Accelerating merger and acquisition activity is producing larger and more sophisticated MSPs with more technicians, deeper skills, and better tools than their more modestly-sized competitors. George expects those firms to dominate the managed services space soon.
“There will be a separation in this market, and 80 percent of the revenue is going to be generated by 20 percent of the MSP providers,” he says.
That will be especially true in the country’s 30 largest population centers (aka the “NFL cities”) and the 107 other locales containing 500,000 or more people. Within 30 miles of those “metropolitan statistical areas” (MSAs), George forecasts, big-time MSPs will rule the five most valuable industries: healthcare, financial services, legal, construction, and non-profit/education.
“If [you’re] in one of these geographies and you’re small and you’re focused on these vertical markets, it’s just going to get more difficult,” he predicts. “There’s going to be more and more competition.”
Indeed, there already is, according to Steve Ayers, CEO of CCS Business Solutions Inc., an MSP and Continuum partner in Caton, Ohio. “We’re seeing more and more larger players get into the MSP market,” he says, adding that he’s working hard to keep pace with them.
“We are trying to gain market share in our area rapidly,” Ayers says.
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