9 Integrators: How I Made The 2013 Solution Provider 500
Among the companies named to this year's Solution Provider 500 are 45 companies that are new to the list. CRN checked in with some of them to get a sense for what's driving their growth, where they are finding success, how they are overcoming challenges and what makes them tick. Here's what we found.
Brite Computers
Year Founded: 1983
CEO: John Smith
EVP: Trevor Smith
No. of Employees: 75
Fastest-Growing Service or Business: Data Growth, Security
Key to Success: Try to pay attention to your customers—from that we learn a lot. We understand what changes are happening, their goals and we meet up with them regularly.
Key Vendors: Dell, ExaGrid Systems, ForeScout, Fujitsu, Lenovo, McAfee, SonicWall
CRN: What's driving business?
Trevor Smith: There is a huge drive coming from data growth and security—the need to protect shareholder value, how to access and secure that data. I also think the economy is driving a lot of business in a couple of ways. It's low for some companies, not going well, so they are figuring out how to outsource and use technology to make their costs predictable.
CRN: What's new that prompted growth?
T.S.: Well I think we have seen a lot of success with our customers. They are coming back to us and looking at us as a trusted adviser where we are providing very good customer service. We are on top of everything, pay attention to our customers and recommend their solutions after we've implemented talented professionals.
CRN: What was the customer 'win' you're most proud of in the last year?
T.S.: Well we had a large customer, a global Fortune 500 company that needed a Windows 7 migration nationally. With 30 locations across the U.S., it was a pretty big project to upgrade and manage an entire nationwide deployment. The customer was extremely happy we got it done in a shorter timeline [six months], but in line with what we had expected.
CRN: What are you projecting for the rest of this year and into 2014?
T.S.: We're going to invest in a lot of infrastructure. We're looking to make acquisitions because it would allow us to expand where we can differentiate ourselves for niche products and solutions for vertical markets that we target.
CRN: What kind of sales growth do you expect for 2013?
T.S.: I think if we close our quarter this month, it will be the highest recorded quarter. We experienced between 20 to 50 percent over the last five years. Before that, we anticipated 30 to 35 percent, which is pretty strong from an organic growth perspective, which is growing based on our own activity—hiring salespeople and delivery people.
CRN: How do you retain employees?
T.S.: Well, we're a family-run business and we try to treat our employers like family; work comes second. Through the life of our organization, we run into situations and allow them to have flexibility. It helps to build up a culture where we give independence to do the right thing and get it done, and have a sense of responsibility that creates maturity and reliability.
CRN: What was your upbringing like? How has it made an impact on your business?
T.S.: I grew up near Rochester, with my tight-knit family. I went to University of Vermont, majoring in managed information system and a minor in finance. I went to work for Bloomberg Finance and Tech. I joined my family business after with my dad and brother. I've seen other people in family business where they don't trust. However, we have a great ability to communicate, a good relationship with mutual respect, and we believe in each other so we don't second-guess each other.
CRN: What makes you different as a leader?
T.S.: As one of the leaders in our organization, I think my strength is trying to understand whomever I'm talking to and what their issue is. If it's business-related, I try to understand technology at a detailed level and how it can solve what they need.
NEXT: Cloud Sherpas
Cloud Sherpas
Year Founded: 2008
CEO: David Northington
No. of Employees: Over 600
Fastest-Growing Service or Business: Cloud
Key to Success: Embrace the technology as a team, take care of the customers and celebrate results.
Key Vendors: Salesforce.com, Google Enterprise, ServiceNow, Informatica, Okta, CipherCloud and nearly 20 others
CRN: What is driving business?
Northington: The biggest thing is simply the adoption rate of the public cloud applications that is taking place with enterprises of all sizes—the acceptance of and expanding use of cloud by larger companies, billion-dollar companies and greater.
CRN: What has prompted your growth?
Northington: The clients were looking for help and we were able to provide it. We quickly built up leadership, marketing teams, architects and sales teams to be able to handle the demand. There is a shortage [of providers] out there, and we're able to fill almost every need.
CRN: What was the customer 'win' you're most proud of in the last year?
Northington: In the last two months, we have signed one of the top five largest contracts in the Google enterprise space. This is a significant win because it is a win for Google, for us and for our customers. In total, more than 80,000 people will be affected. Another example is with a client who has been with us since 2008. We've probably done roughly 30 different projects spanning six countries with them. They have recently invited us to have a permanent seat on the Global Cloud Architecture Board, which is a really big deal.
