William Blair Private Company Spotlight: Q&A With Rob Stephenson, CEO of Managed Services Provider Thrive Networks


Written by: William Blair / Equity Research Technology, Media and Communications

Our conversations with private company executives aid our understanding of emerging trends in the technology sector. For this spotlight, we interviewed Thrive CEO Rob Stephenson to better understand the company’s addressable market, growth opportunity, and overall strategy.

Thrive is one of the largest managed services providers in the United States, combining extensive resources and technical capabilities with a dedicated 24×7 team of highly trained North American engineers who support a midmarket, enterprise, and emerging clientele. Thrive will architect, migrate, and manage applications in Microsoft Azure or its national data center private cloud ecosystem using a best-of-breed approach to security, reliability, and performance.

  1. Can you discuss the sequence of events that led to the founding of Thrive and what problem the company aims to solve? Back in 2015 and 2016, I was a consultant working for both Thrive Networks and Corporate IT Solutions. Thrive had been divested by Staples and was owned by a former client, MetTel, a New York based communications services provider. We discussed a merger of the two to create a Northeast managed services provider (MSP) rollup platform. We received approvals by both companies’ ownership groups and boards to pursue the financing to make it happen. I immediately reached out and made one call to M/C Partners (www.mcpartners.com). The deal was closed four months later with the assistance of Gillis Cashman, Jim Wade, Ryan Carr, Abhishek Rampuria, and team. Our mandate was to create a Northeast enterprise technology platform that provided many of the positive characteristics of smaller MSPs such as great service and concierge-type support, along with increased 24×7 capabilities for cloud, cybersecurity, DRaaS, global network management, and compliance as a service. At the time, these advanced services were offered by only a small handful of behemoth entities, like IBM, Cognizant, Dell, HP, WiPro, and others. Essentially, our plan was to “hit ’em where they ain’t.” M/C Partners’ research showed a large void between the thousands of fragmented MSPs with fewer than 20 employees and $5 million of annualized revenue and these large providers. Our customer conversations were begging for an increased set of skills and higher degree of engineering depth as their business applications began migrating on a mass scale to SaaS and cloud platforms, thus creating complex security, performance, and reliability needs that could not easily be procured by the existing providers in the marketplace.
  2. What is your go-to-market strategy? We architect client solutions with our suite of next-generation managed services, guiding clients’ journey to the cloud and enabling their mission critical business applications to perform globally, always be available, be secure, and be efficient. The product suite is centered on public, private, and most often hybrid cloud management, cybersecurity services like firewall, IDS/IPS, SOC/SIEM, advanced endpoint security, patching, vulnerability management, global network management, SD-WAN, and automated compliance as a service programs. Thrive uses its customer account teams, direct sales teams, and channel sales teams to grow the business with these in-demand services. Thrive’s messaging truly resonates with clients as our talented engineering teams are able to provide them with much-needed depth, skills, and 24×7 coverage to make technology mandates successful. We provide singled scoped services like managed Azure, private VMware cloud, and managed Wi-Fi or we can “become” a client’s IT team as a total outsourced provider, which is quite common in the financial technology community and with start-ups.
  3. How do you look at the market opportunity and the market segments that Thrive is focused on, as well as the current level of market penetration? How do you expect the market to evolve? We see the market opportunity as virtually infinite at the moment. This is the best economic environment that any of us has participated in since the late 1990s. Thrive is garnering a large percentage of new clientele in the financial services, life sciences, and healthcare verticals, with education and retail as strong secondary industries. We are focused predominantly on the midmarket, (100 to 1,500 employees), but we also have a large number of SMB clients that use Thrive as their entire IT staff as well as a growing number of Fortune 5000 enterprises that consume single-scoped services from us, like global network management, patching, vulnerability management, Office365 management, and private and public cloud management. We continue to see the market as proconsolidation, but the frantic M&A pace may start to ease a bit since many of the successful MSP platforms have been gobbled up over the past three to four years.
  4. What can you share about Thrive in terms of size, growth profile, and profitability? Thrive is growing quickly, both organically and via acquisition. We entered 2017 with less than $30 million of revenue. We have since booked more than $1.5 million in new monthly recurring services and acquired four more companies to join our platform: Precision IT, BizCompass, InfoHedge, and Tier1Net. Thrive currently has one company under letter of intent to be acquired in the Mid-Atlantic region and another one very close in the Northeast. The combination of both of these deals plus projected organic growth over the next 12 months will get us close to $100 million in total revenue, with more than 80% as recurring managed services. Our sales team will also book over $1 million in new monthly recurring managed services in 2019 alone, and we expect that figure to grow by more than 20% in 2020. Gross margins have increased significantly over the past three years with efficiencies and economies of scale, and we expect 20% profitability margins or higher to be achieved by the end of 2019 or the first half of 2020. Our employee count has risen from 123 in 2017 to more than 300 projected by the end of 2019.
  5. What differentiates Thrive from its competitors? What do you view as the most sustainable source of differentiation looking forward? Our No. 1 value proposition is our people. Thrive has recruited, hired, and retained the most talented group of professionals in the Northeast— from executives to managers, engineers, technical account managers, sales reps, solutions architects, consultants, customer service reps, and more—that I have ever seen assembled in my 30-year career. We have also built a company culture that is passionate about modernizing our clients’ infrastructure and taking them to the cloud and beyond with nextgeneration services. Our product catalog is comprehensive and consists of the leading vendors, technologies, and services that drive excellence— Fortinet, Cisco, VMware, Microsoft, ServiceNow, Kaseya, Sophos, KnowB4, Infinidat, Correro, and other leading technology vendors. We seek clients who love and embrace technology and see it as a way to enhance their overall business from an efficiency standpoint, not just see IT as an economic loss-leader or fiscal “black hole.” This creates a win-win partnership with our clients and allows them to unlock technological advancements that benefit their overall business. Let us lead, guide, or participate in your IT process, and your company will … “Thrive.”

