Equity firm’s purchase of Carbon60 and GT.net a big deal for Canada, says CEO

After quietly announcing an investment from M/C Partners and a merger with a similar-looking managed cloud services company from Vancouver, Carbon60 Networks is poised to “lead the managed cloud market in Canada,” according to its CEO.

“This is something we’ve been looking at for the past 18-24 months, in terms of scaling the business across Canada and merging with a like-minded business that would help us accelerate and go to market on hybrid cloud,” John Witte told CDN shortly after the merger was announced late January. “We’ve tripled the size of our business quickly…it’s required us to raise more growth capital.”

That like-minded company ended up being BC-based Gossamer Threads (GT.net) a managed cloud services company with more than 400 customers and a physical presence in Vancouver, Toronto, London and New York. GT.net’s familiarity with the Canadian market, combined with Witte’s familiarity with M/C Partners – Witte was an executive at a prior M/C portfolio company, Fusepoint, before it was sold to Savvis in 2010 – means the new-looking Carbon60 will be able to accelerate the growth of its managed third party cloud services as well as its private cloud offerings, indicated Witte.

“They are the perfect partner for us at this stage of our growth as we strive to lead the managed cloud market in Canada and I am thrilled to be working with them for a second time,” he said.

Gillis Cashman, managing partner at M/C Partners, has hinted at future acquisitions to help the business – which will continue to operate under the name Carbon60 Networks – grow.

“We anticipate growing the Carbon60 platform with future acquisitions that will add capabilities and help the company expand into new markets,” Cashman said in a recent statement.

Witte said one of the main priorities for the company in 2019 will be to grow its consulting arm, especially around security, and develop partners within the value-added reseller community. Carbon60 manages AWS and Azure cloud environments, and has several private cloud offerings.

“There is a partner play here…and an obvious partner opportunity for focused security consulting services,” he explained.

Flying under the radar – until now

A lot of organizations in Canada are behind countries like the U.S. when it comes to migrating workloads to the cloud, added Witte, but now they’re realizing the shift is necessary to survive, and they’re desperately looking for help. GT.net has been doing similar work on the West Coast, helping clients manage the latest shifts in the industry.

“For whatever reason, they’ve largely been under the radar,” he said. “But they’ve done fantastic work.”

GT.net’s founder and owner of Alex Krohn attributed the company’s success to word of mouth and strong strategic partnerships. Much like Carbon60, it reached a ceiling in recent years and was looking to double the team and take on a much larger audience.

“We’ve been very successful in the private cloud space. We provide dedicated private environments for customers with the added ability to self-manage and control what they want in the cloud while adding additional services around that like security. But we’re also seeing a lot of growth in hybrid. There’s still so much infrastructure that’s on-prem, and people don’t want to manage hardware anymore, so we’re still seeing a lot of migration,” said Krohn.

Carbon60 is also betting on the two companies’ combined web content management services to set them apart from the competition. Witte said Carbon60 manages websites belonging to some of the largest digital media advertising firms in Canada and abroad.

“It’s an interesting area for us because not a lot of competitors are doing this. Most of them are really only servicing the lower end of the market,” he said, adding Carbon60 services the “tip of the iceberg” with enterprise-grade WordPress and Drupal CMS.

 

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Jim Love, Chief Content Officer, IT World Canada

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Alex Coop
Alex Coophttp://www.itwc.ca
Former Editorial Director for IT World Canada and its sister publications.

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