5 Things To Know About Cognizant’s Planned 10th Magnitude, New Signature Acquisitions

Cognizant’s acquisition of Microsoft cloud services provider 10th Magnitude, coming only five weeks after Cognizant acquired New Signature, signals a huge investment in the burgeoning Microsoft Cloud business.

Cognizant Places One-Two Bets On Microsoft Cloud Services

Cognizant Tuesday said it plans to acquire 10th Magnitude, a large Microsoft cloud services provider. The planned acquisition comes only five weeks after the Teaneck, N.J.-based global solution provider unveiled the planned acquisition of New Signature, another large Microsoft cloud services provider.

The two back-to-back deals signal a major move for Cognizant, No. 6 on the CRN 2020 Solution Provider 500. The two will form the basis of a new Microsoft Business Group in Cognizant and expand its Microsoft Azure expertise. For a company like Cognizant, the move is critical as a way to get part of the growth of the Microsoft Azure cloud, which in the fiscal quarter ended June 30 saw revenue grow 47 percent year over year.

These two acquisitions signal a shift in how the channel and the IT industry approach the growing need for cloud services. Here are five things to know about the moves.

Second Big Microsoft Cloud Bet By Cognizant In Five Weeks

10th Magnitude is Cognizant’s second recently announced planned acquisition of a Microsoft cloud services partner. It follows the July 28 news of its plan to acquire New Signature.

Chris Pyle, president of Champion Solutions Group, a Boca Raton, Fla.-based solution provider that has also invested heavily in Microsoft cloud services, particularly services around Microsoft Teams, told CRN that he has run into both 10th Magnitude and New Signature in the market, and that Cognizant is making a good move with the acquisitions.

“I’m starting to see more acquisitions of Microsoft cloud providers by larger companies,” Pyle said. “Microsoft is a dominant cloud player. Large systems integrators need to get into the business. But finding the right talent is hard. It’s the classic build versus buy decision. And Cognizant is buying.”

Gaining Clout In A Hot Market

10th Magnitude and New Signature have one common characteristic that makes them especially valuable to a company like Cognizant and its customers: Both are on the list of only 70 certified Azure Expert Managed Service Providers worldwide.

Gaining that Azure Expert Managed Service Providers certification takes a lot of work. To get it, an MSP must work with Microsoft on a pre-audit assessment and an on-site audit, and could require over 300 hours of effort, according to Microsoft. The MSP will also need to meet eight basic requirements:

• Have an active Microsoft Gold Cloud Platform competency

• Drive a high minimum bar of monthly Azure consumed revenue

• Have an active Cloud Solution Provider contract in place

• Have its MSP offering listed in AppSource or Azure Marketplace

• Promote its Azure MSP offering on its website

• Meet the minimum number of individuals with the required certifications

• Submit four customer references for its Azure MSP solution, including one public case study

• Have Advanced Support for Partners or Premier Support for Partners covering Azure

Cognizant Is Making Acquisitions In A Hot Space

With the rise of Microsoft Azure and the push by businesses to adopt the Microsoft cloud platform including Microsoft 365, Microsoft cloud service providers like New Signature and 10th Magnitude are now a hot commodity.

In 2020 alone, the channel has seen multiple related acquisitions in this space, including Gordon Flesch Company, Madison, Wis., which in February acquired fellow Madison-based Information Technology Partners, giving it Tier-1 Microsoft Cloud Solution Provider status, and 3Cloud, a Downers Grove, Ill.-based Microsoft Azure-focused solution provider and MSP, which in late July acquired Applied Cloud Systems, a Pittsburgh-based Microsoft Managed Gold Partner with a national footprint.

New Signature and 10th Magnitude Bring Heft To Cognizant’s Microsoft Cloud Business

Cognizant’s new Microsoft Business Group, which will be under the leadership of New Signature CEO Jeff Tench, will be a cloud-focused powerhouse.

New Signature is No. 392 on the 2020 Solution Provider 500 list, while 10th Magnitude is No. 466. Both companies saw their rankings rise from 2019 to 2020.

It's A Small World, After All

Given the rarity of certified Azure Expert Managed Service Providers, it should be no surprise that 10th Magnitude and New Signature have met in the market.

Dan Scarfe, founder and chief solutions officer at New Signature, wrote on LinkedIn that he is excited to work with 10th Magnitude.

“We’ve barely gotten over the excitement of becoming the Microsoft Business Group here at Cognizant before we have even more exciting news to share. We are today announcing our intention to acquire 10th Magnitude. I’ve known [10th Magnitude CEO] Alex Brown (pictured) for many years and always held him in the highest regard. 10th Magnitude was the yardstick all of us were measured against. I am thrilled at the opportunity to finally get to work with him and his team,” Scarfe wrote.

Brown, in response to that post, wrote, “Dan, I am so excited to finally get a chance to work with you and the entire New Sig team. We are going to do something amazing together, and working with you after knowing you for so many years makes it even better.”