After watching many longtime MSPs go through acquisitions following years of service to their customers,
Juan Fernandez, a veteran of the channel industry, had seen enough.
“I feel like a lot of companies that sell to private equity get short-changed and experience culture erosion, then the [owners] have to leave the company and don’t get to stick around,” Fernandez told ChannelE2E. “I see a lot of companies get acquired, and then they go away, and then I see them disappear from the channel.”
The sad demise of these MSPs after their acquisitions, and the lack of respect for their experience, left Fernandez frustrated and imagining a better way for MSP owners to pursue more equitable, rewarding exits from the business when they are ready to take the next step, he said.
With these realities in mind,
Fernandez recently announced the creation of his new company, the MSP Owners Group, which is being organized as a platform of MSPs brought together to be scaled as a group. Other companies have similar missions, including The 20 and Evergreen Services Group, which bring together MSPs to pool resources and plan for business exits and other future options.
But instead of acquisitions and growth fueled by private equity funding, which can lead to decentralized control of the businesses, the MSP Owners Group is using its own private funding to allow MSP owners to make their own choices, whether to sell and retire or chart a new course, he said.
“We are interested in a different model that focuses on culture and legacy and their mutual success and showing what a true exit and those opportunities could look like,” said Fernandez. “This idea is for MSPs that have been in business 10 to 20 years, where the owner may be looking to retire or move on. The motivation here is to give some sort of alternative way of getting out of the business—by selling out, making some money, and having everything be okay, instead of just doing it with private equity.”
How to Have a Future Without Private Equity Funding
“We have enough money, and that is why we are selecting the folks that we work with,” he said. “We’re not looking for everyone, we’re looking for the right people who want to join us, make a difference, and help grow. I’m not saying we’re going to buy 400,000 companies. That’s not realistic. But we don’t need private equity or venture capital to make this happen.”
Also important to the MSP Owners Group is the idea that MSP owners who are thinking about retirement or other options are often interested in keeping the legacies of the companies they started alive—even when someone else may be running them, he said.
“We are trying to create a place where people can come and know their employees are going to be taken care of, and that they can stick around, build community, and share the things that we’re going to go through over the next few years by growing and scaling our businesses,” said Fernandez.
The idea for the organization came to him following years working in the channel industry, he said. “I stuck around through an acquisition or two. There are a lot of lessons to share and learn from each other. And this ramp-up period over the next five years is going to be crazy for MSPs in the channel. So we need a lot more community and support.”
The decision not to accept private equity funding was made “because I do not want anyone telling us what to do. To be honest, they are going to try to drive it toward profitability,” said Fernandez. “And when you’re building something, that’s not always the best approach.”
So far, about 12 MSPs have expressed interest in getting involved with the new organization, he said. Two companies joined from the start, including
ProdigyTeks and
Cool Technology Group, according to Fernandez.
Several analysts who spoke with ChannelE2E said they are intrigued by the company’s strategy.
“We have already seen a significant amount of M&A activity, and according to a recently published
Canalys report on MSP trends, a 45% rise in M&A activity is projected in 2025 alone, as firms seek to scale, specialize, and expand their geographic reach,” said
Shelly Kramer, founder and principal analyst with Kramer & Co. “For owners who want to scale and grow, the MSP Owners Group appears to plan on offering resources to help facilitate that, and that is part of their revenue model.”
For MSP owners who might not want to do what it takes to adapt in an AI-powered future, the MSP Owners Group “provides an opportunity to collaborate, sell an equity stake to the organization, and yet still remain engaged and drawing revenue,” she said. “I see this as being attractive to some owners who are not interested in selling and walking away, which I think is part of what they are leaning on here as a value proposition.”
The organization also appears to extend a lifeline to MSPs who might be struggling to grow, or who may lack the internal capabilities and talent to excel in the new age of automation, even as they want to remain engaged in the business, said Kramer.
“This initiative appears designed to help MSPs grow, avoid acquisition if that is their preference, and remain engaged in their companies if they are not looking to exit completely,” she said. “I think it is probably a timely move.”
Another analyst,
Rob Enderle, principal analyst with Enderle Group, said he also likes the group’s approach.
“This appears to be a collaboration effort to allow MSPs to learn from and help each other. It could be effective in setting common rules, creating a stronger government lobby, and providing better access to talent who may want to relocate to move to job types that don’t exist at their current MSP,” said Enderle. “This is particularly critical during this rise of AI because skills are in short supply, and collaboration could fill these gaps, if the MSPs that join trust each other not to take advantage. The ‘if’ is critical though, because if this is instead used by one or more companies to gain advantage over the others, it will fail.”
