Another year has gone by and it is time to reflect on lessons learned so we may begin to plan for the upcoming year. 2014 was another busy year for managed service providers. There were some notable M&A deals, a few data breaches, and some interesting trends which have developed.
So, let's take a look at a few of the highlights from 2014 and see what we can learn.
Data Breaches & Cyber Threats
2014 may well go into the history books on account of the ferocity and scope of the data breaches that occurred. There were a few celebrity hacks, of course, involving compromising photographs taken from cloud based accounts, but the real damage came in the form of the Sony and Heartbleed attacks.
Heartbleed was disclosed in April 2014 and targeted OpenSSL vulnerabilities. The number of sites affected is not known, although some media sources have indicated that the costs for dealing with the Heartbleed vulnerability is somewhere in the $500 million range. Many MSPs dealt directly with the fallout from Heartbleed and advised their customers on how to mitigate their risks.
Sony recently experienced a devastating cyber attack of its systems, the suspected perpetrators of the hack being North Korea. While the Sony hack involved corporate email, passwords, and other intellectual property, the incident has raised larger issues involving cyber blackmail and its effectiveness. The Sony incident is probably the most effective use of cyber blackmail we've ever experienced and should be a warning to other entities who may be vulnerable to cyber blackmail.
M&A
We still didn't see any "MSP consolidation" in 2014 (for those interested on my views on MSP consolidation click here) but there were a few notable M&A deals worth mentioning. The two biggest deals, which actually didn't get a lot of discussion in the channel involved Best Buy and Staples and the sale of both of their respective MSP business divisions. Best Buy and Staples respectively sold mindSHIFT and Thrive Networks in 2014, marking a reversal of those two company's investments into managed services. Although both companies captured headlines for their acquisition of these marquee MSPs, the sale of the MSP divisions should not be viewed as a failure of the MSP business model, but instead should be seen as further evidence of how complex the MSP profession really is and how it is not so easily commoditized as some may think.
