Insight enterprises exec on buying 'the best google partner' SADA

The acquisition positions Insight as a leading provider of multicloud services and solutions

Insight Enterprises has over the years become a leading provider of Microsoft Azure-focused cloud services to customers looking to improve IT flexibility and costs.

And while Arizona-based Insight also has practices around both Google Cloud Platform and Amazon Web Services, it has not put the same resources into its non-Azure cloud business.

That is about to change. Insight earlier this month said it is acquiring six-time Google Cloud Partner of the Year SADA for $410m along with a potential earnout of up to $390m.

Los Angeles-based SADA brings with it perhaps the IT industry's biggest Google Cloud partnership, one that has 10 Google Cloud specialisations and has won more Google partner awards that just about anyone.

For Insight, ranked No. 16 in the CRN 2023 Solution Provider 500, the acquisition of SADA, ranked No. 108 in the same list, is all about grabbing multicloud opportunities, said Dee Burger, Insight North America president.

"The big opportunity for us is multicloud," Burger told CRN.

"Seventy-five per cent of our clients are multicloud. So in a situation where we're already in with Azure, we can also compete now for the Google business, and vice versa. I told Tony as he was coming in, we don't know how to run SADA.

"Tony has done an excellent job running SADA. We'd like for him to keep running SADA. Just to do it in our framework and take the benefits of Insight as we do it."

For Insight to grow in a multicloud world, it needed to make itself a major Google partner, and the acquisition of SADA will make that happen, Burger said.

"Customers aren't one [cloud] or the other," he said.

"We are increasingly in a multicloud world. And as we talk about the value promises we want to drive, services-led and so on, it's going to be in the cloud predominantly. So ultimately, to be the company Insight needed to be, this was a necessary move."

Burger shared his thoughts about the acquisition, how Insight will get the Microsoft and Google teams to cooperate with each other while focusing on building their respective businesses, and more in a wide-ranging conversation with CRN.

So why the interest in SADA?

"You can go back to what we've been talking about now for a couple of years, which is what first attracted me to Insight and my discussion with Joyce [Mullin] about being a solution integrator.

"And what that really means, if you take the classical kind of VAR asset and the business model, we have a tremendous reach with customers.

"We also have an emerging services capability that gets better and better. It's typically been very strong in Microsoft.

"And what we're really talking about as a solution integrator is how to drive greater and greater value with customers.

"Rather than a really broad customer list and light value, we ultimately want to drive more intimacy, more value as a solution integrator.

"And that requires a higher and higher quality of portfolio. We believe we've got a best-in-breed Microsoft business.

"I believe SADA is literally the best Google partner. Microsoft and Amazon and Google are three of the most powerful companies ever built.

"And to put ourselves as a top-shelf partner with the three was too good to pass up.

Insight is not at the same level with AWS. Any plans to be?

"We definitely have a business with AWS as a partner, but not near the same level as we are with Microsoft and Google.

"As far as plans, we're going to continue to be aggressive and acquiring companies.

"Much of it is circumstantial. Tony and his leadership team were very attractive. The talent profile in the company was very attractive.

"GCP as an asset was very attractive. There are a number of ways we could have gone. We hadn't settled on that it has to be GCP.

"But the circumstances arise and you find the right situations, and we'll remain open to the right situations.

Not so long ago, Insight was really a retailer, and still has a big retail presence. How much in the last couple of years has Insight's business changed in terms of moving more towards the services and the value side of IT?

"Dramatically, I think. That's why I came to Insight. I had 30 years in Capgemini prior to coming. And that was a significant part of the attraction not only from me to Insight, but from Insight to me as a different type of participant in this business. We've put more and more into our services business.

"Our service business in many ways looks like what you'd find in a Capgemini or Accenture, with the exception of being at a bit of a different scale, and not being as comprehensive.

"There's a bunch of pieces that would be very untraditional in the normal VAR industry that we have built over time around data and AI, around building applications in the cloud, around GenAI.

