SADA CEO Safoian: Acquisition By Insight Creates ‘Top Provider’ Of Multicloud Services
SADA President and CEO Tony Safoian says his company's acquisition by Insight is aimed at building a bridge between the Google Cloud Platform and Microsoft Azure.
Building A Multicloud Powerhouse
Google Cloud Platform and Microsoft Azure are fierce competitors in the cloud market. Often they act as if customers’ success depends on which cloud provider they choose over the other.
Left unsaid by these two cloud powerhouses, as well as by their top hyperscaler rival Amazon Web Services, is that business customers are really multicloud businesses that need to work with two or more cloud providers to run their operations and serve their own clients.ha
Cloud service providers and other solution providers know this. But building a multicloud business, especially building it at scale, can be a massive undertaking.
Cue the $410-million blockbuster acquisition of SADA by Insight. Los Angeles-based Sada, one of the largest and most recognized GCP-focused channel partners, is in the process of becoming part of Chandler, Ariz.-based Insight, one of the world’s largest Microsoft Azure channel partners. The move, said SADA President and CEO Tony Safoian in an interview with CRN, is aimed at building a bridge between those two worlds for businesses’ multicloud requirements.
SADA had a successful Microsoft Azure business a few years ago before spinning it out and selling it to another cloud channel partner, in the process becoming a successful Google-focused firm. So the company knows from experience the importance of building multicloud environments.
“It's rare to be all in one cloud, especially in enterprise and traditional organizations,” Safoian told CRN. “We just want to capture the opportunity anyway and increase that customer’s experience across more than one [cloud] without losing focus that our primary job is to drive the Google business forward. Insight’s Microsoft teams know their primary job is to drive the Microsoft business forward. But these things are happening anyway.”
The acquisition will create a top provider of both GCP and Azure services with a focus on bringing the right cloud to the right customer requirement, Safoian said.
“So [Insight’s] teams are going to keep an ear to the ground looking at things like, ‘is there a data need that's uniquely solved by [Google] BigQuery? Is that the right conversation?’” he said. “Now they're gonna have somewhere to take that. And for us, maybe there's a massive customer who wants to migrate their .NET SQL Azure application to cloud. I'm not going to say, ‘Yeah, you should probably take that to Google,’ like that makes sense. If it’s a .NET SQL application running on Microsoft servers, probably do that in Azure.”
The acquisition of SADA by Insight, expected to close in the next few weeks, will make it easier for their large, combined installed base of cloud customers to take advantage of multicloud environments, and perhaps show their peers how to do it. For details, here's CRN’s complete discussion with SADA’s Safoian.
SADA has been a successful company for years. Why sell the company?
I don't see it so much as a sale, even though that's exactly what it is. I see it as yet another phase of doing the most strategic possible thing at exactly the best possible time. I think about how do we uneven the playing field in the market relative to the competitive framework that exists across all sorts of partners and all ecosystems, and also how to provide the most value to customers both present and future. If you had asked me a year ago, ‘Is this where we would end up?’ I'd have had no idea. But in evaluating all possible options to ensure that we can be number one in the world at what we do, not just now but for forever, this new home presented an incredible, unfair opportunity for us as an organization.
Insight has all the incumbency in the world that we could ask for, including 30,000 customers, existing relationships. By the way, that's nothing you can fast track. You have to be around and do a great job for 35 years to have 30,000 customers and be in 26 countries and all of this other stuff, right?
And so, as I thought about the last couple of years, the biggest impediment to our growth is not how fast the cloud is growing. It’s not how good we're executing. It takes a year to win a customer sometimes because of contracts and vendor stuff and agreements and legal. We've had cases where we win major enterprise customers after a 12-month sales cycle. Not because they didn’t know what they wanted. Not because we didn't do what they needed. It's like they couldn't figure out how to buy. So by doing this, we immediately removed that barrier in a way that no other Google Cloud partner in the world has been able to do or can do, frankly, because now we've taken Insight off the board. And so it's a tremendous accelerant to our business.
A lot of founder-led companies make the mistake of getting hyper-emotional about pride of ownership. And they don't always think about what's perpetually best for their business, their customers, or their people. I've also ensured that SADA will be around forever. There's succession plans built into the strategy. And I've talked about a forever company framework being one in which we'd become a public company. I just didn't know it'd be this way.
How many customers does SADA have? What is your annual revenue?
Over 3,000 customers. Our revenue [is $251 million according to Insight’s SEC Form 8K]. We're the largest seller of Google Cloud technology in the world. We're the largest implementer and seller of Google Workspace in the world. We are a very material part of what Google Cloud reports as their revenue on a consumption basis. And we have tremendous growth in our services and solutions capabilities as well.
What was uncanny as far as the things we have in common with Insight, we ourselves have gone through transforming ourselves from being a really good reseller, a really good sales engine, to become services-led and solutions-led. Services is the fastest growing part of what we do because we understood, just like Insight understood, that that's really where the value proposition lands with customers and how we become differentiated with customers. Because nobody writes a success story about, ‘Wow, buying from Insight was so great. And the procurement process was fantastic. And their lawyers were great.’ No. People write stories about, ‘We went down this path. And now our revenue went up 20 percent. Our costs went down 30 percent.’ The CIO of a major construction company posted, ‘I went to Google Workspace and now I save eight hours a week.’ Those are the stories we want and it doesn't happen without exceptional professional and managed services.