William Blair / Jim Breen +1 617 235 7513

Cuba Burch Berner

Cuba Burch Berner is an Associate at M|C Partners, where he focuses on investment opportunities in digital infrastructure and technology services. Prior to joining the firm in 2022, Cuba was an Equity Research Associate at Citi covering infrastructure companies within the telecommunications industry, including data centers and wireless towers. He holds a B.S. in Mathematics with a specialization in Economics from the University of Chicago. Cuba currently lives in Boston’s West End and enjoys  a myriad of outdoor activities including running, swimming, hiking, and skiing.





Ascend Technologies
C3 Integrated Solutions


AccentHealth operates an out-of-home advertising network that reaches over 12,000 physician office waiting areas in the U.S. – JOHN WATKINS




James F. Wade

Jim Wade co-founded M/C Partners in 1986 with Dave Croll. He has been investing in communications and technology services since the advent of wireless and broadband, cornerstones of the firm’s sector focus. As Chairman, he manages the firm’s investment process, and continuously seeks out management teams, company prospects and financial resources to grow the portfolio. Jim’s successful track record includes MetroPCS (IPO), Lightower Holdings (acquired by Berkshire Partners), Cavalier Telephone (acquired by PAETEC), NuVox Communications (acquired by WindStream), Attenda (acquired by Darwin Private Equity), Melita (acquired by Apax Partners), PR Wireless (joint venture with Sprint affiliate in Puerto Rico), Thrive Networks (acquired/recapitalized by Court Square) and Involta (acquired by Carlyle Group). Today he serves as a director on the Board of Connectivity Wireless and has responsibility for Omega Wireless. Jim graduated from the University of Notre Dame a B.B.A in Finance and received an MBA from Harvard Business School. He lives outside Boston with his wife and four children. Jim was an avid boater and is now an average golfer.




Connectivity Wireless


Abhishek Rampuria

Abhishek (A.B.) is a Partner at M/C Partners, where he leads origination, deal diligence and portfolio company support for investments in a variety of communications and technology services segments. He currently serves on the Board of Ascend Technologies, Connectivity Wireless, Edafio Technology Partners, TowerCom and serves as a Board Observer for Thrive Networks. A.B. previously served as a Board Observer for Ensono (acquired by KKR) and QOS Networks (acquired by Zayo). Prior to joining M/C Partners in 2015, A.B. worked at Altman Solon (formerly Altman Vilandrie), a technology, media & telecommunications focused strategy consulting firm, where he completed projects for both operating companies and private equity investors. A.B. received a B.S. in Materials Science & Engineering from the Massachusetts Institute of Technology. He lives in Boston’s South End and outside of work, enjoys skiing, cycling, traveling and cheering on his home-town Patriots and Celtics.




Thrive Networks



Ascend Technologies
Connectivity Wireless
Edafio Technology Partners