10 Things To Know About DXC's Acquisition Of Microsoft Dynamics 365 Workhorse Tribridge

A Dynamics 365 Dynamo

DXC Technology has doubled down on Microsoft Dynamics 365 enterprise resource planning software and managed cloud services through its acquisition Wednesday of Tampa, Fla.-based Tribridge, No. 165 on the 2017 CRN Solution Provider 500.

DXC Global Director of Microsoft Paul Timmins and Tribridge CEO Tony DiBenedetto detailed for CRN the scale the combined organization will have around Dynamics 365, the vertical specialties for each company's Dynamics practice, and the new geographies Tribridge plans to initially target under DXC's tutelage.

Timmins and DiBenedetto also touched upon why Tribridge was interested in becoming part of Tysons, Va.-based DXC, No. 11 on the CRN SP 500, the amount of customer overlap the two companies face, and the potential for channel conflict with Tribridge's Concerto Cloud Services business unit.

Read on to learn more about how DXC and Tribridge plan to play and win around Dynamics 365.

10. Tribridge And Concerto Will Run As Stand-Alone Units Within DXC Technology

Tribridge will maintain its brand and operate independently from DXC Eclipse, Timmins said. DXC Eclipse is an IT application, infrastructure and consulting business DXC purchased in October 2015 for roughly $300 million.

Concerto Cloud Services, for its part, will continue to run as a separate business unit within Tribridge, he said. Tribridge and DXC very rarely go head to head against one another in the market today, according to Timmins.

"It's not as if we're going to be two competing companies selling Dynamics 365," Timmins said. "We're going to be two companies side by side, selling Dynamics 365 into the office."

All 740 of Tribridge's employees joined DXC, and DiBenedetto will report into Timmins as part of the company's Microsoft-focused business.

"This has been a strategic opportunity for both DXC and Tribridge, and when you're doing something strategically, I don't believe you cut people," DiBenedetto said.

9. Retaining Tribridge's Employees Is A Top Priority For DXC

DXC is laser-focused on maintaining Tribridge's base of 740 employees not just in the immediate aftermath of the acquisition, Timmins said, but also in years to come.

"We have made the acquisition of Tribridge because of the great expertise that it brings to the table, but that expertise comes through its employees," Timmins said.

In addition to that, DiBenedetto wants to ensure Tribridge's existing clients see value in the global capabilities the company can now bring to bear as part of DXC. This can be measured through customer satisfaction ratings and retention of existing customers, DiBenedetto said.

"My viewpoint of the world always revolves around two things: Are the team members happy, and are the customers happy?" DiBenedetto said.

8. Tribridge Used A Banker To Help Identify A Buyer That Could Accelerate Growth

Tribridge has enjoyed pretty fast growth integrating cloud solutions with its own intellectual property, DiBenedetto said, but was looking for an outside entity that could accelerate that growth going forward.

Tribridge used a banker and went through the process of formally soliciting bids, DiBenedetto said, with the company finding that DXC's growth strategy aligned almost verbatim with Tribridge's core strategy. That's when it became clear to DiBenedetto that DXC was a company he needed to pay attention to.

"We were very excited to meet somebody that had such passion around those core things," DiBenedetto said. "We've always been a growth company, and to find a large company of that size that was this passionate about growth was exciting to us."

7. Virtually No Overlap Exists Between the DXC and Tribridge Client Bases

Roughly 85 percent of Tribridge's sales are to customers in health care, state and local government, consumer packaged goods and professional services, DiBenedetto said, with the company rarely pursuing an opportunity outside those areas.

Both Tribridge and DXC deal with similar types of Microsoft Dynamics 365 customers, Timmins said, but haven't come across each other in the market because it's so large.

As a result, DiBenedetto said the deal should be accretive for both organizations, with DXC gaining more solutions and Tribridge gaining more customers.

"We're not eliminating a competitor," DiBenedetto said. "We're enhancing the broader customer base for both of us."

