we already have an investment into an Apple-focused MSP that is national) but by and large we want regional platforms and build each of those businesses to be really big,” says Sahyoun.
With that as a model, Evergreen continues to look for potential investments. One of those that it found that fits its philosophy is NetGain.
Founded in 1984, NetGain “monitors, manages and maintains the systems and networks that support 10,000 computer users across the region.” The Kentucky-based company provides managed services from a state-of-the-art network operations center that is backed by 85 engineers and technicians who hold 250 technical certifications. In addition to Kentucky, NetGain has offices in Chattanooga, Tennessee; St. Louis; Little Rock, Arkansas; and Cincinnati.
When Evergreen came calling, NetGain executives liked what they heard.
“There will always be some companies that are small. And there will always be companies trying to do what Office Depot is trying to do. What I do think is going to keep happening is …