A Welcome Investment in the Spirit of MSP Community
Long-time community leaders Dave Sobel and Karl Palachuk are joining forces to keep the go-giver mentality that has long defined managed services alive.
Truth be told, I’m not much into the annual prediction list phenomenon, but as long as I’ve made one prognostication recently I might as well make another, extremely easy one: today’s large, private equity-backed MSP rollups will continue to get larger this year.
That’s partly due to dynamics I won’t belabor here after having done so multiple times in the past, partly because interest rates are slowly subsiding, partly because U.S. private equity firms are sitting on some $1 trillion of investible “dry powder,” according to PitchBook, and partly because private equity deal volume will rise 5% this year, according to EY. That’s down from 2025’s projected 8% uptick, but still a move in the positive direction following multiple years of decline.
Like everyone else in the industry, Dave Sobel has noticed the rise of PE-funded mega MSPs too. Unlike many in the industry, he doesn’t hate it.
“I love the PE guys,” insists Sobel (pictured right above), whose Business of Tech podcast I cite regularly. “I hope that they’re wildly successful, because it’s good for the whole space.”
That said, he continues, citing data from ConnectWise’s Service Leadership unit, 81% of MSPs do less than $10 million top line annually at present and 67% do less than $5 million. “Those are small businesses,” Sobel notes, and unlike PE-owned firms with access to centralized services from experienced professionals, they have to learn everything from sales and marketing to billing, hiring, and beyond more or less on their own through trial and frequent error.
Which is pretty much how it worked for everyone in managed services large or small two decades ago when Sobel, an MSP himself at the time, met fellow MSP Karl Palachuk. Both men, though, were big believers in something else I’ve written about here a few times, a defining quality of managed services rarely found in other professions: the power of communities to help people otherwise figuring everything out on their own help each other reach greater heights.
Palachuk, in particular, was already one of the most respected authorities on managed services success when I met him and Sobel both in 2006, and his Managed Services in a Month: Build a Successful, Modern Computer Consulting Business in 30 Days remains a classic some 20 years after its publication. He eventually exited his managed services practice to focus full time on Small Biz Thoughts, the MSP blog he built over time into a sprawling, widely trusted community and educational resource for MSPs.
So it should probably have been less a surprise to me than it was to learn that MSP Radio, Sobel’s media business and Business of Tech’s parent company, has acquired both Small Biz Thoughts and sister organization IT Service Provider University in a deal made public yesterday and percolating for a long time before that.
“We’ve been talking about this for two decades,” Sobel says. “We both have an idea of the way we should serve this community.”
For Palachuk (pictured left above), who will serve as strategic advisor and instructor at MSP Radio during a two-year transition period, the sale opens more room for the work he most loves doing. “I want to write a lot, and I don’t have the time for that when I’m trying to run a community and a training center and all that stuff,” he says.
For Sobel, the deal offers more ways to get the vendor-neutral content he’s been distributing through Business of Tech out to MSPs.
“I do podcasting and video and TikTok and all of those. Karl’s got an incredibly strong newsletter offering and webinar production capability,” Sobel says. “It just all fits together so nicely.”
It also, he adds, represents a “teachable moment” for his MSP audience and Palachuk’s MSP community in that the deal enabled both buyer and seller to scale what they’d grown without accepting a nickel of private capital.
“I went to the bank with a business plan and pitched them my business plan and they gave me a loan,” Sobel explains. “I’m looking at this saying, ‘if you want to do an expansion, you don’t have to take VC money or PE money.’”
For Sobel and Palachuk both though, and from my perspective as well, the really nice thing about this deal is that as enormous volumes of money continue pouring into the construction of massive MSPs with potentially global reach, there will continue to be a place for the long, long tail of smaller providers to keep the go-giver mentality that’s long distinguished the MSP community alive, not to mention a place to get something Sobel says has grown hard to find: “an independent set of thoughts that are not driven by external money factors.”