CRN: What are you projecting for the rest of this year and into 2014?
Northington: We are investing heavily around expanding our position in the market. We are already in the U.S., the U.K., Australia, New Zealand, Mumbai and Manila. A lot of our energy and efforts are going into making sure we're ready in our own selling capacity and delivery capacity. We are also focusing on infrastructure to support this ever-growing system. Acquisitions are another thing we will consider. Right now, we are looking at at least two to three companies a month as potential acquisitions and we will continue to do that.
CRN: How have you structured your sales compensation model to drive the new cloud order?
Northington: Our sales compensation is based largely on a long-term engagement with a customer. We are engaging in recurring resell. We don't see the large up-front margins as much anymore, so the compensation model has had to reflect that. Compensation is largely based on the flow of funds into the organization versus a signing of a contract. Cloud is based on clients paying over time, so compensation happens accordingly. This is not necessarily new or unique—it's a model that has been around for a while.
CRN: Describe your corporate culture.
Northington: We have a result-oriented mindset, but we have that as a team, and we reward results. Even though we take technology seriously and we take our jobs very seriously, we don't take ourselves too seriously. It is important to me to create an environment that makes it fun to come to work. You'll find us dressed casually at the office, joking and laughing with each other, and helping one another out. We have pingpong tables and foosball tables at our offices and sometimes we have happy hours. We also embrace technology. You see people who are very comfortable in leading-edge technology in both their personal life and business life. We're always ready to have conversations about that kind of technology because we use it ourselves. Our clients ask really good questions and we have to be on our toes.
CRN: What is the greatest barrier for growth your company is facing right now?
Northington: I wouldn't call it a barrier, but we spend a tremendous amount of energy in attracting the right kind of folks and making sure they succeed once they get here. We're in a constant state of growing and training our team, and will be providing 900 jobs in 2013-2014. But it's all about knowing how to find the right kind of people to add to the team.
NEXT: CloudSwell
CloudSwell
Year Founded: 2012
CEO: Dave Carney
No. of Employees: Over 80
Fastest-Growing Service or Business: Security and Compliance as a Service, Custom Application Development and Brokered Services
Key to Success: Providing value to our customers. If we aren't providing value, there is no reason for us to even be there.
Key Vendors: Savvis, SavvisDirect, Masergy, DBADirect, CBeyond, GNAX, 4thSource and New Relic
CRN: What is driving business?
Carney: Business is being driven by customers who are looking for a cost-effective and quicker approach to technology and business solutions. From my standpoint, a lot of it stems around [that] we don't have to procure infrastructure anymore, we leverage from the cloud.
CRN: What has prompted your growth?
Carney: For us it has been the requirements around security and compliance. We're seeing a lot of pressure around compliance and we're seeing a lot of activity in that space. A lot of organizations are afraid of the cloud from a security standpoint, but we've built a discipline around it. We have a lot of experience in helping people understand what their concern may be and then addressing it. We also have a deep staff when it comes to security and compliance for that reason exactly.
CRN: If you had $1 million, how would you invest it in your business?
Carney: I would certainly invest in our people. I think additional training would be a first priority. After additional training, I would focus on continuing to invest in the compliance and security areas, because like I said, compliance and security is such a driving force right now.
CRN: What was the customer 'win' you're most proud of in the last year?
Carney: One example was working with a company from the very beginning to define their requirements around their business needs and deliver the right applications. This is our sweet spot. It just so happened they needed to be HIPAA-compliant as well. We now provide ongoing support, monitoring and maintenance for the company. In the end, we ended up delivering this application about six weeks ahead of schedule. In IT, you just don't see that happen.
CRN: What are you projecting for the rest of this year and into 2014?
Carney: The biggest thing is we are getting out of the data center business. Right now, we are working very hard to transition our current customer base to the cloud. Our customers will see 20 percent to 30 percent savings in IT cost by making this transition to the cloud with us. We want to have that transition done by the end of the year.
CRN: How have you structured your sales compensation model to drive the new cloud order?
Carney: We have maintained the same model as we have transitioned to cloud, which is salary plus commission.
CRN: Can you describe your corporate culture?
