German Tech Giant Buys HPM Networks To Launch U.S. Midmarket Cloud Offensive

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Cancom Group, one of the top German technology integrators, has acquired one of the solution provider crown jewels of Silicon Valley, HPM Networks, as the foundation for a U.S. midmarket cloud computing offensive

The Pleasanton, Calif. based HPM, started 20 years ago by Romi Randhawa, has provided infrastructure and services for some of the top Silicon Valley companies, including Facebook and Twitter.

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HPM is one of Hewlett-Packard's largest enterprise partners on the West Coast and a top VMware enterprise partner. It was No. 87 on the 2013 Solution Provider 500 with $270 million in annual sales.

Cancom, an $800 million IT services power with more than 2,400 employees, plans to leverage the cloud talent at HPM to bring its Cancom AHP (Application Hosting Platform) virtual desktop cloud to the U.S. market with a sharp focus on midmarket companies with anywhere from 500 to 5,000 employees, said Cancom Group CEO Klaus Weinmann.

Randhawa will continue to lead the HPM business in the U.S. as a separate subsidiary with a focus on driving the cloud computing business first in Silicon Valley and then throughout the country, potentially through partnerships with other solution providers.

"We do a fantastic job today of laying the infrastructure layer for any private cloud," said Randhawa. "What we were lacking was the ability to provide the software and applications and manage that private cloud for our customers. This allows us to continue selling the infrastructure layer but adds the application layer and allows us to create an entire offering on a private cloud and manage it for our customers with a multi-year recurring revenue contract."

Randhawa, widely respected among his solution provider peers, said he felt the time was right to merge with a larger company given just how radically cloud computing is transforming the business. "VARs in the infrastructure space have to get to the next level, adding the software layer to the private cloud," he said. "That is where we are going with Cancom."

Cancom, which already does $100 million a year in recurring cloud revenue with its virtual desktop cloud platform, was looking for a hot Silicon Valley tech company to help bring the Cancom AHP cloud virtual desktop to the U.S. market and found it in HPM, said Weinmann.

"This gets us into the U.S. market," said Weinmann. "With HPM we think we can grow the cloud business fast in the U.S. This is the most important place in the world for cloud computing. We had to be in Silicon Valley."

NEXT: A Better Midmarket Solution Than Amazon or VMware


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