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William Blair Private Company Spotlight: Ascend Technologies

July 20, 2020 William Blair – Equity Research Technology, Media and Communications
Providing Technology to Drive Business Growth Our Q&A With Wayne Kiphart, CEO
Discuss the sequence of events that led to the founding of Ascend and what problem is the company aiming to solve? Ascend Technologies was formed through the carve-out of the managed services division of West Monroe and the subsequent acquisition of cybersecurity services provider Gratia, Inc. in March 2020. West Monroe, a U.S.-based business and technology consulting firm, blends industry expertise with deep operational and technology capabilities to create quantifiable, financial value for its clients. West Monroe had originally established a managed services division to provide IT support services for its consulting customers. M/C Partners engaged with West Monroe in a discussion around divesting the managed services business 18 months ago—both groups acknowledge the growth potential of the business and need for increased investments to improve development of the managed services, Salesforce application management, and cybersecurity services businesses. Simultaneously, M/C Partners engaged with Gratia regarding an acquisition, with me and my partner Thomas Runge taking over as CEO and COO of the combined entity. The formation of Ascend created a leading Midwest-focused platform for a comprehensive IT services provider with plans to scale the business to over $100 million in revenue.

What is your go-to-market strategy? Ascend was founded on the core belief that technology is foundational to enabling growth. Today’s most successful and adaptive organizations endure, grow, and innovate on a foundation of efficiently run core IT systems that are tailored to their specific business needs. Increasingly, organizations are relying on hybrid data centers and cloud configurations and have progressively complex data security and compliance requirements. We are passionate about helping these organizations solve their complex IT problems and provide ongoing management to enable them to focus on growing their business, while having the peace of mind that their IT services organization will fully support this growth. Ascend’s three pillars of cloud and infrastructure management, cybersecurity, and application management position us to be uniquely capable of providing end-toend customer support from the application layer to the end-user. Ascend supports a customer base across many industry verticals, with core competencies and expertise in the financial services industry, including banking, capital markets, venture capital, and private equity firms. In addition to financial services, we also support customers in the healthcare, medical device, manufacturing, and pharmaceutical industries, among others.

How do you look at the market opportunity and the market segments that Ascend is focused on, as well as the current level of market penetration? How do you expect the market to evolve? Many MSPs today are built on legacy data center and end-user support models that focus on reacting to problems rather than preventing them in the first place. Some are only now moving toward cybersecurity and application level support but often lack a comprehensive offering to provide end-to-end customer support. Ascend was formed with the capabilities and vision to address exactly that market opportunity, delivering application support and cybersecurity services today. Since its launch in March 2020 after the carveout from West Monroe, Ascend has already established itself as a leading service provider in the Greater Chicago area and plans to rapidly scale across the broader Midwest market.

What can you share about Ascend in terms of size, growth profile, and profitability? Ascend is growing quickly, both organically and through acquisitions. At its formation, Ascend lacked a sales function. We have since built out a sales team and strategy, and have seen strong bookings momentum in the first two quarters of 2020. In addition, we have identified several acquisitions that we hope to complete in the near term, and expect to approach $50 million in revenue by 2021.

What differentiates Ascend from its competitors? What do you view as the most sustainable source of differentiation looking forward? We see a few key differentiators against the broader MSP market. First, Ascend delivers a holistic view across midmarket and enterprise IT infrastructure and applications with expertise across multiple layers. Our ability to deliver customer support for the application layer, cloud infrastructure, and cybersecurity in addition to end-user support is an offering that resonates with our customers and is unique in the market. Second, we support and monitor sophisticated hybrid and cloud-based environments with a focus on cloudfirst approaches. This is a more modern approach to customer infrastructure management that supports enhanced flexibility and lower overall cost of ownership while providing customers with reliable technology support for users working in the fluid business realities organizations face today. Third, we bring a dedicated and focused approach to data security for highly regulated industries with complex compliance requirements and regulations. Combining the security expertise of West Monroe’s cybersecurity practice and Gratia’s legacy as a cybersecurity services provider, our rigorous approach to IT security is a critical differentiator in today’s technological environment. Lastly, we understand that applications are central to running a successful business. Ascend delivers business application support that goes beyond simply monitoring application environments by instituting integration across applications and customization to meet unique customer requirements.

James Breen jbreen@williamblair.com

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