MSPX Creates Platform to Buy and Sell Customer Contracts

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It’s an issue that has plagued many a managed service provider over the years: How do you fire a customer?

After all, MSPs are constantly evaluating their book of business as they iterate their service offering. This can cause certain customers to fall out of the MSPs new model. If the MSP wants to stop offering VoIP, for example, but has four or five contracts that are predominantly VoIP-supported, they don’t have many options. They can either tell that customer that they aren’t going to offer that service anymore and hope for the best, or fire that customer and deal with the lost revenue.

It’s not an ideal situation for anyone. But one new company is trying to solve this problem.

MSPX isn’t even six months old at the time of writing, but the managed service public exchange is already garnering attention for its unique solution. The platform provides a marketplace where MSPs can buy and sell contracts - providing them an opportunity to offload unwanted contracts and buy others that better suit their offerings.

The Inspiration Behind MSPX

Company founder Matt Yesbeck has been working in the MSP sphere for 25 years, joining a managed service provider straight out of college in the 1990s. Since then, Yesbeck has moved around the industry, working his way up to senior level positions.

Eventually, his son Gage Yesbeck followed in his footsteps, joining an MSP and, after five years, he was promoted to director.

It was around this period that the Yesbecks realized that they had recognized the same problem within the industry.

“He started noticing a gap that I had seen in the industry where, as an MSP, when you have a customer or customers that you no longer want to service, there's no good off-ramp for that,” Matt Yesbeck explained to ChannelE2E. “You end up having to just fire the customer and it's not a good look. Both sides lose. And there's just a hard thing to have to do.”

Matt and Gage Yesbeck began working on what would become MSPX in February of 2023. Their vision was to create a platform that would not only streamline the process of offloading unwanted contracts but also facilitate smooth transitions for customers, ensuring that they are not left in the lurch when an MSP decides to make a change. The platform went live in January of 2024, after months of refining the site and pilot testing. Since its launch, MSPX has seen a steady increase in signups, with MSPs eager to take advantage of this innovative solution to a longstanding industry challenge.

Brokers Embrace MSPX: A New Approach to MSP Contract Monetization

While the platform was initially designed for managed service providers, a new type of user quickly made itself apparent. Business brokers, often involved in mergers and acquisitions, saw the potential of MSPX as a valuable tool for their transactions. For these brokers, MSPX offered a way to monetize contracts that might otherwise be lost in deals, providing a smoother transition for both buyers and sellers. This unexpected but welcome uptake by brokers has added another layer of functionality to MSPX, expanding its reach and impact within the industry.

"Brokers are a big thing because they're doing this on a larger scale,” explained Matt Yesbeck.

In many M&A deals involving MSPs, a broker will find an interested buyer who is otherwise turned off by some of the seller’s contracts. This can be problematic because the seller risks losing revenue on these contracts that the buyer doesn't want. 

To address this, brokers can offer to sell these contracts separately or, with MSPX, list them on the marketplace, allowing the sale to proceed smoothly while ensuring the seller is compensated for the contracts that are sold.

“So it helps to not belabor an M&A deal," Matt Yesbeck said.

The Challenges and Growth Ahead For MSPX

For the young platform, their biggest challenge is two-fold: They need more exposure, and they need to keep up with demand.

“As [the contracts] come in, they go out just as quickly,” Matt Yesbeck explains.

This rapid turnover underscores the platform's potential and the industry's appetite for such a service. However, to fully realize its vision and impact, MSPX must continue to raise awareness within the MSP community and attract more sellers to meet the high demand from buyers, according to Matt Yesbeck.

It’s a challenge that he is confident the platform will be able to overcome. Since the beginning, MSPX has garnered interest from across the United States and around the world – in places as far-flung as New Zealand and Dubai. Now, it’s just a matter of expanding the platform to meet that demand.

MSPX’s Business Model

Though the platform is young, it is seeing between six and 12 new MSPs signing up each week. 

The company operates on a subscription-based model. MSPX opted early on to stay out of any transactions, so the company offers different tiers of subscription plans in order to access the platform.

The company also offers a freemium model, where those MSPs and brokers looking to sell can access it for free with various features and services offered as paid upgrades.

The company is also looking to build community amidst what it sees as a fragmented industry, according to Matt Yesbeck.

“The goal is to build a community and to bring awareness far and wide to the MSP industry so that they know that there is a resource above and beyond cold calling or knocking on doors,” he said. “[A place] where you can go and see if there are contracts listed that meet the criteria that you want, that meet your business model. And likewise, if there are contracts you no longer want, instead of firing the customer, you can list that on the marketplace, find an MSP that wants to pick it up, negotiate with that other MSP and come up with a deal.”

Looking to the Future: Building Community

This seems to be the crux of what MSPX is trying to accomplish - building a community where MSPs can come together to help each other and their customers. Matt Yesbeck is the first to admit that this is not a new idea in the world of managed services. 

"We're just trying to do it over a platform that revolves around really the lifeblood of MSPs, which are their contracts,” he said. “You know, and there are many other companies that are you know, doing the community thing and trying to bring the MSP industry together. We're just trying to do it over a platform that revolves around really the lifeblood of MSPs, which are their contracts."

If MSPX succeeds in its mission, it will streamline processes and create a win-win situation for MSPs and their customers.

“It's just much better for the MSP to be able to monetize that on the marketplace and then transition that customer to another MSP who's going to take over right where they left off,” Matt Yebeck explained. “So it's a good feeling all the way around and everybody wins.”