For all the emphasis on cloud based application provision, there is still activity in the application managed services space but in a tough market critical mass remains important. That will be part of the reason Glasgow-based velos-IT, a provider of Oracle ERP hosting and support services, opted for acquisition by US-based managed application and cloud services company Velocity Technology Solutions. But the acquisition also brings a new supplier to the UK market.
velos-IT, founded in 2004 and now with c100 staff and a client base of mid and large sized companies within Europe, gains access to more financial resources and Velocity’s cloud resources which include PaaS and IaaS so it can extend the type of services is can offer. As for Velocity, it gains a foothold in Europe for the first time. Terms of the deal, which was brokered by Prism Corporate Banking, were not revealed. There is money in the background as Velocity was recently acquired by Silver Lake Sumeru.
While the balance of services of the combined entity is more managed services than cloud services, the mix does provide a basis for immediate business wins and a path towards future growth. Velocity will not have an easy time as it will be going up against off-shore providers like TCS, stalwarts like Atos whose managed services have been driving its UK growth (see here) and combined software and managed application service providers like K3 (see here) and ACS (see here). However, there is momentum in the SME space so there is plenty to play for.