GTT: M&A Will Continue to Be Part of Growth Strategy

**Editor’s Note: Please click here for a recap of the biggest channel-impacting merger and acquisition news from February.**

GTT Communications has been on quite an acquisition spree the past few years and don’t expect to see that momentum slowing anytime soon.

Its latest acquisition, announced this week, is Accelerated Connections (ACI), a Toronto-based provider of managed networking, VoIP and colocation services to large, distributed Canadian enterprises.  And in February, the company announced it is bolstering its fiber, data-center and SD-WAN capabilities with the acquisition of Interoute.

GTT’s acquisition of ACI: creates one of the largest non-incumbent network footprints in the Canadian market; extends GTT’s market presence and network assets in Canada, including its landing station for GTT Express, the transatlantic cable system; contributes complementary connectivity, VoIP and managed services to the company’s cloud networking service portfolio; and adds strategic clients in key vertical markets, including hospitality, retail and financial services.

GTT’s Rick Calder

“The combination of ACI and GTT creates a disruptive competitor in the Canadian market,” said Michael Garbe, ACI’s CEO. “Customers will benefit from access to GTT’s Tier 1 IP network, comprehensive service portfolio, global reach and deep experience in connectivity and managed services. We expect a rapid and smooth integration over the coming months.”

Other GTT acquisitions include Transbeam, Global Capacity and Hibernia Networks.

And in December, the company announced it was upgrading its channel partner program to make its agent partners more successful, from initial engagement with GTT to direct support of partners’ end-user clients.

In a Q&A with Channel Partners, Rick Calder, GTT’s president and CEO, talks about how his company and its partners have benefited from the company’s M&A strategy.

Channel Partners: What prompted the ACI acquisition? How do this and other recent acquisitions fit into GTT’s business and channel strategies?

Rick Calder: We think ACI is highly complementary to us. We have always wanted to have a deeper selling presence in Canada, particularly in Toronto where they’re headquartered, and we think it’s a great market to sell to large and multinational firms, and be able to deliver cloud-networking services to any location in the world to clients headquartered here in Canada and particularly in Toronto, the largest city. It’s a really key presence for us; they’ve built a great market presence in Canada. Moreover, they add to our supplier portfolio a much deeper set of Canadian supplier relationships, which will help all of our clients worldwide who have locations in Canada, where we now can deliver to any location in the world. They sell a very complementary set of cloud-networking services, exactly what we do in terms of voice, data, managed services, colocation services, etc., and so we think the integration will be relatively seamless. I’ve had a chance to meet with the majority of their leadership over the last couple of days through the due-diligence process and it’s going to be an excellent acquisition for us.

CP: Will the ACI acquisition create new opportunities for partners?

RC: As we announced several weeks ago, we have a very deep and expanding role with channel partners. We think everything we do in terms of adding depth and breadth to our platform, including the much deeper reach into Canada at this stage, is helpful to our channel partners worldwide. We have an opportunity to …

… extend some of the channel master arrangements we have into Canada as well, given that we have a deeper presence here so we see that as an opportunity for channel partners. And we also see that our value proposition in terms of extending secure connectivity to anywhere in the world has just been strengthened by adding very deep relationships in Canada to be able to extend large multinational client locations throughout all the provinces in Canada. So we think our value proposition is really strong for channel partners worldwide, and we think this acquisition just continues to strengthen that proposition and really differentiates us from common telcos.

CP: Is M&A going to continue to be a business strategy for GTT? How it is helping your company?

RC: A couple of weeks ago we also announced the acquisition of Interoute, which we think will transform the scope and scale of our business. We were about a $1 billion business prior to the pending acquisition of Interoute and we’ll be close to a $2 billion business, but still able to live our core values, which are simplicity, speed and agility, which set us apart from the incumbent telcos. And we think M&A has helped us to build a significantly stronger business that we can represent to channel partners and enterprises globally. So absolutely we plan to continue to be inquisitive. We have a very proven approach to buy things that are strategic, that complement our strategy of providing cloud networking services to large and multinational clients, to continue to extend diverse and secure connectivity to any location in the world, and to be very differentiated and disruptive to the business models of the incumbent telcos by being a business that’s very different to do business with.

CP: ACI has channel partners and a partner program, as does Interoute. How are these partners being impacted? How is this impacting their contracts, relationships with customers, how they’ve been operating, and so on?

RC: Generally, it’s relatively small. We’ve had a much bigger channel presence in the United States, so while there are channel programs at Interoute in Europe, which is where they were exclusively focused, and channel partners here at ACI, they’re much smaller, so we believe they will fit into – at least in the context of ACI – our enterprise division in the Americas, which is run by Eric Warren and the channel program that he’s created. So we think that ACI will be very complementary to what Eric is doing and just extend our ability to service masters and subagents in the Canadian market as part of our enterprise channel program. In Europe, it’s much, much smaller. Historically, most of their business has been direct. They have a few channel partners, but it has been a much bigger initiative for us in the North American market.

CP: Has GTT been taking on new partners with these acquisitions? What’s that process been like?

RC: We assume the existing channel-partner relationships and what we really try to do is represent the core GTT products to the channel partner moving forward and integrate the businesses into the core GTT platform, and represent the full totality of …

… the product set to the partners. Some of them are overlapping, where we have existing relationships through multiple acquisitions and we work collectively with the channel partners to represent us as one company and not as multiple companies. And we do that very rapidly, in one or two quarters, and we think it’s generally of high benefit because we have a deeper product set to sell that can be delivered anywhere in the world. So it’s a real benefit to channel partners to have the strength of GTT to be able to represent great services to them to serve their enterprise clients anywhere in the world.

CP: What’s the latest with GTT’s partner program? Are changes being made in response to the acquisitions, market trends?

RC: The biggest change is to have a very dedicated partner organization that’s led by three different leaders in the East, West and Central in the Americas, to handle channel partners with a dedicated service and support team. And this is a key distribution effort for GTT as we continue to grow, so we’re making a big commitment to the channel-partner community and the channel-partner program, and we look forward to sharing even more of that.

CP: Are there new and emerging opportunities for partners that they may not be aware of?

RC: Clearly the biggest technology trend in our industry is the movement of wide-area networks from legacy technologies – HD, MPLS – to next-generation technologies like SD-WAN, which take advantage of the internet. GTT is one of the largest internet backbones in the world with the deepest array of internet-access options, and is uniquely positioned to help channel partners transition some of their client relationships from legacy technology MPLS … to better technologies where we can expand the amount of bandwidth and connectivity to each of a client’s office locations, and at the same time save them cost and give them better application visibility. So we think there’s really going to be a sea change in the technology of choice for most enterprises.

CP: What can we expect to see from GTT in the coming months in terms of activities, latest technologies, and so on?

RC: It’s really that technology change that’s there. The other thing we really want to stress with channel partners is, hey, our experience dealing with big telco is not very satisfying, and we think there’s a significantly better firm that they can deal with that lives the values that we think are important to clients. So that’s the big difference in dealing with GTT.