Core plays Microsoft Office 365 channel consolidator

Office 365 migration specialist hungry for more M&A after closing second acquisition this year

Consolidation continues apace in the fragmented Microsoft Office 365 channel after Core Technology Systems snapped up a second smaller rival in six months.

The 40-strong London-based firm has followed up its acquisition of Geordie consultancy System Centric Consulting in January with the purchase of local rival Parative.

Talking to CRN, chief executive Conor Callanan said the move doubles Core's engineering headcount, bolstering its position as one of the UK's top Office 365 consulting, migration and support specialists.

"We wanted to strengthen the skills we had and both Lloyd [Carnie] and Tim [Eichman] come with a strong pedigree in mail migration," he said.

"Secondly, they had some SaaS offerings we did not have, which we can expand on [namely ADFS in the cloud and ID management in the cloud]."

Callanan bought Core, which was one of the first Microsoft Partners to achieve Cloud Accelerate Status in the UK, in 2002.

The acquisition will consolidate its position as one of the leading lights in Microsoft Office 365's fragmented UK channel, which Callanan said is populated by a large number of small "born-in-the-cloud partners".

"We are looking for more acquisitions in the Microsoft cloud space. We do not have a practice in CRM online," Callanan added.

Microsoft has been tight-lipped on Office365 uptake but in its Q3 results last month revealed that a quarter of its enterprise customers have now made the switch to its cloud-based productivity suite, which it said now has an annual revenue run rate of $1bn (£661m). Since last October partners have been offered up to $40 a seat for migrating customers across and although this promotion is set to end in June, channel whispers suggest it will be extended.

The acquisition comes just six weeks after Microsoft announced the general availability of its IaaS Azure platform.

"This means we can now put our SaaS on Microsoft's services and manage it ourselves – previously we had to use another hosting company," Callanan said.