Interlink, Equarius Latest Microsoft Partners To Merge

Interlink Group, Englewood, Colo. and Equarius, Bellevue, Wash., unveiled merger plans in a bid to amplify their presence in the western United States. Terms of the deal weren't disclosed, but Interlink CEO Bart Hammond said the combined company--to be called Interlink--will generate about $25 million in services revenue annually. It also will field nearly 200 staffers in the Seattle, San Francisco, Denver, Sacramento, Calif., and Portland, Ore., metro areas.

Hammond, who will serve as CEO of the merged company, said the new and improved Interlink will combine Interlink's know-how in Windows Server, Exchange Server and other Microsoft infrastructure products with Equarius' expertise in Microsoft CRM, e-business and e-commerce. In today's business climate, growth was imperative, he told CRN on Wednesday.

"If you look at what's happened in IT services, there are the big guys--Cap Gemini, Accenture, IBM Global Services--and then there are the boutique firms, typically traditional Microsoft partners in a single geography with 30 to 40 people," Hammond said. "We wanted to serve companies with $200 million to $2 billion in revenue. That segment wants full services but [combined] with the close relationship with a boutique provider. Now with 200 people, we're one of the largest Microsoft-focused providers in the western U.S."

Burley Kawasaki, former CTO of Equarius, who will be vice president of solutions for the combined company, agreed that size is critical. "Equarius, like a lot of partners at the regional level, struggled to fit into the various partner programs," Kawasaki said. "Microsoft has great programs for 'the globals'--the Accentures of the world--and the way they're revamping their partner programs around competencies rewards some of the very small niche partners. We've struggled at times with being in the middle. We were trying to grow, but we were too big for the specialized programs and not big enough to get the love going to the globals."

The size of the market comprising companies in the $200 million to $2 billion range is big enough to support several strong regional players, as well as the global partners, according to industry observers. Yet even Microsoft executives say the company doesn't field enough personnel to attack that huge market, they maintained.

Microsoft partners, especially Microsoft Business Solutions (MBS) partners, have been on a merger-and-acquisition spree of late. Just last week, Tectura made its 10th acquisition in two years. And earlier this year, EYT merged with In2Gr8, another MBS partner. The moves bulked up those solution providers' services expertise and geographical coverage.

And Microsoft has been watching with interest. Microsoft Senior Vice President Doug Burgum, who heads MBS, has said that as long as such moves mean more talent and feet on the street behind MBS products, it's positive. But if acquisitions are made merely to consolidate and to cut costs, that won't do much to bolster MBS' profile or that of its Great Plains, Axapta, Navision and CRM products, he added.

What's more, Burgum said, it's a good thing that MBS partners are drawing investment dollars. Several partners have garnered new rounds of venture funding, which attests to the overall health of the MBS channel, he said.

"You've seen deals with EYT, with $10 million to $20 million of new capital coming in. Tectura announced another round [of financing], and some others are pending," Burgum told CRN in an interview last week. "When you see that kind of capital flowing into MBS partner organizations, it tells me that we're on the right track because these VCs wouldn't be putting money in unless they thought there was a business opportunity."