Cloud consulting deals revolve around ServiceNow, Google

Cognizant's pending purchase of Thirdera and Insight Enterprises' acquisition of SADA reveal the global systems integrators' preference for pure-play cloud consulting firms.

The cloud consulting sector is ending 2023 on an acquisition note, with a pair of global systems integrators looking to expand their reach through specialty service providers.

Cognizant, a $19 billion integrator, last week agreed to purchase Thirdera, a cloud advisory and implementation firm that focuses on the ServiceNow platform. Cognizant said the purchase of Thirdera, based in Broomfield, Colo., will boost its effort to build a $1 billion AI automation business in partnership with ServiceNow. The transaction is expected to close in January 2024.

The pending Thirdera deal comes two weeks after Insight Enterprises' $410 million acquisition of SADA, a business and technology consultancy that specializes in Google Cloud. Insight, a $10 billion solutions integrator, said SADA bolsters its multi-cloud strategy, which also includes AWS and Microsoft Azure. SADA, based in Los Angeles, sold its Microsoft business to Core BTS in 2019 to become a single-cloud partner specializing in Google's platform.

Those deals arrive as prospects appear to be improving for the top-tier cloud providers. Enterprise cloud spending slackened in 2022, causing cloud vendors' revenue growth rates to cool. That trend carried over into 2023 amid customers' cloud cost optimization campaigns. But the fourth quarter has seen cloud vendors point to an uptick in cloud sales. AWS in October reported a bounceback in the number of new workloads moving to the cloud, for example.

Thirdera deal to add ServiceNow depth

Upon completion of the deal, Thirdera will migrate into Cognizant's ServiceNow Business Group. That move will add Thirdera's 940 employees to Cognizant's 1,500-employee ServiceNow roster. The result will be greater depth in the ServiceNow market, said Jason Wojahn, CEO at Thirdera.

He said Thirdera brings highly technical, architecture-level ServiceNow skills -- along with intellectual property -- while Cognizant offers its industry reach and broader technology coverage.

"We have a very complementary set of businesses," Wojahn said.

Cloud specialization is key

When Wojahn co-founded Thirdera in 2021, he said the objective was to build the "most comprehensive partner dedicated to ServiceNow." The company has since expanded through organic growth and the acquisition of regional ServiceNow partners. The company expanded its presence in Europe earlier this year, acquiring SilverStorm in the Netherlands.

That single cloud focus appeals to the large integrators seeking greater depth in certain platforms.

"I think specialization really matters," Wojahn said.

Within Cognizant, Thirdera will operate under its current brand for a certain amount of time, Wojahn said, noting the details are still being worked out.

Acquisition experience

Wojahn has a history with ServiceNow-related cloud consulting deals.

He was working for ServiceNow consulting firm Navigis when cloud advisor Cloud Sherpas acquired it in 2013. Two years later, Accenture acquired Cloud Sherpas, where Wojahn was leading the ServiceNow practice.

The path to a sale appears to be quickening in the cloud consulting market. Cloud Sherpas was 7 years old when Accenture came calling. Thirdera, founded in February 2021, is a bit under 3 years old.

Wojahn said he didn't necessarily have that accelerated pace in mind when Thirdera launched. But he did note that customers' favorable response to Thirdera's thesis -- digital transformation through the ServiceNow platform -- was greater than he anticipated.

Thirdera, created through the merger of three ServiceNow partners, began with about 200 employees. The company grew that base to 465 employees by the second half of 2021 and more than doubled that number this year.

SADA purchase bolsters multi-cloud approach

SADA, meanwhile, will continue to operate as its own business, remaining focused on Google Cloud, said Dee Burger, Insight North America president. But in the broader context of Insight's business, the addition of SADA contributes to a multi-cloud strategy.

I think specialization really matters.
Jason WojahnCEO at Thirdera

Burger noted 75% of the combined company's clients are multi-cloud enterprises. The SADA acquisition helps "ready our business to capture the shift toward multi-cloud," he said.

SADA contributes capabilities in the Google Cloud Platform, Google Workspace, security, data and generative AI, noted Joyce Mullen, president and CEO of Insight. Mullen, speaking during a conference call, said more than 400 of SADA's 850 employees are engineers and technical experts.

John Moore is a writer for TechTarget Editorial covering the CIO role, economic trends and the IT services industry.

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