INDUSTRY VIEW
Continuous improvement
Do not stand still . Use data and analytics to identify areas of improvement and implement continuous processes focused on improving service delivery .
Investors must be able to see a clear pathway to adding value to any new asset . Transformation may even present the opportunity to consider investments in challenged businesses that can be quickly integrated into a roll-up entity to reap higher future returns .
Here are some ways that Smart MSPs deliver on their valuations :
Predictable recurring revenue
One of the most attractive aspects of MSPs for investors is the predictable recurring revenue stream . MSPs typically charge clients a monthly fee for their services , providing a steady stream of revenue . This revenue stream is more predictable than other types of businesses , where it can be volatile and dependent on new customers or projects .
High demand for IT Services
The demand for IT services is on the rise , with businesses of all
Source : Why Smart MSPs deliver greater investor returns , POPX
MSPs need to challenge traditional business by adopting an innovative approach that puts customer needs first . sizes needing help managing their IT infrastructure . MSPs are wellpositioned to meet this demand , offering businesses access to advanced technology and expertise that would be too expensive to manage in-house . As a result , MSPs are becoming an increasingly critical component of many businesses ’ operations , making them an attractive investment for investors .
Strong growth potential
The MSP industry is still relatively new , and there is plenty of room for growth . The demand for IT services is only going to increase as businesses continue to embrace digital transformation , making MSPs an attractive investment opportunity . Additionally , MSPs can expand their services beyond traditional IT services to include cloud computing , cybersecurity , and other advanced technologies , creating even more opportunities for growth .
Recession-proof business model
During times of economic uncertainty , businesses still need to manage their IT infrastructure , and MSPs can provide critical services that can help businesses stay operational . As a result , MSPs are less susceptible to economic downturns than other types of businesses , making them a safer investment .
For institutional investors preparing MSPs in their portfolio for the next stage , achieving transformation is fundamental . Only in this way can an MSP ’ s service operations and the underpinning technology that runs them be viewed as an asset , rather than be flagged as a potential risk during the due diligence process . •
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