Logicalis Turns To Australia, Buys Cloud, Data Center Services Provider

Solution provider goliath Logicalis has acquired Australian cloud and data center services provider Thomas Duryea Consulting, boosting is presence in that part of the world, Logicalis announced Tuesday.

Details of the deal were not disclosed. Duryea has annual profits of about $50 million, according to Logicalis.

"This acquisition is strategically important for Logicalis," Mike Rodgers, CEO of New York-based Logicalis, said in a statement.

[Related: Logicalis CEO On MCPc ATIG Acquisition And Rampant Channel Consolidation]

The acquisition of Duryea will help Logicalis add professional services capabilities in desktop, data center, storage and cloud that will integrate with the company's existing offerings, Rodgers said. They will also bolster Logicalis' relationship with key vendor partners EMC, Dell, NetApp, VMWare and Microsoft, companies for which Duryea is also a partner.

Duryea, which has 125 employees, focuses on mid-size and enterprise businesses.

Marilyn Carr, an analyst with Framingham, Mass.-based analyst firm IDC, said the acquisition helps prop up Logicalis - No. 27 on CRN's Solution Provider 500 list - as a managed services provider.

"Traditional managed services companies – both infrastructure and application – are obviously feeling the pinch from IaaS and SaaS providers," she said in an email reply to a question from CRN.

Carr said that IDC believes Logicalis' acquisition of Duryea, along with other acquisitions the company has made this year, indicates that the company "is seeking to grow broader into social, mobile, analytics and cloud, and deeper into higher value, more differentiated professional services. This is completely in line with what we would expect from a company trying to become more relevant to today's IT provider ecosystem."

This acquisition is Logicalis' fourth of 2015, following its deals for two companies that will help Logicalis grow into the spaces Carr cited. In October, Logicalis acquired managed service provider Lekscom. Five months earlier, it bought analytics dashboard solution provider Trovus.

However, one of the largest investments Logicalis made this year came in July, when it spent $42 million to acquire MCPc's advanced technology integration group, a deal that strengthened the company's reach into the Midwest and parts of the East and West coasts. The deal also bolstered the provider's capabilities in IT and professional services, including the data center, unified communications, cloud and infrastructure integration.

The acquisition also fits into a broader evolution for the solution provider giant in recent months. In an interview with CRN after the acquisition of Cleveland-based MCPc, Logicalis CEO Vince DeLuca said the company is seeing more acquisition activity in 2015 than it has before, attributing the high activity as a direct result of the rise of recurring revenue-based business models. That trend won’t slow down anytime soon, he said.

’It’s pretty difficult to make that shift without really financially leveraging yourself in a big way. It's a big risk.’

But he added, ’I think we'll still continue to see further consolidation in the industry.’

At Logicalis, DeLuca said that means a drastic shift in the company’s business model toward services, software and consulting capabilities. He said Logicalis plans to continue to invest and change ’close to 40 percent’ of the company over the next few years to keep pace with that shift.

"It's a pretty significant investment and I think it's vital for us to stay ahead," he said. "If we don't, I think we get ourselves into fairly significant trouble pretty quickly."

PUBLISHED DEC. 1, 2015