ePlus Boosts Global Security Capabilities With Deal For IGX

EPlus Technology, the tech subsidiary of ePlus Inc., boosted its international security portfolio Monday with the acquisition of security solution provider IGX.

Terms of the deal were not disclosed.

The deal is ePlus Technology's first international acquisition, according to Senior Vice President Kley Parkhurst, and was driven by a demand for global support by ePlus' U.S. customers, he said. "They want to take what we build and put it up in their data centers in other places."

[Related: ePlus Technology National Practice Director Wins Microsoft Sales Specialist Partner Of Year Award]

The deal is one of many in a consolidating market, Parkhurst said, who added that as more end users seek solution providers that "can do it all," providers must start adding to their portfolios to stay competitive.

"Technology is getting more complicated," Parkhurst said, citing the importance of understanding clients’ needs - from architecture to lifecycle management - and adding engineering talent that understands everything.

Through the acquisition, ePlus - No. 32 on CRN's Solution Provider 500 list - will gain resources to support its U.S.-based customers that have global operations, Parkhurst said. By making use of the relationships of IGX’s UK-based subsidiary, IGX Global LLC, ePlus will be able to meet demand in more than 15 countries.

It will also boost its headcount from around 975 to over 1,000, according to Parkhurst.

"This deal is moving us towards success in our key strategic goals," he said, "expanding our territory and adding personnel for sales and engineering."

IGX provides security solutions, secured networking products and related professional services to commercial, enterprise and SLED – or state, local and education – organizations. It’s composed of IGX Global LLC, IGX Global UK Ltd. and IGX Support LLC. The company will continue to operate as it has, and ePlus has no plans to make any changes in IGX management, according to Parkhurst.

However, according to a statement released by ePlus chairman and CEO Phillip G. Norton, IGX will soon offer ePlus solutions. He said IGX will gain access to ePlus' full range of managed and professional services and solutions from "top manufacturers like Cisco, EMC, HP, NetApp, and VMWare."

ePlus, for its part, will also benefit from IGX's engineers and security offerings, both of which will enhance the company’s engineering delivery in security and secured networking in the company's newly extended customer bases in Boston, Connecticut and New York, Norton said.

Mark P. Marron, president and COO for ePlus, recently called security one of his firm’s key focus areas during the company's Q2 2016 earnings call on Nov. 2.

"We believe it’s a hot market," he said during the conference call with financial analysts, "And with some of the regulatory and compliance issues that are out there for our customers, we think it’s a big market that we can continue to grow in and outpace the market."

Marron also said ePlus continues to see security opportunities in higher education. He added that ePlus is continuing to invest in the security space because it believes there’s still room to grow, he said.

Marilyn Carr, an analyst with Framingham, Mass.-based analyst firm IDC, said the acquisition is most important for ePlus' because of the international presence IGX Global will provide.

"ePlus already has solid security credentials and key vendor relationships," she said in an emailed response to a question from CRN. "So, [This acquisition] doesn’t seem to be filling a gaping hole in [ePlus'] security capabilities. I think this acquisition is more around the international angle."

In the technology business, she said, geographic boundaries are much more fluid than what they used to be. However, U.S.-based managed service providers and cloud service providers are finding an increasing need to have a presence in other countries when doing business internationally because of concerns over data sovereignty.

Carr explained that some international companies fear that the U.S. Patriot Act would allow the federal government to gain access to data either hosted in the U.S. or by a U.S. organization. Carr said it’s because of that apprehension that companies like ePlus may be looking to execute more overseas-based acquisitions.

PUBLISHED DEC. 7, 2015