Kam Kaila, Partner and President, IT By Design
Sunny Kaila, CEO, IT By Design
Several hundred MSPs will attend the conference this week Build IT Live 2022 Conferencethat overlooks Manhattan, New York. Big Themes for the Manage Service Provider Event - Hosted by IT by design — will certainly include:
- talent acquisition, development and management;
- Internet security; and
- MSP M&A strategies, among other areas of discussion.
Check this blog every day for official news and chatter in the hallway. Here's the latest...
6. Review of MSP Ratings: We'll be meeting with several M&A insiders to discuss MSP reviews. The context: Within the IT channel, some experts rank MSPs as “recession-proof” because of their predictable monthly recurring revenue. In general, operationally mature MSPs are well positioned to weather a recession. The good news as of July 2022: MSP and MSSP valuations have held up well despite the collapse in Wall Street valuations of SaaS companies. Why is this?
- In general, MSPs and MSSPs have always been valued on the basis of their EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization). Sure, there are additional evaluation metrics. But M&A in the MSP market has been largely a for-profit conversation for more than a decade.
- Meanwhile, until recently, SaaS companies were largely evaluated based on their annual recurring revenue (ARR) -- and many SaaS investors ignored net earnings.
However, the entire managed IT services sector certainly is Not recession proof. The Proof: Even in a healthy economy, around 25 percent of MSPs are balanced or losing money every quarter Service Leadership Inc.a ConnectWise Business. Certainly, these money-losing service providers could face liquidity pressures as their customers reduce the number of employees per user or scale back recurring services.
On the other hand, some experts argue that MSPs can benefit during a recession. The thesis: As medium-sized and large companies scale back their own IT employment, they are more inclined to outsource IT services to MSPs and MSSPs. The thesis makes sense and may give a boost to some high-performing MSPs. But we don't think a recession would trigger a generalized tidal wave of IT outsourcing opportunities.
We collect and share the latest perspectives from the conference.
John Pagliuca, CEO, N-able
5. Cloud Revenue Opportunities...and...: N-capable CEO John Pagliuca and Senior Director David Weeks will describe cloud revenue opportunities. This is quite an interesting session considering Pagliuca rarely takes the stage at third party events. Could N-able and IT By Design explore a deeper relationship? Hmmm…
Rob Rae, SVP, Datto
4. Kaseya-Datto Post Deal: date Senior VP Rob Rae will help MSPs define their cyber resilience strategies. Rae knows his way around a stage and an open mic. We doubt he'll address some of the recent town hall controversies between Kaseya and Datto — but you never know.
3. The extension of services to software: IT By Design is perhaps best known for its talent pool, NOC and helpdesk services, and pure focus on MSP partners. But at last year's event, CEO Sunny Kaila and President Kam Kaila described how the company also develops software. A key example is Team GPS, a cloud-based platform that helps MSPs manage their workforce; work performance and satisfaction; work culture; and general business planning. We'll be looking for updates on those efforts during this year's event.
Kevin Blake, CEO, ICS
ConnectWise VP Arlin Sorensen
2. MSPs and employee ownership: Amid all of MSP's M&A activity, some employees are wondering how they can potentially benefit from company exits. ICS CEO Kevin Blake and ConnectWise VP Arlin Sorensen will provide responses during a discussion on stock plans, stock options and profit sharing.
1. Meet ChannelE2E: Email Joe Panettieri if you might want to meet at the conference. Please include with your email a brief summary of what you may wish to discuss at the event.
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