Not all revenue is created equal.

For years, technology services businesses were valued primarily on earnings. A company generated revenue, produced EBITDA, and buyers applied a multiple. Simple.

Cloud computing changed that equation permanently.

What Buyers Are Paying For Today

Private equity firms and strategic acquirers are no longer buying revenue. They are buying recurring revenue, customer retention, and services depth.

The numbers tell the story clearly:

• Resale-heavy technology firms are selling at 4x–6x EBITDA

• Services-first firms are commanding 12x–18x

That gap is not an accident. It reflects how Google and Microsoft have restructured their partner programs to reward firms that attach services, build recurring relationships, and drive consumption — not firms that simply resell licenses.

The Simple Version

Google generates approximately $7.05 in services revenue for every $1.00 in cloud consumption. Microsoft generates approximately $6.26.

Firms that capture that services opportunity are worth dramatically more than firms that don't.

What This Means For Buyers

A resale-heavy firm with strong cloud consumption but limited services attachment represents an acquisition opportunity — buy at a lower multiple, add services capability, and capture the value already sitting inside the existing customer base.

That is exactly the kind of opportunity I look for.

What This Means For Owners

If your business is heavily weighted toward resale, your current valuation likely doesn't reflect your full potential. Understanding where you sit on the services spectrum — and what it would take to shift that mix — can meaningfully change your outcome.

If you'd like to talk through what your business might look like through a buyer's lens, I welcome the conversation.