An Unlikely Acquisition into an Elegant Integration
In 2017, eFolder, an IT solutions provider with a focus on cloud-based data protection and business productivity, acquired Axcient, a well-known IT solution innovator. It was a move that confused the Managed Service Provider (MSP) space.
At the time of the acquisition, eFolder was a relationally focused company with proven marketplace longevity and a recognized commitment to the channel. But they were serving small MSPs, struggling with product reliability, and had little brand equity. In contrast, Axcient was a darling of Silicon Valley fueled by a start-up mentality, VC backing, and a best-in-class disaster recovery solution. However, a growth-decision misstep proved financially unsustainable, created tension with their MSP customer base, cost them their #1 marketplace position, and set the stage for the acquisition.
Two years post-acquistion, eFolder and Axcient had merged on paper only. Each company was operating independently under the name eFolder/Axcient but with unrelated offerings, different target audiences and opposing corporate cultures. To make matters worse, the marketplace was questioning the move. Rumors were circulating about the acquisition, but few significant MSPs knew eFolder, there was little industry confidence the marriage could work, and the company was losing money and market share.
With investors pressing for returns, company leadership needed an effective branding strategy for the joint enterprise that would justify the acquisition and unify the companies and offerings under a relevant name, a single mission and a shared value proposition. The question was how to introduce the new entity to the marketplace without jeopardizing eFolder’s solid rapport with MSPs or Axcient’s reputation as an industry force.
According to collated research and a recent Harvard Business Review report, the failure rate for mergers and acquisitions (M&A) sits between 70 percent and 90 percent.
To bring the two companies together and equip the new entity to live up to its post-acquisition potential, TBG launched an intensive rebranding effort. The goal was to create a new brand narrative that would make sense of the union and give the company a common vision based on complementary strengths and shared values.
TBG’s industry research noted a number of significant trends that uncovered real opportunity for the new company if branded correctly. The bottom line was MSPs were seeking out innovative, secure cloud-based solutions and craving trusted partnerships with their providers in a marketplace that was changing rapidly. However, extensive interviews with
company executives, staff, customers and industry analysts revealed conflicting corporate cultures, opposing sales approaches, and differing product roadmaps. Adding to the challenge, market share and brand awareness indicated that the name Axcient was the better choice for the merged enterprise despite eFolder being the acquiring company.
Company executives wanted to retain the name eFolder/Axcient as a way of appeasing both sides of the merger. However, our marketplace surveys revealed that less than 1% of respondents indicated the name eFolder/Axcient as a strong choice.
Leveraging the insights gained through legacy brand audits, marketplace research and in-depth interviews, TBG constructed a fresh and powerful brand that capitalized on the best assets of each company and merged the offerings under the umbrella “Cloud Solutions”. Despite the apparent incongruity of the two companies, the new entity was introduced to the marketplace as an intentional and elegant integration of complementary strengths that resoundingly served the technology as well as the relational needs of the MSP—the perfect “Together We Are Better” story.
Under the name The New Axcient (a transitional moniker that would eventually revert back to simply Axcient) the new entity was positioned as a new kind of IT solutions provider that viewed their technology as one component of a more extensive offering designed to serve the greater needs of MSPs. In this refresh structure, The New Axcient would deliver best-in-class cloud technology enveloped in extensive business and sales support designed to help MSPs grow their business. The New Axcient is a company Purpose-Built for the MSP.