The booming Texas technology sector has seen a rapid increase in local Managed Service Providers (MSPs) being acquired, as private equity firms and larger MSPs are looking to consolidate the market and gain access to new client bases and talent. Austin, in particular, has seen its thriving tech scene become a magnet for businesses hoping to scale their offerings and increase their reach through local MSP acquisition.
In 2024, Austin-based MSP IT Freedom was acquired by global technology outsourcing provider, Thrive. Prior to this, IT Freedom had a small team but a strong local presence, and many of their clients likely chose them for their deep understanding of Austin’s business environment. For firms who find their MSP under acquisition, many worry about the impact this could have on how they receive IT support, and whether they will still receive the same level of personalized, locally-focused service.
For professional service firms, these transitions can be particularly challenging. Law firms using specialized practice management software need IT partners who understand these platforms inside and out. Similarly, CPA firms rely heavily on their IT infrastructure during tax season when demands are high. Any disruption in support or unfamiliarity with these critical systems can directly impact billable hours and client service.
Understanding the Risks for Firms across Texas
Compliance and Security Gaps
If your partnered MSP is acquired, the new owner may lack a full understanding of your business and its IT needs, particularly any specific regulatory requirements relevant to your practice. Documentation and security protocols might change and data handling procedures could be modified during the transition, potentially affecting your firm’s compliance status and even compromising the security of your clients’ data.
For professional services firms, any changes to IT security protocols or data handling procedures during an MSP transition could affect your regulatory compliance and client data protection requirements. This is particularly crucial when handling sensitive client information, financial records, and confidential documents – all of which require consistent, reliable security measures.
IT Service Quality Deterioration
An MSP’s internal culture heavily impacts the quality of support you receive. A new owner may lack a personalized understanding of your firm’s workflow and prioritize ticket closures or profit margins over delivering the customer-centric, solution-oriented service you’ve come to expect. Furthermore, any changes in the MSP support structure could affect their response times during critical business hours.
When IT support quality deteriorates, it directly impacts your firm’s ability to serve clients. System downtime, slower response times, and support staff unfamiliar with professional services operations can all lead to lost billable hours and frustrated clients. This is particularly critical during high-volume periods like tax season for CPAs or court filing deadlines for law firms.
Price Increases and Financial Pressures
New MSP owners prioritising financial returns may hike their prices higher and introduce new fees to enhance their profitability, straining your firm’s budgets and diminishing trust. This is particularly concerning for smaller firms who operate with limited resources and budgets, with many relying heavily on their IT infrastructure to maintain client confidentiality, handle complex workflows and ensure compliance.
It’s Not Always Bad News
An MSP merger or acquisition doesn’t have to spell disaster for your business. In certain cases, firms may find there is a seamless transition and a continuation of high-quality service. Acquisition can expand the MSP’s capabilities and expertise, and your firm may gain access to new resources and advanced tools that can better meet your IT needs. While these acquisitions may bring about many positives, it’s important that businesses remain alert for signs that the MSP’s service quality is declining. Businesses should also proactively manage their relationship with the MSP and ensure any concerns are communicated.
Protecting Your Firm’s IT Services: A Strategic Approach
If you’re facing an MSP acquisition, it’s important to take a proactive approach:
- Evaluate Business Impact
You should review how changes in the MSP’s IT support might affect your billable hours, compliance, and security. Assess how these changes might impact service delivery to your clients. - Communicate Your Needs
Establish your firm’s specific needs, from practice management software support to client portal security. You should also define acceptable response times for different types of issues and outline compliance and security requirements specific to your practice. - Consider Alternative Solutions
If problems persist despite efforts to address them, you may want to explore alternative options for IT support. Consider switching to an MSP with local expertise and a commitment to providing personalized, high-quality service.
Take Action Today
If your MSP has been acquired or you’re concerned about the future of your IT support, reach out to Lighthouse IT today. As a Temple-based MSP serving numerous firms across Austin, Temple and Waco, our approach goes beyond closing tickets; we focus on solving problems, delivering high-quality service and supporting your business growth. We provide:
- Local, dedicated support teams who understand your business
- Expertise in IT requirements across a number of industries
- Proven experience in maintaining security and compliance
- Reliable support when you need it most
Don’t wait for service disruptions to affect your practice. Contact us today and schedule your consultation to discuss how we can support your firm’s success.