TDS enhances its cloud power with Vital Support Systems


The deal: TDS put another element of its growing cloud services portfolio together when it struck a $45 million deal to acquire Vital Support Systems.

Through this deal, TDS HMS was able to immediately extend its footprint not only into Des Moines, Cedar Rapids, and Davenport, Iowa, but also other Midwest markets, including Omaha, Kansas City, Mo., and Rockford, Ill.  

Similar to the other data center and managed service acquisitions, TDS will run Vital Support Systems as a subsidiary in its Hosted and Managed Services (HMS) unit. Jeff Sparling, Vital Support Systems' CEO will retain his role, while the company's 140 employees will retain their positions.

To build up the HMS division, TDS has acquired four data center and cloud-focused providers in just the past two years. In addition to Vital Support Systems, it acquired VISI, One Neck and TEAM, bringing all of them under the HMS umbrella.

Why it's significant: By acquiring Vital Support Systems, TDS HMS gained all of Vital Support Systems' managed services and vendor equipment relationships to its growing toolbox of solutions, including data center, cloud and managed IT services. Being part of a larger company with more capital, Vital will gain access into other markets where it does not reach yet, including TDS' strongholds such as Wisconsin and Minnesota in addition bringing existing clients TDS HMS' solutions from VISI, One Neck and TEAM.

"The services that Vital offered prior to the deal are still available, but now they can also offer this set of services that TDS has brought including data center services and cloud services," said William Megan, president of TDS HMS, in an interview with FierceTelecom. "We've had elements of cloud, but we're just about to roll out an enterprise class cloud."

Megan emphasized that even though every company in the HMS unit brings particular strengths to the table, all of them can sell and bundle each service in the expanded portfolio. One Neck's ERP hosting application service, for example, could be sold by another member of HMS like VISI in a different geography.

"We're building a set of services and a management team that can go to market with a robust set of capabilities that we'll share," Megan said.

HMS and managed services has been a growing engine of TDS' wireline division. As of the end of Q3 2012, TDS reported that ManagedIP services, which are offered via its ILEC and CLEC operations, grew 89 percent to 84,500 from 44,800.