21 January 2008
by Alex Scroxton
Another Cisco Gold Partner has fallen under the spell of an acquisitive suitor as security-focused managed services provider s2s was picked up for an undisclosed sum by Bailey Teswaine, the IT division of building services specialist NG Bailey.
The deal, which mirrors BT’s acquisition of Lynx last year, has prompted the channel to ask why this part of the Cisco business is seeing increased mergers and acquisitions activity.
Tom Kelly, managing director at tier-one Cisco Gold Partner Logicalis, said: "There’s obviously a lot of consolidation in the market. We’ve not bought any Gold Partners but we’ve bought HP and IBM partners in the past. If there were opportunities on the Cisco front, we would act accordingly.
"This is down to market conditions; I don’t believe it’s down to people trying to buy up Cisco partners," he added.
Speaking exclusively to MicroScope, Bailey Teswaine technical director Rajesh Sinha also believed the market conditions were right for Gold Partners to become targets: "Cisco has previously said there is huge demand for engineers and services. A number of Cisco Gold Partners have now got to the point where they’re at the peak of their growth, and are looking around to see how they can keep growing."
He added: "s2s was looking to give the reins to somebody else who could inject capital where needed."
One Cisco dealer theorised that acquirers could be attracted in future by the keener pricing and better discounts that Gold Partners were able to offer — attributes that had made s2s an aggressive rival.
"I came up against it once or twice, and with the Gold Partner pricing it was tough," he commented.
The acquisition brings to an end a year-long hunt for Bailey Teswaine. The company hoped the move demonstrated its commitment to the managed services sector, as well as augmenting its ‘intelligent building’, facilities management and real estate services propositions.
The networking provider also plans to leverage its acquisition to improve its existing relationship with Cisco; it has already attained Premier Certified level.
s2s and Cisco were unavailable for comment.
