**Editor's Note: Click here for the list of the companies that comprise the Channel Futures 2018 MSP 501.**
Imagine you’re a top 50 MSP 501 company that caters to financial services firms that need exacting vertical market expertise, comprehensive insights on regulatory compliance and superior technological integration and development skills.
What do you think would be the fastest growing part of your business today?
“Over the last 36 months, we have seen threats escalating at nearly biblical proportions. In 2016 and 2017, everyone talked about cybersecurity, but no one did much about it from an IT budgeting perspective,” says Thrive CEO Rob Stephenson. “I think over the last 12 months, CEOs, CFOs [and] CIOs have begun to say, ‘Gee, this could be the single biggest threat that is facing our business. If we don’t make appropriate investments [to fix,] we are crazy.’”
Thrive is only too happy to accommodate them.
If you’re not familiar with Thrive, here’s some background. The Foxborough, Massachusetts, company is an MSP with a vertical market, geographic and customer-segment focus. Thrive provides outsourced IT support and services to midsize enterprise customers that focus on financial services in New England and the mid-Atlantic. More than half of Thrive's client revenue comes from private-equity companies, hedge funds, venture capitalists and alternative-investment organizations.
Where Thrive really shines is the sizable and profitable market sweet spot that lives between the SMB space and the Fortune 500 enterprise segment. Between these two distinct customer segments is a vast opportunity known as the midsize enterprise market, where hundreds of billions of dollars information and telecommunications (ICT) goods and services are up for grabs annually. These customer organizations, which typically employ between 100 and 2,000 employees, have regulatory needs, technological ambitions and cybersecurity exposure, among other things.
While many smaller, local MSPs can't meet their digital-transformation ambitions, numerous global providers can't affordably service their needs. But Thrive, and companies like it, can.
To make the most of its opportunity, Thrive is building out a new kind of organization. This is a purpose-built technology services provider that offers all the capabilities of a large, global services provider and the customer intimacy of a local IT outsourcer. Thrive today offers everything from hosting to DevOps to managed services to advanced security. The company’s go-to-market strategy is underpinned by choice acquisitions, clever financing and hard-fought lessons.
Recall, Thrive has been acquired by Staples (2006), purchased by telecom provider MetTel (2014) and bought by M/C Partners (2016).
“After scratching around and trying to define its distinct market proposition, Thrive has found its stride and then some,” says Jim Lippie, general manager of cloud computing at Kaseya. Between 2005 and 2012, Lippie served as president and CEO of Thrive, which is an important Kaseya partner today.
“I don’t think you could have picked a better executive to run Thrive than Stephenson,” says Lippie. “Rob has brought vision, process excellence and industry support to the company.”
Among other things, Stephenson, who has been with the company since 2015, has helped refine Thrive’s go-to-market strategy and complete select acquisitions. Last October, Thrive bought Precision IT of New York, which gave it a much larger footprint in the nation’s financial-services capital. Then in April of this year, Thrive purchased BizCompass of Maine.
In July, Thrive’s chief investor, M/C Partners, acquired InfoHedge, a leading financial-services technology provider that is focused on private cloud and managed services. Based in New York, InfoHedge will become a separate division within Thrive, providing Thrive customers application hosting services and geographic diversity.
“The opportunity for InfoHedge’s customers to take advantage of Thrive’s unbundled, next-generation managed services and our clients to have access to the InfoHedge hosted platform is a powerful story for the marketplace and a strong motivator behind the deal,” says Thrive.
Since the deal was announced, inquiries have begun pouring in. Customers, Stephenson says, want a trusted hosted platform with specific application capabilities and rock-solid security.
The latter is key to the company’s value proposition. In the last year or so, 30-40 percent of new bookings at Thrive have been cybersecurity-related. Previously, no more than 10-20 percent of annual new bookings were security-related, says Stephenson.
Thrive is growing at double-digit rates and increasing its influence within target accounts, which aren’t tempted by the price-oriented come-ons of small companies or the global capabilities of larger providers.
“This is the single best IT economy [for midsize MSPs] I have seen since 1996. There’s not even a close second,” says Stephenson. Thrive’s investment in security is a big reason why.
In addition to partnering with Fortinet and other security-platform companies, Thrive now offers SIEM and other capabilities. Internally, it has almost doubled the number of security personnel that it employs. What's more, it will likely double the size of its security team once more in the second half of 2018.
In terms of vendor partners, Thrive is getting closer with AlertLogic and Artic Wolf, which offers customers a full-fledged security operation center (SOC) complete with 24x7 “eyes on glass” support.
Customers that want full-service, name-brand capabilities can secure services from Alert Logic. For those that don't need that level of support, Thrive offers another level of SIEM services based on the Fortinet platform. (The former offers complete proactive response and incident management while the latter provides reporting and recording capabilities.)
In addition to its investments into security, Thrive is now developing its own IP. It has a DevOps team that specializes in developing solutions in SQL and SharePoint for its Microsoft customers. And its InfoHedge business unit has a team that develops solutions and applications for customers in the financial-services industry using Geneva, Eze and other platforms.
With its security, vertical-industry and technology portfolios taking shape, Thrive looks to expand geographically where possible. Thanks to choice acquisitions, Thrive can now cater to mid-level clients from Boston, New York, Philadelphia and beyond. It's also expanding to Chicago, San Francisco and other metropolitan areas where it has existing clients and believes it can win new business. It’s value proposition in places where it isn’t widely known? Thrive has the proven technology expertise, vertical-industry knowledge, economies of scale and industry relationships that other midmarket providers simply don't have.
“Our value proposition for the next three-to-five years is simply going to be working with clients to help them develop a cohesive, cybersecure, compliance-driven cloud strategy,” says Stephenson. “This is at least two-thirds of what our sales teams are working on with clients today.”
To make its plans come to fruition, Thrive is looking to make its business more agile and efficient. To that end, it is simultaneously investing into the ServiceNow platform and AI-enabled innovations from CrushBank and others.
“There is a certain class of customers that are going to be very attracted to us because the big guys that have those capabilities don’t also have the flexibility and price points that work for [midmarket] customers, while the smaller providers don’t have a full SOC behind them or a partner that has its own developmental capabilities,” says Stephenson.
The in-between, at least in this instance, could be the sweetest destination of all.
Editor's note: A previous version of this story misidentified Thrive's corporate headquarters. The company is based in Foxborough, Massachusetts.