In the old days, M&A activity was largely geared to the coming together of competitors in the same market, either with a view to taking one out of the market altogether, or of saving multiple vendors by merging them into one rationalised entity. Now it is more likely to be to build something that better fits changing and emerging markets.
This trend creates a new need for tools that make bringing together disparate data management environments – a crucial requirement in M&A activity - a practical reality. It also requires people with experience of managing M&A processes and providing the solutions that engineer that practical reality.
So bumping into Jaye Tillson, head of Architecture at TT Electronics, at the recent Nutanix.NEXT conference in Anaheim provided an opportune moment to kick over some of those issues, both in terms of managing the task through to completion, and the tools that help lubricate the process.
His experience is in building and managing IT infrastructure, with a concentration on due diligence for M&A integrations. In practice, this often goes hand in hand with keeping a watching brief on new technologies that might prove helpful.
So whenever his employers are looking at acquiring a company, his job is to investigate their current infrastructure and how the company works with it. From that comes an integration roadmap.
It is a process that has had a fair amount of exercise with TT Electronics, a global manufacturer of electronic components for the industrial, aerospace and defence sectors with an HQ in the UK, but facilities in 21 locations around the world. It started life in Sheffield back in 1812 as W. Tyzack and Sons, making agricultural tools and implements, and by 1870 had added Benjamin Turner as a partner, to become W.Tyzack, Sons and Turner.
It has been a long journey to the £500 million-plus turnover TT Electronics of today, including a couple of name changes and a goodly number of acquisitions along the road, particularly since the 1990s. These have included businesses such as Magnetic Materials Group, AB Electronic Products Group, BI Technologies, Dale Electric International, the AEI Group, the Stadium Group and the Crystalate Manufacturing Company.
Point one: get a framework
Tillson joined the company some 10 years ago, just as the global banking crisis was biting hard into business activity. This was when TT realised that different divisions within the business were competing with each other because there was no real integration of the acquisitions across the whole company . The firm brought in Tillson to introduce a pan-divisional trading framework across the business.
To begin with this structure was, as far as possible, based on HP kit, and that might have remained the case had the vendor had an unhelpful pricing and product policy when it came to hyperconverged systems technology. The technology was something Tillson had by then heard about and had become seriously interested in its potential for the company. HP had become a player in the technology having acquired Simplivity and he had therefore been looking to that to be the obvious route to follow. But there's always a but. Tillson recalls:
At the time they were only doing an all-Flash version, which was really expensive, like $300,000 or $400,000. Nutanix were offering it for $150,000. That was when I started to do more and more investigation into other hyper-converged solutions, such as Dell and Nutanix. Funnily enough, some third-party consultants we work with in our US offices had been deploying Nutanix. It was really big in the US and really unheard of in the UK. So when on one of my visits they took me to look at a customer site of theirs that was running Nutanix and I thought this was a really good system.
The target was the company’s key US datacenter in San Diego, then running HP kit. Tillson admits now to being unsure, seeing a switch to new, untried kit as something of a risk. The consultants were, however, convinced it would work, so finally Tillson talked to Nutanix in the UK, which offered him what he readily calls a great deal:
Touch wood, ever since then we have grown it. We’ve got 10 sites running Nutanix now, ranging from a one node to 10 nodes.
From a business management perspective, he sees the hyper-converged environment as being a lot less complicated to work with than the traditional three-tier architecture offered by HP. To this end, it fits well with TT and its needs. Despite being in that 'half-a-billion’ bracket as a group Tillson would claim that its IT requirements cannot be classed as huge and is relatively uncomplicated.
The major segregation in staffing is between platforms and networking, for these do require different skillsets. But the other areas often seen in large businesses, such as siloes for storage, or for VMs, make no appearance at TT. This means that one standard interface is used by the same staff at every point in the stack. The company is still using VMware, but in part this is because its current backup executive, Veritas, does not support the Nutanix hypervisor, AHV.
This is one of several areas that will need to be resolved over time: where TT’s existing suppliers have tools and products which are not compatible with Nutanix and whether they plan to offer such a capability or not. Simplicity and flexibility are the goal, says Tillson:
The aim is to have it all in one box where you can just add more nodes with a small number of clicks and then take those nodes out if needed. Our data center here in San Diego was 10 nodes, but we've out-sourced email now, so we don't need 10 nodes. So we just pulled a couple of them out and put them into another chassis. The hardware is not wasted, it is just used somewhere else.
Where rip and replace can make sense
This also contributes positively when it comes to acquisitions, for his standard approach is to replace all of the hardware the new company is running within the first six months following acquisition. The only time this does not happen is if the acquired company has recently invested in new hardware itself. This can cause some operational complications as the short term economic benefit will normally be to sweat the new asset for a year or two.
But in practice this is an unlikely occurrence because the businesses acquired have usually been up for sale for a while, and therefore investment in new IT resources has been a pretty low priority. It is also worth pointing out here that, with the majority of mainstream business management applications now certified to run on Nutanix, porting existing applications to the new hardware should normally be a reasonably straight forward exercise:
In the last three acquisitions we've been using Hyper-V, so we've put Nutanix in, whether it be a one, two or three-node cluster, and we've migrated the virtual machines. The Stadium Group acquisition covered six sites that we put Nutanix in onsite, it was easy to set up out of the box and add the VMware on the top. And it's even easier if you've got VMware, because you connect them together using with VMware.
Tillson is now looking to extend the services available with the current Nutanix implementation, in particular Disaster Recovery services, and the notion of moving at least the storage element of the on-premise development and test capabilities out into the cloud is on his list of projects to examine. This will not be taken in any rush, however, for the company is heavily regulated as it manufactures a large number of components for the UK Ministry of Defence for direct military use. It therefore faces a raft of restrictions on where data can, and cannot, be stored. For much of that data, the cloud is not an option, and the current Disaster Recovery practice is to use Nutanix replication capabilities.
Tillson also has praise for the support available from Nutanix engineering staff, particularly as a business still wedded to using VMware:
It is not just for things that have broken with Nutanix, but when we don't know how to do something with VMware within Nutanix the VMware support is better than we've ever got from VMware. They know more than the VMware people.
That was a comfort when he had to sit with his Board of Directors and recommend a brand new product that no one had heard of...