Skip to main content
SolarWinds MSP
  • Login
  • Support
  • Partnerships
    • Partnerships Overview
    • Solution Provider Program
    • Technology Alliance Program
    • Distributor Program
SolarWinds MSP
  • Products
    • SolarWinds N-central Automate what you need. Tackle complex networks. Try this remote monitoring and management solution built to help maximize efficiency and scale.
    • SolarWinds RMM Start fast. Grow at your own pace. Try this powerful but simple remote monitoring and management solution.
    • SolarWinds EDR Defend against ransomware, zero-day attacks, and evolving online threats with Endpoint Detection and Response
    • SolarWinds Backup Manage data protection for servers, workstations applications, documents and Microsoft 365 from one SaaS dashboard.
    • Mail Protection & Archiving Protect users from email threats and downtime.
    • Password Management Easily adopt and demonstrate best practice password and documentation management workflows.
      • Passportal Demo
    • PSA & Ticketing Manage ticketing, reporting, and billing to increase helpdesk efficiency.
    • Remote Support Help support customers and their devices with remote support tools designed to be fast and powerful.
  • Solutions

    I'm looking for...

    • Security Solutions
    • Monitoring Solutions
    • Efficiency Solutions
  • Resources
    • Blog
    • Webcasts & Events
    • Ask the N-central Experts
    • Daily Live Demos
    • RMM Foundations Training
    • Upcoming Events
    • Upcoming Webcasts
    • Resource Center
    • COVID-19 Resources
    • Resource Library
      • Case Studies
      • Product Information
      • eBooks
      • White Papers
      • Infographics
    • SolarWinds MSP Free Tools
    • GDPR Resource Center
    • Security Resource Center
    • MSP Institute Webinar Series
    • MSP Advice Project
  • About
    • Contact
    • Customer Success
    • Worldwide sales and support
    • Careers
    • Awards and Recognition
    • Get A Quote
    • Newsroom
      • Press Releases
      • In The News
      • Media Contacts
      • COVID-19 Response
    • Leadership Team
    • Legal
      • Cookie Policy
      • Privacy Notice
      • Software Services Agreement
      • Terms of Use
      • Backup Fair Use Policy
    • Security
      • SolarWinds Security Statement
      • Vendor Data Protection Requirements
    • Support
  • IT Departments
  • Contact Sales
    • Get A Quote
    • General Inquiry
  • TRY NOW
    • SolarWinds RMM
    • SolarWinds Backup
    • MSP Manager
    • SolarWinds Passportal
    • SolarWinds N-central
    • SolarWinds Mail Assure
    • SolarWinds Risk Intelligence
    • SolarWinds Take Control
  • Request a Quote
  • Try Now
    • SolarWinds RMM
    • SolarWinds N-central
    • SolarWinds Backup
    • MSP Manager
    • SolarWinds Mail Assure
    • SolarWinds Passportal
    • SolarWinds Risk Intelligence
    • SolarWinds Take Control
Request quote
Filter Blogs
  • Filter by:
  • MSP Business
    • Automation
    • Backup & Disaster Recovery
    • Security-series
    • Best Practices
    • Business
    • Business Growth
    • Business Risk
    • Cloud Computing
    • Customer Service
    • Cybersecurity
    • Cybersecurity Awareness Month
    • Data
    • GDPR
    • Internet of Things
    • IT Support
    • ITSM
    • LOGICcards
    • Machine Learning
    • Mail
    • Managed Services
    • Marketing
    • Mobile
    • Networking
    • Operations
    • Podcast
    • Product
    • PSA
    • Remote Management
    • Research & Trends
    • Risk Intelligence
    • Security
    • Security Vlog
    • Service Desk
    • Services & Support
    • The Head Nerds
    • Tips & Advice
    • Training
Home Blog MSP Business Business Growth When Should You Consider a Merger or Partnership?
Business Growth

When Should You Consider a Merger or Partnership?

By Eric Anthony
16 July, 2019

Mergers and acquisitions (M&As) are becoming more prevalent across the IT services industry. This trend is being seen on both the vendor and customer sides of the market. So, why are so many IT service providers making the leap to acquire or be acquired? What are the benefits? And are there any other options?

The current climate for M&A within the managed services provider (MSP) community is driven by a combination of maturity of the market and healthy profit margins compared to other business models. This is encouraging MSPs who are looking for revenue growth and regional expansion to make that leap through acquisition rather than organic growth. 

In addition, as technology continues to converge, many IT service providers are adding complementary services, such as communications and security. These specialized areas are frequently easier to acquire than to build—there are companies out there that already have a skilled workforce, tested product offering, and established customer base. The other factor fueling M&As is the age of business owners in the market. More than at any other time, we have owners of technology-focused companies who are getting ready to retire. This means there is a greater supply of those companies looking to sell than ever.

But what if acquisition is not an option for you yet? Are there other options? 

The Partnership

While still technically a merger, partnerships can be created without any financial transaction taking place. Each partner receives a percentage ownership of the new entity, equivalent to the value they bring to the partnership. This creates a new business based on the strengths of the two original businesses. This is often seen when two businesses with different services or expertise join forces to form a one-stop shop for their respective customer bases. It is a model that has been common between traditional IT businesses and telecom businesses, especially when getting into VOIP. 

CTA Image

Try SolarWinds RMM today

Get the tools you need to manage, secure, and improve all things IT—all within a single web-based dashboard.

Try It Free

The Joint Venture

A similar relationship can be accomplished through joint ventures. Joint ventures are informal and therefore are easier to start and to stop. The typical joint venture involves little more than marketing to each other’s customers and cross promoting your services. These can be short-term or long-term, but are usually not much more than handshake agreements. 

