This article was originally posted on SearchITChannel.
NWN Corp.’s acquisition of Carousel Industries, announced May 12, fits into the anticipated rise in hybrid work environments and the resulting need for as-a-service offerings.
The combination of the cloud communications and infrastructure companies, backed by New State Capital Partners, creates an entity with a projected 2021 revenue run-rate of $1 billion. NWN, based in Waltham, Mass., and Carousel, based in Exeter, R.I., “will become an integrated company under a unified brand — though that will take a bit of time,” said NWN vice president of marketing Andrew Gilman.
The unified company will focus on high-growth market segments such as devices/endpoints; business communications applications, including contact center and unified communications; and cloud infrastructure, including networking, security, wireless and public switched telephone network; Gilman said.
“The timing of this transaction is great, as IT delivery and consumption is rapidly changing to adopt to hybrid work models,” said Kevin Rhone, practice director of channel acceleration at Enterprise Strategy Group, a division of TechTarget.
“ESG research on overall trends shows that almost half of enterprises want to consume IT via as a service and/or consumption-based models,” added Mark Bowker, an ESG senior analyst who covers the digital workspace market.
ESG’s IT Decision Maker research revealed that increased employee productivity and improved digital collaboration ranked among the top three considerations for justifying IT investment in 2021, Bowker said.
“We believe that distributed, intelligent workspaces will drive knowledge worker productivity and create a great opportunity for partners to add long-term value,” Rhone noted.
NWN grew revenue 20% in 2020, benefiting from its September 2019 launch of a solution-as-a-service cloud communication portfolio and a management layer called Experience Management Platform. The cloud services lineup, and the technology for managing cloud communications platforms, attracted customers that devised work-from-home strategies during the pandemic.
NWN now has an opportunity to further deploy its services and technology.
The acquisition of Carousel Industries by NWN is highly strategic for our customer base,” Gilman said. The combined company has more than 6,000 customers, with fewer than 40 overlapping accounts, he noted.
Accordingly, NWN has an opportunity to provide additional service to the customer base, as well as automation and cloud management via the Experience Management Platform, Gilman said.
The deal also “brings tremendous scale and differentiation” for the combined business and an expanded national footprint, Gilman noted. As for the latter, Carousel Industries adds offices in eight states, bringing the companies’ total footprint to 15 states.
“For providers, scale definitely matters — especially as more organizations consider offerings from large service providers,” Rhone said.
Carousel Industries also provides NWN an expanded set of technology partner relationships, including Fortinet, Nice InContact, RingCentral and Zoom. Prior to the acquisition, NWN’s partner roster included AWS, Cisco, Dell, HP Inc., Hewlett Packard Enterprise, Intel, Microsoft, NetApp and Riverbed.
“The combined company will continue to integrate and extend the capabilities of [Carousel Industries’] strategic OEM partners,” Gilman said, citing customers’ ability to deliver better user experiences through the Experience Management Platform.