Cloud Hosting Provider Contegix Merges With Distributed Services Systems

Cloud computing and managed application hosting provider Contegix merged with managed service provider Distributed Systems Services this month, creating a new entity poised to capture the increasing opportunities around both on-premise and cloud-based hybrid environments.

DSS, No. 416 on the 2016 CRN Solution Provider 500, is a "full-line reseller and full-line managed service provider," Ann Borza, the company’s vice president of sales, told CRN.

Contegix's merger with DSS will give both companies something they haven’t had before, marrying Contegix's cloud hosting and application capabilities with DSS' reseller partnerships and managed services background, according to Borza.

The result, she said, will give the new company a portfolio that is poised to capture new opportunities.

[Related: Cognizant Makes Digital Agency Acquisition In Wake Of Elliott Management Activist Offensive ]

"The whole hybrid cloud in the marketplace is certainly a need that this combined organization can fulfill. DSS has the capabilities to run and support a client's on-premise environment … and now, together, both companies are looking to expand and be able to leverage the [Amazon Web Services] and Azure public clouds," she said.

Contegix, featured on the 2016 CRN MSP 500 list, financed the deal through private equity firm Strattam Capital, which had bought a majority share of Contegix earlier this month. Strattam Capital appointed former DigitalGlobe senior vice president David Turner as the company’s new CEO and appointed founder and former CEO Matthew Porter to the role of vice chairman. Financial details of the transaction were not disclosed.

"Strattam's investments have given us the flexibility to grow and envelop new technology, allowing us to bring new opportunities to our current and potential clients. … The infusion of capital is allowing us to expand and better support our clients,’ Tom Prindiville, Contegix vice president of marketing, told CRN.

St. Louis-based Contegix, which since its inception has focused on cloud computing and managed hosting, has not worked directly within customers' infrastructure. The addition of DSS’ capabilities and partnerships with vendors including Microsoft and IBM will enable Contegix to push deeper into that space, according to Prindiville.

’This merger will give us the tools to go deeper and support our clients' infrastructure [and] will fill a lot of holes for both companies,’ he said.

Following the close of the deal, the merged company adopted the Contegix name and Jim Sweeney, founder and CEO of Reading, Pa.-based DSS, was appointed to the board of directors at Contegix.

’We’ve built up a broad array of products and services for our clients, and as their needs grew, we’ve grown with them. The next logical step is providing additional capacity and geographic reach,’ Sweeney said in a statement.

Sweeney said the merger will help both companies better address the increasing complexity of customer workloads.

’DSS has fostered true partnerships with its clients by becoming an extension of their organizations and delivering tremendous value. … Its commitment to ’white glove’ service is a mind-set the company will continue to embrace as well as going beyond for its clients,’ David Turner, Contegix’s CEO, said in a statement.

Strattam Capital said in a statement that it intends to accelerate Contegix's growth through the merger with DSS and with a number of other strategic initiatives, including an expansion to Kansas City, which was pre-funded at close.

’The managed hosting and application hosting market has seen a great deal of change over the past decade. There is a lot of room to meet the fast-changing demands of clients who want full-service support for their growing, evolving businesses,’ said Strattam Capital Co-Founder and Managing Director Adrian Polak in the statement.