Dive Brief:
- Marketplace platform provider AppDirect acquired tech services distributor NXTSYS Consulting to expand its sales through managed service providers. The companies announced the deal Nov. 20.
- AppDirect, which operates a TSD practice, onboarded a community of MSPs that use NXTSYS to sell carrier, cloud and software solutions. The acquisition also brings a specialized TSD playbook developed for MSP partnerships — a key target market for TSDs.
- The deal has its roots in AppDirect's 2021 agreement to fund NXTSY in exchange for the TSD selling through AppDirect supplier contracts. NXTSYS MSP partners now enjoy a unified experience, AppDirect VP of Operations Andy Ellerhorst said. "Combining our innovative catalog and MSP-focused enhancements with NXTSYS’ deep partner relationships positions us to deliver even greater value to the channel community,” Ellerhorst told Channel Dive in an email.
Dive Insight:
The acquisition highlights how TSDs work with diverse partner types and tailor their support accordingly.
TSDs are associated with technology advisors, whose revenue primarily comes from the commission-based deals sold through TSDs. But MSPs, whose main revenue comes from their own contracted IT services, represent a growing subset of TSD partners. MSPs typically lean on TSDs to expand into product lines they do not directly manage — often in connectivity or unified communications. MSPs see these offerings as easy-to-add ancillary services that boost margin and protect accounts.
Many of the new companies entering the TSD ecosystem are MSPs, rather than pure agencies.
“[Many] of the new partners [TSDs] are working with have another focus to their business. What they're doing on the agent side has been an additional revenue source,” TopSpin Tech Founder and President Aram Bolduc told Channel Dive.
MSPs operatations are distinct from a pure TA. The former wants to deploy, monitor and support the product after the sale. And because many MSPs count their TSD-based offerings as ancillary, they’re less likely to be experts in those solutions.
“NXTSYS’s success in developing and growing MSP partners has been the direct result of their commitment to partner training, culture of responsiveness, and high-touch pre- and post-sale support,” Ellerhorst told Channel Dive. “They also have a significant number of partners that rely on the team to co-sell with them on the majority of their opportunities to close and support a sale.”
AppDirect said NXTSYS MSPs will experience business as usual, AppDirect said in an announcement. However, partners will now get direct access to AppDirect’s AI development platform and other services.
“It means less friction, more automation, and the ability to manage every product and customer interaction – from network to cybersecurity to AI services — in a single environment,” Ellerhorst said.
AppDirect and its peers are increasingly segmenting their different partner types. Intelisys, earlier this year, added a group dedicated to VARs.
