M&As Signal Market Growth

You know a market segment is enjoying growth when it starts to fuel mergers and acquisitions.

M&As, in fact, are a sure-fire indication of mainstream interest in the segment, said analyst Jeff Kaplan, founder and director of Thinkstrategies.

And when it comes to managed services, much of the mainstream attention is coming from telephone companies. Independent MSPs (managed services providers) need look no further than their own backyards to see how telcos are playing the game. Over the past few years, there have been instances of telcos buying MSPs to bring in-house skills or a market presence they coveted.

Channel companies on the prowl for acquisitions Click here to read more.

In fact, 2006 was a busy year. British Telecommunications purchased Counterpane Internet Security, a company that provided managed networked security. AT&T purchased application service provider Usinternetworking, and Verizon has closed the deal with MCI, a company that also had some managed services offerings.

On Dec. 30, 2005, a smaller telco, HickoryTech, completed the acquisition of stand-alone MSP Enventis Telecom.

Chances are, the pace of acquisitions will accelerate, and market observers said they believe one of the managed services platform vendors may soon be part of a merger or an acquisition.