Consolidation in the Microsoft channel continues, with Dynamics expert SAGlobal snapping up fellow Welsh player M4 Systems, in a move onlookers have claimed marks the maturing of the Dynamics channel.
Both firms are based in the Cardiff area and have worked together on a number of occasions in the past. But last week, SAGlobal snapped up M4 for an undisclosed sum, in a move which will create a £7m turnover firm with around 500 staff globally.
Microsoft partners have been acquiring one another a lot recently. Most recently, New Signature bought Paradigm, and RedPixie snapped up Cloudamour at the start of last year.
Stephen James, CEO of SAGlobal, told CRN that the consolidation in the partner community mirrors what is happening among vendors in the industry.
"Look at how the market has changed," he said. "It was very, very scattered before. You had hundreds of small partners and even the suppliers were scattered. Now there has been consolidation at both ends. What has happened in the last year is that [Microsoft] has made a strategic pivot towards the cloud, and that has been reflected in their strategy for CRM. Their strategy is to try to become very sticky in their customer base by having multiple contact points within the customer.
"With the move to cloud, the traditional VAR did things that in the cloud scenario, Microsoft is now doing - things like provisioning servers, that's all gone to Microsoft. Similarly, a lot of support has gone to Microsoft. If you're a reseller like us, Microsoft is eating your lunch, to some extent. You've got to find other complementary services on top to replace the revenue streams you didn't have before. And Microsoft themselves are looking for resellers who offer something over and above what they offer themselves in their generic product. They want end-to-end and a more vertical market approach."
James added that the acquisition brings both SAGlobal and M4 scale, which is important in light of the market conditions he described.
Stuart Fenton, CEO of QuantiQ - a fellow Microsoft Dynamics partner - said the acquisition shows that the Dynamics channel is maturing.
"It illustrates the maturity of the Dynamics channel as the number of transactions is on the increase in a similar fashion to the way traditional product resellers did in the early 2000s," he said. "The drivers are either scale or capability. The new version of Dynamics365 requires a broader skill set than traditional Dynamics partners would have. I expect to see many of the very small partners disappearing as they cannot compete and several others acquiring skills as quickly as they can afford.
"QuantiQ made a significant investment last year to build the broader skill set in readiness for Dynamics365. It probably cost as much as an acquisition, but has been less distracting and leverages our existing infrastructure and organisation. I suspect that had we not had the foresight to invest, that we would be acquiring too."
Vendor's announcements include AI-powered Microsoft Office, a move away from password verification and an alliance with Adobe and SAP
Vendor claims hackers are hijacking machines to mine for cryptocurrency
Nearly half of SMBs are planning to invest in digital workflows to reduce their paper-based processes by 2025, according to Quocirca
The charter has pulled together the biggest names in tech in an unprecedented attempt to address the tech industry's lack of diversity. Tom Wright asks how it plans to do it