The COVID-19 pandemic and its shift to remote work resulted in an increased demand for managed services and cloud-based solutions across virtually every industry. Valued at $152 billion in 2020, the managed services market is thriving and continues to grow. With a CAGR of 11.2%, current predictions estimate that the market will hit $274 billion by 2026.

Managed Service Providers (also known as “MSPs”) are companies that serve as “outsourced IT” departments focused on remote management and maintenance of business IT structure, with on-site support as needed. MSPs can be responsible for troubleshooting hardware and software technical issues to hardware procurement and configuration. They are incorporated widely by businesses small and large, organizations, non-profits, and government agencies.

Industry expert Sean Frank is bullish on Managed Service Providers.

Sean Frank is widely recognized as an industry expert within the Managed Service Provider sector. Sean serves as Chief Investment Officer for Cloud Equity Group, a New York City-based private equity firm that is an active acquirer of MSPs. In 2021 alone, Cloud Equity Group announced the acquisition of four different Managed Service Providers. “Managed Service Providers are well-positioned for accelerated growth as businesses shift their operations remotely,” Sean shared recently. “With remotely accessible operations and ever-changing cyber security and regulatory needs, businesses will find it cost-effective to rely on third-party experts to help them stay ahead of the technological curve.” Sean’s research shows that leveraging a reputable Managed Service Provider can allow businesses to reduce their IT costs by up to 45% while increasing productivity by up to 65%.

MSPs face many challenges while growing their business.

A common challenge faced by many MSP owners is growth. For managed service providers looking to grow their business and strengthen and expand their customer base, Sean recommends a dedicated business development officer who works with existing client relationships and helps create new ones. According to Sean, MSP clients tend to be very “sticky” – once a small business chooses a company to manage its IT infrastructure, it’s rarely easy to switch.

Sean points out that it’s just as important to grow with existing clients as it is to solicit new ones. The “stickiness” of MSP customers compounds the difficulty of finding new customers organically. Growth through inside sales and acquiring competitors is a great way to overcome this obstacle.

The trend towards remote connectivity is increasing the demand for MSPs.

Over the next few years, Cloud Equity Group expects to see the MSP sector’s growth rate continue to accelerate. The past two years have witnessed a significant rise in demand for businesses to adapt to an increasingly remote world. This has led to a spike in demand for MSPs with their unique capabilities to manage workforces, interact with customers, and maintain necessary compliances. Sean predicts these trends will continue as we move towards a remote, cloud-based, digital future.

Meet MSP expert Sean Frank.

Sean Frank is the founder of Cloud Equity Group, an active private equity firm averaging 5-7 distinct transactions per year. Founded in 2013, Cloud Equity Group invests debt and equity in tech-enabled business services, primarily cloud hosting, managed service providers, and digital marketing businesses. Sean serves as the firm’s Chief Investment Officer with oversight of all major investment decisions for the firm.

Sean is a serial entrepreneur with an operational background in web services. He is an active public speaker who has spoken at universities and conferences including Harvard University, the University of Chicago, the Alternative Asset Summit, the Alternative Investment Summit, and many others.

Sean is a proud alum of the University of Pittsburgh, where he earned a B.S. in Finance. He holds the Chartered Financial Analyst designation.

Read more about Cloud Equity Group and founder Sean Frank online.