Midmarket, MSP

Midmarket Managed Services: CWPS Cracks the Code

Jason Waldrop
Jason Waldrop

CWPS, one of the most successful MSPs serving customers in Washington, D.C, has successfully stormed the midmarket and scaled its 150-person business accordingly. The company's growth numbers are staggering -- with recurring revenues jumping 40 percent in 2015, and many of the wins involving customers with 500 to 2000 seats.

CEO Jason Waldrop made a conscious decision to scale CWPS into the midmarket several years ago, plowing money back into the company rather than pursuing a "lifestyle" business. He discovered an underserved market segment along the way.

  • SMB: At the low-end of the market, small businesses are certainly accustomed to IT outsourcing and MSP engagements.
  • Enterprise: Ditto for the enterprise segment, where giants like IBM Global Services, Dell Perot, Verizon and others navigate the industry with a range of services designed for Global 2000 customers.
  • The Midmarket Gap: Here, Waldrop discovered that customers "don't want to go offshore" for outsourcing services, nor are customers big enough to warrant engagements with IBM Global Services and the like. At the same time, most small MSPs aren't equipped to fill the midmarket gap. That's where CWPS enters the picture.

Midmarket Managed Services: The Numbers

CWPS's midmarket pursuit has paid big dividends. Within the $40 million business, about half of the company revenues involve managed services, and the MSP practice is growing about 40 percent per year. "Five years ago a project sale would pull us into a managed services engagement," he says. "But the conversations have flip-flopped. These days, about 80 percent of our first meetings involve IT outsourcing and managed services."

Midmarket customers are driving much of the business growth, with some engagements representing anywhere from $50,000 to $70,000 in MRR (monthly recurring revenue) per customer. "Customers are asking us to take over their help desks, infrastructure and more because they need to focus on applications," Waldrop says.

The outsourcing engagements typically involve complex data center work, unified communications, network management, and even cloud engagements where Office 365, Microsoft Azure, Amazon Web Services and Salesforce.com are increasingly the norm.

Scalable MSP Tools

As part of the growth journey, Waldrop has had to make sure he has the right IT toolsets in place. While Autotask (for PSA) and Kaseya (for RMM) remain cornerstone technologies in the business, CWPS recently swapped out PRTG's infrastructure management platform for LogicMonitor, a more scalable solution that's a better fit for midmarket customer management, he says. That new system is now managing roughly 15,000 nodes.

Can CWPS ever get to a single tool platform -- a single dashboard -- for all of those customers? Waldrop doubts it, suggesting that midmarket complexity demands the proper mix of best-in-class solutions rather than a one-size-fits-all offering.

So what's next? Actually, ChannelE2E plans to learn more about CWPS's business when Waldrop and I potentially catch up at Cisco Partner Summit 2016 in San Diego later this month. We'll be sure to update this article accordingly.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.