You said SADA is the largest Google channel partner in the world. Can you quantify that?
If we trust accolades, because we don't really have everybody else's data, we just won sales partner of the year in Google Cloud globally. We hope it's a meritocracy. We believe that it is, so it's revenue. And we won either the North America award or the global award in this category for the last six years in a row.
What is your role going forward at Insight?
I'm going to continue to run SADA. I'm the CEO of SADA. My entire executive team is coming along. Our entire organization is coming along. This is not a cost reduction synergy play. This is a go-to-market growth play. And by the way, I have some experience balancing a portfolio of quasi-competing partnerships, because we used to run a great Microsoft business at SADA as well. We ran a cloud-focused Microsoft business and a cloud-focused Google business for a decade straight. So we ourselves had segmented P&L [profit and loss] and segmented teams, specialized teams, literally on two different floors of the building that I'm in as well. Physically separated. Because there's tremendous value in hyper-specialization and focus and how you manage competing priorities.
So we need to stay intact. We will stay intact. What Dee [President, Insight North America Dee Burger] wants, and Joyce [President and CEO Joyce Mullen] wants, and the shareholders want, and everybody else wants, is for us to continue to absolutely be hyper-specialized and the best in the world at what we do. And the way to do that is to let us do what we do best and just pour fuel on the fire, which is in the form of go-to-market synergies and customers.
What happened to your Microsoft business?
We sold our Microsoft business in 2019. We spun it out. And it was acquired by [Indianapolis, Ind.-based] Core BTS, which was building a private equity-backed platform company. And they did really well with that, actually, because we had an excellent Microsoft business. Because everything we do, we try to do in an excellent way.
But we just saw something really early in the Google ecosystem that nobody else saw. And it was before we even knew [Google Cloud CEO] Thomas Kurian was going to come on board that we made this decision. I think the deal closed three months after he started, so you can imagine that means we started the process nine months before that. We looked at our size. We knew that to be the best in the world, we had to focus. And we couldn't do all things for all people at our scale, especially then. Anybody who tried that didn't do a good job.
And we learned from that. And by the way, those who were multi-disciplinary partners, not to name names, they didn't do the firewalling. They didn't do the separate business units. So many things they didn't do. And so we learned from that. When we were running [with Microsoft], we had it separate. At some point, we decided we were going to be number one in the world at Google. And why Google? Because we believe in the technology and in being the big fish in the small pond. And to be honest, we couldn’t be the Insight of the Microsoft business no matter what we did. What we could be was the best at what they did in the Google business because the ecosystem was so small back then. Best decision we could have made. I understand, by the way, the irony of selling a Microsoft business and then going back into one of the biggest parts of Microsoft world. So there's a little bit of irony in that. But you know, the world works in mysterious ways.
How do you keep the Google partnership separate from Insight’s long-time Microsoft partnership?
We don't have any customer of any material size that does not have a Microsoft relationship. It's not always with Insight. And now we're going to try to make sure those relationships are all with Insight. Our people have come to me over the last couple of years regularly saying something like, ‘Hey, so and so is not happy with their other, whatever they're using. They wish we could do that for them or wish we could refer.’ So we want to mostly capture the activity that's happening anyway.
It's rare to be all in one cloud, especially in enterprise and traditional organizations. We just want to capture the opportunity anyway, and increase that customer’s experience across more than one [cloud] without losing focus that our primary job is to drive the Google business forward. Insight’s Microsoft Teams know their primary job is to drive the Microsoft business forward. But these things are happening anyway. So their teams are going to keep an ear to the ground looking at things like, is there a data need that's uniquely solved by [Google] BigQuery? Is that the right conversation? Now they're gonna have somewhere to take that. And for us, maybe there's a massive customer who wants to migrate their .NET SQL application to cloud. I'm not going to say, ‘Yeah, you should probably take that to Google,’ like that makes sense. If it’s a .NET SQL application running on Microsoft servers, probably do that in Azure. Some of that's pretty straightforward, actually.
How did Insight and SADA get together? Did SADA decide to look for a sale and then go out to find somebody to find a buyer? Did Insight send somebody to look at SADA?
We hired Goldman Sachs a couple years ago to find the best possible solution for our long term strategy, and we looked at every option on the planet over the last few years. And while this was going on, I started seeing Insight around the Google ecosystem. And I was curious, because I knew Insight and I respected Insight. I knew of them for the Microsoft ecosystem. There are people I’ve known who have been at Insight for 12 years. We’ve competed with or knew them. We're were in the same roundtables at Microsoft events five years ago. So we knew them well. That's why we purposely put Insight on the list [of potential buyers]. And Goldman’s TMT [technology, media, and telecommunications investment team] has done a good job over the last couple of years, and a great job helping us get this particular marriage consummated.
The culture aspect cannot be overstated. The importance of it for me and my family, our legacy, our people. The culture at Insight is unbelievable. It doesn't feel like a massive company at all. And that's a credit to Dee and Joyce and just the whole team. Everybody we met, it was like, ‘Oh my god, they're like us. Highly competent, very experienced. They want to win. They're nice people who shoot straight.’ That's like us. That was critical for me. And I feel like we're also going to learn from each other and influence each other’s culture.
When’s the last time you had a boss?
1999? I don’t know. 2000? Although my father thought he was my boss this whole time. He’s chairman of the board and founder but this is different, obviously. And I couldn't be happier.