WTG is merging — but not with another master agent.

In a transaction the Malibu, California-based company calls the first of its kind, WTG will merge with NeoCloud, a North Carolina-based cloud service provider.

The cloud commerce platform AppDirect is acquiring both WTG and NeoCloud to create a new unit called AppSmart.

WTG’s Vince Bradley

“In order to transform and be successful in the long term, master agents in the field truly need to partner with technology companies to do more,” WTG CEO Vince Bradley said. “Because with cloud proliferation, with IoT, there is… a need for a lot more resources and technical assistance in the channel.”

Why didn’t WTG follow the model of rival master agent Telarus, which acquired fellow master CarrierSales a year ago? If anything, the agreement is a little bit closer the distributor ScanSource purchasing master agent Intelisys, but even so, AppDirect fits into an entirely different category.

Bradley said distributors and other master agents expressed interested in combining with WTG, but his outfit turned them down.

“That’s a financial transaction. It’s not a strategic one. I was looking for something strategic if I was going to do anything,” he said. “Partnering with a cloud SaaS company was a far more promising path in my opinion, avoiding some of the pitfalls that have happened with other acquisitions in the past.”

Bradley assured partners that the transition will not disrupt their businesses. He will remain with the company and take on the role of vice president of business development, and WTG’s entire executive team will remain on board. Its parent company, Commerce Consulting Corp., will also stay intact, preserving provider contracts and commission structures.

Bradley said the new unit will invest in additional channel managers, provider managers and field marketing support.

Van Murray, AppSmart’s vice president of strategic operations, told WTG subagents that AppSmart intends to do for the channel what Uber did for taxis: simplify the experience.

AppSmart’s Van Murray

“We want to make it easy to sell. We want to make it easy to transact. That shouldn’t be a big part of your day,” Murray said.

Bryn Nettesheim, senior analyst for The 2112 Group, said the M&A reflects the trend of a “marketplaces model.”

“With the acquisition of WTG and AppDirect’s structure as a marketplace, this provides access to agents who will drive thousands of customers to purchase those…

…digital solutions,” Nettesheim said. “The partner value is found within guiding customers to aligning platforms and integrating the variant solution sets to meet their customers’ needs.”

AppDirect President and Co-CEO Daniel Saks has advocated for the channel, noting that the personal and relational side of business should not be overlooked in the midst of a technological revolution.

“Businesses won’t just buy technology from a website; they buy technology from people they trust,” he said at Channel Partners’ Las Vegas conference earlier this year. “The biggest thing we realized is, how do we build the tools and technologies to enable you — the channel of resellers — to best help your customer through this shift to digital transformation?”

WTG made the announcement at its Holiday Event in Rancho Mirage, California. The master agent is well known for its unique energy portfolio, but has been building its arsenal of technology partnerships this year. WTG has made strides in connectivity, deepening its partnership with Bigleaf Networks for SD-WAN earlier this year. A recently expanded agreement with Sprint gave it new IoT solutions, and WTG has also partnered with SaaS marketing provider Vivial.

“The customer’s needs have changed dramatically, and if you leave solutions on the table, we’re not going to do as much business,” Bradley told partners in October.