The Subcontractor

The third option is subcontracting. Some IT service providers are highly focused experts in a specific technology, application, or vertical. Many times, it makes sense to employ these resources on a subcontract basis to expand your capabilities without having to hire a specialist full-time. A prime example of this type of relationship is an MSP and a low-voltage cable installer.

Making your new venture a success

If you do decide to combine efforts with another company, there are some key factors that can help increase your chances of success. First, make sure you have a plan for how the new acquisition or partnership is going to work and communicate that to all employees, vendors, and customers. 

As I have said many times before, setting expectations goes a long way at the beginning of any relationship or initiative. Culture fit is also a big contributor to success, it cannot always be a perfect fit, but it should be evaluated, and differences solved for whenever a combination of two disparate teams is going to take place. 

Another source of friction when merging two companies is the tool sets and back office infrastructure. From the obvious accounting and CRM applications used to run the day-to-day to the line of business applications used in the actual delivery of services. If those systems are the same, there we will be much less work involved in transitioning data, employees, and customers to the systems that will be used going forward. 

The last factor in a smooth transition is minimizing customer disruption. Customers do not care that you are making a change unless it disturbs the status quo for them, especially in a negative way. Take care to lessen the impact on customers and to continue delivering the services as close to the same way you have been. If possible, make any customer-facing changes last, after you have successfully integrated your internal processes and culture.

With mergers and acquisitions becoming commonplace in our industry you owe it to yourself and your business to be prepared should the opportunity arise for you to either acquire or be acquired. In addition, part of your business development plan should always include looking out for beneficial partnerships, even if they are not formal mergers.


Eric Anthony is principal of customer experience at SolarWinds MSP. Before joining SolarWinds, Eric ran his own MSP business for over six years.

You can follow Eric on Twitter at @EricAnthonyMSP

 

Additional reading

Why Integration Is a Critical Component of MSP Growth
How to Scale Your MSP Business to Manage Rapid Growth
Grow your MSP business with strategic alliances and partnerships

 

 

 

 

 

You might also like...
Business

VIDEO: SolarWinds MSP Presents—Pinot With John Pagliuca & Joe Panettieri, Ep. 2

Business Growth

Could Your MSP Be Growing More Quickly? 

Business Growth

From Necessity, to Consolidation, to Transformation

Business Growth

TAP Blog Series: MSP Customer Acquisition Starts With Planning

Business Growth

When to Stop Working in Your Business 

Business Growth

Aligning Your Personal and Business Growth Ambitions

Want to stay up to date?

Get the latest MSP tips, tricks, and ideas sent to your inbox each week.

Loading form....

If the form does not load in a few seconds, it is probably because your browser is using Tracking Protection. This is either an Ad Blocker plug-in or your browser is in private mode. Please allow tracking on this page to request a subscription.

Note: Firefox users may see a shield icon to the left of the URL in the address bar. Click on this to disable tracking protection for this session/site

Recent Posts
  • January 2021 Patch Tuesday: One Actively Exploited Vulnerability and a Few Likely to Be
  • TAP Blog Series: Maximizing Your Service Delivery Opportunity
  • Why Do MSPs Choose SolarWinds Backup? IT Central Station Finds Out
  • Seven Features Remote Assistance Software Should Have
  • TAP Blog Series: Creating Your Automation Strategy—Three Key Components You Must Have in Place
Categories:
  • Security (229)
  • Tips & Advice (122)
  • Best Practices (94)
  • Managed Services (86)
  • Backup & Disaster Recovery (82)
  • Business Growth (75)
  • The Head Nerds (74)
  • IT Support (41)
  • Business (39)
  • Cybersecurity (37)
  • Automation (36)
  • Operations (33)
  • Mail (33)
  • Remote Management (27)
  • ITSM (25)
  • Cloud Computing (21)
  • Networking (21)
  • Data (21)
  • Marketing (14)
  • Product (11)
  • PSA (10)
  • Mobile (4)
  • Risk Intelligence (4)
  • Service Desk (4)
  • Services & Support (4)
  • Internet of Things (3)
  • Customer Service (3)
  • Research & Trends (2)
  • Training (2)
  • GDPR (2)
  • Business Risk (1)
  • LOGICcards (1)
Show moreless
SolarWinds MSP

Products
  • SolarWinds RMM
  • SolarWinds N-central
  • SolarWinds Backup
  • SolarWinds EDR
  • SolarWinds MSP Manager
  • SolarWinds Mail Assure
  • SolarWinds Risk Intelligence
  • SolarWinds Take Control
  • SolarWinds Passportal
  • All Products Use Cases
Solutions
  • Security Solutions
  • Monitoring Solutions
  • Efficiency Solutions
  • Identify which RMM solution is right for me
  • Drive Efficiency with Automation
  • Manage my MSP Business More Efficiently
  • Manage my IT Department More Efficiently
  • Layered Security
  • Cross-Platform Support
  • Data-Driven Insights
About
  • About Us
  • Careers
  • Newsroom
  • Leadership Team
  • Upcoming Events
  • Subscription Preferences
  • SolarWinds
  • SolarWinds Trust Center
  • COVID-19 Response
Support
  • SolarWinds RMM
  • Solarwinds N-central
  • SolarWinds Backup
  • SolarWinds Mail Assure
  • SolarWinds Take Control
  • SolarWinds MSP Manager
  • Solarwinds Risk Intelligence
  • Solarwinds Threat Monitor
  • SolarWinds Passportal
  • SolarWinds Take Control Downloads
  • Backup & Recovery Downloads
  • Service Status

Footer 2

  • Legal Documents
  • Privacy
  • California Privacy Rights
  • Security Information
  • Sitemap

© SolarWinds MSP Canada ULC and SolarWinds MSP UK Ltd.
All Rights Reserved.