The Doyle Report: Ramping Up for a Big Fall: Updates from Konica Minolta, OmniNet and Skytap September 2017

By Vendor

So much for the dog days of August and the lazy days of summer. Recent moves by a number of companies hint toward a very busy fall.

In the past few days and weeks, several companies have made strategic moves to expand their horizons. This includes new acquisitions, alliances, investments and more. Herein I take a closer look at Konica-Minolta’s move into telephony, OmniNet’s embrace of new distribution allies, and Skytap’s infusion of capital. First up: Konica Minolta.

Konica Minolta Solutions Enters Telephony Market with Acquisition of TLS.NET

In July, Konica Minolta jumped into the voice market with the acquisition of TLS.NET of Columbus, Ind. TLS will join the All Covered IT Services division that works with other managed service providers bought by Konica Minolta, plus the office product companies that the company serves.

On a basic level, TLS helps All Covered establish a footprint in the fast-growing Indianapolis market. (Columbus, which is having its big moment this summer as the eponymously named Sundance Film selection “Columbus” makes it way to theaters, is less than an hour from Indianapolis.)

But that’s only part of why Konica Minolta prized TLS. TLS has deep technological expertise and vertical market savvy—two things that mean more to Konica Minolta now than simple geography. For insights on why TLS and why now, I turned to All Covered President Todd Croteau and TLS.NET Chief Operating Officer and [former] Co-Owner Phil Luzius. Here’s why a deal you may have overlooked has implications for the channel as a whole.

If you haven’t followed, Konica Minolta and All Covered are building an interesting business that spans everything from office products to print services to cloud services to now voice and beyond. With its purchase of TLS.NET, which is more than 30 years old, All Covered shows that it wants to be more than a provider of commoditized services. It wants to be a true business partner capable of helping customers with their total digital transformation needs.

“What appealed to me with TLS, which has extensive network capabilities, was the ability to own the revenue stream to the customer, as opposed to simply reselling services from ShoreTel, RingCentral, 8×8 and others for a basic referral fee,” says Croteau (pictured right).Todd Croteau

For his part, Luzius say he is thrilled to be able to expand his customer base and make greater use of his company’s engineering talent. Add it all up and you wind up with a national MSP that can offer everything from hosted voice to UCaaS to cloud services office supplies and services to applications expertise, call center solutions and more.

“As companies decide to move capabilities, data and apps from on-prem to the cloud, we want to be there and take advantage of the literally thousands upon thousands of opportunities this shift presents,” says Croteau.

The timing couldn’t be better. Take the generational change underway in the work place alone. It is ushering in Millennials by the millions into the workforce. Their view of technology, workspaces and even work itself is very different than before. With TLS and other investments, All Covered is laying the groundwork to serve their future needs in a truly exciting way.

OmniNet Looks to Expand Partner Base with New Deal with Telarus

From acquisitions, let’s turn to alliances. This month, OmniNet inked a deal with Telarus that paves the way for the Utah-based master agent of business data, voice, and cloud services to offer OmniNet’s MyDigitalShield Security-as-a-Service (SECaaS) technology to its growing network of telecom agents and cloud services providers.

The agreement is a big deal for both companies—and for the industry. For Telarus, OmniNet provides a simple albeit comprehensive set of security offerings that telecom agents and more can easily add to their portfolio of services. For OmniNet, which only sells through partners, Telarus represents an opportunity to connect with more than 4,000 new sales allies. Telarus is OmniNet’s first master agent though not it’s only one for much longer.

As for the industry, the deal underscores just how far some agents have come in terms moving up the value chain to address their customer’s top technology concerns. For insights, I turned to OmniNet CEO and founder Andrew Bagrin. Bagrin began our conversation by pointing out that OmniNet’s traditional channel is comprised of MSPs. But lately, more and more telecom agents and cloud service providers have begun eyeing enterprise-class security for their SMB customers.

Andrew Bagrin, OmniNet“Agents have been wanting to get into cybersecurity, but everything [else] has been so difficult, complex and expensive. It’s been out-of-scope and unattainable for them, in other words,” says Bagrin (pictured left). “Our recent release of OmniWAN fused together cybersecurity with SD-WAN, which is a technology agents are very familiar with and used to selling. When Telarus came to us and said ‘we’re hearing from a lot of our agents about your technology,’ we were able to get set up together pretty quickly.”

That’s a good thing given the increased level of threats to business users. Contrary to popular convention, most say they aren’t too busy to be bothered with cybersecurity, they are too baffled by it. (For more on that, see my next Doyle Report, “The One Truth Cybersecurity and Healthcare Have in Common.”

“One of the smart things we did was recognize that security was getting overly complex. A big part of the problem out there is that even the good threat management products out there are so complex that a large majority [of installations] are set up completely incorrectly. That’s why there are so many breaches,” says Bagrin. “What we have done is remove a lot of the bells and whistles that a large enterprise would want… so that a level one or two tech could easily set up without screwing it up.”

Skytap Secures $45 Million in New Funding for New Staff and Market Expansion

Seattle-based Skytap, a technology services provider that helps big companies move key business apps to the cloud, announced this week that is has received $45 million in new funding from Goldman-Sachs and existing investors.

This comes at a time when the company is growing by leaps in bounds. In the second quarter of this year, sales jumped three-fold alone.

Why the growth? Corporate customers love the company’s “modernization” positioning, which amounts to “we provide a public cloud that offers all the enterprise capabilities you expect and supports your existing applications natively.” With Skytap Cloud, customers have a new home for their critical business applications “without refactoring or rearchitecting.” So in addition to getting access to new functionality and capabilities via the cloud, they can also count on leveraging the applications that they have sunk millions upon millions of dollars into over the last few decades.

“Every time there is a new innovation in technology, there’s this onrush of enthusiasm and excitement. Everyone believes everything will be rewritten for the new paradigm whether its object-oriented, client-server, workstations, cloud or cognitive or DevOps. But that never happens. What does happen is that things go down a path of using the new ideas and concepts to augment what people already have,” says CTO Brad Schick. “Skytap offers companies a bridge from where they are today to where they want to be.”Brad Schick, Skytap

So what’s a company do with $45 million in new funding? Plenty says Schick.

“The funding allows us to grow our marketing teams, our product development teams and expand our innovation,” says Schick (pictured right). Headcount in product development, for example, is expected to double in the next 18 months. Skytap also has plans to open another development office somewhere in the U.S.

Acquisitions could also be a possibility, but the emphasis now is building out the Skytap cloud with new capabilities and adding new customers. The company, which is aligned with IBM, VMware, AWS, Microsoft, Docker and others, also plans a big marketing push once its AIX cloud product, which is currently in beta testing, is ready for general availability.

While critics believe Skytap has a headstart in this space, it will likely face stiff challenge from other cloud providers working on solving this same problem. This includes AWS—or some combination of AWS and other members of its extended ecosystem. Skytap doesn’t expect or necessarily want to compete head-to-head with the likes of AWS, Google or Microsoft. But to be safe, it is looking to solidify deals with infrastructure companies, ISVs, global systems integrators and more. Staying ahead of the curve will take plenty of ingenuity and a lot of that new dough.

Speaking of an influx of money, what would you do with an extra $45 million? Let me know: [email protected].