AWS Partner Day1 Buys Government Unit of Hosted Cloud Powerhouse

Amazon Web Services partner Day1 Solutions has made its fourth deal in eight months to strengthen its data center services offerings in the public sector, Day1 revealed Tuesday.

The acquisition of Plano, Texas-based Vazata's public sector business unit provides Day1 with enhanced cloud infrastructure, data center colocation space in Northern Virginia as well as access to the FedRAMP certification, which has increasingly become the cloud security standard for government customers.

"If you're not in the (FedRAMP) process, you're better off acquiring a company to move into that space," Luis Benavides, founder and CEO of McLean, Va.-based Day1, told CRN. "Day1 is just in hyper-growth mode."

[Related: CRN Exclusive: Top AWS Partner Day1 Acquires Data Analytics Shop]

The acquisition is designed to fuel growth in both public sector and enterprise markets, with Day1 and Vazata forming an alliance to pursue hybrid cloud opportunities. Customers of both companies will have more choices and greater flexibility, Benavides said, and are now able to leverage either a private cloud environment or a true hybrid cloud solution.

Stephen Kovac, Vazata executive vice president of strategy, has joined Day1 as vice president of data center services, where he will be responsible for growing Day1's hybrid cloud, colocation and FedRAMP initiatives. Some members of Vazata's sales and operations teams will also join Day1, Benavides said.

The public sector team will continue to leverage Vazata into the fall for help with taking customer calls, monitoring their cloud platform and doing basic network provisioning, Kovac said. Day1 will also lean on Vazata in the longer run to support commercial customers and data center usage outside of the Northern Virginia area (Vazata has three data centers in the Dallas area).

Vazata as a whole has 11 to 50 employees, according to the company's LinkedIn page, while Day1 had a head count of nearly 60 before this most recent deal. Day1 has been on an equity tear, Benavides said, closing one round of funding earlier this year and planning to close another round this summer.

Vazata opted to sell its public sector operations so the company could focus exclusively on the commercial and enterprise space, which Kovac said still makes up the majority of the company's business. The acquisition closed April 30, and was announced Tuesday.

Vazata's public sector business has served as an infrastructure provider for midsize and large systems integrators, as well as original equipment manufacturers such as Cisco and NetApp, Kovac said. The company has also worked with several software and services providers that are interested in layering their offerings on top of Vazata's infrastructure.

Day1 has increasingly moved beyond the state, local and education space into servicing federal government customers, Benavides said, and is also interested in teaming with systems integrators.

Vazata's U.S. government customers include the Department of Energy, Department of the Interior and the Federal Deposit Insurance Corp. (FDIC), according to the company. Although Kovac's unit does some business with commercial clients, 80 percent of its revenue comes from government customers.

"The big dollars come from the public sector side," Kovac said.

The Vazata acquisition follows Day1's May acquisition of big-data consulting firm OpenOsmium, November acquisition of cloud managed services provider Logic Method IT and the purchase of the cloud services group of a nationally recognized engineering firm. Day1 was one of just six managed service providers nationwide named to the new AWS cloud partner program in March.

Benavides said Day1 expects to announce additional acquisitions this summer centered around specific capabilities or vertical markets in high demand from customers.

PUBLISHED JUNE 2, 2015