NWN Acquires Carousel Industries To Form $1B Cloud Communications Powerhouse

The two Cisco Gold partners will ‘combine all of our strengths’ to tackle a $70 billion market in North America with solutions and services that include unified communications, collaboration, networking and security, NWN Carousel CEO Jim Sullivan tells CRN.

NWN Corp. has acquired Carousel Industries in a blockbuster deal that brings together two leading solution providers in cloud communications, forming a national powerhouse in the fast-growing space with a $1 billion run rate.

The companies—both more than two decades old and well known as specialists in unified communications, networking and security—will “combine all of our strengths” following the now-closed acquisition, said Jim Sullivan, who has served as CEO of NWN. Sullivan will continue as chief executive of the combined company, which will be known as NWN Carousel.

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Backing the acquisition is Larchmont, N.Y.-based private equity firm New State Capital Partners, which has owned a majority stake in NWN since 2015. The financial terms of the Carousel acquisition were not disclosed.

Jeff Gardner, CEO and co-founder of Carousel, will hold a seat on the board at NWN Carousel but won’t have an operational role with the combined company. Jim Marsh, co-founder and chief revenue officer of Carousel, will stay on as chief revenue officer at NWN Carousel.

Both Carousel and NWN already ranked among the largest solution providers in North America. Exeter, R.I.-based Carousel held the No. 59 spot on CRN’s Solution Provider 500 for 2020, while Waltham, Mass.-based NWN ranked at No. 80 on the list.

Bringing together the two companies creates “national scale” that will be an advantage in meeting customer needs, Sullivan said.

“We’ll have major operations all over the country—from New England and the Northeast, to North Carolina, Texas, California, Florida. So we’ll be a national player,” he said.

NWN Carousel has a $1 billion run rate for 2021, with more than 6,000 combined customers and more than 1,400 employees. Only 37 customers are shared between the two companies, NWN Carousel executives said.

Both solution providers specialize in segments including unified communications and collaboration, networking, contact center and cybersecurity—and both bring an emphasis on services and recurring revenue. Key vendor partners for NWN include Cisco and HP Inc., while Carousel brings strong partnerships with vendors including Avaya, Cisco and Microsoft. Both companies are Cisco Gold partners and have held prestigious Cisco certifications such as Unified Contact Center Enterprise.

“The top priority for customers that we see is cloud communications,” Sullivan said. “And a subset of that is the unified communications, the contact center, the security around those environments, the networks to support it—and then all the endpoints, with a management layer around it. Our goal is to be the best provider for all of the accounts in North America in that space.”

By joining forces, NWN and Carousel will be even more competitive in the North American market than they’ve been separately, Marsh said.

“A lot of the partners in our ecosystem have neglected change, because change is very tough. Investments need to change, skill sets need to change. But we’ve embraced it,” Marsh said. “And that’s why I think this thing makes a lot of sense for us at Carousel. Because as we get size and scale, we’re going to be able to challenge a lot of the legacy-type partners that are a billion and above. And they should be scared.”

Carousel Industries was founded in 1992, while NWN launched in 2000—and each has made a number of acquisitions in addition to their organic growth. For instance, NWN acquired Sacramento, Calif.-based Western Blue in 2010 and Dallas-based Collabramind in 2016, while Carousel acquired 10 companies over its nearly three decades including Warwick, R.I.-based Atrion in 2016.

Sullivan joined NWN as CEO in mid-2019, and by that fall the company had launched its strategy to focus on five key solution areas—unified communications, security, contact center, device-as-a-service and advanced technology solutions. NWN has been growing at a clip of 20 percent per year since then, Sullivan said.

Crucially, “the model and the vision [at Carousel] is really aligned with everything that we’ve been doing,” he said. “The marketplace is a $70 billion marketplace in North America, and everybody during COVID has been moving to work from anywhere—and all of this has led to cloud communications being adopted faster and becoming really a must-have.”

A key focus in the integration of the two companies will be bringing the NWN-developed Experience Management Platform (EMP)—which provides advanced analytics, reporting and alerts about a customer’s environment—to Carousel’s 5,000 customers, Sullivan said.

“They’ll begin picking up the EMP platform for their customers. They’ll pick up device-as-a-service. And then they’ve got some really solid other offerings that we’ll pick up,” he said.

Bringing the Experience Management Platform to Carousel customers will “really elevate us,” Marsh said.

“Customers will have the opportunity not just to have a cloud solution from us, but to really manage their cloud environment through the Experience Management Platform, which will really help them to be much more self-sufficient,” Marsh said. “And then on top of it, we’ll be wrapping more managed services and more cloud services around these solutions to make sure that our customer success piece is 100 percent executed on and successful.”

Meanwhile, Carousel will be bringing a greater emphasis on Microsoft solutions to the combined portfolio, including the Microsoft Teams collaboration app. Microsoft Teams will “absolutely” be among the solutions that NWN Carousel focuses on, Sullivan said.

Marsh said that the NWN and Carousel management teams have been discussing the possibility of launching new offerings around Microsoft Teams and Microsoft security solutions, while also discussing “the whole Microsoft relationship.”

“It just fits really nicely in both portfolios for both companies to continue to grow that piece,” Marsh said, noting that Carousel brings “some very exceptional talent on our Microsoft team” to the combined company.

The widespread shift to work-from-home has created massive growth for cloud communications solutions such as Microsoft Teams and Cisco Webex. It’s also sparked demand for the underlying infrastructure, security and devices needed to enable those solutions, Sullivan said.

Solution providers must be able to serve those customer needs during the pandemic and beyond, when a hybrid workforce that’s split between the office and home is expected to become the norm, he said.

Having national scale is “a huge advantage,” Sullivan said. “Employees used to be predominantly at one headquarter, and they were all pretty centralized, and the tools and the resources could have been centralized. Now we’re going to see that employees could be anywhere, but they have to have that same experience and security as if they were in that corporate headquarters.”

Additionally, many enterprises will still have locations spread around the country—and with the acquisition of Carousel, “we’ll be able to handle their locations with technology and people anywhere they exist in the country,” Sullivan said. “That gives us that scale to help customers meet their business objectives better.”

In the current environment, “I think scale offers the most value and advantages for our customers,” he said.

In terms of integrating the two companies, Marsh said he expects there will be “no disruptions in either business.”

“There will be synergies that we’re going to have to capitalize on. But really for go-to-market, sales, engineering—that piece is not going to change,” Marsh said. “Our customers are just going to find more resources to provide more success for their team.”

Ultimately, as the two solution providers come together, “it’s going to be all about the customer satisfaction, the customer experience, and providing the best solutions for that in a very repeatable way,” Sullivan said.