If you’ve noticed your IT support costs rising while service quality declines, you’re not imagining things. Many small and mid-sized businesses (SMEs) across the UK are facing the same problem. IT providers that once delivered fast, reliable, and personalised service are now harder to reach, slower to respond, and charging more for the same level of support.
So, what’s changed?
One of the biggest reasons is the rise of big investors—large financial firms and corporations buying up smaller, independent IT providers. While these acquisitions might seem like a sign of growth, they often come at the expense of customer service, transparency, and long-term value for SMEs.
What does this mean for small and mid-sized businesses (SMEs) that rely on these IT partners?
This blog explores:
- Who these big investors are and why they’re acquiring IT providers.
- How these takeovers impact SMEs—from rising costs to declining service.
- How to tell if your IT provider has been acquired.
- What you can do to protect your business and find the right IT support.
Who Are “Big Investors” in the IT Industry?
When we talk about big investors, we’re referring to organisations that buy and merge businesses with the goal of increasing financial returns. These investors often don’t specialise in IT—instead, they see IT support as an industry with steady recurring revenue, making it an attractive target.
While there are different types of investors, they often use similar strategies to increase profits—whether through cost-cutting, aggressive expansion, or acquisitions. In many cases, a single investor may apply a combination of these approaches, leading to big changes for SMEs relying on these IT providers.
Here are the three main types of big investors you’ll find in IT services today:
Private Equity (PE) Firms
Private equity firms buy IT providers, merge them with other companies, and aim to sell them later at a profit—often within 3-5 years. Their priority is increasing profit quickly, which can lead to:
- Price increases for existing customers
- Cost-cutting on support staff to maximise profit
- A focus on short-term gains rather than long-term service improvements
Venture Capital (VC) Investors
Venture capital firms typically invest in tech startups and high-growth IT firms. While this can bring innovation, it also means:
- High-risk, aggressive growth strategies
- Frequent changes in leadership and services
- An emphasis on expansion over stability
Corporate Buyers & Large IT Groups
Bigger IT companies or corporate giants often acquire smaller IT firms to expand their market share. While this might seem like a stable option, it often results in:
- More rigid, corporate-style service (less flexibility for SMEs)
- A shift to centralised, less personal support teams
- Longer wait times due to higher customer volumes
Although these investor types have different business models, their impact on SMEs is often similar. Many IT providers, especially those that have been acquired, may adopt a mix of these approaches—leading to higher costs, less personalised service, and reduced flexibility.
For SMEs, the outcome is often the same: rising costs, declining service, and a loss of personal touch—regardless of whether it’s a PE firm, VC investor, or corporate buyer making the decisions.
Why Big Investors Are Buying Up IT Support Providers?
The managed IT services market is undergoing massive consolidation, with bigger firms gobbling up smaller providers. According to Moore Kingston Smith, 620 IT services deals were completed in the UK in 2024, and 66% of those were private equity-backed. Notably, 36% of these deals were for managed IT services, making it the most sought-after segment.
Even in uncertain economic conditions, private equity firms see IT support providers as gold mines—but what makes them so attractive?
Why IT Support is a Prime Acquisition Target
Private equity firms invest heavily in IT support companies because they offer:
- Recurring Revenue – IT services generate steady, predictable income through long-term contracts.
- Long-Term Sticky Customers – SMEs rely heavily on their IT providers, making them unlikely to switch frequently.
- Fragmented Market – The industry is made up of many small providers, making acquisitions easy.
- High Growth Potential – As technology advances, demand for IT support continues to rise.
- Profitability – Investors see IT services as a high-margin business with strong earning potential.
The "Buy, Build, Flip" Strategy
Once private equity firms acquire an IT provider, their goal is rapid value extraction—often at the expense of service quality. The typical “Buy, Build, Flip” strategy works like this:
- Step 1: Acquire a profitable IT provider with a strong customer base.
- Step 2: Cut costs by reducing staff, standardising service, and outsourcing helpdesks.
