Provade Acquired by Pinnacle — VMS/MSP Consolidation Continues (Part 2)

In the first part of this post, we covered some history and context behind Provade as well as some of the high-level information about their new alliance and ownership relation with Pinnacle Technical Resources. Pinnacle's shtick in relation to other MSPs is that they're minority and women-owned. The announcement of the deal notes that, "Edward Jackson will remain President of Provade. Vaca-Humrichouse, who founded Pinnacle Technical Resources, has led the company to become one of the staffing industry's fastest-growing firms in the nation." Key to this growth has undoubtedly been the diversity status and focus of the firm.

Pinnacle is unique in the market in that among MSPs that have achieved a certain size, it is not directly competitive -- in the same manner as the top players -- with other, non-minority/women-owned MSPs. Rather, it seeks to complement and work with them in deals, carving out a specific portion of the spend, auxiliary related areas and management fees. Regarding the acquisition of Provade, Pinnacle obviously took the perspective that owning a VMS asset would be a means to bring their offerings to large, global MSPs, in addition to its diversity MSP capabilities (alongside other diversity staffing, payroll, contractor compliance and related services).

Minority/women-owned MSPs is an area we'll dig into in more detail, including the attractiveness of end covers in working with a prime MSP who can sub to a diversity MSP and/or staffing provider. But you can be sure that the major players in the market (e.g., Tapfin, Allegis, Volt, Kelly, Randstad) will no-doubt be touching all the bases regarding potential relationships with Pinnacle and others in the coming years.

Regarding Provade, the technical blessing and curse of the solution is its close ties to PeopleSoft capabilities (less so Oracle integration relative to other solutions which can claim similar interoperability). While the ultimate user interface (current skin), development independence, configurability of the toolset and the breadth of capability may not be quite in the same class of the very top VMS players, its native and built-in Oracle analytics engine (Oracle Business Intelligence) is on some levels superior, at least in comparison to select competitors, although not all. Moreover, we've heard the MSP-focused capabilities of Provade are welcomed by those who work with the application in a third-party manner on behalf of the clients they are serving. In other words, although Provade is an underdog and not an automatic VMS shortlist inclusion like an IQNavigator or Fieldglass, companies with a PeopleSoft back-end especially would be wise to at least consider the Provade option on their short list given the close linkages with their ERP provider.

Stay tuned as we turn our attention in the next post in this series to Provade's core capabilities.

- Jason Busch