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Pythian acquires Agosto in Google Cloud partner deal

The combination of Pythian and Agosto offers a broader set of Google Cloud specializations in fields including cloud migration, machine learning and application development.

Pythian Services Inc., an IT services company, has acquired Agosto to deepen the company's Google Cloud Platform skills and potentially open more customer doors.

Pythian, with headquarters in Ottawa and U.S. operations based in New York, is a Google Cloud Premier Partner, as is Agosto, based in Minneapolis. The combined company will be "very relevant to customers who have made a commitment to the Google Cloud Platform," Pythian president Keith Millar said.

Customers are asking service providers to build more complete offerings on top of the Google Cloud. Millar said Pythian and Agosto share seven Google Cloud specializations between them: Cloud Migration, Data Analytics, Machine Learning, Infrastructure, IoT, Application Development and Work Transformation-Enterprise.

"We can start solving a lot more problems" without having to bring in smaller vendors, he said.

The combined company's scale, with regard to both revenue and employee numbers, is another aspect of the transaction.

"We are now crossing the $100 million mark and have a combined employee base of 370," Millar said. "You are going to get more meetings with CIOs when you are of that size and when you have an expanded customer list."

Deal background

The Agosto transaction stems from an earlier deal. In September 2019, Mill Point Capital, a private equity firm, purchased Pythian with the objective of building a cloud solutions platform. Mill Point Capital looked at 100 potential deals, Millar said. He credited Vanessa Simmons, vice president of business development at Pythian, for pointing out Agosto as an acquisition candidate, based on the companies' shared background and cultural compatibility.

We have always had a very high level of respect for their team and how they operate in their customer-centric approach.
Vanessa SimmonsVice president of business development, Pythian

Pythian and Agosto have partnered on about five Google-focused customers' deals in the last three months. However, the companies have been familiar with each other prior to their partnership because only a handful of service providers focused on the Google Cloud ecosystem in the early days of that market.

"We already moved in the same circles," Simmons said. "We have always had a very high level of respect for their team and how they operate in their customer-centric approach."

The Agosto-Pythian deal follows other moves among IT services providers to bolster their Google Cloud businesses. In February, French IT services firm Atos purchased Chicago-based Maven Wave to increase its Google Cloud presence in North America.

Playing the long game

The Agosto transaction began coming together in the fourth quarter of 2019, but the closing stages of the deal coincided with the coronavirus pandemic. Millar said he believes the outbreak has scuttled many deals that hadn't closed prior to the onset of the economic upheaval. But the business case surrounding the Agosto transaction proved too compelling to pass on.

"We are playing the long game," Millar said. "We were going to miss an opportunity if we paused out of fear."

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