​Deloitte makes AWS advancements through Strut Digital acquisition

Consultancy house strengthens DevOps hand with boutique MSP buy.
L-R - David Cheal (Strut); Tim Bradey (Strut); Kevin Russo (Deloitte) and Zack Levy (Strut)

L-R - David Cheal (Strut); Tim Bradey (Strut); Kevin Russo (Deloitte) and Zack Levy (Strut)

Deloitte has acquired boutique managed services provider Strut Digital, as the consultancy house continues to bolster its cloud practice across Australia.

As a DevOps specialist provider, Strut helps companies move to and manage cloud-based IT environments, by leveraging the Amazon Web Services (AWS) cloud platform.

Terms of the deal will see the 25-strong Strut team join Deloitte’s Sydney office effective 22 May, with Strut CEO Zack Levy coming on board as a partner, while the company’s other directors, David Cheal and Tim Bradey, will join as principals.

In addition, the team will form the DevOps component of the cloud operating unit within Deloitte’s Technology Consulting practice, led by Deloitte technology, strategy, and architecture lead partner, Kevin Russo.

“The team really complement our existing cloud implementation services,” Russo told ARN.

“We can now provide our clients with dedicated DevOps capability to help de-risk their migration to the cloud and where required manage the ongoing cloud environment.”

Since starting out in 2014, Strut has forged a reputation for delivering a range of cloud services in the market, spanning migration, managed services, strategy, enterprise applications, DevOps services and application development.

“Strut’s cultural focus on getting the job done right through pragmatic innovative solutions, aligns so well with Deloitte’s culture,” Russo added.

“Our ability to provide our clients with a full scale cloud-focused technical capability, from advisory through to managed services, just got stronger.”

Why Strut?

In closing the deal, Strut represents the latest strategic investment made by Deloitte in Australia, as the global system integrator (GSI) attempts to remain at the forefront of enterprise technology services.

“We are experiencing significant demand from public and private sector clients for our technology expertise,” Deloitte CEO Cindy Hook said.

“Our clients are all talking about how to make the best use of the cloud, reflecting their need to rapidly adapt to unforeseen shifts in their marketplace, while improving how they service their customers in new and innovative ways.”

Specifically, Hook said the acquisition complements previous transactions with Cloud Solutions Group, Plenary Networks and Sixtree.

Consequently, Deloitte will leverage the cloud expertise of those local acquisitions within the last two years, as the consultancy house expands its cloud capabilities through AWS.

As reported by ARN, the professional services giant will employ 2,500 practitioners globally as part of an AWS-dedicated cloud practice roll-out, designed to “de-risk” migration of enterprise applications to the public cloud.

Deloitte will utilise the cloud platform to build and host more than 20 preconfigured SAP S/4HANA industry solutions.

"Strut Digital’s deep expertise in AWS Cloud really complements our recently announced alliance with Amazon Web Services and our ability to help our clients digitally transform their entire organisations," Deloitte Consulting managing partner Robert Hillard added.

Since pursuing a localised merger and activity (M&A) strategy during the past two years, the business has bolstered cloud expertise across integration, architecture, security, infrastructure, identity management and now DevOps.

“We knew we needed this capability,” Russo told ARN. “If you look at our M&A activity during the past few years around technology, the pieces of the puzzle are starting to come together.

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"We needed to explore establishing a DevOps capability not just for how we’re going to market, but also for our customers.”

Across Australia, Russo said Deloitte is seeing “increased demand” around building digital solutions and platforms, as businesses look to leverage the cloud in new ways.

“Automation is the key to that,” Russo explained. “When you look at our M&A activity, we bring on new capabilities but we don’t necessarily bolt on capabilities.

“Strut are coming in to be our DevOps team because we don’t have an existing one and that’s why our acquisitions have been successful.”

Collectively, Russo said the move further cements Deloitte’s ability to provide a "strong end-to-end play" across the local market.

The deal originated at EDGE 2016 following a meeting between Josh Rubens (Deloitte) and Zack Levy (Strut Digital)
The deal originated at EDGE 2016 following a meeting between Josh Rubens (Deloitte) and Zack Levy (Strut Digital)

Why Deloitte?

In leading a small team of technical engineers with a growing customer base, Levy said positioning the business for acquisition was not initially on his to-do list for Strut.

But with growth remaining an ongoing challenge for the boutique provider, a meeting at EDGE 2016 in Hamilton Island starting proceedings on a nine-month acquisition plan.

Through attending the leading destination channel conference across Australia and New Zealand, Levy met Josh Rubens, a Deloitte partner specialising in cloud and infrastructure solutions.

As former managing director of Cloud Solutions Group - acquired by Deloitte in November 2015 - Rubens was spotted potential in the blossoming business, as well as providing first-hard advice on the benefits of being acquired by a global multi-national.

“We first connected at EDGE in 2016 and from there, it opened our eyes up to Deloitte,” Levy told ARN. “The timing was perfect because we were focusing as a business on how we could fund investment to take us to the next level.”

Strut’s track record includes projects with some of Australia’s leading brands such as Westpac, Qantas, Redballoon, Amway and Bauer Media Group.

Going forward, Levy said the company's core customer basis will not change, with Strut continuing to work with its current clients while looking to expand its practice under the Deloitte brand.

“What validated the decision was after Christmas we were inundated with work but we had to give up a lot because we just didn’t have the people available to do it,” he acknowledged. “Our conversations with customers were more around, ‘sorry we don’t have the firepower currently’ which was frustrating.”

Levy said joining forces means Strut can bring "leading-edge" AWS Cloud expertise with "some of the best talent" in Australia to Deloitte.

“At the same time we are taking advantage of enterprise opportunities to scale-up our offering in the market,” he added.

“Having access to Deloitte’s pool of resources, expertise and talent, not only benefits our clients, but also our team’s ability to think big.

“We help our clients to transform their businesses and now we can do it even bigger and better as Deloitte.”