CRN Exclusive: Green Cloud Technologies Buys Cirrity; Deal Creates Largest Independent Channel-Only Cloud Provider

Rapidly growing Green Cloud Technologies has acquired cloud service provider Cirrity in a deal that creates the largest 100 percent channel-focused independent cloud services provider.

The acquisition combines Cirrity's 80 partners with approximately 400 accounts and Green Cloud's community of more than 400 channel partners.

Together, Green Cloud Technologies will have a footprint of six data centers throughout the Southeast, Midwest, and West. Cirrity's Phoenix-based data center will be a bonus for Green Cloud's partners that have West Coast customers.

[Related: Cirrity CEO On AWS' 'Arcane' Pricing, Carrier Turmoil And Helping Partners Crack The Cloud Code]

Terms of the acquisition were not disclosed. Debt and equity financing was provided by Green Cloud’s existing investors, and the transaction is immediately accretive for the company. All former Cirrity employees are now shareholders in Green Cloud Technologies, according to Green Cloud.

The combination of Cirrity and Green Cloud Technologies will give existing partners of both companies more solutions and products to choose from, as well as access to a larger and more secure data center footprint, Cirrity CEO Dr. Steven Vicinanza told CRN.

"This is going to give the combined new company a lot of momentum in the market," Vicinanza said. "Green Cloud is going to have access to our compliant cloud services and a full complement of security certifications that they don't have for their customers today. Similarly, having a combined cloud company that will have potentially better economics for our customers will also help to increase margins over time for our partners. We think it’s a big win for everybody."

The deal grants Green Cloud partners access to Cirrity's range of HIPA and PCI-compliant data centers, "a very big positive" for Green Cloud partners that sell to federal institutions, according to Charles Houser, executive vice president of sales and marketing for Greenville, S.C.-based Green Cloud.

"These customer relationships haven't been very productive because of the perception that our data centers weren't close enough. The Phoenix-based data center will be a big plus for those partners," he said.

"Through the deal, we are picking up more MSP and VAR partners looking for a white-label cloud option," Houser said. "Right now, partners need help building their cloud practices, and that's what we are going to continue to do."

Green Cloud also partners with telecom and connectivity channel partners, including master agents Intelisys and Converged Network Services Group (CNSG).

Both providers are Cisco-powered cloud service providers, another reason why the move to merge was a "great fit" for Green Cloud and Cirrity, Vicinanza added.

The acquisition comes as consolidation continues to run rampant in the cloud market as providers go up against market heavyweights like Amazon and Google. Cloud service providers, like Green Cloud and Cirrity, have differentiated themselves through their exclusive focus on the channel, said Vicinanza, who was also the former CEO of IT solution provider BlueWave Computing before it was acquired by managed services provider Onepath Systems in 2015.

Business customers see some risk associated with working with a small cloud provider that may not be around in the long-term, Vicinanza said. "The ability to have scale gives partners and customers some peace of mind, and lets them know that we aren’t just dabbling in the cloud – we are a serious player."

Smaller cloud providers either need to quickly scale organically or partner with another provider to reach the scale necessary to stay competitive in the crowded market, he said. For Cirrity, identifying a cloud service provider that shared its channel-only approach was crucial.

"Green Cloud has the same philosophy, same approach to the market and same pricing models, so in Green Cloud, we really found an ideal complement to our business," Vicinanza said.

Vicinanza is not planning to remain with Green Cloud and is looking at new opportunities. Dan Timko, Cirrity’s former CTO, is staying on as Green Cloud’s CIO.

Vicinanza, for his part, is encouraging solution providers to move more quickly in adopting the recurring revenue cloud services model.

"The bottom line is that partners need to get awfully worried about where they are going to be in five years, which will be so different than what they have seen in their business lifetimes," he said. "Partners are afraid of moving away from things that have made them successful. If you don't change your product set to create something future-oriented, you'll be left behind."