- Step 3: Increase revenue by raising prices, enforcing long-term contracts, and selling unnecessary add-ons.
- Step 4: Sell the company to a larger PE firm or IT conglomerate at a massive profit.
For investors, this strategy maximises financial gains in just 3-5 years. For SME clients? It often leads to higher prices, rigid service models, and declining customer support.
This isn’t a speculation—it’s a pattern seen across multiple IT firms. We will be covering a real-world case studies in Part 2 of this blog series.
How Big Investors Are Changing IT Support Industry (For the Worse)
When a private equity firm acquires an IT support provider, the immediate changes might seem subtle. But in reality, what follows is often a fundamental shift in priorities—away from customer service and toward maximising investor returns. Over time, SMEs start noticing gradual but painful changes in how their IT provider operates.
Here are the most common shifts SMEs experience after a private equity buyout:
The Most Common Changes After a Private Equity Buyout
When a private equity firm acquires an IT support provider, the immediate changes might seem subtle. But in reality, what follows is often a fundamental shift in priorities—away from customer service and toward maximizing investor returns. Over time, SMEs start noticing gradual but painful changes in how their IT provider operates.
Here are the most common shifts SMEs experience after a private equity buyout:
Customer Service Takes a Backseat
Before: IT support felt personal and responsive—you had familiar engineers who understood your business and resolved issues quickly.
After: Support becomes more rigid, slow, and impersonal.
Why?
- Experienced engineers leave – Many key IT staff either resign or are laid off due to cost-cutting.
- Management struggles – As the company grows rapidly, managing a larger team becomes chaotic, leading to inconsistent service
- Support is centralised or outsourced – Instead of speaking to the same team, you now deal with a generic call center.
- Response times increase – Tickets that used to be resolved within minutes now take hours or even days.
What SMEs experience: You find yourself waiting longer for help, repeating your issue to different agents, and getting less proactive support than before.
Price Hikes & Hidden Fees
Before: Pricing was fair and predictable, with clear service levels.
After: Renewal costs skyrocket, new service fees appear, and you’re forced into pricier plans.
Why?
- PE firms need to increase profits quickly, and the fastest way is by raising prices on existing customers.
- IT providers start bundling services together, forcing SMEs to pay for features they don’t need.
- Extra charges creep in – What was once free (priority support, after-hours assistance) now comes with an added cost.
What SMEs experience: You’re told your contract needs to be upgraded for the same level of service—or worse, you’re locked into auto-renewing terms with inflationary price increases.
Long-Term Contracts & Restrictive Terms
Before: Many IT providers offered flexible, month-to-month contracts or fair exit clauses.
After: The company pushes multi-year contracts with stiff penalties for early termination.
Why?
- Locking SMEs into long-term deals guarantees stable revenue for the PE owners.
- Beyond just cancellation fees, many IT providers tie businesses into rigid multi-year contracts with no easy way out, leaving SMEs stuck even when service quality declines.
- Some contracts auto-renew with price increases, forcing businesses to pay more without any additional value.
What SMEs experience: Even if you’re unhappy with your provider, switching becomes a logistical and financial nightmare.
Standardised, One-Size-Fits-All Support
Before: Your IT provider tailored solutions to your unique business needs.
After: Service is rigid, inflexible, and more generic.
Why?
- Personalisation is expensive, so PE firms push standardised IT packages.
- Your IT provider no longer takes the time to understand your business—they just apply a cookie-cutter approach.
- Less investment in R&D means fewer new solutions or proactive recommendations.
What SMEs experience: You’re forced into a generic IT plan that doesn’t fully support your business operations.
Endless Upselling & Sales Pressure
Before: Your IT provider focused on solving issues, not selling extra services.
After: Your account manager is constantly pushing upgrades and add-ons.
Why?
- PE-backed IT firms incentivise sales reps to increase revenue per customer.
- Instead of recommending solutions that genuinely benefit your business, IT providers bundle essential services into higher-tier packages to drive profits.
- You might start hearing: “To maintain priority support, you need to upgrade to our Essential Security Package, Advanced Cloud Backup, or Managed Compliance Plan.”
