Cybertron, Aiming At Cloud Services Market, Buys ITKansas

Systems builder Cybertron is bolstering its managed services practice with the acquisition of IT services provider ITKansas as it moves closer to its goal of offering cloud services.

ITKansas is Cybertron’s second services-focused acquisition since it added managed services to its offerings five years ago. In 2012, Cybertron, which has 107 employees, acquired The Bill Guy Technology Solutions.

Cybertron and ITKansas are both based in Wichita, Kan. Terms of the deal were not disclosed.

[Related: Managed Services News From CRN]

Cybertron co-founder and CEO Ahmed Abdelaziz told CRN the ITKansas deal represents ’a step towards our ultimate goal of providing cloud services. And a big reason we did this deal is that we need the right vested people with the right vision to come in and help us do this."

Abdelaziz said the deal also would allow Cybertron to expand its current local services offerings via cloud technology to match the national reach of its hardware business.

"We’ve seen companies across the board invest in the MSP space," said Allan Krans, an analyst for Technology Business Research. In an emailed response to a question from CRN, Krans said he’s seeing a number of early acquisitions in the MSP market, and those acquisitions can quickly build a competency around a company’s specific skills or capabilities.

Krans said more companies are focusing on the cloud as key to their future, stating that smaller VARs and other resellers have had their value displaced and are looking for a "new entry point to remain relevant."

Krans said Cybertron's move is well timed as demand for cloud services shifts to providers that can deliver extra value such as customization, integration, management and services.

For ITKansas, the acquisition is a good fit, said Michael Capps, its former CEO, who will be vice president of technology services for Cybertron. Within the past few years, he added, ITKansas had been approached by other suitors, all of which it turned down. He said that, in the end, ITKansas and Cybertron saw eye-to-eye on how to do business and where cloud is leading the market.

Capps said that all eight ITKansas employees would be retained and absorbed into Cybertron.

Abdelaziz also said the deal will help Cybertron win more business from the federal government as ITKansas already has experience in that space.

"This is a huge transformation in the market," Abdelaziz said, referring to the cloud, "and you have to take advantage of it." The need for Cybertron’s hardware products will continue to be high as the shift to cloud occurs, he said. "But instead of putting [our products] in a box," he said "we are going to be putting them in our data center." That, he added, will create more efficiencies for both customers and providers.

Abdelaziz said he expects Cybertron to open its own data center within the next 18 months.

"We are going to be different from those born-in-the-cloud-type companies," he said.

Abdelaziz added that Cybertron would work on its approach as a service provider before it starts to leverage its national presence in hardware and rolls out its services offerings beyond its home region.

"As an MSP provider, you have to go beyond providing tech solutions," he said. "You have to be a business partner, a business consultant and sometimes even a bit of a business psychologist. You have to deal with a lot … so, we are looking to perfect that model before we start rolling out into our national market.’