"We're absolutely a leader in that with Microsoft. And now with Tony and his team, with Google Bard as well. We're pushing more and more into the highest value services in the market without having to drag all the legacy stuff that the big services industry has stuck with. We're not going to outsource 1,200 developers.

"We're not doing massive low-cost infrastructure outsourcing sorts of things and getting caught in all that. We're really going towards a modern high-value portfolio."

How will SADA and the Google-focused team work at Insight?

"We intend for that to be a long-term construct. Very much like how the system integrator world dealt with SAP and Oracle for years and years, our teams that sell Microsoft, our teams that sell Google, the relationships we have with those companies, they don't fuse well together.

"But the sincerity with which we deal with Google and Microsoft as partners is not going to be compromised.

"So we're going to effectively build a [barrier]. The big opportunity for us is multicloud. Seventy-five per cent of our clients are multicloud.

"So in a situation where we're already in with Azure, we can also compete now for the Google business, and vice versa.

"I told Tony as he was coming in, we don't know how to run SADA. Tony has done an excellent job running SADA.

"We'd like for him to keep running SADA. Just to do it in our framework and take the benefits of Insight as we do it.

Will SADA be a separate business within Insight, or be melted into the overall organization?

It'll be a separate business unit inside of Insight that will go by ‘SADA, an Insight Company.'

You mentioned building a barrier between Insight's Microsoft and Google businesses. Yet you also talked about being able to go to your customers and offer Google as another cloud as part of their multicloud strategies? How do you do that with that with that wall between the two? That wall has to be porous.

"‘Porous' is a way to look at it. I think of it slightly differently in the sense of what we've done at a sales level.

"We've had a GCP business and an AWS business forever. So there's been a little bit of this. It's just the scale has been giant and minor.

"There's more balance between GCP and Microsoft. The traditional Insight sellers will still be much more incentivized to sell Microsoft. And they'll have a referral fee on Google, so they can add to an account.

"Same is going to be true for SADA in reverse.

"They're primarily motivated to continue to drive the Google business, but where there's a Microsoft opportunity, they can get a referral fee. And we want to keep that because if you go to the Google world, you count on SADA…

"SADA is a material part of the growth number that Google is driving quarter over quarter. Likewise with us and Microsoft. Microsoft executives count on us and our long-term partnership, and we want to make sure that we maintain the integrity of both sides of that. So what we'll continue to do both and balance it.

"The key is, customers aren't one or the other. We are increasingly in a multicloud world. And as we talk about the value promises we want to drive, services-led and so on, it's going to be in the cloud predominantly.

"So ultimately, to be the company Insight needed to be, this was a necessary move."

How did Insight and SADA get together?

"Our strategy is to take the depth of our relationships and build really high-quality portfolio components into it, becoming a solutions integrator, aggressively looking at different M&A options.

"In my first year, I'd say I'd talked to 75 companies, something like that. And there were five or six that were interesting.

"We got connected with Tony. He could see the strategic side of it. But the biggest thing you do when you acquire a company is you make a DNA change.

"That's the lasting piece. A DNA change to your organization. The resulting organization after acquisition is different than whatever came before it on each side. And you got to make sure that's right.

"We spent some time. We had some dinners. We connected at a leadership level, a handful of people on each side.

"And frankly, the vibe was so good, the trust was so good, the alignment between what we wanted to be when we grew up and put it together was so good. Tony and I had a conversation in early August.

"It was basically, ‘Hey, I know there's a lot of people involved, and there's bankers and appraisals, there's all kinds of things to negotiate.

"But let's do this.' And we agreed from there, and worked it out over a few months, and we couldn't be happier…

"The first time I'd heard of it, I had just come to Insight in May of 2022. It was obvious that GCP was something we should look at.

"I probably in June of 2022 sent a note to a friend of mine who's a high-level executive back at Google, saying, ‘Where do we start?'

"His response was to me a list of a bunch of potential partners. And he basically said SADA is the one for you guys. So, it was always out there. Tony was known inside of Insight. He mentioned that he had several friends here.

"And so, there was a company that was out there that was very attractive. I'd say the initiation of SADA's process meant it was time to actually really think through this seriously."