Acquisition-Hungry Konica Minolta Continues to Gobble Up Managed Services Companies

Brendan Morse
Apr 8, 2015

Konica Minolta has continued its aggressive acquisitions of managed services providers in the US. In January 2015, the company acquired the assets of Preferred Network Corporation of Atlanta, and in April, the Boston- and California-based EveryNetwork. These come on the heels of 2014 acquisitions of Detroit-based Integrated Data Solutions, Inc. and its sister company RockIT Cloud Solutions, and Southern California-based KnowledgeCentrix.

These companies generally provide a wide portfolio of IT services and related services like desktop, application management, communications, mobility, backup and restore, hosting and cloud, among numerous others. With these acquisitions, AllCovered will add to its already considerable presence and capabilities in several major metropolitan areas. Below is the map of AllCovereds’ offices.

With Konica Minolta’s ownership of AllCovered and Ricoh’s ownership of MindSHIFT, OEMs now own two leading IT services with diversified portfolios and customer bases and nationwide presence. The growing capabilities and geographic presence of AllCovered and MindSHIFT position them to win accounts of different sizes across industries. This is vital to their success as managed services providers generally face tight profit margins and must leverage economies of scale to derive significant profits.

We believe the acquisition strategy has generally been similar for both Konica Minolta and Ricoh. Acquisition is preferable to organic growth because managed IT service organizations in part are built around fundamentally different human resources and revenue models, and then use their large footprint to gain advantage over the many smaller MSPs that go after the SMB market. In addition, acquisitions bring new customer relationships that can be slow to develop elsewise. Another component of the strategy is to help their traditional office equipment channels resell these services. In the longer run, we believe both are hoping managed IT services can help dealers build a services business and potentially get more print and imaging hardware, solutions, and print services in through the figurative managed services backdoor. 

Stepping back, it seems we are witnessing the emergence of this managed service acquisition strategy globally. In 2014, Ricoh subsidiaries acquired managed IT companies in the US, Spain, Italy, and Korea.  On April 1, 2015, Konica Minolta Australia acquired two leading managed IT services companies named Knowledge Partners and Stonebridge Systems. With these recent acquisitions, it remains somewhat unclear how Ricoh and Konica Minolta will expand and leverage these similar to what has been done in the US.

InfoTrends’ Solutions and Services team is watching this and related events in the industry closely. To better serve our clients, we launched the Managed Services advisory area (MSCS) in February. In addition, InfoTrends is the process of developing a global multiclient study that will inform subscribers about the present and future SMB technology environment, including managed services. To receive more information about subscribing to our Managed Services advisory area and fascinating SMB Multiclient study, please contact an InfoTrends representative. Follow us on Twitter at InfoTrends_MSCS to receive news updates and trends across all managed services (including print) and cloud technologies.

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