Carney: We are a small, rapidly growing company. We are extremely team-oriented, customer-focused, and we love to have fun. One of the things I love to do is solve business problems. I get a lot of excitement out of seeing a solution delivered. My focus is always on doing what is right for the customer. As we continue to do that as a team, we'll have success in growing our business.
NEXT: Data Recovery Services
DRS (Data Recovery Services)
Year Founded: 2000
CEO: Mike Meloy
No. of Employees: 82
Fastest-Growing Service or Business: EMC
Key to Success: We build strong networks, relationships and trust, and we build our company around that philosophy—with our partners, vendors, employees and clients.
Key Vendors: Cisco, EMC, HP, Microsoft, VMware
CRN: What has prompted your growth?
Meloy: For us, business has been driven around managed services and cloud, and the annuity-based business model. Managed services are driving projects on top of everything else; it didn't always used to be that way. We have also seen a lot more demand around disaster recovery and business continuity services; those have definitely been our fastest-growing services. We build private and public cloud stacks, so use of our vendors tend to be pretty even.
CRN: What was the customer 'win' you're most proud of in the last year?
Meloy: One of our long-term customers went from being a nonmanaged relationship to managed relationship. They were purchased by a very large company and we were worried about losing them entirely, but, instead, we actually gained the business of the new company. That new company brings us five times as much business as the company that was purchased by it. We provide everything from their data center, the management of all of their equipment—we sold them the equipment—and we manage all of their users down to the helpdesk level. They have five IT people on staff, otherwise, we take care of everything.
CRN: What are you projecting for the rest of this year and into 2014?
Meloy: Our pipeline is really full right now for product and project revenue as well as managed services revenue. Quarter 1 was a little slow, but we have had a record Quarter 2, and we're still expecting another 25 percent growth. I think our slow quarter was due to governmental uncertainty. Government directions have a lot to do with whether people are spending their money or holding [onto] their money. Those government directions are our biggest barrier to growth. We almost follow exactly what the market does. Now there has been a little more direction; people are feeling a little more comfortable with projects and project work.
CRN: How have you structured your sales compensation model to drive the new cloud order?
Meloy: There is not a person in our company that 20 percent of their revenue isn't generated by service revenue. We operate on a base-plus-commission model. As our salepeople build their annuity business, we pay them monthly on their contract values.
CRN: Describe your corporate culture.
Meloy: We go to great lengths to promote a family type of environment here. We celebrate successes with parties and Customer Core Awards. One thing we just did to try to support one another is we had a 'biggest loser' contest, complete with yoga instructors and runs during our lunch breaks. Ultimately, I think we have just found some really good people. I let my managers manage and they do a great job of it. I also try to lead by example. My philosophy is, I'd rather see an employee make a bad decision than no decision at all.
NEXT: High Point Networks
High Point Networks
Year Founded: 2003
CEO: Tom McDougall
No. of Employees: 75
Fastest-Growing Service or Business: Data Center
Key to Success: I have clearly defined goals that don't revolve around numbers but in the success of the people around me.
Key Vendors: Extreme Networks, ShoreTel, Dell SonicWall
CRN: What's driving business?
McDougall: The success of our growing customer base is driving business; it's increasing rapidly on an annual basis. We started in Fargo, N.D. We opened in Sioux Falls, S.D., Billings, Mont., and are looking to expand to Denver. We never had a vision for the Denver and Minneapolis markets but we're having great success in areas near there where customers talk to each other. We're getting a lot of referrals from vendors and customers that are growing into some of those areas.
CRN: What's new that prompted growth?
McDougall: Our fastest-growing segment is data center, and I think there are many people in different parts of the country that are seeing cloud types of models. We don't have a lot of cloud models, instead they are private clouds. Customers are trying to establish a robust private cloud environment that is replicated in 7x20 uptime.
CRN: What was the customer 'win' you're most proud of within the last year?
McDougall: It's not our biggest win, but it was a complete replacement and upgrade of a unified phone system at the city of Fargo, N.D. There were 1,300 phones in 30-something buildings. It took us six months to get it done through a major flood threat, but the weather cooperated.
CRN: What are you projecting for the rest of the year and into 2014?
McDougall: We are going to make that investment into the Denver market. We will be into our new building in November, right off the busiest interstate in the West—Fargo, N.D., the fastest-growing part of the Eastern part of the state.
