2nd Watch CEO: ST Telemedia Investment Will Drive Multi-Cloud Expansion

The pioneering AWS partner has sold a controlling interest to a Singapore-based investment firm. It will apply that capital infusion into building out Microsoft and Google practices as it scales internationally.


Fueled by its largest-ever equity investment, pioneering AWS channel partner 2nd Watch is preparing to launch an aggressive new growth phase that will expand its practice across cloud providers and into international markets, the CEO of the born-in-the-cloud cloud solutions provider told CRN.

The infusion of capital from ST Telemedia, or STT, will accelerate 2nd Watch's strategy of growing beyond Amazon's cloud through developing partnerships with Microsoft Azure and Google Cloud Platform, 2nd Watch CEO Doug Schneider said.

With the definitive agreement signed this week, STT, a strategic investor based in Singapore, will take a controlling interest in the Seattle-based firm. Further details of the transaction were not disclosed.

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"This just kind of reinforces that 2nd Watch has plans and ambitions to be around for the long-term and build a company that not only endures the test of time but a lot of changes in the competitive landscape that are to come, and reaches new heights on a lot of fronts," Schneider told CRN.

2nd Watch was one of Amazon Web Services' earliest and most successful born-in-the-cloud partners—its brand is closely associated with the industry's largest public cloud.

Years of organic growth in the AWS ecosystem have "served us well," Schneider said. But the emerging multi-cloud world has led 2nd Watch over the past year to test the waters of working with Amazon's hyper-scale rivals.

"Multi-cloud has never been a question of if, but when," Schneider said. Enterprise customers are often asking for Microsoft Azure as another cloud option, and "Google is going to get there also" because of its unique capabilities around certain workloads.

2nd Watch's Microsoft Azure engagements have so far been mostly professional services, with just the beginnings of managed cloud services business. The Google practice is even more nascent.

"But we're investing," Schneider said. "That's what this [equity deal] starts to unlock for us. We will make our own accelerated investments in driving more business with Azure and Google as well."

The STT deal will facilitate that strategy of going "broader and deeper" with Google and Microsoft, Schneider added.

Complementing organic growth with M&A will also empower 2nd Watch to offer cloud services across all those cloud providers more globally, he told CRN.

STT isn't a typical private equity partner. The company is closer to a "strategic acquirer," Schneider said, as it also operates its own data center assets around the world.

STT's investment portfolio has been focused in recent years on AI, cybersecurity, big data and in managed cloud companies like 2nd Watch. In Asia, STT has become a major managed cloud player by purchasing equity in companies like Cloud Comrade.

The company is making such a meaningful investment in 2nd Watch because it sees its leading American managed services practice as "foundational" to what it can build going forward, Schneider said.

Other technology companies in the STT portfolio, such as AIOps-focused Moogsoft, will likely be leveraged to complement 2nd Watch services. "It makes sense to incorporate those other investments into our cloud services delivery practice," Schneider said.

2nd Watch's four core private equity investors have diluted their stakes to allow the Singapore-based fund to take a controlling interest, but all are participating in a new corporate structure that implements a holding company, Schneider said.