February 26, 2019
By Kevin Casey
Amid the continued high volume of M&A activity, “big company buys small company” isn’t exactly a novel storyline. One such deal is worth a closer look from a channel perspective, though: Google’s recent announcement that it will buy data migration vendor Alooma.
This follows Google 2018 purchase of cloud migration company Velostrata and is the latest sign of Google getting serious about making up ground on AWS and Azure in the enterprise public cloud market. As company observer 9to5Google wrote about the deal, “While Google may tout its AI lead, the company has to make it easier for prospective companies to actually use and transition to its various products.”
Partners are likely going to have a growing role to play there: It’s not just tools like Alooma’s but the technical expertise partners can bring that is often in short supply in companies still in the nascent stages of their cloud migrations. It’s another reason why we’re seeing such a high level of investment interest – and correspondingly high valuations – in cloud-oriented MSPs and other partners.
“In today’s multicloud/multiplatform world, orchestration, automation, integration and security are non-optional components of a functioning IT environment. The number of possible connections between systems and data sources expand logarithmically with each new platform,” says Anurag Agrawal, principal analyst at Techaisle. “The role of a channel partner is essential: being the beacon that guides enterprise IT managers to establish processes for connecting, securing, balancing and optimizing systems.”
So don’t be surprised if, once the deal closes, the Alooma deal feeds another expansion of Google’s growing partner programs, because it’s not as if there’s a magic “migrate to cloud” button out there for most companies.
As Google execs Amit Ganesh and Dominic Preuss note in a blog about the Alooma news, this isn’t just a cloud or database (Google is also hyping Cloud Spanner and Cloud Bigtable as beneficiaries of the acquisition) play, either.
“This simplified migration path also opens the door for customers to take advantage of all the technologies we have to offer, including analytics, security, AI and machine learning,” they say.
Add mobile to the list, though for slightly different reasons: On the same day that it announced the Alooma purchase, Google said that it was expanding its Android Enterprise Recommended (AER) program, which launched in 2018, to include MSPs.
“Google wants to provide enterprise customers with a choice in mobility solutions deployment, especially when [an] increasing number of customers are using Google Cloud Platform in addition to Amazon AWS and Microsoft Azure,” Agrawal tells us.
Partners are taking note of all the above, especially on the cloud front, where Alooma appears set to give Google another boost in terms of moving traditional enterprise workloads to the cloud. A recent Techaisle survey found that 44 percent of channel-partner respondents are investing in technical resources for deploying Google Cloud solutions, third on a list of priorities following security and cloud orchestration.
Google’s announcement that it would open AER’s doors to MSPs noted that it was starting with Accenture, Brodos, Cognizant, DXC Technology, Econocom, Honeywell Enterprise, Mobile Mentor, Mobility MEA, Offshore Tech, SCC, SHI, Skywire, Stratix, Tech Data and Vox Mobile as validated partners.
“Over time, we plan to add more MSP partners to the program,” the company said.
Agrawal points out that the web giant might have a learning curve in …
… channel terminology.
“Google seems to be taking liberties by [referring to] the systems integrators as MSPs because it is the most used channel terminology,” he says. “The major business model of the list of partners being certified is either systems integration – Accenture, DXC, Econocom [and so on] – or distribution — Tech Data, [for instance.]
ICYMI: Roundup of Recent M&A Activity
Google’s announcement that it will buy Alooma is far from the only news of late. Here’s a roundup of other channel-relevant deals.
ConnectWise to Be Acquired by Thoma Bravo: ConnectWise announced it will sell to private-equity firm Thoma Bravo, an active player in recent channel deals and elsewhere in the tech space, especially in the security industry. ConnectWise founder and CEO Arnie Bellini will shift into an advisory role, with current president and COO Jason Magee taking over as CEO. As Channel Futures’ Kris Blackmon writes, “The last of the old-guard RMM/PSA lifestyle companies has bitten the bullet and taken outside cash.” Blackmon notes that ConnectWise has now (finally) joined peers like Datto, Continuum, SolarWinds and Kaseya in seeking outside capital to fuel the next stages of its growth.
Palo Alto Networks Announces Deal for Demisto: The $560 million purchase brings Demisto’s security orchestration, automation and response (SOAR) technology into the Palo Alto Networks fold, another sign of white-hot competition and consolidation in the cybersecurity realm.
Carbonite to Buy Webroot for $619 Million: Speaking of white-hot competition and consolidation, how about Carbonite’s $619 million announced purchase of Webroot? That seems to fit the bill. It’s the latest in a series of growth-by-acquisition moves by Carbonite, and brings Webroot’s endpoint security capabilities into the data protection company’s portfolio.
Hitachi Capital America Acquires Global Technology Finance: Let’s play “follow the money” literally for a moment: Commercial leasing and financial services firm Hitachi Capital America has stepped into the channel market with its recently closed acquisition of Global Technology Finance, a supply chain financing firm that services VARs.
Zayo Group in the Wall Street Chatter: There’s no deal news here – not yet, anyway – but Zayo is in the Wall Street news a good bit lately, with a variety of rumored potential buyers – CenturyLink and Google’s parent company Alphabet among them – in recent weeks. (One analyst noted Google isn’t likely to be an actual buyer.) Expect more buzz to come, with Zayo execs set to present at two investor conferences this week and a previously announced analyst day in the works for mid-March.
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