- Add-ons that were once optional become mandatory, increasing costs overtime.
What SMEs experience: Instead of strategic IT advice, you get aggressive upselling—even when your existing setup works fine.
Lack of Transparency & Worsening Relationships
Before: Your IT provider was open and transparent about pricing, service changes, and company direction.
After: Communication becomes vague, impersonal, or even misleading.
Why?
- The new PE owners prioritise financial reports over client relationships.
- Decisions are made behind closed doors, and customers are informed after changes take effect.
- Account managers come and go, leading to a lack of consistency in communication.
What SMEs experience: It’s harder to get straight answers about changes, and long-term relationships start to feel transactional.
High Staff Turnover & Disrupted Service
Before: You worked with the same IT team, who knew your business well.
After: Engineers leave in waves, and service quality plummets.
Why?
- IT professionals often leave after an acquisition—either due to company culture changes or layoffs.
- New engineers don’t know your business, leading to longer issue resolution times.
- Service feels disjointed—every time you call support, you speak to someone new.
What SMEs experience: You no longer trust your IT provider to handle issues efficiently, leading to frustration and operational risk.
Want to see how this plays out in the real world?
In Part 2, we’ll cover actual case studies of IT support providers that were acquired by PE firms. Don’t miss it!
How to Tell If Your IT Provider Has Been Acquired
At first, nothing seems different. You might get an email saying, “Exciting changes are coming!” or “We’ve partnered with a new investment group to serve you better.” Everything sounds positive—but behind the scenes, big changes could already be happening.
If you suspect that your IT provider is now part of a larger group, look for these red flags:
- Your contract terms have changed – Higher prices, stricter exit clauses, or new fees
- Support response times are slower – IT issues take longer to resolve
- Familiar staff members have left – The technicians who knew your business are gone
- You’re being upsold more often – More aggressive pushes for upgrades or add-ons
- The company branding or communication feels more corporate
If any of these sound familiar, your IT provider may no longer be independently run.
What Can SMEs Do About It?
If you’re unhappy with your current IT provider or worried about investor takeovers, here are three key steps you can take:
Ask the Right Questions
If you’re unsure about ownership changes, ask your IT provider:
✔️ Has your company recently changed ownership?
✔️ Have there been any changes in leadership or service structure?
✔️ Do you still have the same service team handling our account?
A trustworthy provider will be transparent about any acquisitions.
Monitor Service Changes
Pay attention to how your IT provider is handling support:
✅ Are issues being resolved quickly?
✅ Has customer service declined over time?
✅ Are you still getting personalised advice and proactive support?
If not, it may be time to explore alternatives.
Look for an Independent IT Provider
Not all IT providers have been taken over by big investors. There are still independently owned IT firms that prioritise service over shareholders.
When evaluating IT providers, ask:
✔️ Who owns the company? (Is it still run by IT professionals?)
✔️ What’s their approach to customer service? (Do they focus on relationships, not just profits?)
✔️ Are they proactive or just reactive? (Do they prevent problems or only fix them when they occur?)
A good IT provider should feel like an extension of your team, not just a service provider.
But how do you know if your IT provider is owned by investors?
In Part 2 of this series, we’ll reveal a full list of PE-backed vs. independent IT support firms in London.
What you’ll discover in Part 2:
- Real-world case studies of IT providers that changed after a buyout
- The full list of Investor Owned vs. Independent IT support firms in London
- How to choose an IT provider that won’t put investors before customers
If you’re concerned about your IT provider’s future, this deep dive is a must-read. Don’t miss Part 2.
Final Thoughts: Don’t Settle for Poor IT Support
Big investors are reshaping the IT industry, but that doesn’t mean your business has to suffer. By staying informed and choosing a provider that puts service first, you can ensure your IT support is reliable, proactive, and genuinely helpful.
If you’re looking for an independent IT provider that prioritises SMEs, we’d love to help. Get in touch today to see how we can support your business—without the corporate red tape.
