AppDirect Buys Canadian Cloud Distributor, Expands AppSmart Microsoft Capabilities

ITCloud.ca boasts a base of Canadian partners and customers and strong competencies in Microsoft.

James Anderson, Senior News Editor

February 10, 2022

5 Min Read
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AppDirect is buying Canadian cloud distributor ITCloud.ca in a deal that expands AppSmart‘s geographical footprint and Microsoft capabilities.

San Francisco-based AppDirect isn’t saying how much it’s paying for Quebec-based ITCloud. AppDirect will integrate the distributor’s partner portal with the AppSmart Marketplace, giving sales partners a more extensive product portfolio.

“We’ll have very solid end-to-end Microsoft capabilities available to our partners, plus an expanded catalog, which will help partners really become that trusted adviser and earn a bigger share of their end customers’ wallet,” said Renee Bergeron, senior vice president and general manager at AppSmart.

3 Reasons for the Acquisition

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AppSmart’s Renee Bergeron

Bergeron offered three reasons why AppDirect is buying the distributor.

First, ITCloud gives AppDirect a strong presence in Canada. ITCloud’s 1,200 partners serve thousands of Canadian business. This acquisition will reinforce AppDirect’s “long-standing commitment and presence in Canada.”

Second, Bergeron praised ITCloud’s competencies in cloud, particularly Microsoft. Microsoft last year named the distributor a finalist for its Indirect Cloud Solution Provider of the Year award. ITCloud offers Microsoft Azure and Business 365 solutions that will pair with AppSmart’s Dynamics 365 offerings.

Keep up with the latest channel-impacting mergers and acquisitions in our M&A roundup. Then check out what we thought were the biggest mergers and acquisitions of 2021!

Third, Bergeron said AppDirect can bring its relationships with 600-plus vendors to Canada as a result of the acquisition. ITCloud’s partners will see their technology line card expand dramatically.

“They’ll go literally from having 10 or 15 different providers offered today by ITCloud to having 600 over time, as we bring all these relationships into Canada,” Bergeron said.

Cloud commerce platform provider AppDirect has been merging the technology solutions brokerage (TSB) world with that of the marketplace world since its acquisition of WTG three years ago. AppDirect has bought multiple TSBs and connected their supplier and agent bases to the AppSmart Marketplace.

ITCloud Background

ITCloud launched in 2005 as a provider of an online backup service to small and medium-size enterprises. The company eventually added partners and expanded its solutions to include continuity, productivity and cybersecurity.  ITCloud joined the newly launched Microsoft CSP program as a direct partner, and Microsoft expanded the relationship to make ITCloud an indirect partner.

ITCloud also holds authorized distributor status with Acronis, Avepoint, Bitdefender, NinjaRMM, BitTitan and other vendors. Its selling partners include MSPs, VARs and agents. Partners can bill the customer directly or rely on ITCloud for the invoice.

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ITcloud.ca’s Mirco Cristoni

“We believe our partners will greatly benefit from this new relationship by combining AppDirect’s strong global industry depth and leadership with our relationships and expertise in helping our partners digitally transform their customers,” ITCloud president Mirco Cristoni said. “Our partners will have access to more services, solutions and tools to grow their business, while enjoying the same relationships at ITCloud that they have had for the past 17 years.”

Bergeron said the ITCloud leadership team will remain in place.

“They’ve got a magic formula,” Bergeron said. “They’ve got something pretty unique in the market as reflected by the tremendous growth they’ve seen, and we really want to amplify that as opposed to changing it.”

Agent Perspective

Peter Radizeski, founder and president of Rad-Info, called ITCloud a Canadian version of Pax8. He noted that some of AppSmart’s competitors, including Telarus, have moved into Canada. Pax8, for that matter, has made acquisitions recently to expand internationally.

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Rad-Info’s Peter Radizeski

Moreover, the purchase of a Canadian distributor makes sense to Radizeski in part because Canadian firms have financed AppDirect’s expansion. Most recently Quebec-based CDPQ gave AppDirect $80 million that will partly go into the AppSmart Invest program.

Radizeski pointed to the software partners that work with ITCloud as key targets for AppDirect.

“This was a fast way to add software partners, which is what AppDirect needs to meet its goals. Not telco partners, but partners who will actively sell SaaS, because that is where their sweet spot is,” Radizeski told Channel Futures. “They may be able to automate SaaS but will find it nearly impossible to automate the telecom services agencies have traditionally sold.”

Jay Morris runs the agency MOReCOMM Voice and Data Solutions. He raised the question of how the move will impact AppSmart suppliers that offer services similar to what ITCloud offers.

“Are they competing with their own [TSB] now? This is the risk when an agency wants to get closer to customers and my concern related to handing over the CRM keys to a third party. Private equity firms are going to continually push them in this direction if they have any skin in their game,” Morris told Channel Futures. “This is the very same process that happens to many agencies, they eventually want the customer to be on their own paper. To me, this is an opportunity for less intrusive, less controlling agencies, like TCG, to leverage less-is-more.”

Jay McBain, Forrester’s principal analyst for channels, partnerships and ecosystems, pointed to AppDirect, Mirakl, Ingram’s CloudBlue and Vendasta as companies that are taking the lead among marketplace development platforms with the help of private equity investment.

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Forrester’s Jay McBain

Forrester has predicted that a third of the $7 trillion technology market will go through marketplaces by 2030. McBain said companies are making massive investments to establish themselves as leaders in the new world.

“We are expecting several geographic expansion M&A activities to take place with these investments and to compete for customer and partner attention with super marketplaces run by hyperscalers, Fortune-size tech vendors, and large SaaS players. Cloud service providers are also growing much larger, raising hundreds of millions in investment and starting to acquire capabilities and capacity in Europe and APAC,” McBain told Channel Futures.

Want to contact the author directly about this story? Have ideas for a follow-up article? Email James Anderson or connect with him on LinkedIn.

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About the Author

James Anderson

Senior News Editor, Channel Futures

James Anderson is a senior news editor for Channel Futures. He interned with Informa while working toward his degree in journalism from Arizona State University, then joined the company after graduating. He writes about SD-WAN, telecom and cablecos, technology services distributors and carriers. He has served as a moderator for multiple panels at Channel Partners events.

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