Staples Unloads MSP Thrive Networks to Telecom Services Player MetTel

Staples is selling Thrive Networks -- its MSP unit featured on CRN's 2014 Managed Service Provider Elite 150 list -- to telecom services company MetTel, the companies said Tuesday.

The purchase will allow MetTel, which is based in New York and has 7,600 customers, to add network management and monitoring, virtualization solutions, data protection and a cloud service to its managed services offering. Financial details of the acquisition were not disclosed.

Thrive Networks, which employs more than two-thirds of its workforce as engineers, was founded in 2000 and currently operates as a unit of Staples. The Tewksbury, Mass., company has 71 employees and is a VMware Enterprise, Dell Premier and Microsoft Gold partner.

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"We are excited to bring Thrive's deep bench of engineering talent to MetTel's customer base," Marshall Aronow, MetTel CEO, said in a statement. "With this partnership, we will be able to offer Thrive's wide range of managed service capabilities to our customers to provide end-to-end networking and managed service solutions."

MetTel, a private company, offers voice, data, wireless and cloud products nationwide. The company has 255 employees and expects to close 2014 with roughly $300 million in revenue, a company spokeswoman said.

Thrive Networks will continue to operate out of Tewksbury and its current management team will be retained, MetTel said in a press release. The deal will offer Thrive Networks access to MetTel's network hubs in California, Illinois, Texas and New York, and MetTel will have access to email, file sharing and data backup through Thrive Networks' cloud service.

Steve Tunney, MetTel's executive vice president of planning and strategy, said the company will continue looking to make acquisitions, partnerships or joint ventures that will allow it to boost its enterprise communications portfolio.

Bob Venero, CEO of Future Tech Enterprise, a Holbrook, N.Y., enterprise IT solution provider, No. 211 on the CRN 2014 Solution Provider 500 list, said he sees the MetTel-Thrive Networks deal as a sign of consolidation in the MSP market.

’The SMB market is flooded with MSPs right now,’ said Venero. ’That SMB MSP market is very diluted right now because anybody can put together an MSP business very quickly.’

Venero said he expects further consolidation in the market over the next year. ’We’re going to see big consolidation in the MSP market going forward,’ he said. ’The good thing about the MSP model is you have clients that are delivering continual revenue so even the small MSPs are attractive targets.’

Further exacerbating the pressure in the MSP market is the aggressive push into the SMB cloud services market by industry behemoths such as Google and Microsoft, said Venero.

In addition, many MSPs serving the SMB space are not doing enough due diligence around IT service-level agreements, which guarantee service levels around uptime and disaster recovery, said Venero.

In fact, Venero said Future Tech recently inked a deal with an SMB customer who had run through three MSPs in the past four years. ’They were willing to pay us more more as an enterprirse provider because of the poor service in the SMB market,’ he said.

Steven Burke contributed to this story.