Red River Buys 60-Person Software and Application Development Firm

Red River has purchased a software integration solution provider to increase its geographic footprint and expand the range of services it can provide to federal customers.

The Claremont, N.H.-based company, No. 55 on the 2017 CRN Solution Provider 500, acquired Sacramento, Calif.-based Natoma Technologies to boost its position in the fast-growing software space and gain a foothold in the Western United States, according to CEO Jeff Sessions.

"Everything we do now is based on software," Sessions told CRN. "Every hardware OEM is starting to look at their software play and trying to reimagine themselves in a software world."

[Related: Red River Promotes Sessions To CEO, Outgoing Chief Will Lead M&A Efforts]

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Red River has until now focused on network and infrastructure-related integrations, Sessions said. Although the $500 million solution provider has relationships with pretty much every software manufacturer, Sessions said the company has refrained from helping customers integrate software into their current ecosystem.

That all changes after the acquisition of 60-person Natoma, which closed last week. Sessions, who became Red River's CEO in February, said Natoma's synergy with OEMs is expected to drive exponential growth.

Natoma has tight relationships with Oracle, Microsoft, Salesforce and Amazon Web Services, according to Marty McGartland, Natoma's president and CEO. McGartland said his company has worked closely with state and local governments to support mission-critical systems around everything from licensing to Medicare eligibility.

"Many states face the same challenges," McGartland told CRN. "If you can do it in California, you can probably do it elsewhere."

Natoma will operate as a standalone business unit with Red River focused on enterprise applications. McGartland will serve as the division's president, reporting to Red River Chief Operating Officer Dan McGee.

From Natoma's perspective, McGartland said becoming part of Red River will enable the company to go after bigger and more complex projects. The Natoma brand will be retained in the short-term, Sessions said, with the division gradually adopting the Red River moniker in the longer run.

"Until there's a comfort level, that will stay," Sessions said.

Sessions plans to start by extending Natoma's abilities across the entire state of California. From there, Sessions said the company will look to identify repeatable processes and spread them to other states.

From a geographic standpoint, Sessions said Red River currently has facilities in New Hampshire, New York, Texas and Virginia. Gaining a brick-and-mortar presence in the world's sixth largest economy will allow Red River to grow its customer base and enable the company to better support its around-the-clock network operations center (NOC) based in New England.

Red River has been averaging 20 percent annual growth for each of the past five years, Sessions said. After completing the Natoma deal and the October 2016 acquisition of commercial solution provider Accunet, Sessions expects that growth to accelerate exponentially.

In the coming months, Sessions anticipates that Red River will add headcount, take on new projects, and move up the stack with its existing customers. All told, Sessions said Red River wants to help its customer develop and grow regardless of whether they have needs related to software, infrastructure or the network.

"This is a long-term play," Session said. "It's a large investment in the area."