Four growth-focused and succesful MSPs are joining forces as the new Iconic IT as of July 1, giving the firm a combined revenue of $25 million,135 employees, and a service area covering three time zones.
The leaders of the four companies—Capstone IT, Rochester, N.Y.; Choose Networks, Wichita, Kan.; Live Consulting, Denver; and Networking Results, Dallas— have been part ConnectWise’s IT Nation Evolve industry peer group (formerly HTG Peer Group) for over four years.
Capstone IT’s co-CEOs Mike Fowler will take on the role of CEO of Iconic IT, which will be headquartered in Dallas, and co-CEO Sitima Fowler will be the executive vice president and general manager for the Rochester geography. Choose Networks’ CEO Chris Hoose will be the vice president of communication and COO for Iconic IT, and COO Nicklas Herrera will become the general manager of the Wichita geography. Live Consulting’s owners, Tony Miller and Nick Nyberg, will become the vice president of technology and vice president of revenue, respectively. And Networking Results’ CEO Jeff Howard will become the VP of experience.
The merger came about as the leaders discussed ways to help each other by sharing resources, which “turned into a discussion about becoming one company,” says Hoose.
It was a unique vetting process. “It's not very often that you get the opportunity to merge with people you know so well,” Hoose explains. “I didn't have to ask for three years of financials. I've seen them every quarter for the last four and a half years. I know where their struggles have been, where they've succeeded. I think we have strengths in different areas across all of the owners, and so it's not very often you get to do something where you have so much information because you've known each other so long.”
Hoose says all four companies are pure managed serivces players and are very similar in size and employee count. Each entity has an equal share of ownership, and will continue to use its local name “for the foreseeable future,” he says. Plus Iconic IT is keepiing all of the four firms’ employees. “We anticipate growth. All four of our organizations have grown significantly over the last four years, double digit growth year over year. We anticipate needing more people as we continue to grow,” Hoose adds.
In addition to the ConnectWise platform, the four MPSs use many of the same tools. And where they don’t, Hoose says it will enable Iconic IT to offer more than one backup solution or firewall. “Certainly where it makes sense in the long run we'll consolidate tool sets but [there's] nothing that's on the immediate horizon that has to be done other than maybe accounting software and some of the back office stuff. But ... from our service delivery, not a lot of changes will need to be made.”
With a national reach, the combined company will be better able to fend off competition as well, Hoose says. “If you look around our industry there's a considerable amount of consolidation. And smaller MSPs are certainly going to have to compete with larger ones. We could either stay one of the smaller ones and wait for someone to enter our markets, or we could utilize the same benefits that the larger companies have with buying power and more experience with more people. We felt like that was in our best interest with where our industry is going.”
Indeed, scale will be increasingly important to MSP success, according to industry leaders like Continuum CEO Michael George. Managed services co-op The 20 is pursuing a similar strategy aimed at national reach.