Article Thinking of selling your MSP business and getting acquired someday? Start preparing today
By Insight UK / 14 Jan 2022 / Topics: Cloud
By Insight UK / 14 Jan 2022 / Topics: Cloud
Many MSPs stand at a crossroads. Years ago, they built their own data centres from scratch. Nowadays, they offer private cloud solutions to their customers and make good money. Still, past successes are no guarantee for the future. The MSP market is changing rapidly. As a result of the digital transition and new cloud technology, competition is more challenging than ever, and new business models arise.
Customers expect more value for their money. They don’t settle anymore for hosting and routine maintenance. Instead, they want commitment from an IT partner who offers advice and services of all kinds, like cloud migration, security, and cost optimization. They demand maximum scalability and flexibility for a minimum price. Fair enough, but the average MSP doesn’t have the resources and capacity to offer new technical solutions for all these needs.
The constant focus on efficiency and scalability pushes MSPs to team up with well-known high-tech cloud service providers as Google, Microsoft, or Citrix. Instead of running their own data centres and developing their own solutions, they start using and selling external services in the cloud: a total change of focus.
Another trend in the MSP market is consolidation. Small and mid-sized service providers have become a popular target for mergers and acquisition as they usually have a solid long-term customer base and high recurring revenues in a high-demand market. This situation opens up opportunities for MSPs who consider selling their business.
If you consider selling your MSP business, good preparation increases your chance of attracting the right investor and making a good deal. The first step is to clean up your administration and get a good overview of your finances. You need to know what your company is worth, which is also the million-dollar question of potential acquirers. If you can’t provide enough detail, they will easily undervalue your company for the simple reason that buyers don’t want to take risks.
It is not enough to come up with financial information from the past. Acquirers want to determine the future potential for your business. To make a proper assessment, they need to know all about your customers, the services you offer them, your infrastructure, the software that runs on it, and related licensing costs. They are going to worm all kinds of facts and figures out of you to identify new business opportunities and determine a transition strategy for a complete cloud migration. The more potential prospective buyers see for future success, the more eager they become to acquire your business and the better your position to negotiate the sale.
At Insight, we help many MSPs in their transition to the cloud. When they are preparing for acquisition, we provide them with the proper tooling and solutions to gain accurate data insights on their current business and opportunities for future success. By giving MSPs more grip on their processes, we help reduce risks and improve business performance. Even more, we offer advanced tools to make predictions on licensing costs and make detailed forecasts for different cloud migration scenarios. Just what you need to find the best buyer for your MSP.
Contact one of our cloud specialists to find out how we can support you in optimizing your cloud services in line with your goals.
As a multi-vendor software licensing, workload and platform specialist, we can guide you through all stages of your strategic cloud journey with a series of workshops, assessments, services and best practices. From the first exploration of cloud or hybrid opportunities and benefits to support and optimization after migration. No matter where you are in your journey, we help you to find new ways forward and accelerate your business.
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