Partners are applauding Peak 10's move this week to acquire cloud service provider ViaWest for $1.67 billion in a deal that will form a global co-location, connectivity and managed cloud service provider behemoth.
The deal will boost the provider's competitive position in the crowded cloud services market, as well as its position in the eyes of channel partners, said Andrew Pryfogle, senior vice president of cloud transformation for Intelisys, a Peak 10 and ViaWest partner. Peak 10, a channel-friendly, Cisco-powerered Infrastructure-as-a-Service provider, today takes in about 40 percent of its revenue through indirect sales.
Pryfogle called the proposed tie-up "exciting." The Petaluma, Calif.-based master agent has been promoting cloud to its community of agent partners through several education programs, including its Super9 group and Cloud Services University.
“Both [Peak 10 and ViaWest] have been tremendous supporters of our education efforts at Intelisys, and both share a strong commitment to the channel. The combined organization will be well positioned to win big with our community going forward,” Pryfogle said.
Peak 10's channel chief, Dave Sroka, who joined the company in November, told CRN in April that the channel is a big part of Peak's 10's strategy for 2017. Sroka said that the company wanted to be viewed as a national provider, not just a regional player, and was investing in the channel as way to grow its business.
As there is no overlap in market coverage between Peak 10 and ViaWest, the acquisition enhances the new company's channel strategy and lets partners offer more services and solutions to more locations, Jeff Spalding, chief revenue officer at Peak 10, told CRN.
"The combined company will have more capabilities, services [and] skills, and thus more choices for partners and their customers. Our expanded geographic reach provides a more complete and consistent solution for our partners, [so] it's truly a win-win-win scenario," Spalding said.
While many providers have moved out of the data center infrastructure space, Peak 10 decided to dig in and expand into new markets based on requests it was receiving from its customers, Spalding said.
"This combination provides us scale as one of the largest hybrid IT solution providers now in the industry," Spalding said. "We can now offer more choices for our partners and their customers."
Following the close of the transaction, Peak 10's operational footprint will expand to reach 20 domestic and international markets and 4,400 global customers, according to the Charlotte, N.C.-based provider.
"We see all infrastructure providers racing to scale to achieve the economies necessary to compete in the hyper-competitive landscape -- this includes carriers and data centers. The Peak 10 and ViaWest combination makes sense as we've seen Peak 10 as an eastern U.S. version of ViaWest," said Adam Edwards, CEO and co-founder of Sandy, Utah-based master agent Telarus, a Peak 10 and ViaWest partner.
Peak 10's market expansion will include Atlanta; Dallas and Austin, Texas; Cincinnati; Denver; Fort Lauderdale, Jacksonville, and Tampa, Fla.; Las Vegas; Louisville, Ky.; Minneapolis; Nashville, Tenn.; Phoenix; Portland, Ore.; Charlotte and Raleigh, N.C.; Richmond, Va.; Salt Lake City; Amsterdam; and Calgary, Canada.
Together, the two providers will offer enhanced cloud and interconnection capabilities, highly redundant data centers, and back-office and operational support, according to Peak 10 and Denver-based ViaWest.
Master agent Avant, a longtime partner of both Peak 10 and ViaWest, is also enthusiastic about the tie-up and expanded geographic reach.
"The merger creates a natural synergy of geographic coverage combining cloud, co-location and security offerings," said Alex Danyluk, Chicago-based Avant's chief strategy officer.
Telarus' Edwards said that the merger will combine two "healthy" channel programs.
"We think they'll take the best elements of both channel programs to improve even more," he added.
Via the terms of the deal, GI Partners, which acquired Peak 10 in 2014, will be the majority shareholder for the merged company. ViaWest is a wholly owned subsidiary of Shaw Communications Inc.
Current Peak 10 CEO Chris Downie will remain as CEO of the combined company. Nancy Phillips, CEO of ViaWest, will become the executive chair of the board of the combined company, the two companies said in a statement.
The two companies expect the all-cash deal to close in the third quarter and is subject to regulatory approval.