Alliant Technologies Spins Off Continuous Infrastructure Service Platform To Give It Channel Reach

Alliant Technologies has bet big on its Continuous Infrastructure Service platform, culminating Wednesday in a company rebranding and spinoff of the CIS offering to accommodate the increased interest in the platform.

The CIS platform will be housed under new Alliant Technologies sister company Red Forge. CIS, created in 2008, is a private cloud and continuous IT Infrastructure-as-a-Service platform that provides customers with a utility-based pricing model -- similar to how homeowners pay for their gas and electric bills -- covering WAN, LAN, unified communications and data center platforms.

With the spinoff, Morristown, N.J.-based Alliant Technologies unveiled a rebranding, including a new logo and website.

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The split and rebranding were driven by an increasing amount of interest in the CIS platform, Alliant Technologies CEO Bruce Flitcroft said. As the company looked to continue to scale the CIS platform, it needed to split off from its systems integrator roots to extend the offering, he said.

The technology becomes especially important as solution providers look to navigate the transition to a recurring revenue-based model, he said. Alliant Technologies underwent that transition itself beginning five years ago, moving from a traditional integrator to what Flitcroft called a "utility company" with the CIS offering.

"We fought past that," Flitcroft said about the decision to not stop at managed services. "We're not going to go with the crowd. Let's find a way to create differentiated value that’s different from what everyone else is doing. We think we've done that finally."

Flitcroft said he sees the utility-based pricing business model as the "new breed of solution provider," catalyzed by the commoditization of IT across the industry. Every industry turns to a commodity eventually, Flitcroft said, pointing to the electric and heating industries in particular, as bigger companies attempt to figure out how to consolidate and create economies of scale and efficiencies. However, he said that the IT industry, despite its maturity, has yet to fully hit that point.

"Cloud was the first movement of that. We're starting to see companies just want to consume. ... They just want to deliver their data focus on their information, the apps and the data. That’s what we're enabling right now. We're taking a traditional integrator with a good managed services practice and turning it into a large-scale global service provider with a different business model," Flitcroft said.

The move hasn't been without challenges, Flitcroft said. In particular, he said that both developing the CIS product and diving into the utility-based pricing model involved a lot of risk for Alliant Technologies. For the development, CIS demanded massive investments, totaling an average of 20 percent of the company revenue and 35 percent of its staff over the past five years, he said. That was largely funded by venture capital and private equity. On top of that, the shifting business model for Alliant Technologies meant assuming all of the risk for the customer, including hardware costs, outages and security.

Prior to the spinoff, Alliant Technologies already had seen a series of contract wins around the CIS offering, including new customers signed up within the past three months and three more in the works before the end of the year. That adds up to more than $55 million in contract wins over the past few months, Flitcroft said.

"We have won almost every deal we've gone up against. ... The excitement around here is huge," Flitcroft said.

Going forward, Flitcroft said there is a three-pronged plan for the two companies to continue to work together. First, Alliant Technologies will work to expand its market share as a service provider, driving behind the CIS products and scaling from there. Second, Red Forge will continue to develop the CIS platform and, third, will bring it to market through channel partners and partnerships with telecom providers such as AT&T.

PUBLISHED SEPT. 18, 2014