MSP SevenSpace to Buy StrataSource

By Paula Musich  |  Posted 2001-09-17

SevenSpace Inc. is hoping to remain one of the few MSPs left standing after the consolidation dust settles and, in an effort to bolster its application and infrastructure management offerings, has announced it will acquire StrataSource Inc.

Despite their similar focus, SevenSpace CEO Peter Weber said he sees very little overlap between the two management service providers.

"StrataSource has five years of operating history and a library of automation technologies. SevenSpace built its own platform to be the most scalable. We have a very comprehensive integration plan," said Weber, in Chantilly, Va. The integration plan calls for complete integration in 90 days, he added.

The StrataSource automation library is a combination of a variety of automation scripts that either gather management data or act on the gathered data. "It lets operators fully use the technology with our own operating platform," Weber said.

SevenSpace, to make its acquisition successful, will have to quickly meld technologies and methodologies from the two companies, said Corey Ferengul, vice president at Meta Group Inc., in Bloomingdale, Ill.

"StrataSource bragged about their own tools and all their processes built around that. SevenSpace used off- the-shelf tools. If they dont rationalize those quickly, any gains from the acquisition will be lost," said Ferengul, who added that neither company has experience in merging such processes.

The acquisition is intended to allow SevenSpace to upsell services to StrataSource customers, Ferengul said. "They have to get StrataSource customers to a higher revenue average. With StrataSource, it was typically under $10,000 per month; in some cases, under $10,000 per year," he said.

SevenSpace will take on the StrataSource operations center in Irvine, Calif., creating bicoastal operations there and at its Chantilly, operations center. The combined company will also create an MSP with offices across the country, and with a string of partnerships with 21 resellers.

With StrataSource customers, SevenSpace can claim about 100 customers, including 20th Century Fox, Warner Bros. and Xerox Corp. Weber said he believes the combined company will be profitable by the middle of next year.

Acquiring the business of many of StrataSources customers is also key to the success of the deal, said Eric Goodness, an analyst with Gartner Dataquest, in Lowell, Mass.

"Whats important here is customer acquisition. [StrataSource] did that in a big way. Now they have a potential to sell in the professional services space, which SevenSpace really has," Goodness said.

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