Dive Brief:
- 11:11 Systems bought select enterprise customers from IBM's VMware Cloud Service Provider business, marking its eighth acquisition related to the virtualization software provider and eleventh overall, the company announced Thursday. Financial terms were not disclosed.
- The transaction extends the global managed infrastructure provider's customer reach across four continents. 11:11, which calls itself the world's largest privately held VMware Cloud Service Provider, will support incoming customers through its cloud, connectivity, security and recovery portfolio.
- The IBM deal also signals a new phase in 11:11's growth strategy. After years of building its VMware business through acquisitions, 11:11 expects to emphasize organic growth and platform development in 2027 while remaining open to selective deals, the company’s Founder, Chairman and CEO Brett Diamond told Channel Dive.
Dive Insight:
11:11 Systems has spent several years building a global VMware cloud services operation through acquisitions. Now, the company is looking to capitalize on that scale.
11:11’s previous acquisitions "were instrumental in building the company’s global platform, technical expertise and market presence and solidifying 11:11’s position as the largest privately held VMware Cloud Service Provider,” Diamond said.
The IBM deal marks a shift in emphasis. It "represents the next stage," Diamond said, as 11:11 looks to bring enterprise customers onto its platform.
11:11's moves have come amid upheaval in the VMware channel. Since acquiring the company in 2023, Broadcom drastically narrowed VMware’s channel ecosystem, opening the door for larger authorized partners to snap up locked-out partners and take on customers from providers excluded from VCSP.
11:11 has ranked among the principal beneficiaries of Broadcom's VCSP restructuring. The MSP's VMware acquisitions to date include iland Cloud, Green Cloud Defense, Unitas Global, Sungard Availability Services, Faction, Ntirety and Digital Sense.
11:11 has used M&A to extend both its capabilities and geographic reach. Ntirety, acquired in January, added managed infrastructure, database and security expertise, while Australia-based Digital Sense, closed in February, bolstered 11:11's Asia-Pacific presence.
Acquisitions, however, aren’t 11:11's only growth strategy. In February, the company told Channel Dive it was working with former VMware partners on wholesale relationships, customer migrations and other arrangements. Diamond said the combined approach will guide 11:11's priorities next year.
“In 2027, our primary focus will be on building on our strong organic growth and advancing an innovative roadmap designed to expand the value of the 11:11 platform,” Diamond said.
Further acquisitions remain in play for 11:11.
"Any transaction will be evaluated through that lens and not as an end in itself," Diamond said.
For customers joining 11:11 from IBM, service continuity remains the immediate priority. Longer term, Diamond sees potential to modernize enterprise workloads through VMware Cloud Foundation, including containers, private AI and GPU-enabled infrastructure.
The IBM deal carries Broadcom's endorsement as the VMware owner concentrates its cloud service provider business among fewer, larger partners. Ram Velaga, president of Broadcom's Infrastructure Software Group, pointed to 11:11's global infrastructure, VMware expertise and more than 6,000 customers as strengths supporting enterprise modernization on VMware Cloud Foundation.
“11:11 Systems is a partner that reflects our model,” Velaga said in the announcement.
11:11 is betting that continued investment in VMware will give customers a modernization path that doesn’t involve overhauling existing environments.
"Broadcom’s investment in VMware, including its work with Anthropic to advance secure AI innovation on VCF, further reinforces our confidence in the platform’s long-term relevance," Diamond said. "That innovation gives customers and partners greater flexibility to modernize without abandoning the infrastructure investments and operational expertise they rely on today."
