Mergers and Acquisitions, MSP, Networking, Content, Networking

Cytracom Acquires OmniNet; MSPs Gain SD-WAN Connectivity Services


Cytracom, backed by private equity firm Sverica Capital Management, has acquired OmniNet to enable simplified and secure SD-WAN network connectivity for MSPs and their end-customers. Financial terms of the deal were not disclosed.

This is technology M&A deal number 569 that ChannelE2E has covered so far in 2021. See all technology M&A deals for 2021 and 2020 listed here.

Cytracom, which develops VoIP and Unified Communications as a Service (UCaaS) solutions delivered through MSPs, will leverage OmniNet's engineering to extend into the SD-WAN technology market.

Cytracom, armed with OmniNet, now grows to roughly 120 employees. Moreover, Cytracom is seeking to fill additional positions.

Cytracom and OmniNet: A Closer Look

In terms of product and technology alignment, the Cytracom and OmniNet intellectual property each lean heavily on cloud-centric designs that are purpose-built for MSPs, Cytracom CEO Zane Conkle told ChannelE2E in an interview.

Cytracom CEO Zane Conkle
Cytracom CEO Zane Conkle

Moreover, Cytracom gains a greater network presence via OmniNet -- including six additional data centers and Points of Presence.

In our conversation, Conkle emphasized that Cytracom is not "chasing" the security market -- which is rich with M&A activity. Rather, Cytracom was listening and responding to its MSP base -- which has been seeking simplified, secure network connectivity solutions that support today's modern "work-from-anywhere" reality, he said.

With that goal in mind, OmniNet's technology eliminates the need for traditional on-premises UTM (unified threat management) and firewall equipment -- which can be a hassle to configure (and re-configure) as MSP customers randomly move from location to location, Conkle says.

"For MSPs, simplicity equals profitability," Conkle adds. "This deal is the continued evolution of everything going to the cloud. We took the phone to the cloud. We took unified communications to the cloud. We took mobile to the cloud. Now we're taking the network and the edge to the cloud. Partners should be able to configure the network virtually in the cloud" for the sake of security, simplicity and network reliability. OmniNet's technology solves for that, he says.

Secure, Simple Network Connectivity: Build, Buy or Partner?

Cytracom Chief Operating Officer John Tippett echoed those sentiments in a conversation with ChannelE2E. With an eye toward simplified but secure network connectivity, Cytracom weighed the classic "build, buy or partner" scenarios.

John Tippett, COO, Cytracom

The acquisition scenario quickly emerged as the fastest path forward because OmniNet's technology aligned so well with Cytracom's cloud approach for MSPs, Tippett said. Both code bases emphasize simplicity for MSPs while touting powerful, reliable, secure communications for end-customers, he added.

In a prepared statement about the deal, OmniNet CEO Andrew Bagrin added:

“Since its inception, OmniNet has helped MSP and IT service providers deliver simple but effective enterprise-grade security and connectivity solutions for their customers. Cytracom was the clear choice to continue this mission, remain committed to the channel, and help partners meet the ever-changing needs of the modern workforce.”

Near term, the OmniNet and Cytracom service delivery models and operations will continue unchanged. The near-term goal? "Don't break anything," Conkle said.

Admittedly, Cytracom isn't alone in the SD-WAN market. From technology giants to software upstarts, dozens of companies are chasing the fast-growth market. Indeed, the SD-WAN Market will reach $19.1 billion in 2026, which represents a 38.5 percent compound annual growth rate (CAGR) from 2017, Market Research Future (MRFR) forecsasts.

Still, Cytracom won't be resting on the deal's laurels. The company is known for delivering code updates at a rapid pace. The overall goal: Make secure network connectivity dead-simple for MSPs to deploy and manage, Conkle and Tippett assert.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.