The Dutch MSP market remains in a state of flux. While a number of large players are leading the consolidation, we are also seeing more and more small parties stirring.
Every MSP entrepreneur has no doubt been approached several times in the past year by potential buyers or will soon be approached asking if there is interest in joining a larger group.
Well-known large Dutch players include Hallo, Your Online, Futureproof Group and Interstellar, but smaller players such as Smizer, Vooruit and Cubics are also growing fast through acquisitions. Scale seems to be the holy grail in this. Why? Because bigger players can better invest in new technology, talent and marketing.
So as an entrepreneur, how do you ensure that your business is extra attractive to that potential buyer who may soon be knocking on your door? Here are three key trends you can take advantage of as an MSP entrepreneur.
1. Know who your best customers are: the biggest are not always the best
At first glance, a good customer is one that is responsible for a large portion of revenue. However, this does not necessarily mean that this is also the best and most profitable customer. This is because there is often limited insight into the "profitability" of SLA contracts. For example, which customers call a lot? Or which customers require the most capacity from the support desk?
A thorough analysis of, among other things, the ticketing system can be used to determine which customers contribute to sustainable growth and profitability and which ones actually slow the company down.
2. Keeping systems up to date and eliminating legacy
Every MSP has to deal with "legacy. Customers, who have been customers for decades, still run on old systems or use products that are no longer fully supported by the various vendors. This creates a risk when it comes to backup and recovery solutions.
Recently, a large Dutch MSP party was reprimanded by the courts for negligence in this regard, resulting in a substantial fine and reputational damage for the business in question. Therefore, make sure you have a clear strategy for migrating customers to modern platforms and implementing reliable backup and recovery solutions.
3. Meet the curiosity of buyers
Potential buyers have a keen eye for detail and are becoming increasingly curious about all kinds of company data. Getting your financial reports in order is therefore perhaps one of the most valuable action items as an entrepreneur.
Monthly in-depth insight into what is happening in the financial, commercial and operational areas not only gives you as an entrepreneur the opportunity to make timely adjustments to your business, but also provides buyers with the assurance that your business is adequately managed.
In conclusion
Consolidation in the MSP market will continue unabated in the coming year. Whether you as an entrepreneur are considering staying independent for a while or joining a larger group, it is crucial to make your business future-proof and attractive.
