As we begin to wind down a tumultuous year, we need to look back at 2020 and ask ourselves whether investments into the managed services profession were negatively impacted this year due to the global pandemic. MSPs were affected by the pandemic, just like most businesses worldwide, but some fascinating trends emerging should bode well for the future of the profession. Let's take a closer look.
Work From Home in 2020
It is worth repeating that the rapid transition to work from home (WFH) had a significant positive impact on the global MSP community. While we know that break/fix and reactive IT companies took a financial hit this year, we also know that MSPs saw at best a stabilization of their business if not modest growth throughout Q2 2020.
Managed Services is Mission Critical
Despite many attempts to shut down commerce during the pandemic, MSPs were deemed essential businesses in many areas throughout the world. It is not difficult to understand why MSPs were considered mission-critical in helping so many other organizations survive the pandemic shutdowns.
Stock Market Uncertainty
Global stock markets were rattled through much of the 2nd quarter of 2020. Uncertainty about the pandemic, the recovery, and vaccines, all weighed on investors as they searched for safe places for their investments.
Private equity Targets MSPs
This year, stock market uncertainty, combined with the undeniable surge in managed services growth, has not been lost on the private equity community. Many MSPs have been acquired this year, often fueled by PE investments.
While we do not yet see the "roll-up" frenzy we've seen in previous years, the M&A activity is far more logical and precise. Gone are the days of bulk acquisitions with little thought of integration or efficiency.
Datto IPO
Seeing private equity interest in MSPs is excellent news for our profession. So is seeing an MSP platform go public. Datto's IPO has brought significant positive attention to investors worldwide and will likely create many new MSP investors in the future.
We have more work to do in defeating this pandemic. But, MSPs will continue to play a role in helping people and businesses survive the economic challenges caused by COVID-19. These factors will further fuel the interest in managed services sector investments for the foreseeable future.
