The recent news of Colt Technology Services buying ThinkGrid, a cloud platform provider, has bigger ramifications than merely another MSP M&A deal. Yes, there have been many M&A deals in our industry of late, and we’ve analyzied quite a few of them. What makes this deal unique is what it creates, not the transaction itself. I had the opportunity to speak with Falk Weinreich, VP of Sales for Colt, and Rob Lovell, CEO of ThinkGrid, to get their comments and views on why the deal happened and what it means for the global MSP and cloud community.
Colt, a UK based MSP, through this acquisition now has the ability to grow a channel of MSPs, VARs, and IT companies, who want to deliver cloud based solutions (along with the backend billing and support) to customers in both the US and western Europe. Boasting 12 datacenters world wide, and a cloud platform designed for both frond and back end support, this news might sound just like any other cloud based channel play. But it isn’t.
The acquisition is unique a in couple of ways. First, it seems ThinkGrid had as much to gain from the deal as Colt did; an unusual combination in today’s M&A world. Most deals I see focus first on revenue growth. This acquisiton has great technology synergy for both companies, as well as giving ThinkGrid additional resources and capital upon which it can continue its channel expansion.
The second unique aspect of this deal is that it represents probably one of the first pure telecommunications and cloud channel hybrids. Colt, with its telecom roots, now adds pure channel cloud and data to its portfolio. Undoubtedly, this should see a very nice increase in Colt’s valuation, as well as offer a competitive distinction for ThinkGrid as it grows its market on at least 2 continents. This deal, in many ways, represents the epitome of the modern managed services model. Data and the voice sides of the channel are converging, and appear to have done so in a very real way with the Colt/ThinkGrid acquisition.
There are some potential hurdles, however, that Colt/ThinkGrid may have to overcome. Roughly 30-40% of the company’s revenues comes from the US. It will be interesting to see how ThinkGrid deals with private cloud competition from US providers, as more and more customers are demanding transparency and accountability for their data.
We will be monitoring Colt/ThinkGrid movements and let you know how events evolve throughout the remainder of the year.