Solution provider Ensono is aggressively building out its cloud business, saying Wednesday it has forged a strategic deal with India-based IT services and consulting firm Wipro to acquire the company's data center business for $405 million.
The deal will expand Ensono's data center footprint into new geographies, including India, and double the provider's European business. The acquisition also will give Ensono the power to provide a range of cloud solutions to match any business' cloud strategy, Ensono CEO Jeff VonDeylen told CRN.
Downers Grove, Ill.-based Ensono offers infrastructure management services, including mainframe, private and public cloud services. Two years ago, Ensono, which was then known as Axciom, generated about 50 percent of its revenue from its mainframe management business. Today, the company has a mix of services revenue, with mainframe services accounting for just under 40 percent of its business.
The company's cloud business, VonDeylen said, is growing at a faster rate than its mainframe business. Combined with Wipro's data center business, Ensono's revenue will still be generated from about 40 percent mainframe services sales, with public and private cloud services filling out the rest of its services mix.
"We'll be able to really talk to customers about their complete IT state, which includes private and public cloud," VonDeylen said.
The deal is subject to regulatory review and is expected to close by June 30, the companies said. Wipro will have a minority stake in the company as well as a seat on Ensono's board of directors.
After the deal closes, Ensono will own eight new data centers, bringing its total to 14 global data center locations. Specifically, Wipro's data center location in Germany will help Ensono reach a new geography in Europe that it couldn't reach today. Wipro's U.S.-based data centers are also situated in regions that Ensono didn't have a presence in, an attractive prospect for Ensono that will let it reach more prospective customers, VonDeylen said.
"We think the Wipro footprint is very complementary to our strategy," he said.
Via the terms of the deal, more than 900 Wipro employees will join Ensono's staff of over 2,000. More than 60 Wipro enterprise customers will become Ensono customers. Wipro will still retain its IT services and consulting business, and the company will have an exclusive agreement with Ensono for its data center services, VonDeylen said.
While Wipro provided infrastructure services to its customers, the company didn't have a managed public cloud offering. The tie-up will give former Wipro customers access to another sought-after solution, thus providing Ensono with another revenue opportunity with these customers, VonDeylen said.
"This gives us a tremendous opportunity to have another conversation with existing clients who are taking that public journey to move to more agile infrastructure, and are trying to figure out which applications make sense in the public cloud," he said.
In 2016, Ensono bought U.K.-based MSP Attenda for $59 million, which helped expand its geographic footprint in Europe. More importantly, the deal gaive Ensono's managed Amazon Web Services service a boost and allowed the company to launch a private cloud offering, Ensono Cloud.