Mergers, Acquisitions, and Strategic Differentiation

20 Mar Navigating MSSP Growth: Mergers, Acquisitions, and Strategic Differentiation

The Rise of Mergers and Acquisitions in the MSP and MSSP Industry

– Steve Garrison, Senior Vice President of Marketing, Stellar Cyber

San Jose, Calif. – Mar. 20, 2025

It’s an exciting time for service providers, with a lot of merger and acquisition activity among MSPs and MSSPs. How should providers navigate this landscape? For some insights, Stellar Cyber’s SVP of Marketing, Steve Garrison, spoke with Jeff Hill, Global MSSP Practice Leader at Stellar Cyber.

Steve: Why are we seeing service provider growth and consolidation at the same time?

Jeff: Many organizations are recognizing that they’re very good at some things, and less good at others, and the industry overall has recognized the need for service providers to augment what they’re doing in terms of cybersecurity. I think we’re seeing increased M&A activity because organizations are seeing an opportunity to grow – maybe one group is really good at cybersecurity, while another is a great fit at providing services.  Joining forces is a really good way for both organizations to expand and differentiate themselves. I also think these organizations are taking an opportunity to clean house with their technology – to rationalize all the different tools they’ve acquired over the years and make sure they’re optimizing costs while improving profitability. When our customers see an opportunity to merge with other companies, Stellar Cyber can help them with technology rationalization and optimizing their profitability.

Steve:  Are you suggesting there are different ways to grow, by bringing together best-of-breed practices via a merger as well as bringing together different parts of your stack?

Jeff: Yes. When organizations recognize they’re good at some things and not others, merging is a way for them to remain competitive in a market that’s asking for a broader range of services. For example, some organizations have decided they no longer want to offer managed services, but want to focus on their advisory capabilities instead. I’m finding that organizations offering managed services, cybersecurity services and advisory services all together become wildly successful.  They do a whole range of valuable things like compliance, insurance, and advisory services while helping customers rationalize their collections of operating systems or tools.

Steve: How does Stellar Cyber help?

Jeff: We often play the ‘man behind the curtain,’ where we offer financial guidance as well as helping customers automate a lot of what they’re offering in managed cybersecurity services. Greater automation is where we’re headed. Historically, companies have acquired tool after tool, and they have adopted an alert-centric approach to cybersecurity. Stellar Cyber improves their operations by orchestrating and correlating the data from every tool in the stack with a case-centric approach where related alerts are placed into context. That increases productivity, reduces mean time to detection and mean time to response, and improves service provider profitability. After all, when providers can deliver their  services more effectively, they grow their customer base faster, create stickier customer relationships, and differentiate their services better.

Steve: That’s great, Jeff. To wrap this up, what does a provider do if they’re at the beginning of this journey?

Jeff: First, providers have to determine what they’re really good at, how they deliver it, and whether they can continue to grow their business that way. Then, they should think about how they can expand and better differentiate their services, maybe by adding on advisory, consulting, compliance or even cyber insurance services. Providers that offer all of those services are doing amazingly well, so if you have just one or two pieces of that, you might consider how you can add others by identifying partners who can help you achieve your goals by augmenting what you’re doing today.

Steve: Thanks, Jeff. I think that ecosystems are really what this is all about –  as we say, “partner, partner, partner.”

Listen to the full interview.

– Steve Garrison is the Senior Vice President of Marketing at Stellar Cyber.

About Stellar Cyber

Stellar Cyber’s Open XDR Platform delivers comprehensive, unified security without complexity, empowering lean security teams of any skill level to secure their environments successfully. With Stellar Cyber, organizations reduce risk with early and precise identification and remediation of threats while slashing costs, retaining investments in existing tools, and improving analyst productivity, delivering an 8X improvement in MTTD and a 20X improvement in MTTR. The company is based in Silicon Valley. For more information, visit https://stellarcyber.ai.