Two solution providers, Dallas-based Lumenate and Marlborough, Mass.-based International Computerware, Inc. (ICI), have joined forces in a move to help both scale to the level needed to grow their enterprise business and relevancy among enterprise customers.
That growth will come as the two solution providers bring together complementary business models and skill sets that can be brought to each others' existing customer base and used to further their reach into new potential enterprise customers, said Jamie Shepard, regional vice president for the Northeast and principal at Lumenate and, until this month, the former executive vice president of technology solutions at ICI.
For ICI, the merger came as a way to remain relevant, something that is difficult for smaller partners no matter how good their business models are, Shepard said.
"The need to be relevant is 100 percent the reason to grow," he said. "For the last three years, I know we had probably the best business model in the industry. Even our competitors congratulated me. And, we've proven it with our customers. But, we got to the point where I had to decide to be more relevant and take our model national."
Lumenate and ICI bring different technology skill sets to the new combined company, which will continue to operate under the Lumenate name.
ICI started as a professional services organization, but in January of 2006, it started selling products after signing as an EMC partner, Shepard said. ICI between 2009 and 2011 grew 60 percent year-over-year and is now working with ever-larger enterprise customers and customers who are increasingly moving towards the cloud, he said.
"Our customers are global, and they want us to be global," he said. "For instance, we are now building a global IaaS solution for a customer who we cannot name. We need to expand our model. But, it's hard for me to grow beyond $50 million on my own. It's very hard to do. We just don't have the resources. We need to either partner or merge."
Lumenate brought to the merged company a huge collaboration business including Cisco Unified Communications and VoIP, Shepard said. "I was trying to build our data center and infrastructure practices but wasn't able to build a collaboration practice, which meant our customers had to go elsewhere for that part," he said.
NEXT: Merging, Acquiring Their Way To RelevancyLumenate also has an advanced security business, which ICI had not yet developed, he said.
Before the merger with ICI, Lumenate had been growing in part via acquisitions.
Lumenate last Spring acquired Troubadour, a Houston-based solution provider with a primary focus on networking, infrastructure and security.
Lumenate in 2012 also acquired security specialist ANI Direct and data center solution provider International Computerware.
Lumenate's Shepard said he did not want ICI to be acquired or to acquire someone else. Instead, he said he was looking for something similar in size that could complement its weakness, which he said is on the finance and management side.
"I'm good at customer services and at taking a customer problem and turning it into a solution," he said. "I can build a brand and a profitable business. My other half needs strength in management and finance. I needed to find a way to go to the next level."
That way came via a friend of over 19 years who told Shepard about Lumenate, which was also looking for a way to grow.
That introduction led to a meeting last Fall between Shepard and Reagan Dixon, president of Lumenate, where the two very quickly realized their companies could grow more quickly as one.
"The meeting was like a blind data where you walk away thinking, 'I'm going to marry this person,'" Shepard said.
The channel seems to be going through a new wave of mergers and acquisitions activity.
Other recent deals include the October acquisition of Computex by Stratos, an investment firm looking to build a national IT solution provider through acquisitions, along with this month's acquisition of Minnesota-based St. Croix Solutions by Edmond, Okla.-based Pinnacle Business Systems.
PUBLISHED JAN. 14, 2013