TDS, MSN Communications Deal: The Inside Story on Building a Next Gen MSP
Telephone and Data Systems, Inc. (TDS) acquired MSN Communications, Inc., a technology services provider, for $40 million yesterday. Today MSPmentor spoke with two of the deal’s architects about the reasoning behind the acquisition and what it means for both companies going forward.
TDS Hosted & Managed Services, LLC (TDS HMS) President Phil LaForge told MSPmentor during a phone interview that the company’s goal is to serve the middle market by leveraging existing trusted advisor relationships.
“We’re not pure play cloud, colocation, traditional VAR,” he said. “We want to bring all of those capabilities to the middle market, so we can focus on solving business and IT problems.”
LaForge said to do that the company must focus on customers’ economic and risk profiles to deploy IT effectively.
“Middle market companies are in the process of moving their workloads to the cloud, but we don’t know the time frame for that,” he said.
So TDS employs a trusted advisor strategy and partners with companies already familiar with a local market instead of building a data center and waiting for customers.
MSN Communications CEO Doug Schuck agreed: “There’s nothing better, from my perspective, than to have a good strategy and to have it all in-house. That’s what we’ve finally been able to obtain with the new relationship.”
LaForge said TDS is building “the next generation solution provider. It’s going to take the localness, the trusted, the agility of being in the market for a long time combined with a Fortune 500 balance sheet that can better stake and compete for them in the cloud market.”
Solution providers are a core part of TDS’ route-to-market strategy. “We are active at TDS, but selective,” he said. “We are looking for the best of the best.”
Schuck said he originally wasn’t looking to sell, but after talks with LaForge for two years, he eventually came to the realization that this deal was right for him and the company.
“I am much, much better off to do it this way,” he said. “It will be good, it will be effective, and it will have the financial stability I was looking for.”
With regards to Shuck’s team, he mentioned that he will do everything in his power to expand, not contract. “I look at it as a giant expansion move, not a contraction move,” he said. “It’s absolutely business as usual. I’m staying in my current capacity, all my management team is staying in their current capacity and so forth.”
Are the more acquisitions ahead for TDS? LaForge said the company has an “active development staff” that is exploring the market, specifically looking at solution providers and infrastructure providers that make sense for TDS geographically.