IT and Business Insights for SMB Solution Providers

The 20 Is Going for Growth: Page 2 of 2

The managed services co-op sees a path to becoming a multibillion-dollar behemoth that private equity firms will line up to buy. By Rich Freeman
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THE 20 is entering a “growth phase” aimed at building it into a multibillion-dollar MSP that’s enticing to private equity firms.
A BIG, AGGRESSIVE MARKETING CAMPAIGN targeting SMBs in the U.S. and Canada is a core element of The 20’s growth strategy.
THE BIGGER THE 20 GETS, its CEO believes, the harder it will be for smaller MSPs to compete with it.

A PE Firm’s Dream

In some ways, it’s a curious time for anyone to be chasing growth. Coronavirus infection rates are at all-time highs, employment continues to lag, and business-to-business technology sales through the U.S. channel dipped 4% year over year through the third quarter of 2020, according to NPD. On the other hand, the sudden shift to work-from-home computing has even midsize companies with in-house IT teams signing “co-managed IT” deals with MSPs in mounting numbers.

“You just created 50 networks instead of one, and they just cannot do it with the one or two people that they had before,” Conkle says. “I see a ton of new doors opening up by virtue of what’s going on.”

It takes breadth of services and depth of resources to charge through those doors, though, and MSPs increasingly recognize it. “We’re seeing this incredible, incredible, incredible amount of mergers and acquisitions going on,” observes Conkle, who expects The 20’s own members to begin consolidating soon too. “I think that you’ll start seeing a roll-up inside The 20 in the next five years,” he says.

Private equity investors, who were bullish on managed services before COVID-19’s arrival, are rolling up MSPs too. “Big firms have figured out that there’s really good money in the IT space if it’s done right,” Conkle says.

The “if it’s done right” part is key. According to Conkle, most MSPs struggle at sales and employ inconsistent operational practices. “They buy the same problems over and over,” he says of PE firms. The 20, by contrast, has proven methodologies in place for everything from lead generation to service delivery. “We’re going to be a PE firm’s dream,” Conkle predicts.

And a smaller MSP’s nightmare, he adds. Remote workers with flexible hours often need IT assistance well into the evening. “What happens to that 8-to-5 IT company when that guy needs service after hours?” Conkle asks. “How are you going to compete? You can’t.”

That, as Conkle sees it, may be the most compelling reason of all for channel pros to join The 20. “We know how to market, we know how to sell, and we know how to scale our business super, super fast,” he says. “You’re going to be with us or you’re going to compete against us, because we’re coming.”

About the Author

Rich Freeman's picture

Rich Freeman is ChannelPro's Executive Editor

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