Early on, the industry was heavily product- and project-based. Back then, we started every month at ground zero, climbing uphill to achieve profitability. Transitioning to a recurring revenue model fundamentally changed the game. Knowing your operational expenses are covered on the first day of the month provides peace of mind that wasn’t possible with the earlier project-based model.
Joining Meriplex: A Vision Realized
After running my own firm for 26 years, I became part of Meriplex in August 2020. That’s when my company, Preferred Technology Solutions, became the second major acquisition under the Meriplex umbrella. Since then, the company has acquired 11 other successful MSPs, growing into a 650-person organization operating across 12 cities.
My decision to join Meriplex was rooted in shared values and ambitions. My vision was to provide value to larger end-user firms in the co-managed space and join a team of high-caliber individuals with diverse talents. This has materialized beyond my expectations.
Navigating the Challenges of Scaling
Growing an MSP is no easy task. Many owners struggle with moving from a product-based focus to a recurring revenue model — and from a smaller, family-owned business to one that is more mature and growth-oriented. These transitions are critical as firms with strong recurring revenue numbers are inherently more valuable.
Leadership plays a key role. Managing an 18-person team differs drastically from managing 650. Leaders must be strong enough to make tough decisions, such as recognizing when someone no longer fits their role as the company expands. Of course, this doesn’t mean that a person isn’t valuable; it simply means that role is no longer right for them.
The Foundations of a Successful MSP
To succeed as an MSP in today’s competitive landscape, customer-centricity is paramount. A culture that emphasizes client success directly drives business success.
Equally important is acknowledging that knowledge is the core product. Continuous training is essential in our fast-evolving industry, yet many organizations fall short in this area.
Finally, it’s critical to use technology and tools to enhance efficiency. Throwing bodies at problems isn’t sustainable; smart tools reduce costs and improve service delivery.
Lessons Learned: Data, Delegation, and Profitability
Looking back at my time as an MSP owner, I would have done many things differently. For instance, I would have leaned heavily on data, using KPIs — not relying on instinct — to drive decisions.
Another area I would have improved: delegation. Titles should come with the authority to act. Failing to grant that authority can stifle growth.
Lastly, I would emphasize optimizing profitability. Even as a lifestyle business, maximum profitability is crucial for long-term success.
Practical Steps for MSPs to Build a Stronger Foundation
To refine your MSP’s operations, start with an honest assessment of strengths and weaknesses. Bringing in outside expertise can offer a clearer picture.
Optimize profitability and efficiency, as these factors enable reinvestment in critical areas. Balance present operations with future planning and map out goals and strategies to achieve them. Engage in peer groups and communities to exchange insights and avoid common pitfalls. Continuous learning and thoughtful decision-making are key to creating a robust foundation for growth.
My journey has taught me that leveraging data, empowering teams, and focusing on profitability are essential to building a successful MSP. The future is bright for MSPs that are willing to adapt, innovate, and invest in their people and processes.
Neil Medwed
Vice president-corporate development and M&A, Meriplex
- Founded: 2001
- Location: Houston
- Number of employees: 650
- Website: meriplex.com
- Company focus: Meriplex is a managed IT and cybersecurity provider that drives business growth through innovative and secure technology solutions.
- Professional memberships: Informa Lifetime Achievement Award 2024, FBI Citizens Academy lifetime member, DEA Citizen’s Academy
- Recommended book: The Go-Giver by Bob Burg and John David Mann
- Favorite part of my job: That I can help shareholders build greater wealth than they could otherwise, help the employees of acquired companies grow their careers by breaking their glass ceilings, and use my vast experience and knowledge to help other business owners avoid mistakes and enhance successes.
- Least favorite part: I am truly living my dream and cannot think of much that I would change. If I had to choose something, I’m an idea and a passion person, not a paperwork person. Luckily, I have teammates that help me there whenever needed.
- What people would be surprised to learn about me: My father was a Holocaust survivor, and I was the first child in my family born after that terrible time. They called me the “Miracle Baby” because it proved that Hitler didn’t win. I guess I was brought into this world for a higher purpose: to make a positive difference in this world. I live each day trying to make that positive difference.
Images: Neil Medwed
