How Channel Star CTS Plans To ‘Buy’ $1 Billion In Revenue Per Year

‘For the next three years, we’re going to buy $1 billion of revenue in the channel: $400 million in North America, $400 million euros in Europe—per year—for the next three years,’ says Shaun Maine, CEO of Converged Technology Solutions.

Converge Technology Solutions (CTS) is one of the hottest channel partners in the world thanks to its bullish channel acquisition strategy with plans to grow by $1 billion in net new sales per year, focused squarely on the mid-market.

Many mid-market channel partners are facing a herculean task of transitioning customers to the cloud but are falling behind due to a lack of talent and skillset, help from vendors whose resources are focused more on larger partners, and scale issues around providing digital transformation, said Shaun Maine, CEO of Converge Technology Solutions.

“Mid-market customers can buy hardware from anyone, but moving those workloads to the cloud—that is what they desperately need. Large enterprises have specialists for that and it’s all about cost to them, but mid-market customers are like, ‘Please help me!’” said Maine in an interview with CRN. “Small channel partners can’t afford things like data scientists. They can’t afford the cybersecurity people. These are skillsets that smaller partners are discovering they really need, so they need to be part of something bigger.”

CTS has stepped up to the plate by acquiring an astounding 27 channel partners over the past five years.

In 2022, the Quebec-based solution provider plans to acquire between eight to 12 channel partners in North America and Europe.

“For the next three years, we’re going to buy $1 billion of revenue in the channel: $400 million in North America, $400 million euros in Europe—per year,” said Maine.

[Related: Top 12 In-Demand IT Skills With Salaries Over $130K: Dice]

CTS plans to acquire between four to six channel partners headquartered in Europe this year as well as four to six channel partners based in North America, all with a focus on partners who have solid mid-market customer bases.

Maine said he was able to raise $640 million over the past 18 months in the public markets because people witnessed how successful CTS was around executing M&A, then driving sales growth inside the acquired company.

“This is a better way of growing. Some people try to grow by hiring salespeople or training them up as new grads, I would rather buy people with great customer relationships and cross-sell,” said Maine. “We grow organically through the cross-sell, but no one can compete with my growth rate when I can buy the way I buy companies with the way I grow companies.”

CTS is providing mid-market channel partners it acquires the ability to scale, cross-sell, offer better customer engagement, and expand the cloud and digital transformation capabilities mid-market customers are begging for.

This week, Converge Technology Solutions acquired Germany-based Visucom GmbH, which provides screens, interactive blackboards, displays and media controls products and services targeting the education and public sector markets. Last month, CTS bought Delaware-based PDS Holding Company, which included solution provider Paragon Development Systems (PDS) that specializes in managed services and digital workplace platforms with offers ranging from cloud and security to servers and infrastructure to remote work.

Why Being A Channel Partner In 2022 Is ‘Expensive’

“The problem the VARs have is, they’ve been there 20 to 25 years with great customer relationships. But it’s really expensive to have a practice around analytics, and cybersecurity, and cloud, managed services—and they need the cloud provider practices as well: so an AWS practice, a GCP [Google Cloud Platform] practice, etc.” said Maine. “When we buy partners, they can now have so many more things to sell into their customer base.”

Maine said his company is helping mid-market channel partners achieve scale faster than they ever could if they tried hiring talent for scale themselves.

“If you had to go and build an 85-person data scientist team from scratch—that would be very hard. So if you can be bought by Converge, then we’ll cross-sell our analytics practice—which is one of the richest ones in North America—into your customer base,” said Maine. “Then your salespeople are making more money.”

Converge Technology Solutions has risen through the ranks of CRN’s Solution Provider 500 list faster than nearly any other channel partner in the world.

CTG has climbed from No. 450 on CRN’s Solution Provider 500 list in 2017 to ranking No. 39 on the 2021 Solution Provider 500.

In 2021, CTS acquired mobility and application specialist OPIN Digital Inc.; Dasher Technologies, one of Hewlett Packard Enterprise’s largest channel partners in North America; consulting and systems integrator specialist Accudata Systems; data analytics firm LPA Software Solutions; international managed IT services provider ExactlyIT; analytics consulting firm CarpeDatum; and multi-cloud infrastructure and services provider Vicom Computer Services.

Overall, Maine is bullish on his company’s future in 2022 and beyond due to its unique M&A capabilities and market momentum. “So $1 billion of revenue is our target this year, it will probably be north of that,” he said. “There are some fantastic companies that are ready to become part of the family.”