When AHEAD, Data Blue and Sovereign Systems confirmed their merger to form a $1.3 billion digital transformation solutions provider, ChannelE2E went searching for more details about the deal.
Our journey led us to AHEAD CEO Daniel Adamany, who will lead the combined companies. In an interview with ChannelE2E, Adamany describes how AHEAD, Data Blue and Sovereign Systems came together. And where the companies will focus their efforts in the months and years ahead.
The interview, conducted on October 10, is paraphrased below.
ChannelE2E: When (approximate month) and how did conversations between AHEAD, Data Blue and Sovereign Systems begin?
Adamany: Data Blue was looking for a new private equity partner at the end of 2018. I knew Data Blue CEO Stephen Ayoub. He reached out to us to see how we like Court Square (which owns AHEAD). At the same time, Court Square reached our to us to see what we thought of Data Blue. Court Square then acquired Data Blue, and originally ran it separately from us. Stephen and I sat down at Dell World in Las Vegas in April 2019. The more we spoke the more it made sense to bring the businesses together.
In terms of Sovereign Systems, we looked at them around three years ago. Also, Data Blue was aggressively pursuing them but had to hit pause during their own Court Square deal process. The fact that we pulled all of this together at the same time worked out really well.
ChannelE2E: Post-deal, will the combined companies be profitable?
Adamany: Oh yes. We’re all extremely healthy. We're bringing them together as a growth play. This isn't a cost takeout deal. AHEAD and Data Blue have each been growing north of 30 percent in recent years. This is a services and geographic expansion play. We have no overlap with Data Blue. We're Midwest. They're East and South East.
ChannelE2E: How many employees did each company have before the deal?
Adamany: AHEAD had about 400; Data Blue about 140; and Sovereign about 50. So combined headcount is about 600 people. But it's important to note that the employee growth opportunities will be huge. In the reseller world it's a sales rep model. In the services world, it's a people model.
ChannelE2E: The merger announcement emphasizes a Fortune 1000 customer focus. Will you extend down into the midmarket as well -- or is the Fortune 1000 really your pure focus?
Adamany: The Fortune 1000 really is our hardcore focus. We’ve looked at companies that go down market -- even touching SMB. But that’s a different sales motion and even different compensation plans. As we look at the Fortune 1000, digital transformation can be a painful, complicated process for businesses. There are so many legacy applications that need to be addressed. That’s where we help. The bigger the business, the more value we can add.
ChannelE2E: What steps will you take through the end of 2019 to ensure the integration of the three firms goes smoothly – both internally and for customers?
Adamany: The near-term steps have already started. In some ways this deal is the worst-kept secret. The businesses already know this is coming. We started formal integration work about a month ago. Our goal is to integrate the organizations by the end of this year. By January 2020 we will have clear plans for all functional areas. Then we'll move to one brand in 2020. My biggest focus is to operate as one company. I don't want the business to suffer from any legacy conflicts or legacy issues.
ChannelE2E: What longer-term steps (2020 and/or beyond) will you take?
Adamany: Phase one will be about how we cross-sell. How do we bring the best of all companies to each company? How do we bring each other’s super powers to each other? As we look out to 2021 and beyond, we will take a look at our existing market and service gaps and we will explore more M&A to eventually extend out West.
ChannelE2E: Amazon Web Services and Microsoft Azure clearly are big focus areas for the combined companies. Given your VMware focus, are you also diving into VMware Cloud on AWS?
Adamany: Yes. We were one of the first partners in the VMC program. We’re also seeing momentum and interest around Pivotal. VMware has developed a great strategy involving Pivotal. I see pure growth opportunities at the application layer around Pivotal.
ChannelE2E: Have you given Google Cloud Platform, Oracle Cloud or any other public cloud platforms a look in terms of business development?
Adamany: Google is one area where we’ve started to invest. They have some unique capabilities and we’re trying to get some things going there.
ChannelE2E: Does each company (AHEAD, Data Blue and Sovereign Systems) run similar back-end IT systems (CRM, ITSM, finance, HR, etc.). Or will you need to take considerable steps to standardize your back-office systems?
Adamany: AHEAD has invested a lot in back-end systems. Mainly Salesforce. Each of the companies in this deal uses Salesforce, so we'll consolidate onto one Salesforce platform.