VSS Capital backs Centroid Systems
VSS Capital Partners, a private investment firm based in New York, made what it termed “a significant growth investment” in Centroid Systems Inc., a managed cloud services firm based in Troy, Mich.
Centroid, an Oracle Cloud Service Provider, provides Oracle enterprise workload consulting and managed services across public cloud companies such as AWS, Google, IBM, Microsoft and Oracle. The company also works with private cloud technology.
Trent Hickman, managing director at VSS, said his company was attracted to Centroid because of VSS’ prior investment in another MSP, Coretelligent. That company, based in Westwood, Mass., focuses on SMBs in the financial services and life sciences industries. The company has seen an increase in co-managed IT support relationships.
“Managed services companies typically have had high levels of recurring revenue, well above average growth and attractive margins,” Hickman said.
Centroid is similar in that regard but focuses on Oracle workloads with enterprise clients, he said. While Oracle lags behind other cloud providers, that status could prove to be a virtue.
“In comparison to many of its competitors, Oracle has been slower in migrating its business to the cloud, but therein lies part of the opportunity,” Hickman said. “We believe that we’re still in the early innings of cloud migration, in general, and it’s probably an inning or two earlier for Oracle.”
Oracle’s public cloud platform grew about 100% in 2020, Hickman said, citing Oracle. Gartner estimated Oracle’s cloud market share doubled, but from a smaller base than the other major players, he added.
Hickman said he expects Centroid to “grow nicely on its own” but sees opportunities for add-on acquisitions. Such deals will generally aim to add clients and depth to Centroid’s current expertise in the Oracle ecosystem, gain further expertise with other public cloud ecosystems, and develop credentials with SaaS applications such as Salesforce and Snowflake.