Microsoft Azure Superstar 10th Magnitude Receives Private Equity Investment

10th Magnitude, one of the fastest-growing Microsoft Azure strategic service providers, has received a "significant growth equity investment" from private equity firm Pamlico Capital to capitalize on the soaring Microsoft Azure cloud services opportunity.

The six-year-old Chicago-based cloud services superstar said the private equity investment "will support the firm's strategic and geographic expansion initiatives as well as provide resources for potential acquisitions." Terms of the transaction with Charlotte, N.C.-based Pamlico Capital were not disclosed.

Pamlico Capital also has an investment in cloud service provider superstar TekLinks and Workday highflier DayNine.

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The private equity investment has the potential to reshape the Azure services landscape with 10th Magnitude investing heavily to provide a broader and deeper set of Azure services to customers globally, said Jason Rook, vice president of customer and partner success for 10th Magnitude, in an interview at this week’s Best of Breed conference, hosted by CRN parent The Channel Company.

"The Azure market opportunity is accelerating at an unimaginable pace with more and more large enterprises embracing public cloud," said Rook. "This partnership will allow us to capture growth opportunities in areas like IoT, data analytics, and grab more of the groundswell of large enterprises moving away from expensive data centers."

10th Magnitude founder and CEO Alex Brown said in a prepared statement that the investment will help the company "scale to meet increasing demand for transformational cloud-based solutions, and will allow us to quickly expand our capabilities to address rapidly emerging client needs" in areas like managed cloud services. "The vast Microsoft Azure market opportunity continues to grow exponentially," he said.

Rook said the only thing holding back further growth for Azure service providers like 10th Magnitude is access to hard-to-find talent. "Over the past six years, we have become very good at finding and developing talent that aligns with the breakneck innovation in the public cloud market," he said. "Our customers are demanding more support as they embark on solutions with emerging technologies like containers, IoT, big data – all while trying to wrap it all into a DevOps ecosystem. That's our sweet spot and now we'll be able to do it at a much larger scale."

10th Magnitude, which has delivered hundreds of Azure consulting engagements for clients, is a member of the Azure Partner Advisory Council and has achieved the elite status of a Microsoft National Solution Provider.

"Our National Solution Provider team recognized the potential for an Azure-focused system integrator and added 10th Magnitude in 2014," said Stephen Boyle, vice president of U.S. Partner Strategy and Programs at Microsoft, in a prepared statement. "10th Magnitude has continued to lead the Microsoft channel with tremendous year-over-year growth by driving transformation with our joint customers and engaging proactively with our field teams. This next phase in 10th Magnitude's evolution further validates their model and the significant opportunity for all partners in the Microsoft Cloud."

Rook said the private equity partnership is a sign of just how robust the opportunity is for service providers focused squarely on public cloud.

"While there is an opportunity in the hybrid market, the economics are more advantageous in public cloud where strategic service providers do not need large capital outlays for data centers or co-location," said Rook. "The 10th Magnitude focus on public cloud allows us to provide customers with game-changing business transformation at a pace that legacy solution providers cannot keep up with."