CRN: What kind of sales growth do you expect for 2013?
McDougall: We achieved a minimum of 30 percent growth but maybe even 50 percent. In May, we had our largest sales volume month, which was larger than the entire second year of business. I felt overwhelmed, but excited; a blessing is really what it is.
CRN: How do you retain employees?
McDougall: Our employees know that they are loved and appreciated. They know their roles—we try to make it as fun as possible. We do many outings, sports events, and we have them attend events with their families; family is key. We want our employees to actually have a life where work is just a part of it. We pay our employees well, but to be honest, we keep them busy doing things they want to actually do. We don't pigeonhole them. If they want to learn something new, we let them.
CRN: What makes you different as a leader?
McDougall: There are two models of management: One model is the owner at the top. Then you have VPs, management and the customers at the bottom. Ours is upside-down. I am at the bottom of the model, and customers are at the top—that's part of the culture. What makes me different, I think, is that I attribute my leadership abilities to my mentors, people that I can trust to bounce ideas off. I also read a ton of information out there like personality books by Simon Sinek, Dale Carnegie, Florence Tower. If you can understand how to deal with people, whether it's family or employees, life becomes a lot easier.
NEXT: One Source Networks
One Source Networks
Year Founded: 2007
CEO: Ernest Cunningham
No. of Employees: 80
Fastest-Growing Service or Business: Managed Services, Infrastructure-as-a-Service Cloud Offering
Key to Success: It's the can-do attitude and we want to be that easy button for our customers. They can turn to us when times are tough or they have short intervals to complete projects, and we'll make that happen.
Key Vendors: Cisco, Dell, VMware, CommVault, Polycom
CRN: What's driving business?
Cunningham: What's driving business is that we've done an excellent job for our customers, and we consistently get referrals from our existing customers and we continue to grow the business that exists where our key focus is Fortune 1000 clients.
CRN: What's new that prompted growth?
Cunningham: The newest is our managed services and our Infrastructure-as-Cloud offerings. It's additional value-adds for our clients, a one-stop shop.
CRN: What was the customer 'win' that you're most proud of within the last year?
Cunningham: We had a large technology company that had the opportunity for their customers [to choose] all the various communication service providers out there, and they chose One Source Networks as their preferred provider for both primary and back-up networks for their voice network.
CRN: What are you projecting for the rest of the year and into 2014?
Cunningham: We are launching an expansion of our voice network internationally to expand that footprint, and we continue to expand our managed services offering as well. We are putting locations in Europe, Asia and Latin America.
CRN: What kind of sales growth do you expect for 2013?
Cunningham: We're expecting almost 100 percent growth year-over-year.
CRN: What makes you different as a leader?
Cunningham: I can be the hammer and I can also be compassionate as well. The biggest thing is that I truly do look at everybody as family. Nomellini: I think there is another aspect of having to work with Ernest for a number of years. He takes a unique approach to business problems and perhaps it's his tenacity, background or upbringing. But he doesn't take no for an answer. If somebody says something can't be done, he takes a look towards a different direction to find a way to solve that problem. If we're struggling, he'll ask, 'What do you need to get that done, how can we change this and that approach?" This approach has worked so well with our customer base because we're about solving problems and solutions for our customers.
NEXT: SADA Systems
SADA Systems
Year Founded: 2000
CEO: Tony Safoian
No. of Employees: 78
Fastest-Growing Service or Business: Google Enterprise resale and deployment offerings, Apps, Search, Geo, Microsoft Office 365, Azure Deployment services
Key to Success: Make them rave and be one step ahead. Every interaction has to be such that our clients can't wait to tell someone else how incredible it is to work with SADA systems.
Key Vendors: N/A
CRN: What is driving business?
Safoian: There is a higher demand in the market for what we do. We are in the fastest-moving part of the fastest-moving industry in America. Cloud is the fastest-moving part of the fastest industry. We just have to be one step ahead of it.
CRN: What has prompted your growth?
Safoian: We are seeing 50 to 60 percent growth rates. Our success is somewhat pegged to the uptake in the market for our services. Our growth is also linked to our Google Enterprise cloud solution and Microsoft 365.
CRN: What was the customer 'win' you're most proud of in the last year?
