Presidio Focuses On Building Mega-VAR Business

CRN first reported about Green Belt, Md.-based Presidio's acquisition of Atlanta-based Solarcom in mid-March. The resulting solution provider, which includes several other acquisitions over the last two years, has become one of the largest channel partners of vendors such as Cisco Systems, Sun Microsystems, IBM and Hewlett-Packard.

With the acquisition, Presidio now offers a wide range of services and solutions, including finance, leasing, buying and selling of used IT equipment, and disaster recovery hosting.

The acquisition was funded in part via an equity investment by Columbia Capital, an Alexandria, Va.-based venture-capital firm specializing in the communications and IT industries.

Rudy Casasola, divisional president of Presidio, said that in many cases where equity money comes into the channel, the result is a move to roll up smaller players into a larger company and then spin the company out for cash.

For Presidio, the goal instead is to build a solid organization that can work with a customer from architecting and deploying a solution, handling old assets, doing the services and offering leasing, Casasola said.

"To me, it has been a refreshing change," he said. "As a stand-alone business, our biggest problem was having enough capital to do all that. Our other problem was our engineering bench. If one or two people leave with certain critical certifications, we don't want to need to scramble to replace them."

Presidio, on the other hand, is happy with its geographical reach across the Atlantic seaboard and the Gulf coast, and the company is pretty much done with acquiring other solution providers, Casasola said.

"We wanted the leasing, asset management and government capabilities," he said. "We wanted the enterprise business and got it with Ficomp. NIS in Boston gave us geographical reach into that market, as well as midmarket capabilities. If we do an acquisition, it would be technology-specific, especially in the call center or security spaces. But not to scale in growth."

The solution provider market is big enough to support large and small solution providers, Casasola said. Solution providers with business under $50 million per year and that specialize in particular verticals or geographies where they have good relationships with customers and vendors reps will continue to do well.

However, Casasola said, such solution providers may need to turn to outside help to grow their scale going forward. "They might find it hard to grow to $500 million players without equity backing," he said.

The acquisition is the latest in a frenzy of mergers and acquisitions that are consolidating the channel into a smaller number of larger players.