Can New Exec Continue Gov't Reseller's Revival?

Remember 18 months ago, when GTSI's chief financial officer left the company amid charges of accounting errors? GTSI was even delisted from NASDAQ for a time, following the surfacing of accounting errors that forced it to restate earnings for two years. That was big news, as GTSI was one of the biggest public VARs in the government sector, an important partner to vendors such as Microsoft, Sun, Cisco and Panasonic, to name just a few.

Even before the delisting, GTSI had a tumultuous history. Eleven years ago, it nearly went bankrupt. Two years earlier, in 1994, it paid $20 million for Falcon Microsystems and then lost an Air Force contract at the same time. Couple that with an inability to deliver memory cards and, well, you've got some angry customers and creditors.

At that time, Dendy Young came in to steer the teetering ship (he had been the top dog at Falcon but left a multimillionaire after the buyout), sacked most of the management team and took a $1 a year salary. But last year, Young -- who won the VARBusiness 500 Lifetime Achievement award in 2003 -- relinquished his CEO title and James Leto took over as president and CEO. Young retired earlier this year, and another round of restructuring followed.

But GTSI also has a history of resurrection. GTSI knew it had to reinvent itself -- really and truly and not just give the idea lip service and a figurehead. The traditional government reseller market was in a decline; services were the new wave, and GTSI had to sink or swim. Unfortunately, it looked like the life preserver sprung a leak.

What happened instead was that the company seemingly has turned itself around. GTSI has just logged in its 12th month of profitability. It was #62 on the VARBusines 500 list of top North American solution providers. Today, the $850 million solution provider's stock hovers around $9.85, roughly the same as one year ago. And, yesterday, GTSI announced that Scott Friedlander would become president and COO of the government-focused solution provider, promoting him from his position of executive vice president. Friedlander joined the company in 2002, as vice president of GTSI's then-new Solutions Group. The GTSI turnaround has occurred during Friedlander's tenure.

In GTSI Names New COO And President, Friedlander refers to his company's three-pronged approach, which involves the company's human capital, morphing GTSI to a enterprise solutions provider from a product reseller, and technologically updating its legacy business.

"We're doing that through what we are calling 'technical lifecycle management.' We're identifying opportunities and bringing to customers the proper level of engineering, compelling proposals, and support together with integrated services," Friedlander said. "We've built out services and our capabilities to offer end-to-end services. We've found that you are really tied to the partners as a reseller, but as a solutions company you are much closer to the customer."

So many times these new initiatives come and go, replaced by new ones before the original can take hold and flourish. GTSI is still in its infancy, still needs nurturing, but the numbers indicate it has found its footing.