FusionStorm Acquires Cisco VoIP VAR

The acquisition continues FusionStorm's solution provider shopping spree, and is only the latest in a wave of consolidations hitting the channel.

FusionStorm, a San Francisco, Calif.-based solution provider with primary business in the Sun Microsystems and IBM market, this month closed its acquisition of Technology Services and Integration (TSI), a Glendale, Calif.-based provider professional services related to Cisco VoIP solutions.

John Varel, FusionStorm CEO, said his company acquired TSI because of an acute shortage of qualified engineering talent for VoIP, which is one of the fastest-growing parts of the IT market.

TSI has been focusing on Cisco VoIP for years, and over the past couple years counted FusionStorm as one of its VoIP outsourcing customers, Varel said. "Cisco is one of our strongest growing partners," Varel said. "It's hard to find enough technical talent in this space."

TSI brings FusionStorm a team of engineers who are already going out on billable projects for the company, Varel said. It also brings its two co-owners and co-directors, Bill Towne and John Teel, into FusionStorm. Towne, who was director of engineering at TSI, becomes FusionStorm's national engineering manager. Teel, TSI's former director of operations, is now services operations manager at FusionStorm.

"We have had open reqs (requisitions) for Cisco professionals services, post-sales engineering, and so on for VoIP," Varel said. "We still do, even after the acquisition. We've been using TSI for the past couple of years. And it got to the point where Bill and John realized they weren't able to grow like they wanted. At a meeting, we came to an epiphany. We're the fastest growing of their customers. Why not get together?"

TSI has about 25 customers, of which 30 percent to 40 percent, including FusionStorm and a couple of its competitors, use it as an outsourcing partner, Varel said. "Most of the competitors' contracts will continue," he said. "Maybe one or two will drop [as a result of the acquisition]."

FusionStorm, which has traditionally focused on Sun Microsystems, has been on a big shopping spree in the last couple years. The company in October acquired Jeskell, a large IBM government solution provider. It has also acquired a number of services-oriented solution providers.

Cisco experience is cited as a reason for many solution provider acquisitions, including the building of the $800 million solution provider Presidio, based in Green Belt, Md., which was formed by merging a number of East Costs solution providers including Solarcom, Atlantix, NIS and Ficomp.