The cash cow that is cloud continues to attract interest from a range of parties, including smaller channel-centric providers. On the heels of N-able’s Spinpanel acquisition and Node4’s risual deal comes word that another company has snapped up two organizations focused on cloud computing. And, in this case, their IBM Cloud capabilities served as the big lure.

The buyer in question is Service Express. The Michigan-based company delivers data center maintenance and support (CDW ranks as one of its key partners) in the United States and the U.K.

The acquirees in question are iTech Solutions Group and iInTheCloud. The former acts as a managed service provider; the latter as a cloud hosting provider. Both specialize in IBM technologies, with strength in IBM Cloud.

Who Are iTech Solutions and iInTheCloud?

MSP iTech Solutions, headquartered in Connecticut, holds IBM Gold Business Partner Status. In fact, one of the big reasons Service Express bought iTech Solutions was for that standing. Thanks to iTech Solutions’ IBM Gold ranking, Service Express said its U.S. operations now mirror those of its UK counterpart.

iTech Solutions targets organizations in financial services, manufacturing and retail running IBM Power Systems. It offers storage, administration and operating system subscription services, as well as IBM cloud hosting, security assessments and remediation, and more. iTech Solutions employs a team of certified technical consultants, IBM i system administrators and IBM Power Systems technicians, all of whom bring their specialties to Service Express.

iTech’s Pete Massiello

“Joining Service Express gives us the ability to expand our service offerings to existing and new customers, which was challenging as a smaller organization,” said Pete Massiello, president of iTech Solutions Group. “I’m looking forward to working with the Service Express team to create synergy and bring our solutions to more companies around the globe.”

Meantime, iInTheCloud takes aim at IBM cloud hosting, through IBM Power and IBM Flash Systems, within the Tier 3 data centers it runs in Michigan. End users look to iInTheCloud to handle responsibilities including consolidating their workloads, increasing server usage and reducing costs.

Long-Standing Partnership

Of note is that iTech Solutions and iInTheCloud have worked together for some time and come to Service Express with that partnership. iTech offers IBM i cloud hosting using iInTheCloud’s infrastructure. Plus, iIntheCloud teams up with Service Express — the two companies are located close to each other in Michigan.

iIntheCloud’s Larry Bolhuis

“My focus has always been on creating flexible, reliable and scalable solutions for IBM i and Power System customers around the Midwest,” said Larry Bolhuis, co-president of iInTheCloud. “With Service Express’s headquarters only minutes from our data centers, the company has been the go-to service provider for many of our customers, as well as for iInTheCloud since its inception. I’m excited to expand our support options and capabilities for our new and existing customers.”

Adding iTech and iInTheCloud expands Service Express’s IBM and IBM Cloud expertise overall.

“The acquisition of iTech and iInTheCloud accelerate the expansion of…

Service Express’ Ron Alvesteffer

…our managed and infrastructure service offerings to the U.S.,” said Ron Alvesteffer, president and CEO of Service Express. “We anticipate strong company growth as we continue to broaden and diversify our solutions, bringing a wider portfolio of services to customers in the U.S. and UK.”

There’s a Frenzy of Small-Provider M&A

This latest acquisition reflects frenzied M&A activity among smaller providers in the indirect channel, despite fears of recession.

Already this week — and, remember, this is a short week due to July 4 — the industry has counted two other deals involving MSPs. We’re referring to N-able/Spinpanel again, as well as to Node4 buying risual. And last week, Thrive continued its consolidation march with the acquisitions of Edge Technology Group and DSM. (Thrive, incidentally, earned the No. 50 spot on the 2022 Channel Futures MSP 501 list.)

What accounts for all the MSP-driven M&A? Much of the impetus comes down to organizations’ demand for cloud services and scalability. Many MSPs are still moving away from legacy business models themselves. Gaining capabilities through acquisition helps achieve that goal more quickly compared to organic growth.

That Service Express is intent on IBM Cloud and i Series expertise is of interest. Channel partners are well aware that, similar to competitors HPE and Dell, IBM continues to transform itself into a cloud company. At the same time, a number of IBM’s end users remain entrenched in old hardware and applications. Shifting those resources and workflows into the cloud takes time, money and deep knowledge. Stalwarts such as Big Blue will benefit as MSPs such as iTech Solutions and iInTheCloud, and firms such as Service Express, also evolve.