Node4 tweaks M&A strategy to work with market shifts, MSP tells CRN
Two Node4 directors chatted to CRN following its third acquisition in 18 months
Node4 is having to change with the times as the market shifts following the impact of the Covid-19 pandemic and current inflationary pressures.
The Derby-based MSP snapped up ThreeTwoFour earlier this year.
Paul Bryce, managing director, and Mark Cox, director of M&A, spoke to CRN about the reasons behind Node4's third M&A move in 18 months
"It had been in the works for a while. I've been at Node4 for about 18 months now. As I joined, cybersecurity was top of the list in terms of priorities to look at both organically through M&A," says Cox.
"We were subscale compared to the market opportunity in terms of our staffing and our capability in that area, so it was a priority for a long time.
"It's a nice complement to what we have in terms of cybersecurity which is more of a technology, platform-based offering and a managed services element. They have a consultative-led offering.
"I think it puts us squarely into consulting-led conversations with enterprise clients."
Historically, Node hasn't been afraid to splash the cash on an acquisition, making ten deals in about ten years, most recently snapping up the likes of risual and Tisski prior to ThreeTwoFour.
Lifting the lid on how the MSP's M&A game plan has changed over time, Cox reveals it's not all about growth, but rather strategy.
"The M&A strategy has not just been about buy and scale. It's always been about adding capability and this is a new capability as well for us," he says.
"The last 18 months we've done three quite large deals. I think we have built quite a considerable platform now, and I think the future M&A strategy will be to look to tuck into particular areas that we'd want to bolster in terms of capability around data, different pockets of Microsoft skills where we think there's more opportunity."
Bryce emphasises Cox's point around strategic growth, sharing what Node4 wants out of a deal.
"It's more about is it complementary? Does it give us access to a different market? Does it add a technology area that we see as an opportunity or want to enhance what we're doing? Or it might be a skill set of people."
Keep reading to hear more on Node4's growth strategy and how it's dealing with market changes...
Node4 tweaks M&A strategy to work with market shifts, MSP tells CRN
Two Node4 directors chatted to CRN following its third acquisition in 18 months
Node4's priorities for 2023
Having built up its platform offering, Bryce states this is now his top priority.
"We now have a base of over 1,800 clients," he says.
"It's very much about making sure we have a joined up story to tell, a joined up message that we communicate to the market in terms of what we're doing.
"That feeds into the other priority around growth. We need to continue to grow but to grow in the right way."
Bryce adds Node4 is trying to build a sustainable business that is here for the long run.
"And then the other thing that we're always mindful of is scale. Three years ago we were 450 people as an organisation.
"We don't want to lose sight of the things that made us what we are today.
"That can be a little bit difficult sometimes when we get more people in the mix, but in terms of delivering that personal approach, particularly working with the channel, working alongside them to enable and empower them to deliver some of the solutions and technology areas that we have expertise in but that they might not have in."
Node4 tweaks M&A strategy to work with market shifts, MSP tells CRN
Two Node4 directors chatted to CRN following its third acquisition in 18 months
Node4's growth strategy
Bryce opens up about how his company is dealing with a shift in the market on top of a change in the way that people engage with the Node4 business.
"In our early days we were very much a true technology provider. We loved talking about tech, engaged with an audience who understood technology and wanted to talk about all the speeds and feeds and throughputs and all that sort of stuff.
"But the world's changed in the sense that technology is such a significant investment at board level, people are wanting to understand what and how technology is going to support that organisation's goals."
The Node4 MD reveals the MSP's interactions have switched to become more about understanding people's strategic goals and then applying technology to help them achieve those aims.
"A key part of the growth strategy is the way that we're engaging and communicating the message we've got. It's also about picking up people earlier in the journey.
"One of the reasons for the ThreeTwoFour acquisitions was around that consultative approach, so that we can credibly go into a boardroom and have a dialogue that we maybe wouldn't be able to have before."