Providea Is Latest Purchase of SPS

The Parsippany, New Jersey-based communications and systems integration giant, Strategic Products and Services (SPS), has recently bought Providea Conferencing, a major video and managed services solution provider.

Although both companies confirmed this on Monday, the financial terms to this agreement were not mentioned.

Located in Camarillo, California, Providea was established in 1999. The company is popular for its video and telepresence services, as well as its partnership with Cisco, Lifesize, AT&T, Masergy and others. It centers most of its attention on videoconferencing, cloud applications and managed services. For the year 2012, Providea was also named U.S. Partner of the Year by Polycom.

The Providea Gateway Service was recently rolled-out, and delivers a B2B connectivity service as well as removing integration costs and administrative problems linked to business-class video services connecting to consumer-grade platforms such as Google Talk and Skype.

SPS has broad capabilities such as combined communications, contact center, IP telephony, unified communications, network infrastructure and mobility, and is also one of the country's top Avaya Platinum partners. Furthemore, SPS focuses its services towards Microsoft, Cisco, Extreme Networks, Motorola and various other important vendors in the segment.

SPS' COO, Jim Felicetti, said, "Expanding our video and cloud-based competencies is an important step to enhance our UC portfolio and bolster our company's capabilities as a full UC and managed services provider... The Providea acquisition increases our scale, fortifies our knowledge base and extends [...] our reach [to] video conferencing, telepresence and private cloud solutions."

Reporting to Felicetti, Providea Conferencing, an SPS company, will be formed as a Providea business unit of SPS. The President and CEO of Providea, Todd Luttinger, will persist in managing the running of Providea's services as well as the 160 employees.

SPS was established in 1988 and consists of around 500 employees as well as offices in more than 30 North American cities. On the 2012 installment of UBM Channel's Solution Provider 500, SPS ranked at 104, and on the 2012 CRN Fast Growth 100, ranked 79.

SPS has also developed a taste for channel M&A, and in the past two and a half years, five purchases of fellow VARs and systems integrators have been completed.

Of those five, are Jones Communications (March 2012), Imagine Technologies (December 2011), Spenser Communications (February 2011) and Consultedge (August 2010). In addition to this, an agent program for smaller solution providers was offered by SPS, and is aimed in particular at those who wish to refer SMB business to SPS or leverage SPS' more significant vendor relationships to resell products.

The industry-wide consolidation trend is expected to persist, and those monitoring the channel note that solution providers are seeking to broaden their influence and distribute their product and service breadth. The managing director of boutique investment firm and M&A advisory group Foros, Simon Auerbach, warned at UBM Channel's recent Best of Breed (BoB) conference that partners should not depreciate sudden consolidation.

Auerbach stated to attendees at BoB that, "[They] need to look at 'Can I survive on a standalone basis,'" and focus on "existential questions" relating to buying businesses or selling their own businesses, and investigating all the other options in-between.

He added, "It's always easy to ignore these questions, or to avoid or defer answering them and say, let's do that next year... Make that decision today. Even if it's nothing. Make that decision consciously." (CY) Link