Microsoft SI Giant Expands Global Footprint With U.K. Acquisition

All-star Microsoft systems integrator New Signature has made its initial jump across the pond, scooping up yet another award-winning Microsoft partner - London-based Dot Net Solutions – continuing an acquisition frenzy fueled by investments from private equity firm Columbia Capital.

This deal, which will bolster the portfolio of the 2014 and 2015 Microsoft partner of the year in such areas like Azure migration and application development will also give New Signature a launch pad from which it can grow its international presence.

"The approach with this acquisition was – number one - a response to the demand of our customers’ for global reach," New Signature CEO Jeff Tench told CRN. In fact, he said New Signature will likely acquire more Microsoft partners in the U.K. via Dot Net, following a strategy similar to the one it saw success with in the U.S.

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"It was never our intention to acquire only the best partner in the U.K.," he said. "Although we have done that, now we are looking at a broader strategy of expanding the same way we have in North America, but it was never one-and-done."

In North America, New Signature has acquired four firms over in the last 12 months, each focused on adding to New Signature's technical capabilities or extending its geographical reach in the U.S.

However, Tench said New Signature saw an opportunity for growth in the U.K. born out of a demand from customers looking for a partner with international capabilities.

Paul Cosgrave, Dot Net’s managing director, said there’s a "significant" growth opportunity for Microsoft partners in the U.K., noting that Dot Net doubled its business last year and has already grown 50 percent this year, having expanded from 20 to 70 employees since 2014.

Cosgrave said Dot Net is now ready to begin taking advantage of the synergies and support it will have in being part of New Signature. In an interview with CRN, he specifically cited New Signature's application development portfolio as an opportunity for growth and hopes New Signature will take advantage of Dot Net's services expertise focusing on the Internet of Things.

However, both Cosgrave and Tench are looking forward to acquiring more companies throughout the U.K.

"In the U.K., we are seeing a huge change in perception around Microsoft," Cosgrave said. ’What they are doing more than anything else (is) bringing people back to Microsoft world."

Dot Net, Microsoft’s U.K. partner of the year for 2015, will continue to operate as it has. Cosgrave will remain managing director, as will founder and Chief Technology Officer Dan Scarfe. Cosgrave will report to Tench.

Financial details of the deal were not disclosed.

In April 2015, Washington, D.C.-based New Signature received $35 million in private equity from Columbia Capital. As part of that, Tench was appointed CEO. He said New Signature's first round of acquisitions, made in April and May 2015, helped develop a set of offerings to assist customers that sought to migrate to modern business platforms such as Office 365 and Azure. That push to expand capabilities led the company to acquire data center infrastructure specialist CMS Consulting, and add a scalable managed services offering through its acquisition of Infrastructure Guardian. Both companies are based in Toronto.

"The question then became: Once they are [migrated to modern business platforms] what do you do to drive an ongoing relationship?" Tench said. He added that New Signature later decided to add Toronto-based applications development company iMason, in November, to create applications that could be built on top of those platforms.

All three of those acquired companies were awarded Microsoft's 2015 Canada Impact award for their combined efforts in transforming software solutions into fully managed services via Azure, Microsoft’s enterprise-grade cloud platform.

In November, after completing acquisitions focused around business capabilities, the company shifted its focus to deals that expanded its geographic reach, purchasing Atlanta-based Microsoft partner and identity and access management specialist InfraScience, which now serves the entire East Coast from Toronto to Florida.

Last year, following the Columbia investment, New Signature said in a statement that it aimed to use the money to triple the size of its business over two years, increasing headcount from 90 to at least 180 by 2017, and hoping the investment would enable New Signature to hit $500 million in annual revenue within the five years.

According to Tench, the company has blown past its headcount goal, and, following the addition of Dot Net's 70 employees in the U.K., will have more than 350 on staff, with about 110 in Canada and 170 in the U.S.
As for the other goals, Tench said the company is "clearly ahead of pace." But he added that it will still "take a lot of good work on everyone's part’ to reach $500 million in annual revenue.

Tench said New Signature is going to continue on its growth path by creating a "community of all-stars."

"Our approach is to take great companies and make them even greater," he said.