Digital transformation service providers are gearing up for growth, with companies rebranding, building IP and cultivating offshore resources.
The moves come as IT industry watchers anticipate market expansion for 2021 and beyond. Forrester Research earlier this month projected U.S. technology budgets to increase 6% in 2021, revising an earlier estimate that called for a 0.4% decline. Consulting and systems integration services are poised to grow 5.6% in 2021 and 7.6% in 2022, according to Forrester. Meanwhile, the cloud computing slice of IT is expected to expand faster still. Gartner forecasted global spending on public cloud services to grow 23% in 2021, when spending will hit $332.3 billion.
In general, digital acceleration, wrought by the COVID-19 pandemic, has opened businesses to new ways of operating and sparked adoption of enabling technologies such as cloud and AI.
IT services and consulting firms have begun to position themselves to seize the market opportunity. As part of its post-merger strategy, Prime Technology Group, a technology services provider based in Wayne, Pa., and Synerzip, an Agile software product development firm based in Dallas, this week rebranded as Excellarate. The two companies merged in 2020.
"Digital acceleration … has helped companies like us enter markets," said Excellarate CEO Nick Sharma.
That digital push has particularly benefitted markets that had lagged somewhat due to regulations and restrictions, Sharma said. Excellarate focuses on fintech, insurtech and healthcare companies. In those markets, the company has created software frameworks that provide out-of-the-box functionality on which the company can customize customer offerings.
Excellarate also manages its software frameworks for the customer. "We are going to maintain the framework on an ongoing basis and do enhancements," Sharma said. The company, which also provides resources to co-develop products with ISVs, views its industry niche frameworks as a key source of differentiation. "[The platforms] make us unique to that customer base we are focusing on," he said.
Nick SharmaCEO, Excellarate
Vertically oriented IP is a hallmark of what some industry executives describe as the third wave of cloud consulting.
SADA Systems, a business and technology consultancy based in Los Angeles, has expanded its service delivery options to accommodate growth. The company this week launched a Global Delivery Center in Yerevan, Armenia. The opening marks a shift for SADA, which had focused entirely on local delivery, noted SADA CEO Tony Safoian. Safoian and company co-founders Hovig and Annie Safoian were born in Armenia.
"Our customers are getting to such a size and our contracts are getting to such a size that offshore capabilities do matter," Tony Safoian said. SADA rebranded in 2020, with the company conducting more enterprise business and approaching $1 billion in total contract value bookings.
Resources in Armenia provide scalability and a "blended rate construct for big projects that are at par with what the global [system integrators] can do," he said. A blended rate takes into account the contributions of local and offshore resources.
SADA's latest executive and board appointments also aim to manage high levels of growth. The company, for example, appointed SADA board member Lusine Yeghiazaryan as CFO. Yeghiazaryan joined SADA full time from GoPro. As vice president of finance at that company, Yeghiazaryan focused on operational maturity, according to SADA.
Safoian cited Yeghiazaryan's experience in implementing "structures and processes to withstand the demands of high growth."
In addition, SADA named Julie Cullivan, formerly senior vice president at Forescout, to its board of directors and Sudhakar Ramakrishna, president and CEO of SolarWinds, as an advisor to the board.
Meanwhile, KSM Consulting, a consulting firm that specializes in digital transformation, rebranded as Resultant. The Indianapolis-based company has grown to more than 300 employees, acquiring three companies within two years.
Resultant aims to have teams in more than 10 cities and employ 1,000 people by 2025. In addition to Indianapolis, the company currently operates offices in Fort Wayne, Ind.; Columbus, Ohio; Lansing, Mich.; and Denver. A Resultant spokeswoman said the company's expansion would be through a blend of hiring and acquisitions. Resultant is currently hiring in Atlanta, Denver and Fort Wayne, she said.
Equinix aims to grow partner sales past 50%
Equinix, a colocation and data center provider based in Redwood City, Calif., seeks to make partner sales 50% or more of its business within the next few years.
As recently as five years ago, the percentage of business coming through partners was in the single digits, said Jules Johnston, senior vice president of global channels at Equinix. Partners' contribution is currently more than 35% of business. Equinix works with a range of partners, including alliance partners such as AWS, Google Cloud and Microsoft Azure; MSPs; systems integrators; and local colocation providers.
In April 2021, Johnston was promoted to the global channels role, which marks the first time the company's channel efforts have operated under one executive. The company also previously lacked regional channel leaders in APAC and EMEA. Channel personnel were scattered across various sales teams.
Partners can expect to find more consistency as a result of the unified channel structure, Johnston said. They can also anticipate a greater presence, she added, noting Equinix has increased channel organization headcount across its geographic regions.
In addition, the global channel organization lets Equinix "aggregate" partner voices to understand what they want to see in the company's products and tools, Johnston noted.
IT services M&A
The merger-and-acquisition spree continues in the IT services market. Here is a sampling of the week's transactions.
- NTT Data Services, a digital business and IT services company based in Plano, Texas, agreed to acquire Nexient, a cloud-native software services firm based in Newark, Calif. Nexient will bolster NTT Data's cloud app development capabilities, anchoring the company's Application Development and Modernization practice. The deal is expected to close in June.
- OSF Digital, a Salesforce partner and digital transformation services company based in Quebec City, acquired Adept Group, which focuses on Salesforce in New Zealand. Adept Group has offices in Auckland and Wellington, where it works with banking, retail, energy and fast-moving consumer goods customers. The transition is the first of several deals the company has on tap for 2021.
