Buying Was the Easy Part

Almost every company that wants a managed service provider already has one. Barracuda asked two thousand organizations between fifty and two thousand employees whether they hand their security to an MSP, and seventy-three percent already do. For almost any provider, a new client is somebody else’s client.

Winning those accounts one at a time takes a sales motion most MSPs never built. So the industry found another way. There were 466 MSP acquisitions in 2025, roughly twenty percent more than the year before, and private equity was on the buy side of most of them.

That part works. Buying is the easy part. What you own the morning after is a book of clients somebody else priced, sold by an owner who is now your employee and probably will not be for long, running on tools that are not your tools, under contracts that do not look like your contracts. None of that turns into revenue by itself.

The morning after

Start with what you can lose, because it moves faster than anything you can gain.

When a client leaves an MSP, they rarely leave partly. Barracuda found that eighty-nine percent of departing clients also strip out the other IT services bundled alongside security, forty-six percent immediately and forty-two percent later. One relationship goes bad and the whole account unwinds with it.

Now look at what makes a client start shopping in the first place. The most common answer buyers give is that they cannot see evidence their provider has the expertise and the round-the-clock coverage they were sold. Forty-five percent named that.

Put those two together and the integration risk is obvious. The months right after close are exactly when service gets shaky, when the person who used to answer the phone stops answering it, and when the client cannot see who is minding the store. Dave Sobel described the sequence plainly: “Response times that used to be personal become ticketed. The owner who knew every client by name is now a regional director, or gone.”

That is not a service problem. It is a revenue problem wearing a service problem’s clothes, and it lands in the exact quarter the model assumed you would be selling more.

Two ways to do it, and both are defensible

The industry has settled into two camps, and both say so publicly.

Evergreen Services Group leaves the acquired business alone on purpose. Sydney Hockett, who runs their M&A, put it directly: “We don’t integrate and roll up our businesses. We retain the brands and teams.” On technology: “We’re not mandating solutions, tech stack, things like that.”

Thrive does the opposite and is just as blunt. “We are not an aggregator, we’re a true integrator.” Their stated timeline is twelve months to move an acquired firm onto the platform’s service management system, its playbooks, and its sales and delivery process.

Both are real strategies. The first protects the client relationship and gives up the cost savings and the cross-sell. The second buys those and pays for them in disruption. What is not a strategy is doing neither on purpose, which is what happens when nobody owns the decision and the acquired firm simply drifts.

Russ Reeder, who runs XTIUM, described where drift ends up: “When you grow through acquisition, you have all these systems and all these technologies, and that part is difficult. They haven’t implemented new, scalable financial systems. They haven’t consolidated the tools on the back end, and there’s just so much tech debt that they are just waiting to pass on to the next owner.”

Where the revenue actually is

The sponsor’s case for buying small MSPs is that they are underpriced and under-secured, and that a platform can fix both. That case is mostly right, and it deserves to be stated more precisely than it usually is.

Underpriced is the easiest to verify. Ninety-five percent of MSPs use contracts. Nine percent have an automatic price increase written into them. Most of the rest review price by hand once a year, if they get to it. Buy a firm like that and you have bought a book that has been drifting below market for years, not because the owner was generous but because raising price was never anybody’s job.

Under-secured is where the client will actually pay. Ninety-two percent of MSP clients say they would pay more for help integrating their security tools, and around seventy percent will absorb an increase of up to ten or twenty-five percent for services they want.

But read the same survey’s list of reasons clients leave and the trap shows up. Cost increases without added value, and a competitor offering better security, sit at exactly the same height. Thirty-eight percent each. The lever that raises revenue and the lever that loses the account are the same lever pointed in different directions, and what separates them is whether the client can see what changed before the invoice changes.

Which gives you the order of operations. Fix the service and prove it. Then attach what the client is missing. Then price the whole thing. A platform that reprices in the first ninety days is collecting on trust it has not earned yet, in the one quarter when the client is already looking for a reason to leave.

Nobody keeps score

Here is the part that should bother a buyer most.

None of this is measured. There is no published figure for how many clients an acquired MSP loses in its first year under new ownership. There is no published cross-sell attainment rate for any platform. There is no evidence-based integration timeline either; every hundred-day plan in this category is an advisor’s opinion with nothing behind it. I went looking for all three. They do not exist.

The growth number itself is barely more available. Evergreen’s co-founder told CRN in February that the firm grew roughly thirty to forty percent last year with a double-digit organic piece, which is more than anyone else offers and is still a founder talking to a trade magazine, with no method attached. The industry’s own benchmark reported that MSP revenue grew 9.6 percent last year without once using the word organic.

An industry running tens of billions of dollars of consolidation has no scoreboard for whether the consolidation is working.

The scoreboard

So build one. Four numbers, reported monthly, none of which requires an acquisition to produce.

Same-store revenue. Take the clients owned at the start of the year, set aside everything bought since, and compare what they spend now against what they spent then. It is the only number that says whether the revenue engine runs.

Retention inside each acquired book, tracked on its own for at least eight quarters after close. Blended retention hides the exact thing you are trying to see.

What the acquired base has bought since close. A platform that has done twenty deals and sold nothing new into any of them has bought twenty companies and one revenue engine.

Price on renewal, kept separate from price on new business. Those are two different businesses and an average hides which one is sick.

The market has proven it can buy. The harder claim, and the one almost nobody in this industry can currently make, is that a platform can grow what it already owns. The number that would settle it costs nothing to produce, and nobody publishes it.