9 October 2018 – With fewer than 50 customers and 20 people on staff, the acquisition of Melbourne-based cloud service provider CNI represents a quality over quantity approach for Thomas Duryea Logicalis (TDL).
Because at face value, such an acquisition may appear like a small fry for an Australian technology giant to bring on board.
Nevertheless, its acquisition of the 18-year-old Microsoft partner, revealed by ARN, demonstrates that what CNI lacks in numbers, is more than made up for in growth potential.
According to TDL CEO Michael Chanter - when speaking exclusively to ARN - the acquisition will generate a 10 per cent increase in profitability without even factoring in CNI's future work for the company’s customers. This is all while adding just five per cent to TDL’s overall workforce of more than 300 people.
"The number of people is less relevant than the intellectual property,” Chanter explained. “CNI is able to leverage that for customers efficiently. They’re a little bit different to a typical professional services-oriented business, where revenue and people track pretty closely.
"Plus we have 1600 customers; they have less than 50. We only have to scratch the surface when going out to our customers and offering them new services that are relevant."
Founded by Toby Alcock in 1999, CNI is a cloud service provider specialising in Microsoft Azure.
In boasting attributes of being a Microsoft certified gold partner and having a tier-1 Cloud Solution Provider (CSP) certification, the choice to acquire the firm was a “no-brainer”, according to Chanter.
"Firstly, CNI is a successful profitable business: what Toby has done there is build a scalable model with a lot of IP in it, which enables them to deliver some really unique solutions in the Azure space," he added.
"We can take that IP through a scalable model and plug it into our 1,600 customers and then hopefully deliver some really good value for those customers. We haven’t worked with CNI much but we’ve known each other quite well for a long time - for more than eight years.
“The Microsoft ecosystem is not enormous. We were out there looking for someone with the right capabilities and when speaking with Toby it was apparent that it would be a good match for a number of reasons: culturally, in terms of customer requirements and it was a bit of a no-brainer from that."
Although Chanter said the two parties had a number of shared customers, he claimed they largely did not compete.
"There were some customers where they had some capabilities we didn’t have, but I wouldn’t call that a compete - just different things for the same customer,” he said. "It made sense that we could do those things rather than just have partners in there.
"The reverse also applies: we can assist them in areas like Workspace, where they don’t have the same level of capability as we do.
“It’s exciting for the CNI team because it allows them to provide some leadership in a large organisation, and take some of the benefits in terms of scale and process, plus support around project management that a small business may struggle to deliver."
Although details of the acquisition were not revealed in the announcement, Chanter said he expected its value to be revealed early next year.
As reported by ARN, TDL announced it had acquired CNI on 8 October in a move designed to increase its capacity to provide customers with hybrid IT services and solutions through Microsoft Azure in the public cloud.