The PE Express Train is in the Channel

The roll-up trains have left the station, and many are on an express route no longer stopping at every station. Trains (plural) because all the routes are different, all the passengers are different, and yet all the destinations remain the same, namely, the customers doorstep, or more appropriately, their desktop. As I have long predicted and previously stated, PE's and VC's interests in technology solutions brokerage's (formally "Master Agent") is not limited to revenue or EBITDA however, it is a means to and end or what they're really after. ?

Of course, they’ll always be short-sighted rollups (package and flip) in any industry, but ultimately most of these investors want to be much closer to the end-user. Just like emerging fiber locators and carrier quoting platforms endgame is not to marry Carriers to Channel Partners, although it is a required a first step to their primary goal; the end-user’s desktop. So, while the insurance industry as described in this well written article above is one example, for me, it’s more like a hybrid of insurance, travel, and retail commerce with a dash of Google thrown in.

Just like Allstate has Esurance, along with other examples across other industries, I predict the largest technology suppliers will build their own versions of "One-Stop" shops as well. Comcast and Spectrum are well down the path to building on-net off-net aggregation divisions to deliver no-line-left-behind solutions, like CLEC and ISP aggregators. AT&T is quieter about it, but I predict they too will jump in, as will other top of the food chain network and technology suppliers. I don’t believe they’ll be quite the same roll-up of these new web centric sourcing and procurement like there has been in travel. I.e. Expedia and Priceline own all the travel brands now, but conversely, early entrants, particularly those not owned and operated by the big suppliers, will see epic wins and epic fails along the way.

Some giants like AT&T, Verizon, or Comcast or CDW, (just a few examples) may decide to wait and see, like Microsoft often does. Sit back, let others trip, allow the end-user experience to mature, work out the bugs, wait for the regulatory climate to settle, and then jump in with a new ICON in 365, and shazam!

Right now, it’s like a friendly game of musical chairs, everyone having fun, making money, and supportive of one another because no one is truly ready to take any chairs away at this point. Everybody still needs Everybody, directs, Channel Partners, on-line portals, etc., but things will change. it will, at some point get more Squib Games like to draw a comparison. Clearly more than a single winner, but certainly fewer and a fight to the death.

Furthermore, this is not just about technology, it's about all things sourcing and procurement. I follow another interesting company, The Procurement Foundry, which has their sights (for now) on all things “Enterprise Customers Sourcing & Procurement from Technology and HR to Uniforms and Power and much-much more.

Concerning? Yes, but it didn't stop me from recently starting my own Technology Advisor Agency, I believe I can adapt accordingly, however even as I do so, I still keep one foot firmly planted in another passion of mine, performing M&A due-diligence in the technology space. Finding hair on contracts, concerning revenue/customer analytics, supplier and process synergies, and cost reductions to name a few. There so much activity right now I feel liken it to hailing a cab in NYC, put you hand up and three will run over the median to get to you. It’s still about whale hunting, closing big deals, lowering costs, and improving profits. I just have a real passion for onions. Peeling them back that is.

Exciting times! Hang on for the ride and don’t be one left without a seat.