Cloud Pushes IT Services Firms Into M&A Crosshairs

Additionally, managed services firms with strong application maintenance and cloud integration capabilities -- particularly those that specialize in an industry – are in strong positions. Although private equity has mostly eschewed traditional IT services companies given the project nature of their revenues, managed services firms -- with their recurring and predictable revenue models -- fit the investment theses of many private equity groups. As a result, with many managed services providers maturing and growing alongside this changing market, expect to see increased activity from both private equity and strategic acquirers for vendors with capabilities in application development and maintenance, managed security services, managed storage, backup, disaster recovery, managed VoIP, mobile device management and remote monitoring, among other service offerings.

Is your business exploring a change in ownership or an injection of outside investment? Focus on how your company has adapted to this new landscape and, most importantly, how you continue to capitalize on its perpetual evolution.