According to Channel Futures’ Partner Market Outlook Q2 survey, MSPs are confident in the health of the IT channel and the US economy, with cybersecurity sales expected to remain strong. Confidence in the IT industry’s health was good, with 46% of MSPs reporting strong confidence. About 6% of respondents said in-house use of AI increased more than 50% in Q2, 18% an 11% to 20% increase, 28% a 1% to 10% increase, and 22% said they didn’t use the technology.
Channel E2E spoke with Abe Garver, who indicates the MSP and MSSP M&A market is experiencing high demand from private equity buyers, but there is a shortage of acquisition-ready providers. High wages have impacted MSP EBITDA, and higher interest rates have made it difficult for investors to find the right investment. PE firms are looking for ever-bigger MSP platforms to invest in and paying cash for deals while looking to add leverage later. Garver cites that MSPs should consider a merger of equals and rising prices to increase valuation and get businesses ready for sale.
Hey, good news, right? High confidence, increasing customer demand, and viability on the top end for those ready to sell. Even if you’re not considering selling your business, building to be prepared to sell is smart.