M&A activity snapshot
Demand for cloud and data work is growing faster than at any point in eight years. SRG Research reports that enterprise spending on cloud infrastructure services reached $143 billion in Q2 2026, up 43% year over year. It also reports Q2 market shares of 28% for Amazon, 20% for Microsoft, and 15% for Google. Those three ecosystems define where cloud services firms build their practices.
Deal data for this niche is thin. No major provider tracks cloud migration or data engineering firms as a separate category, and few deals disclose terms. Aventis Advisors notes that fewer than 10 IT services deals in H1 2026 had a disclosed EV/EBITDA multiple in Mergermarket. The pattern is clearer in named transactions: large IT services firms are buying specialist partners of a single cloud or data platform.
Who is buying
Global IT services firms. Cognizant agreed to buy 3Cloud, one of the largest independent Microsoft Azure services providers and a Gryphon Investors portfolio company, to strengthen its role in enterprise AI readiness. The deal added 1,000+ Azure experts and engineers and 1,500+ Microsoft certifications. Terms were not disclosed.
IBM and other consulting arms. IBM acquired Hakkoda, an Elite Snowflake partner and data consultancy, to help clients get their data ready for AI. Financial details were not disclosed.
Large resellers moving into services. Insight Enterprises bought Google Cloud partner SADA to grow its cloud services business. Its 10-K reports a cash price of about $398,589,000 plus earn-outs ranging from $0 to $390,000,000 through 2027.
Private equity. The 3Cloud sale shows the PE path: a sponsor builds a scaled partner of one hyperscaler, then sells to a strategic. Smaller firms are add-on candidates for those platforms.
What buyers look for
Depth in one ecosystem. Each acquirer above bought depth in a single platform: Azure for 3Cloud, Snowflake for Hakkoda, Google Cloud for SADA. Partner tier is the proof. AWS Premier tier requires 25 AWS certified individuals and 50 launched opportunities with total monthly recurring revenue of at least $50,000. Microsoft designations require a partner capability score of at least 70 out of 100 points, with every metric above zero.
Services revenue, not resale. Rackspace says its public cloud segment's margins are lower because infrastructure resale revenue comes at significantly lower margins. The same filing notes these consumption-based contracts can be canceled at any time without penalty. Buyers strip resale out and value the services gross profit.
Exposure to a growing platform. Snowflake's 10-K reports net revenue retention of 125% and 733 customers with more than $1 million of trailing product revenue, and says partners source leads and close transactions. A partner tied to a platform with that kind of consumption growth inherits the tailwind.
What makes a strong company
- Utilization above the industry norm. SPI Research, via Deltek, found billable utilization fell to 66.4% in 2025, well below the 75% target. The same survey put project margins at 37.7% and revenue per consultant at $210K.
- A top partner tier, with certifications spread across many engineers so the tier survives the loss of any one person.
- Recurring managed services or retainer revenue on top of project work, since migrations end.
- Gross profit reported by stream: services, managed services, and resale.
- A clear data and AI practice. Each named acquirer above described the deal as an AI or data-readiness purchase.
Valuation and deal structure
No provider publishes a lower-middle-market multiple for data and cloud services firms. The closest proxy is Mergermarket deal data compiled by Aventis Advisors, an M&A advisory boutique. It shows data and analytics services at a median 2.2x EV/revenue and 16.3x EV/EBITDA, the highest of any IT services subsector. Cloud services sit at a median 1.4x revenue and 8.1x EBITDA, and value-added resellers at 0.5x revenue.
Read those as directional. The EBITDA medians rest on 27 data and analytics deals and 13 cloud services deals since 2015. Aventis's overall IT services median was 10.4x EV/EBITDA across a larger sample.
Earnouts can be large. In the SADA deal, the earn-out range of $0 to $390,000,000 was close to the cash price itself. Sellers should expect contingent pay tied to post-close growth. To see where a specific business might land, use the valuation tool.
Outlook
The AI buildout is pulling services demand behind it. Google Cloud revenue grew 82% to $24.8 billion in Q2 2026, and Meta expects 2026 capital expenditures of $130-145 billion. SRG Research says GenAI-specific cloud services are growing at 165% year over year.
Expect strategics to keep buying data-readiness capability over the next 12-24 months. The risk is in consumption: Snowflake's own 10-K flags customer optimization that reduces usage. Firms with managed services contracts will hold value better than pure migration shops.
For the broader picture, see the Technology & IT Services overview, the MSP page, and why vertical-focused buyers source differently.