MTI jumps on buy-and-build bandwagon

Systems integrator is plotting purchases in a bid to bolster skills base and support its Vblock ambitions

Systems integrator is plotting purchases in a bid to bolster skills base and support its Vblock ambitions

Systems integrator MTI announced in November that its commitment to the VMware, Cisco and EMC Virtual Computing Environment (VCE) had been repaid with a 50 per cent upturn in orders.

At the time, the Surrey-based firm cited growing customer demand for the VCE coalition's Vblock packages, and the private clouds they enable, as a major factor in its success.

As a result, MTI is now preparing to hit the acquisition trail to bolster the size of its workforce so it can take on more Vblock-based work.

Aad Dekkers, chief marketing officer at MTI, said: "The demand for Vblock is growing and we need more skilled people to help us satisfy that.

"Companies with accreditations with VMware, Cisco and EMC that can help us expand on what we already do, would be of interest."

Manchester-based VAR ANS Group recently embarked on an acquisition with similar motives. It was aimed at ramping up the skills needed to meet demand for its Vblock alternative, Infrastructure 3.0.

The storage component of the Infrastructure 3.0 architecture is fulfilled by NetApp, and ANS cites this as a key factor in its decision to acquire rival VAR Alpha last year.

ANS chairman Scott Fletcher said: "Alpha is a big NetApp partner and we have gained a lot more strength and depth in its technology.

"We also have a new set of customers that we can talk to about launching private and public clouds using Infrastructure 3.0."

Acquisition, rather than recruitment, is a much faster way for VARs and SIs to gain vendor-specific technical and sales staff, said Fletcher. "The biggest challenge for MTI will be finding the right company at the right price."

"Because of the recession, getting access to finance is not easy, but it also means that the price of some of these resellers has become more sensible and more deals are being done."

Widening the net
In broader terms, Dekkers said MTI will target companies that complement its cloud computing activities and those of its newly launched managed services initiative, MTI Care.

The service is powered by cloud specialist Nimsoft and allows MTI to remotely monitor and manage clients' server, storage and Vblock infrastructures.

"We are expanding our services portfolio because customers want to concentrate on the other parts of their business and not have to worry about the day-to-day running of their IT," he said.

However, Andrew Coop, managing director of Blackburn-based VAR CMS Group, said the company may struggle to find cloud VARs that are looking to sell up.

"A lot of larger resellers have not made the move into cloud and are now looking to buy their way into the market," he explained.

"The problem with that is there are not huge numbers of cloud resellers out there. Those that do exist are building sizeable recurring revenue streams and business pipelines and do not need to be acquired."

Moreover, purchasing a VAR with a good track record in selling cloud services could prove price prohibitive for a lot of buyers. "It is not going to be a cheap route to market because everyone is talking about it," added Coup.

MTI will also need to pick its cloud targets carefully, he said, because of the different ways in which VARs are embracing cloud.

"MTI has taken a very technical approach by building its own clouds, whereas others are simply reselling other people's services," he added.

Staff recruitment
In preparation for its channel acquisition spree, MTI recently expanded its senior management team by appointing Philip Brown as chief finance officer.

Brown's remit will be to scour the channel for potential takeover targets and oversee the completion of any deals struck.

Dekkers said bringing in Brown, who fulfilled a similar role at IT consultancy Qubitas Consulting, would allow the rest of MTI's management team to concentrate on the company's organic growth.

"It would be unwise for me to set a figure about the number of acquisitions we want to make. It all depends on what is available, how it fits in with what we are doing and how we can finance it," he added.

ANS's Fletcher said MTI is wise to bide its time before splashing the cash. "If you want to achieve 20 to 25 per cent annual growth, you will not do that if you don't take time, and instead rush into buying up lots of companies just because you can afford to."

He added that the fact that MTI had weathered the recession should provide it with plenty of potential acquisition targets.

"Unlike many channel firms, it did not go into the recession with any debt and it has come out the other side in a position to take its pick of the opportunities," he said

"It is the same for ANS. Five years ago, we were not on anyone's radar and now, along with MTI, we have established ourselves as a force to be reckoned with."