A few years ago, the executives at CloudJumper, while working at a nGenx, were looking for an alternative to Citrix – a Desktop-as-a-Service solution less complicated, less expensive, and less challenging to scale.
The application and desktop delivery provider came across IndependenceIT and was so impressed it decided to build a business operating for partner MSPs a turnkey version of that vendor's DaaS solution. It quickly became IndependenceIT's largest partner—so important to the go-to-market efforts, that IndependenceIT exited the services business entirely in 2015, ultimately selling CloudJumper that business unit.
CloudJumper, based in Raleigh, N.C., announced on Tuesday that it closed a deal earlier this month to fully acquire IndependenceIT – —a rare acquisition of a software developer by a services partner.
"We now control effectively our own destiny on both the software and the services pieces," Max Pruger, CloudJumper's chief sales officer, told CRN.
Both companies more than doubled their revenue last year; their growth tied at the hip. "Every time we sold a seat, we would buy software from them," Pruger said.
IndependenceIT, based in Allentown, Pa, needed funding to continue to scale.
"The more we talked, the more we got together, the more it made sense for CloudJumper to acquire IndependenceIT," Pruger said, an all-cash deal that was possible by CloudJumper parent company Q Services.
A straight acquisition, rather than some form of merger, made sense to ensure clarity in the management structure.
"There were questions about who is going to run the company, is this a merger or acquisition? But we didn't want any confusion around that," Pruger said. CloudJumper will annex the entire IndependenceIT staff and will run the combined company.
Since their partnership first formed, the market has changed. Not only did CloudJumper spinout from nGenx (which has since closed its doors) in 2016, but the DaaS product has evolved into a new, more-comprehensive category: Workspace-as-a-Service.
CloudJumper doesn't only work with IndependenceIT, but every subscription they sell through their channel includes that vendor's WaaS software, which CloudJumper packages into a turnkey solution. All sales go through more than 1,000 MSP partners.
"Over the last year, we've been seeing larger, more-mature MSPs wanting to move into the Workspace-as-a-Service space. They don’t necessarily want a full turnkey environment, but at the same time don’t want to manage the full underlying platform," Pruger said.
The IndependenceIT solution can also be installed on private infrastructure, but that doesn't make economic sense for customers with fewer than 1,000 seats. CloudJumper operates the solution through nine data centers, and also offers rapid deployment into Google Cloud Platform and Microsoft Azure, with an Amazon Web Services integration coming soon.
The combined company is targeting an old ally—Citrix Systems. CloudJumper has even developed a migration tool to rip and replace workloads from Citrix.
While nGenx was more than once a Citrix Partner of the Year, CloudJumper expects to recruit Citrix partners and win Citrix customers with a solution it advertises as less complicated, less demanding of technical resources, and a fraction of the cost.
Frank Picarello, the chief operating officer at TeamLogic, a Southern California-based IT outsourcer with 130 franchises delivering DaaS, told CRN the acquisition should yield a higher quality, more comprehensive Workspace-as-a-Service solution.
"Consolidation is really good because this has been a fairly fragmented space," Picarello said. "To see two really good companies coming together, we work with both, knowing the benefits of that will obviously serve them well but will serve us well."
The acquisition should usher in a greater depth of offerings, and better integration of the core software his company's franchises bring to market across the country.
"IndependenceIT's strength is in the vision of what that platform needs to look like," Picarello said. "CloudJumper is clearly the wrapper. All the value-add below it and on top of it, including the hosting, infrastructure making it all realizable, onboarding, market intelligence, how to sell, calculators and tools. The symmetries become efficiency when you put it together."