CDW has acquired Mission Cloud Services, Inc. an AWS Premier Tier Partner which specializes in cloud managed services and consulting, AI innovations, and software. Mission Cloud was also just named Security Partner of the Year by AWS. The deal will help CDW expand its Digital Velocity cloud, data, AI and software platform offerings for small and mid-market customers.
Mission Cloud's sale represents a liquidity event for its private equity backer Great Hill Partners. The company will become part of CDW’s dedicated AWS practice to bolster its existing cloud expertise, market scale and solution capabilities, according to the companies. Terms of the deal were not disclosed.
CDW is based in Vernon Hills, Illinois. It has 17,884 employees, according to LinkedIn, and does business in the United States, the United Kingdom and Canada. Mission Cloud has 304 employees, according to LinkedIn. Mission Cloud is based in Los Angeles. Mission was just named AWS Security Partner of the Year.
“CDW had a gap in their cloud services when it came to small- to mid-sized businesses that want such services,” analyst Rob Enderle, principal of Enderle Group, told ChannelE2E. “They acquired Mission Cloud Services to fill that gap.”
Deal Expands CDW Sales
This deal aligns with others in which value added resellers (VARs) like CDW acquire businesses such as cloud services to expand to a broader range of customers. Such deals set up companies like CDW for additional revenue growth and traction in new markets to fend off competitors and deepen their roots with customers.
The acquisition of Mission Cloud also provides new revenue and customer growth opportunities to CDW for cross-selling additional hardware, software and other services to Mission’s established customers, said Enderle.
In addition, he said, deals like this can make it easier for smaller SMB customers to obtain specialized cloud services because their own internal operations lack the needed resources in staffing and equipment. And that can create long-term relationships that will also increase CDW’s sales, he said.
“Small companies grow to become larger firms and are likely to stay with the vendors if those vendors can scale with them,” said Enderle. “Acquisitions like this are seed corn for vendors like CDW who want to make sure they can capture growing companies before their competitors can.”
Enderle called the deal for Mission Cloud an “interesting move as it allows CDW to strategically grow to encompass emerging enterprises. This will tend to accelerate the services move to the cloud over time.”
CDW to Focus on AI
Dan Maycock, an analyst and the technical leader, at Agerpoint, said that this move by CDW also helps to position the company well as it grows cloud-based AI tools and offerings for its customers.
“Given how strategic GenAI is as a growth target, it is not surprising to see a company acquiring a vendor that can help them stake out a position in AI with a strong cloud provider such as AWS,” said Maycock. “It is clear they want to make a mark in this space, and likely easier to acquire an established vendor in this space vs trying to build that capability in house.”
This is a smart strategy as the overall IT marketplace continues to change and grow in reaction to a wide range of new and maturing technologies, he said.
“CDW is looking to secure capabilities and expertise that best positions them to compete in an AI-centric world going forward, despite already having a presence internally in this space,” said Maycock. “Mission Cloud better positions them beyond where they currently sit. CDW is making a strong play into AI and building a defensible position as GenAI continues to evolve as a key capability across CDW's existing customer portfolio.”
It is a good time for companies like CDW to pick up AI-focused companies so they can build better moats around themselves as demand builds for maturing GenAI related technologies, said Maycock. “ROIs are easier to measure, and companies get interested all over again in the AI marketplace. CDW is picking up a player to add to their existing portfolio of tools and products to strengthen their presence with AI in line with that approach.”
