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Insight Acquisition of SADA Bolsters Google Cloud Play

The deal creates a multicloud powerhouse in the channel.

James Anderson

December 1, 2023

5 Min Read
Insight Acquisition of SADA
kenary820/Shutterstock

Insight Enterprises, the Arizona-based value-added reseller (VAR) and managed services provider (MSP), is buying cloud services provider (CSP) SADA Systems.

The Insight acquisition of SADA, announced Friday morning, brings together a Google Cloud Platform-exclusive partner in SADA with a Microsoft Partner of the Year in Insight.

Insight spent $410 million to buy SADA, using cash on hand and ABL facility. The team that sold SADA can make up to $390 million in earnout and incentive opportunity, according to Insight chief financial officer Glynis Bryan.

Insight purchased SADA from Verse Holdco.

Bryan added that Insight expects SADA contribute $50 to $60 million to Insight's EBITDA in 2024.

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“SADA’s partnership with Google Cloud will enhance our ability to serve clients who operate across multiple clouds, and accelerate adoption of widely sought-after technologies like GenAI,” said Dee Burger, Insight North America president. “With this acquisition, we are taking a significant step forward to becoming the leading Solutions Integrator, focused on the most critical segments of market growth — cloud, data, AI, cybersecurity and edge. In addition, we also add SADA’s Google Cloud clients to our portfolio, along with specialized Google Cloud selling and technical resources.”

Related:Insight Enterprises Names Cloud Services SVP, Product Management SVP

Operational Implications

A news release from Insight said the company will add approximately 850 SADA workers as a result of the deal. Insight already listed 14,500 employees.

SADA's Tony Safoian

“We bring to Insight both a strong technical and service reputation within the Google Cloud ecosystem and deep expertise in the Google Cloud portfolio of solutions," SADA president and CEO Tony Safoian said. "Insight’s resources, global client base and broad technology partnerships will allow us to expand faster into new markets and bring the power of Google Cloud to even more clients.”

Insight CEO Joyce Mullen noted that SADA will operate independently. And that decision makes sense to Alex Smith, Canalys' vice president of channels.

"Insight has acquired various services firms over the past couple of years. But the scale of those have been much smaller. Smaller shops that they can tuck in and hopefully retain some, some talent. This is a much bigger business model to tryand absorb," said Smith (Canalys and Channel Futures are both owned by Informa Tech.) "I think by having a standalone business and a standalone P&L, they can run it with the very focused agenda that SADA has had without getting blended into the broader resell operation that Insight has in their traditional business."

Cloud Implications

The Insight acquisition makes a ringing endorsement of multicloud solutions.

Insight has won Microsoft Partner of the Year 65 times, according to their news release. In addition, Insight holds certifications with Amazon Web Services. SADA has won Google Cloud's Partner of the Year award six times.

While some CSPs have chosen to diversify over the years, SADA has kept its priority on GCP.

"SADA stayed focused on GCP, whereas Slalom Consulting has diversified more to multiple providers," Smith said.

Mullen said the Insight acquisition of SADA significantly augments Insight's multicloud capabilities.

"And that's not only Microsoft; it is also across our AWS practice, but also across the on-prem infrastructure capabilities that we have for on-prem cloud," Mullen said. "So we do expect this gives us significant scale. We know that we have lots of customers who are interested in talking to us about multicloud."

Insight's Trajectory

Insight has styled itself as a "solutions integrator" in recent years.

"There’s definitely more services going on in the VAR world, and there’s some acquisitions that back that up, but I still think I think the fundamental distinction is that their model is, 'We’re a VAR, and as we do that there are some services opportunities we might as well take advantage of,'" North America president Dee Burger told Channel Futures earlier this year. "Our model is that we’re going to be a certain Insight to different customers. And the range of historical VAR capability frankly represents a capability spectrum more than a business model, as does our services side."

Insight and SADA have seen their share of struggles in the last year. SADA approximately one year ago laid off 11% of its workforce. Safoian said the company approached 2022 "overly optimistic" and had to readjust to harsher than expected macroeconomic conditions in the second half of the year.

SADA's initial expansion included the appointment of VMware alumna Sandy Hogan as its chief revenue officer.

Insight saw its net sales decrease 11% year over year in the third quarter.

Notably, Insight's North American product net sales declined 13% to $1.6 billion. The partner did indicate, however, that its core services gross profit increased 20% and cloud gross profit increased 17%.

Reactions to Insight Acquisition of SADA

Techaisle chief global analyst Anurag Agrawal called the deal "a very astute move" in how it expands Insight's cloud capabilities.

"This not only expands Insight’s service offerings, attracting new clients but also strengthens its position in the cloud services market. SADA’s strong presence in the healthcare and life sciences sectors could provide additional benefits to Insight," Agrawal told Channel Futures. "The merger could also lead to cost savings and increased operational efficiency through the consolidation of back-office functions and shared services. Insight stands to gain from SADA’s skilled workforce, who have a deep understanding of cloud technologies and client needs."

Agrawal added that he's interested to see if Insight will build a "strong presence" in Microsoft cloud services.

"The potential for cross-selling Insight’s services to SADA’s clients could further increase revenue and profitability," he said.

Husband and wife team Annie and Hovig Safoian co-founded SADA in 2000. Tony Safoian is their son.

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About the Author(s)

James Anderson

Senior News Editor, Channel Futures

James Anderson is a news editor for Channel Futures. He interned with Informa while working toward his degree in journalism from Arizona State University, then joined the company after graduating. He writes about SD-WAN, telecom and cablecos, technology services distributors and carriers. He has served as a moderator for multiple panels at Channel Partners events.

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