Solution Provider Consolidation Trend Picks Up As Vology Acquires Offsite Technology Solutions

In a strategic move to expand its footprint in the Florida region, fast-growing $180 million solution provider Vology acquired Tampa, Fla.-based MSP Offsite Technology Solutions.

Consolidation in the solution provider space is continuing unabated, with Exigent Technologies acquiring Information Architects Friday and Synoptek increasing its workforce by nearly 50 percent earlier this month by acquiring Pay Per Cloud and Rocket Science Consulting.

"There definitely seems to be consolidation in the current state of the market," said Barry Shevlin, CEO of Vology, No. 139 on 2014 CRN Solution Provider 500 list. "It's a general trend. … We're absolutely looking for acquisitions -- two or three in every given year," he told CRN.

[Related: New Vology President Eyeing Acquisition Targets, Growth]

id
unit-1659132512259
type
Sponsored post

Zeus Kerravala, principal analyst at ZK Research, said the trend of solution providers acquiring other solution providers is nothing new and he doesn’t expect it to stop anytime soon.

"I would expect that to continue, especially in the area of the smaller regional VARs," said Kerravala. "Particularly now with all the transitions going on with cloud computing, the Internet of Things, mobile computing -- a lot of VARs don't really have the right back-end systems to be able to make that transition or perhaps they feel like there's a hole in their skill set, so an acquisition is a good way to take care of those problems."

A regional acquisition, such as with Vology, also allows a company to get a new customer base in the same region, said Kerravala.

Vology, also based in Tampa, provides network management solutions in virtualization, storage and networking and related full-service outsourced management, according to Shevlin, and has been doubling its business every three years due to a healthy mix of organic growth and acquisitions. Approximately 80 percent of Vology's business comes through Florida, California, Texas and the New-York tri-state area.

Shevlin said Vology acquired Offsite Technology Solutions because the company provides similar technical IT services to key business accounts in west central Florida as well as having the "highest customer satisfaction rating in the area."

Offsite Technology Solutions' business model meets the needs of a rapidly growing segment of SMBs looking to outsource their IT network management to focus on core business initiatives rather than network maintenance and management, said Shevlin.

"The management team is also pretty aligned with where we want to go philosophically. … How companies are consuming IT is changing," said Shevlin. "More folks in the midmarket specifically are going to be more likely to outsource certain portions of their IT infrastructure."

NEXT: Vology Stays Laser-Focused On IT Infrastructure

Shevlin, who founded Vology, said his company has been able to consistently grow for more than a decade because of its ability to adapt to the ever-changing IT infrastructure landscape.

"A lot of it has to do with focus, we really stay focused on IT infrastructure -- whether it was selling IT infrastructure products in the early days or helping our customers with professional services around installation, configuration and management, or now getting to the point where more and more folks want to outsource the actual monitoring and management of those same devices or maybe not own them at all," said Shevlin. "We just stayed laser-focused on IT infrastructure from a product set and midmarket from a customer set."

PUBLISHED MARCH 3, 2015