- Thirdera, a ServiceNow professional services and integration company based in Leesburg, Va., purchased Service Line Solutions, a ServiceNow partner in Australia. The transaction provides Thirdera with a base for expansion in the APAC region. The company's strategy is to acquire and integrate regional partners as it builds a global ServiceNow consultancy.
- Peak-Ryzex, a Sole Source Capital portfolio company and specialty reseller headquartered in Columbia, Md., acquired Bar Code Direct, a custom wireless mobile computing and barcode systems provider based in North Grafton, Mass. The deal marks Sole Source Capital's third add-on transaction for Peak-Ryzex, which resells bar coding and data collection offerings. The other acquired companies are Optical Phusion Inc. and Inovity Inc.
- Zensar Technologies Ltd., a technology services company based in Pune, India, entered a definitive agreement to acquire M3bi, a data and digital engineering firm in Scottsdale, Ariz.
Partner roster update
- Science Applications International Corp. (SAIC), a systems integrator based in Reston, Va., attained ServiceNow Elite Partner status. SAIC offers its public sector and commercial customers more than five ServiceNow products, according to the company.
- Tech Data Corp., a distributor based in Clearwater, Fla., entered a North American partnership with Cloudera. The move expands Tech Data's partner portfolio in the IoT, data and analytics category.
- Lemongrass, a professional and managed services company based in Atlanta, will partner with Inawisdom, which specializes in AI, machine learning and data analytics. Both companies are AWS Premier Consulting Partners. The pair will help enterprises build data lakes on AWS and use SAP data for cross-application process optimization, data discovery and SAP estate cost optimization, according to Lemongrass. Channel partners are finding opportunities in SAP modernization
- Schneider-Neureither & Partner SE (SNP), an enterprise transformation software and solutions provider headquartered in Heidelberg, Germany, entered Google Cloud's partner program as a Global Build Partner in North America. SNP said it plans to expand its offerings for migrating customers' SAP workloads to Google Cloud.
- Involta, a hybrid IT and cloud computing based in Cedar Rapids, Iowa, added VMware's SD-WAN to its product portfolio.
- CyberArk, an identity security company, expanded its distributor agreement with Synnex Corp. The distributor, based in Fremont, Calif., now offers CyberArk's privileged access management offerings to customers in the U.S. and Canada, CyberArk said.
- Exertis ProAV, a distributor based in Amherst, N.Y., will offer Maxhub's Direct View LED Wall Display and UC Series product lines. Exertis ProAV will distribute Maxhub's offerings to AV dealers and systems integrators in North America.
Channel partner programs and products
- AttackIQ, a breach and attack simulation systems vendor based in Santa Clara, Calif., launched a learning hub for the company's resellers, distributors, systems integrators and consultants. AttackIQ Partner Academy offers an AttackIQ for Sales learning path, which includes courses such as Foundations of Operationalizing MITRE ATT&CK, Foundations of Purple Teaming, and Foundations of Breach and Attack Simulation. The AttackIQ for Engineers learning path offers courses such as Assessment Design for Security Controls, Beyond Atomic Testing with Attack Flows and AttackIQ Engineer Essentials.
- ConnectWise, a business automation software provider based in Tampa, Fla., unveiled a partner program for technology service providers and MSPs. The ConnectWise Partner Program aims to help partners develop managed cybersecurity businesses. Program benefits include access to a partner development manager, free internal use licenses and market development funds, according to ConnectWise.
- Kaseya, a Dublin-based IT and security management solutions provider for MSPs, will partner with Denver-based mobile device management company Cortado Mobile Solutions. The resulting technology integration lets MSPs manage mobile devices and apps within the Kaseya VSA console.
- Kohler Power, a data center power company based in Kohler, Wisc., launched a partner program. The program provides quotes and lifecycle services, including account management, product management, engineering, commissioning and on-boarding.
- American Virtual Cloud Technologies Inc., a cloud communications and IT service provider based in Atlanta, unveiled an initiative to gift cybersecurity services and technology support to historically Black colleges and universities. The support aims to modernize the institutions' IT infrastructure. The Student Freedom Initiative, a nonprofit organization, will coordinate the collaborative effort.
- Ninety percent of midmarket organizations plan to maintain or increase their digital spending this year, according to BDO Digital, a technology services company based in Chicago. The company's survey of 500 C-level executives from midmarket companies, which BDO Digital defined as those with revenue between $100 million and $3 billion, also found that 49% of respondents are "revising their long-term strategic vision for a more digital future."
- ThoughtWorks, a software consultancy based in Chicago, found 74% of companies are pursuing digital transformation but only 34% of CEOs report success. The poll of more than 400 technology leaders revealed successful firms recruit, invest and retain knowledgeable staff (71%) and work with trusted partners (76%) to compensate for the difficulty of finding digital transformation talent. Forrester Consulting conducted the study, which ThoughtWorks commissioned.
- Unisys Corp., based in Blue Bell, Penn. appointed Teresa Poggenpohl as chief marketing officer and senior vice president of marketing communications. Poggenpohl was previously Accenture's chief marketing and communications officer for North America.
- Pax8, a cloud distributor based in Denver, named Microsoft executive David Willis to its board of directors.
- Fred Mills has joined BaytechIT, a healthcare MSP based in Holyoke, Ma., as vice president of sales. Mills was formerly senior director of worldwide healthcare alliances and business development at Commvault and director, general manager, at Hewlett Packard Enterprise for healthcare in the Americas.
- Otava, a hybrid cloud solutions provider based in Ann Arbor, Mich., appointed Shelly Bodine as channel chief. She joins Otava from SoftwareOne, where she was North American chief of staff.
- ScottMadden Inc., a management consulting firm that specializes in energy and shared services, promoted Dylan D'Ascendis to partner.
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