6. DXC Will Not Make Any Major Changes To Concerto In the Initial Months Or Years

Although Concerto Cloud Services would be a great fit for DXC's partner base, Timmins said no major changes will be made in the initial months or years following the deal.

In the long run, Timmins said DXC would be interested in extending Concerto's capabilities to its existing network of channel partners, but only in situations where it makes broad strategic sense for Concerto and its customer base.

"Our enterprise customers are demanding the same solutions that Tribridge delivers because they want an integration with hybrid cloud," Timmins said. "That is the way the world is moving."

In the interim, Timmins said DXC also has a division purely focused on cloud platforms and offerings that works with similar types of partners as Tribridge and Concerto do today.

5. Concerto Cloud Partners Will Not Experience Any Channel Conflict Under DXC Ownership

Tribridge and subsidiary Concerto Cloud Services have very different go-to-market motions, DiBenedetto said, with Concerto primarily selling through other solution providers but 90 percent of Tribridge's revenue coming from offerings sold directly to the end customer.

Tribridge therefore established Concerto as a separate company with its own systems, DiBenedetto said. Under DXC's ownership, DiBenedetto said Tribridge will keep honoring its contractual agreement to not compete against channel partners, and will continue to register deals and assist channel partners.

Tribridge has never had an issue in its six years of operating Concerto, according to DiBenedetto.

"I think everybody in the world today is both a competitor and a partner," DiBenedetto said. "We live in 2017, and it's relatively easy to do."

4. Becoming Part of DXC Will Take Tribridge's North American Expertise Global

Tribridge will now have more access to more customers thanks to DXC's nearly 6,000 clients located in 70 countries around the world, DiBenedetto said.

"We're primarily a North American operation," DiBenedetto said. "The ability for us to influence clients on a global basis with their reach and our specific solutions in the four verticals is so exciting."

Becoming part of a larger entity should also increase Tribridge's win rate with prospective customers in existing geographies, DiBenedetto predicted, since many will be impressed by the size and scope of capabilities DXC's entire global operation brings to the table.

3. DXC And Tribridge Microsoft Dynamics 365 Practices Specialize In Different Industries

Tribridge will enhance and expand DXC's offerings around Microsoft Dynamics 365, Timmins said, particularly in the health-care, state and local government, consumer goods and professional services verticals.

DXC's Dynamics 365 practice, by contrast, had traditionally focused on retail and manufacturing, according to Timmins.

"In North America, it [the deal] significantly expands our Microsoft Dynamics 365 capabilities around ERP and CRM, and strengthens and expands our addressable market around key industry solutions," Timmins said.

DXC also will benefit from Tribridge's expertise around Dynamics 365, which Timmins said is in short supply around the globe.

2. Tribridge Will Focus Its Initial Expansion On English-Speaking Countries Similar To The U.S.

DiBenedetto said he will sit down with Timmins and determine which countries will be most receptive to Tribridge's existing solutions, and what changes would need to be made to more effectively address that market.

"In the short term, I think we will look at those countries that are more similar to the U.S. in its practices, its language, and its currency, and go from there," DiBenedetto said.

A small number of Tribridge's customers are in Europe today or have global operations, DiBenedetto said. But it's a whole different story for the Concerto business, DiBenedetto said, where a lot of the subsidiary's end customers have global needs.

"We've already told some of our largest customers, and they're super-excited that we now have this global capability in the cloud," DiBenedetto said.

1. DXC's North American Dynamics 365 Business Has Tripled In Size Thanks To Tribridge

Acquiring Tribridge has tripled the size of DXC's North American Dynamics 365 business in terms of both headcount and financial impact, Timmins said, and will make the combined organization ten times as important to Microsoft.

That's because the combined organization will be better-suited to go after large enterprise opportunities around Office 365, which Timmins said is what Microsoft wants DXC to be doing.

All told, Timmins said the acquisition will accelerate DXC's push to become Microsoft's top global systems integrator.

"Microsoft is a key part of our growth initiative," Timmins said. "We have a tremendous opportunity here to continue to grow our Microsoft practice on the back of Dynamics 365."