AdvizeX Looking To Buy Security Firm

AdvizeX Technologies is on the prowl for a security solution provider to acquire, a company executive told CRN.

The Independence, Ohio-based company, No. 92 on the CRN SP500, is experiencing a dramatic increase in customers seeking advisory and managed security services, given the recent high-profile breaches, according to CTO John Brier.

End users are increasingly realizing that they need to better secure their applications and that they can't find enough qualified people to manage their security network during off-hours.

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AdvizeX is organically growing its security business as quickly as it possibly can, Brier said, bringing on an additional two or three security consultants each month.

But India-based IT services giant Rolta -- which purchased AdvizeX for $32 million in November 2012 -- has been challenging the solution provider to grow faster. Competitiveness in the reseller market continues to increase, Brier said, with larger solution providers becoming a lot more aggressive.

Rolta also has deep enough pockets that AdvizeX can, for the first time, look to acquire large national players, Brier said. AdvizeX has, thus far, only undertaken small, tuck-in mergers, with M&A occurring on an opportunistic basis rather than as part of a broader strategy.

AdvizeX has been approached by an average of two or three regional resellers each week that are looking to get acquired as a result of changes in partner programs, Brier said. He said he believes the changes will ultimately mean that a regional player with $20 million to $30 million in annual revenue can no longer make a good living.

OEMs are planning to roll out new partner programs in the next year that mandate a level of activity that isn't attainable for a smaller solution provider. For instance, Brier said EMC will require that platinum-level partners have $100 million in annual revenue.

The enhanced sales requirements by OEMs are meant to drive consolidation in the channel.

"The larger you are, the stronger you get," he said.

AdvizeX has gotten much larger since becoming a stand-alone unit of Rolta, adding more than 50 customers in each of the past eight quarters. For all of 2013, the solution provider brought 214 new end users on board.

The company's customers range from Fortune 500 to midmarket companies and play in verticals such as health care, manufacturing, state government and local government.

AdvizeX has relied on M&A and organic growth to open a couple of new offices each year. Although Brier said AdvizeX is most focused on increasing its reach inside North America, the solution provider has also recently opened offices in Finland and Budapest, Hungary.

From a technology standpoint, the 2012 acquisition allowed AdvizeX to fuse its infrastructure expertise with Rolta's deep background in applications.

As end users transition to software-defined data centers, Brier said customers have been expressing more interest in applications and less in the servers, storage and networking that make up the physical data center.

Organically building up application expertise without Rolta's help would have taken years, he said. Because Rolta operates in 40 countries, the acquisition also boosted AdvizeX's resources in Europe, making it much easier to do business there.

Moving forward, Brier said he expects demand for converged systems to be surpassed by end user requests for integrating application messaging and speeding up SAP deployment.

PUBLISHED DEC. 31, 2014