Bridgepointe Buys Cannon Group, Adds Life Cycle Management Services
New services resulting from the acquisition allow agents to bridge a gap between them and their supplier partners.
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Bridgepointe chief strategy officer Scott Kinka said the acquisition of Cannon Group expands his company in three areas.
The first is expense management. That includes inventory management and auditing, as well as mobility management. These services will help IT strategists provide more value to midmarket and enterprise customers.
“It’s for people who are spending at least $1.5 million a year aggregating technology spend to various service providers,” Kinka said.
Second, Cannon Group provides strategic sourcing. Businesses of all sizes need help in that area. And often, partners lack the ability to run an RFP.
“Agents all over the place – not just ours – would say, ‘Hey, sometimes I go in and get the deal, and then I can’t sell it because the company has a procurement process where they have to have an RFP,'” he said.
Third, Cannon Group provides transition services. That means more fully operating as the customer’s contact for the supplier. Kinka said partners can expand from doing order coordination to taking the customer’s role in project coordination.
Kinka said the acquisition fits well with what’s happening in the customer environment.
First, a recession is looming. Kinka said that won’t impact the advisory channel negatively.
“On the strength of how the IT person has become strategic in the business, IT budgets are not one of the areas that are expected to shrink as businesses are cutting expenses back,” he said.
However, he said IT leaders are increasingly looking for ways to save money.
“We do think that more of the spend will move over to things like cost containment, efficiency, inventory management [and] spend management. For those people who are in cloud management, it’s license and usage management. We’re going to get smarter about our expenditures, and you have to spend money first to do that,” he said.
Moreover, IT leaders are pressed for time. They’re engaging more and more in the big boardrooms with the chief financial officer and chief revenue officer to talk about the strategic direction of the business.
“They already didn’t have time to command and control spend and make optimal decisions and to really evaluate vendors. If they did, we wouldn’t have an industry. But now it’s even worse, because they’ve got 20% of their time or more in boardrooms, which is great, because the board now cares about technology. But that’s time that the tech leader doesn’t have,” he said.
Kinka said IT strategists have expressed enthusiasm for using these professional services.
He said partners can bring up the services on every order they complete.
“For example, if we just did a WAN deal, we would ask two questions: First, do you need someone to manage inventory and expense on this? If so, we can tack that on, and it’s like a percentage-of-revenue kind of model from a cost perspective. And then second, do you have the humans in place and available in the organization to assist our supplier in getting this in right now?”
He said the resources can also prove a competitive advantage against the large consulting firms, who will charge a lot of money for advisory services up front but often lack interest in participating in life cycle services.
“In a lot of ways, what we’re doing is positioning ourselves to compete with the big five consulting firms,” Kinka said. “And for the VARs and the MSPs, we want to be their advisory firm.”
By purchasing Cannon, Bridgepointe is bringing on a group of 50 employees. As a result, Kinka said Bridgepointe’s number of full-time employees will effectively double.
In addition, Kinka said Philadelphia will become a hub for Bridgepointe, which has invested heavily in growing its East Coast presence.
Kinka said Cannon’s project management resources can help complete deals much faster. That’s attractive to agents, who often wait months to receive their commissions.
“The time to install is probably the No. 1 reason why the strategist would consider having this conversation every time they sell something,” he said.
Cannon president and founder Chris Cannon will serve as managing director of life cycle services at Bridgepointe.
Cannon founded the firm in 1996 after serving as a national account manager at AT&T.
This deal represents the third significant acquisition Bridgepoint has made. The first was New Jersey-based Clover Communications in late 2020, which expanded its base of customers and suppliers.
Then using Charlesbank’s funding, Bridgepointe purchased Wave in the spring, adding another East Coast company.
Bridgepointe has also made investments in some of its top IT strategists. Those deals have elevated the IT strategists to “partner” status.
“In many ways, these were acquisitions. We call them investments, because it’s more fiscally applicable to how we actually are doing the transactions,” Kinka said. “They’re still owning a portion of their book. We’re buying a portion of their book. We’re operating together as Bridgepointe.”
Bridgepointe has also made investments in some of its top IT strategists. Those deals have elevated the IT strategists to “partner” status.
“In many ways, these were acquisitions. We call them investments, because it’s more fiscally applicable to how we actually are doing the transactions,” Kinka said. “They’re still owning a portion of their book. We’re buying a portion of their book. We’re operating together as Bridgepointe.”
Bridgepointe Technologies has acquired Cannon Group in a move that doubles Bridgepointe’s full-time staff and gives its partners a deep bench of professional services.
Bridgepointe, the San Mateo, California-based IT strategy firm, announced the purchase of the technology life cycle management firm on Wednesday. Pennsylvania-based Cannon provides expense and mobility management, strategic sourcing and transition management. It will operate as Bridgepointe’s customer life cycle management services division, led by its founder, Chris Cannon.
Bridgepointe’s Scott Kinka
Bridgepointe chief strategy officer Scott Kinka said the addition of these professional services allows agents to bridge a gap that exists between them and their supplier partners. Moreover, he said the new resources help partners demonstrate their value to the customers and expand revenue.
Keep up with the latest channel-impacting mergers and acquisitions in our M&A roundup. |
“These are value-add opportunities that we can add at the end of a deal,” Kinka told Channel Futures. “I think what’s important to the strategist is it’s a deepened relationship with the client. You’re involved in things like inventory and bill pay, which is important strategically on a go-forward basis.”
A $100-plus million investment from Charlesbank Capital Partners fueled the deal for Bridgepointe, which has been making investments in its top IT strategist partners and has also made a few strategic acquisitions.
Scroll through the images above to learn about Cannon Group, the details of the acquisition and the background of Bridgepointe’s investments.
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