Managed Cloud Startup Effectual Doubles Down on Public Sector With JHC Acquisition

Coming on the heels of a private equity investment, the deal builds on other recent moves to expand its public-sector business.

Yevgeniy Sverdlik

January 7, 2020

2 Min Read
Managed Cloud Startup Effectual Doubles Down on Public Sector With JHC Acquisition
A member of the U.S. Army Band salutes U.S. Defense Secretary Ash Carter and Afghan President Ashraf Ghani (standing at top of steps) during an honor cordon ceremony at the Pentagon, March 23, 2015 in Arlington, Virginia. (Drew Angerer/Getty Images)

Effectual, a startup that helps enterprise IT shops get out of their own data centers and move to Amazon Web Services, has acquired JHC Technology, which has been doing a similar thing in the public sector for AWS and other cloud platforms.

Private equity-backed Effectual didn’t disclose the acquisition price in the announcement it released Tuesday. The startup announced an investment by private equity firm Lumerity Capital in November and said Tuesday that the JHC acquisition was possible thanks to a follow-on investment by Lumerity, plus a new investment by Catalyst Investors, also a private equity firm.

Catalyst and Lumerity “have reserved $50 million to support acquisitions and organic growth initiatives” by Effectual, the startup said.

Effectual is notable because most of its team – including CEO Robb Allen – comes from Datapipe, the managed-cloud provider Rackspace acquired in 2017. Datapipe, which Allen founded and led as CEO, was one of the most successful companies in the busy market for helping enterprise IT shops to go to the cloud.

The JHC acquisition builds on a number of steps Effectual has taken to expand its public-sector reach. In May it appointed Dan Tudahl, a Datapipe alum with a long track record in government IT services, to lead its public-sector business.

Related:VMware Cloud Accelerates Expansion to AWS Data Centers Around the World

In June, Effectual partnered with government contractor Carahsoft to make its AWS and VMware Cloud on AWS (a big area of specialization for the startup) available through Carahsoft’s Cloud Purchasing Program. Carahsoft aggregates vendor services for sale into the public sector through numerous contract vehicles.

JHC has been selling into the public sector for close to a decade. The company says it’s done that through various federal and state government programs that streamline procurement (known as “contract vehicles”), such as GSA IT-70, Navy SeaPort-NxG, and Texas DIR.

The company is a “Service Disabled Veteran-Owned Small Business,” a designation that enables it to participate in the federal contract vehicle designed to meet the government’s goal of awarding at least three percent of all federal contracting dollars to businesses owned by military vets who became disabled while serving.

JHC is an AWS GovCloud consulting partner, which means it’s certified to help government clients build and run infrastructure in data centers Amazon built on both US coasts exclusively for security-sensitive public-sector organizations.

The company is also a partner with Google Cloud, Microsoft, and other service providers, not just AWS. On its website, it lists CapitalOne, US Air Force, US Navy, and the Justice Department among other clients.

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