US Signal Grabs MSP OneNeck to Expand Hybrid Cloud Footprint

US Signal is buying OneNeck IT Solutions and OneNeck Data Center Holdings to increase its data centers from nine to 15, quadrupling its square footage and providing it with solid Nutanix and Microsoft Azure technology.

Digital infrastructure provider US Signal is part of the Igneo Infrastructure Partners portfolio, and Wisconsin-based OneNeck was owned by Telephone and Data Systems (TDS). US Signal offers connectivity, cloud hosting, co-location, data protection and disaster recovery services powered by its fiber network. Before the acquisition, Michigan-based US Signal operated a 9,500-route mile fiber network and nine data centers across Michigan, Illinois, Indiana and Wisconsin.

OneNeck – No. 285 on the 2023 Channel Futures MSP 501 list – sells hybrid IT and multicloud solutions through data centers in six Midwestern and Western U.S. states. OneNeck claims more than 1,000 customers across 45 states, selling to banking, education, engineering, food and beverage, government, health care, manufacturing and retail sectors.

US Signal CEO Dan Watts said the company is in growth mode and has a letter of intent out to acquire another data center. He said besides expanding US Signal’s footprint, OneNeck offers a good cultural fit.

US Signal's Dan Watts

“It is really about alignment, as we think about it from a cultural perspective, and from a customer perspective,” he said. “The way that they go to market is very similar to the way that we go to market. Their data centers are amazing and the footprint’s ideal for us in terms of our type of markets. But the thing that really stuck out to us with OneNeck is they’re hyper-focused on the customer. We share that at our core from a cultural perspective.”

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Watts said US Signal and OneNeck both manage private clouds, data center co-location and similar data services, but OneNeck brings strong Microsoft Azure and Nutanix partnerships. He said the Nutanix products complement US Signal’s Broadcom-VMware offerings, and offer an alternative if customers are unhappy with VMware under its new management.

“Now we have a full arsenal,” Watts said.

OneNeck ‘Great Option’ for VMware Customers

Watts said Nutanix is “a great option for customers as they start to weigh the post-Broadcom acquisition of VMware. That was an adjustment for all of us. Many customers have their IT infrastructure built around VMware, so we've worked very diligently and delicately with our customers to help them through the cost changes and the product changes. We’ve had a couple of couple customers who were sensitive to it. Some of the information that you see indicates there could be a 20% shift in market share. It’s nice for us to be able to have options for customers where they need it," he said.

OneNeck CEO Ted Wiessing and director of strategy and technology Sam Larson attended Nutanix Next two weeks ago in Barcelona. Larson said about 90% of OneNeck customers are using the Nutanix AHV hypervisor.

“We're hearing from some of the remaining ones now, and I've heard from some new opportunities [from VMware customers],” Larson said during an interview at Next. “People are exploring Nutanix.”

The deal will expand US Signal’s footprint to the West Coast by adding data centers in Phoenix; Denver; and Bend, Oregon. It also adds OneNeck's Minneapolis; Madison, Wisconsin; and Des Moines, Iowa, markets to the US Signal fiber network and triples its commercial power under management.

Watts said US Signal is setting up an integration management office to determine the roles Wiessing and the OneNeck executive team will play going forward, as well as how OneNeck services will be branded.

“We intend to operate as US Signal, but we understand the OneNeck brand is important to a lot of customers,” he said. “We're going to have to think through what that means long term. We’ll have to determine whether we preserve that in some capacity. That will be part of our integration planning process.”

This was the second asset sale by TDS in less than a week. Last week it said it would sell its US Cellular Corp. business to T-Mobile for $4.4 billion. Both deals were part of TDS’ plan to divest non-strategic assets to raise money to support its fiber expansion.

Michael Ryder, US Signal board chair and co-head of Igneo in North America, called the OneNeck acquisition “an important step toward fulfilling the company's expansion plans in the U.S. middle market.”

At the end of 2023, Igneo managed more than $19.5 billion in assets for 200 investors around the world.