Safoian: I've always been proud that our cloud practice started in the education space. We feel that every time we implement something like we recently did for Chicago Public Schools, we are having an impact on kids and education and the ability to learn and access technology. SADA was able to help Chicago Public Schools save $6 million over the next three years by implementing Google Apps and transitioning to a cloud platform.
CRN: What are you projecting for the rest of this year and into 2014?
Safoian: Essentially, we're pursuing some of the largest requests for proposals in the state and local education space. It's an opportunity to have an impact on hundreds of thousands of people in just a few months. We're also focusing on deepening relationships with existing clients. It's important to make the initial platform migration, but we're making sure they're leveraging everything to have maximum impact on the organization. For example, if a customer has deployed Google Apps, it's about deepening the stack and making sure clients are taking complete advantage of the applications that we launch.
CRN: How have you structured your sales compensation model to drive the new cloud order?
Safoian: First, you have to have drivers around new customer acquisition and structure compensation that rewards that distinctly. You also have to set up a related but distinct practice around retention and growth around each client. We want to get really deep with each of our clients. If we deepen our relationships, they're less likely to jump platforms or not renew. You can't depend on people who are not compensated to maintain customer relationships. We have found what I think is a very unique way to have the appropriate teams in the appropriate compensation models.
CRN: Describe your corporate culture.
Safoian: Everything we believe in are in five core value statements and the things we are most passionate about at SADA. We want to create raving fans, focus on being datadriven, stay one step ahead, become a change agent and do the right thing. Right now, we're running an internal project reinforcing those core values. I believe in transparency to drive decisions; the best idea should win, not the idea that came from the person with the highest title or the loudest voice. People who want to work at SADA are passionate about being in the leading edge of new technology. Technology is changing weekly. Our clients are going to ask tough questions and we are going to have to know the answers. Our people take initiative, they are self-starters, and when they aren't sure what to do, always default to doing the right thing.
CRN: What is the greatest barrier for growth your company is facing right now?
Safoian: We're getting to a size where we are facing some very well-funded, very sophisticated competitors. We have chosen to remain self-funded, which means we have to produce revenues and profits to reinvest in our company. A lot of our competitors have invested in acquisitions and at least on the surface are growing very quickly. We haven't done that yet. It's going to be something that we have to watch carefully.
NEXT: Secure-24
Year Founded: 2001
CEO: Mike Jennings
No. of Employees: 380
Fastest-Growing Service or Business: IT Outsourcing, SAP, Hyperion
Key Vendors: Cisco, EMC, VMware, Citrix
CRN: What is driving business?
Jennings: The general market for managed service outsourcing and cloud computing is on the rise, and the adoption rate by larger companies is heavily driving our growth. Our customer base has expanded from $1million to $100 million to $1 billion companies all the way to $500 billion-plus companies.
CRN: What has prompted your growth?
Jennings: Executives are coming to their CIO and asking, 'What is our cloud strategy, especially when it comes to disaster?' Disaster recovery as a service is driving many cloud initiatives. We have also seen large growth in specific practices. Our fastest-growing practice today is Hyperion. We're expanding horizontally our application stacks and we're expanding into Hyperion business objects. We've been growing over the last three years at just over 40 percent; this year we will grow again in the 40 percent range, and the market is growing at a very healthy rate.
CRN: What was the customer 'win' you're most proud of in the last year?
Jennings: Last year, we brought aboard our largest pharmaceutical company, a company that does just under $6 billion in annual revenue. It was a key win because it drove Secure-24 to a new level around FDA compliance and standards. As part of the contract, it had Secure-24 implementing our own quality management system. In the past 12 months, we've also had some major wins in the automotive sector. One large auto supply company that is north of $16 billion and has around 200 global manufacturing plants selected Secure-24 hosting for all of their financial and manufacturing systems.
CRN: What are you projecting for the rest of this year and into 2014?
Jennings: We own and operate our own data centers and we have just gone live with a new data center buildout in Las Vegas. We have about 40 cabinets out there and are going to continue to expand that environment. We are also investing heavily in upgrades for our existing infrastructures and have developed a very strong partnership with Cisco around storage, and backup and replication. In total, we will spend $17 million on capital infrastructure this year. Quarter 1 was our largest sales quarter in the company's history, and we are consistently adding new and larger clients to the company.
