Managed services provider Ericom has acquired Melbourne’s M2K Technology Solutions.
M2K is also an MSP and focuses on mobility, security and cloud. Ericom CEO Kyle Page told CRN the acquisition is about boosting his company’s capabilities in those fields, because he thinks that 5G will change the market.
“We assume that buyers will go to a mobile-first policy,” he told CRN. “We make money today from fixed networks and the NBN. In the future that will come from mobile. When we discussed strategy we felt we had to be there or we would miss out.” Page added that the shift to wireless links will lead to more demand for SD-WAN, and therefore security. He also predicted device proliferation, meaning more demand for services.
“We do a lot of work in nursing homes and we know they used to have two buttons in the room - one in the bedroom, one in the shower. Now we see they’ll have 15 or 20 devices in each room in the near future.”
“People will want a price per month to manage that.”
Ericom’s main partner is Telstra, and Page said he already sees the big carrier making the same move.
“Telstra moved to a model where internally their portfolio managers are being combined. We decided to make sure we can speak the same language when we talk to the one person we need at Telstra. We want them to be able to have that conversation with us.”
Page said he has “a vision, but not a plan” for how to integrate M2K and create new managed services products.
One element of the vision is for Ericom to serve more geographies. Sydney is the company’s home, but Page feels a substantial Melbourne presence adds gravitas and reach that buyers want.
“To be a serious player, you need to be in both places,” he said.
Ericom flagged a deal of this sort last year. In our profile of the company for the 2019 CRN Fast 50, Page said the following:
“We’ve sat and contemplated whether we just employ some good people and use our skills to grow a mobile business. We realised it would take two years to do that, whereas if I go and buy an existing managed service provider in 5G, a Telstra partner, that would be a quicker way to bring that DNA to our business, because it’s something we’re missing.”
Back in the present, Page said by the start of FY 20/21 Ericom will be ready to use M2K’s expertise to create new mobility-centric services that drive revenue growth. While he declined to offer precise numbers, his plans call for Ericom to add multiple eight-figure increments to its top line.
M2K’s pedigree won’t hamper that ambition: the company won Telstra’s Enterprise International Deal of the Year award for 2019. Ericom won Telstra’s Cisco Partner of the Year, was a finalist in the 2019 CRN IMPACT Awards and came in at number eight on the 2019 CRN Fast 50.
Terns of the deal were not revealed, but M2K’s principals will exit the business. CRN joked that Ericom has written a big enough cheque that M2K’s owners might be found at a nearby marina. Ericom’s Page did not discount that possibility.