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Coming investments and disruption in the MSP market?

So, two to ponder for the weekend.

First, TechCrunch profiles why private equity is interested in the MSP space.     The reasons we know – quoting the article “ a strong demand trend, low risk of obsolescence, a “sticky” service that attracts long-term customers and high recurring revenues, strong cash flow margins and a relatively “asset-light” business.”

The article posits a number of 40,000 MSPs in the US as of 2019 – implying fragmentation – and that only 30-40% of the market is penetrated by MSPs. 

Which leads me to my second – an interesting open source project coming out of the community itself.     A project called the CyberDrain Improved Partner Portal, or CIPP.  Quoting the announcement:

Microsoft Partners are waiting for Lighthouse, they’re waiting for RMM tools to catch up, or they are using a tool that is not evolving or asking for Global Admins without MFA…

I kind of got sick of this, so these last three weeks I deep dove into M365, into the issues we’ve had and decided to make an open source solution for this. A solution that solves the major gripes we all have with current partner administration. Stuff like creating shared mailboxes or converting them for our managed tenants, or applying a specific set of standards”

Why do we care?

Clearly a hot space…. Which we see from the figures earlier and from the investment interest.    My reason to ponder is where the innovation will come from – there’s some needs, as very well laid out here.   Here’s an MSP effort to fill the gaps in the market – because their existing providers haven’t.   Not an endorsement from me – an observation that this is quite healthy, and I’m excited to see what might come of this because the interesting stuff is not happening in the typical places.  You’re going to have to step out of your comfort zone.  If it’s tried and true… it’s also not disruptive.  And I think this market is ready to see some disruption.