Ultima boss on future acquisitions, selling its own RPA to other partners and why cost has become a big issue for MSPs

Scott Dodds says that MSPs must shift to become ‘software-driven’ rather than ‘people-driven’

Ultima Business Solutions is looking to make further bolt-on acquisitions after making its first M&A move earlier this year.

The Reading-based MSP, which ranks #31 in CRN's VAR 350 with revenues of £118.6m, made its first-ever acquisition in its 31 years in business this year in the shape of global cloud and application services firm Just After Midnight (JAM)

At the time of the acquisition, Ultima said that JAM will become a new division within Ultima, adding DevOps and cloud consulting capabilities to the group.

Speaking to CRN in an interview, CEO Scott Dodds said that the JAM acquisition won't be the last for Ultima, hinting that other M&A deals could follow to bolster its technology capabilities.

The firm was acquired by private equity house Apse Capital in 2019.

"We're going to essentially continue to look at the market for bolt-on or add-ons to the business," he said.

"We will continue to add new capabilities to support what customers are looking for now, which has changed quite a lot. In our customer base we're seeing a lot more discussions really driven by the last 14 months. We've got a renewed optimism and a renewed sense of pride as an industry about the role we've played to keep the world moving."

The Ultima boss recently acquired a global cloud and application services firm called Just After Midnight. The firm has a headcount of almost 50 staff based across the UK, the US, Singapore and Australia offering managed cloud infrastructure services as well as application and DevOps capabilities.

Dodds said that JAM will help Ultima to offer an end-to-end hybrid offering and 24/7 "follow-the-sun" support that reaches into the application layer of a customers' IT environment.

"They've got this really, really nice model where they manage the core infrastructure, like Azure and AWS, but also Kubernetes in there for containerisation. So a whole bunch of different technologies on the DevOps side that we've now introduced as a service."

The CEO said that the pandemic has fundamentally changed what customers want from their partners, and are now seeing cost and return on investment (ROI) as a much bigger factor in their IT decisions.

Customers now want instant results and are put off by longer-term projects, said Dodds.

"Cost is still a big issue, we're coming out of a global economic downturn driven by the pandemic. Customers have got to be very, very clear what the ROI is in some of these investments and so we've got to really make sure it's very easy to explain how fast you get a return. Speed is everything now. The concept of long term, massive projects has kind of gone away a bit, these are short- term big shifts in the business that can be made with different types of technology. They're still projects, but they tend to be immediate and customers want to be doing something quickly, not build over a number of years.

Ultima began to white-label its own automated cloud platform, called IA-Cloud, last year to sell to other MSPs. The automation tool was created by Ultima's development arm called Ultima labs.

The tool was first used internally to automate its own first-line support functions, but Dodds believes that the same software could now benefit other MSPs to create their own services, help save costs and deliver a better quality of service to their customers.

Dodds revealed that there are plans to take its IA-Cloud product global and will soon announce distribution partners for the offering.

"That's a big next step," he said.

"My personal belief is that if you're a managed service provider today, you are going to have to be much more software driven in the future than people driven. It doesn't mean you don't need great people, it just means you cannot scale by just throwing more and more people at whatever services you're building.

"The basic management of infrastructure should be software led in our opinion, which is where the automation kicks in. And actually, what we're trying to do is move our first and second-line engineering teams up into third line and beyond so they're really upskilling and getting better value from what they do and build a career out of it.

"So we believe that the future of MSP is kind of next-gen MSP is really going to be based much more around software automation, as well as really smart people. And we call that software and a service. Because it's not an either or, it's blending of great people and great software," he added.