CRN: How have you structured your sales compensation model to drive the new cloud order?
Jennings: I can look back to 2001 and say that we're compensating in a very similar way we always have. For the last 15 years, I've been running companies that have had monthly recurring revenue as a focus. Companies coming out of traditional models have had to go through that transition to recurring revenue, but for Secure-24 and for our sales team, we're still compensating the same way we have the past decade. It's based around annual product and incremental revenue. Eighty-five percent of our revenue is monthly recurring revenue.
CRN: Describe your corporate culture.
Jennings: Our corporate culture is work hard, play hard. We do a lot of recruiting, especially from the Division 1 colleges across the state of Michigan, since we are based in Michigan. Over 80 percent of our employees are at the headquarters office. We run an academy program, which allows us to take folks coming out of an IT degree, put them through 18 months of intense training on Secure-24 and we show them a path to go from college, all the way to an engineering team. Generally, the program moves employees from a customer service representative, to an analyst, and then promoted all the way to IOC engineer. From there, they have access to multiple engineering teams. As people come up through the program, they work with different teams to figure out where they want to land for their career. Having that ability to show someone they have a career instead of a job is a huge differentiator.
NEXT: Zumasys
Zumasys
Year Founded: 2000
CEO: Paul Giobbi
No. Employees: 50
Fastest-Growing Service or Business: Cloud
Key to Success: It's empowering people and motivating them with a vibrant culture and keeping very loose tabs.
Key Vendors: NetApp, Cloud
CRN: What's driving business?
Giobbi: At the end of the equation, the VARs have to either choose to become an MSP and provide proactive IT on-site or they need to go into cloud. Most VARs and resellers are passing on building cloud because of the cost and liability. People want the personalized, boutique-like high-tech feel that they are used to, but with a cloud provider. That's been our magic where we are giving a personalized cloud approach.
CRN: What's new that prompted growth?
Giobbi: We figured out how to scale a vibrant culture that was unique, and now it's taken on a life of its own. We needed one final piece in our puzzle; people needed to find a purpose in their work. They get paid well, but what's the point of coming to work every day? So, we made an announcement last year of taking 1 percent of our top client sales, and giving that to nonprofits. Last year, we raised $200,000 but didn't know where to give it to. So we formed an employee committee, set five guys out to ask each employee what their favorite charity was, and why it was personal to them. It crystallizes why people come to work especially when there's a purpose behind it.
CRN: What was a customer 'win' that you are especially proud of within the last year?
Giobbi: We had a customer in North Carolina that had infrastructure on-site. Their disk on the VMware server got corrupted and their core database went down on a Thursday. We flew somebody out there on a Friday, and the backups weren't working and the disks were corrupted. We sent their disk to a recovery center but from Saturday midday, we moved a decision to move them to our cloud, and by Monday evening we had all their data back for the provider. We had it 100 percent converted to cloud. We minimized downtime and accelerated the cloud.
CRN: What are you projecting for the rest of this year and into 2014?
Giobbi: We're growing outside of Irvine, so we are building remote offices. We relocated four of our people and leased 5,000 square feet to Las Vegas. Basically our vision is to have 15-20 people and have this expansion outside of California where it's tough to do business because of taxes and HR regulations.
CRN: What kind of sales growth do you expect for 2013?
Giobbi: We expect 20 percent; that's our deal. We want a methodical and controlled growth. We want 20 percent per year, not 50 percent or 90 percent; it's too disruptive.
CRN: How do you retain employees?
Giobbi: It's the culture; it's the self-directed model where you become your own boss. It's given them a purpose of work, like the Non-Profit program, and it's made the culture so irresistible. When their family and friends hear about what we're doing, they say, 'I'd like to work for that company.' Whether it's a presidents club or trip overseas for the first time in their life, a food truck that shows up or guacamole contest—all those small things are a motor for our employees that we're thrilled about.
CRN: What makes you different as a leader?
Giobbi: I don't personally think I'm that great of a leader. I think the main thing, which is probably a good cliché, is to let my employees do their job and stand out of their way. Having those early-on experiences, I've seen employees get taken advantage of and realized I was one of them. I represented my parents so I was an owner and employee. I was in an interesting in-between position; now I am sensitive to both perspectives, which makes it better to be here.
PUBLISHED JUNE 24, 2013