How to Build a Better IT Services Business, Carousel-Style

Since MSPmentor and The VAR Guy reported on the acquisition of Atrion by privately-held Carousel yesterday, a number of readers have asked for additional insights into the deal.


June 9, 2016

4 Min Read
Rich Montefusco vice president managed services Carousel
Rich Montefusco, vice president, managed services, Carousel

If all goes according to plan, Carousel will soon absorb fellow Rhode Island solutions integration company Atrion, creating a national powerhouse with reach from New York to San Diego. The combined entity will have more than 1,300 professionals working in 25 offices across the U.S. Together they will serve more than 6,000 clients nationally and generate a combined revenue of approximately $525 million.

Since MSPmentor and The VAR Guy reported on the acquisition of Atrion by privately-held Carousel yesterday, a number of readers have asked for additional insights into the deal. Case in point: How did Carousel get so big? Rich Montefusco, vice president of managed services at Carousel, says the answer is a combination of customer intimacy, effective vendor partnerships and technical superiority.

Over the years, Carousel, which was founded in 1992, grew through both organic expansion and acquisition. But the company had not made a major deal in more than five years. Why this acquisition now? Montefusco said Cisco is a big reason why. The vendor was the one company that Carousel did not represent extensively in the market. Although it developed a small Cisco practice over the last few years, Atrion was the one with the flourishing Cisco practice.

“Over the past two years, we have transitioned to be a very strong cloud and managed services company,” says Montefusco. “But if you talk to customers, it becomes clear that you really have to have Cisco in your stable to become a true [player].”

The majority of customers that Carousel works with, he went on to say, all have Cisco in some form or fashion within their organizations, particularly in routing, switching and video collaboration. “When we were talking to customers in the past, they would tell us that they love working with Carousel and our capabilities. But they wanted us to be able to holistically handle their entire environments.”

The more Carousel considered Cisco’s portfolio and strategic moves, such as its January 2016 acquisition of Acano, a UK-based developer of cloud-based video infrastructure and collaboration software, the more Carousel concluded that it needed to get closer to the company.

Another way the Atrion deal bolsters Carousel’s position in the market is through increased vertical market expertise, particularly in K-12 education and financial services.

When it comes to integration, Montefusco says the company will benefit from common cultures, particularly around customer service. Both have closed-looped support systems and both enjoy longstanding-ties to clients, some dating back more than 15 years.

Looking ahead, Montefusco says there are several trends influencing customer behavior today, including the need to secure data, applications and infrastructure end-to-end, and the desire to leverage data analytics. But the biggest one that Carousel sees is customer realignment around the desire to shift more of “Keep the Lights On” needs to the shoulders of trusted IT advisors. In this audio clip, Montefusco explains:

When asked how MSPs and cloud service providers can elevate their offerings and actually play a role in helping customers achieve not just technology aims but also business objectives, Montefusco said Carousel starts each engagement with customer end goals in mind.

In healthcare, for example, the company has parlayed its expertise in wireless communications to help its clients improve patient care and reduce administrative costs. In some cases, Carousel has helped connect clinical devices such as heart pumps, which are often in short supply in certain facilities and sometimes “squirrelled away” by nurses and other medical professionals, to robust wireless networks so hospital administrators and practitioners can locate their life-saving devices instantly. In other instances, the company has helped care providers integrate wireless communications devices to secure networks and thus avoid “dead zones” that are common in many, large healthcare institutions.

Recently, Carousel helped one New York City care provider reduce its loss of heart pumps by three per year, which translated into not only cost savings but improved patient care.

“There are parallels to these examples in telemedicine, electronic medical records and more,” says Montefusco.

While Carousel acquired Atrion in part for its horizontal Cisco technology expertise, it is increasingly looking to “verticalize’ everything that it does for customers. In this way, Carousel has emerged as a superior technology provider to thousands.

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