VAR500 2010: Five Big Names That Have Been Snapped Up4:00 PM EST Thu. May. 27, 2010
Every year, the VAR500 sees new solution providers join the ranks. In 2010, 131 companies debuted, with six percent of those entering in the top 100.
Those slots open up because other VARs dropped off due to insufficient revenue, mergers, acquisitions or bankruptcies. Here are five big-name integrators that have taken their last turn on the VAR500.
Bought by Xerox in a $6.4 billion deal announced in September 2009, Affiliated Computer Services had made a name for itself in business process outsourcing. The solution provider will substantially add to Xerox Services through its service contracts with government agencies, health care providers and insurance companies. Roughly 40 percent of ACS revenue comes from government contracts. In addition, with health care projects revving up as companies take advantage of federal dollars that are available for electronic medical records systems, the ACS portion of Xerox' business should see continued growth. ACS came in at No. 23 on the 2009 VAR500 and at No. 21 on the 2010 VAR500, which will be it's last year on the list as an independent company.
In February of 2009, what was once one of the largest solution providers of IT and management consulting services filed Chapter 11 bankruptcy. By the summer, Bearingpoint was split up and sold to other IT consultants including Deloitte Consulting and PriceWaterhouseCoopers. It was quite a fall for a firm that in 2008 was named by Businessweek magazine as one of the top 75 places to launch a career.
The company originated as a spinoff of KPMG as its own consulting unit in 1997, with the name KPMG Consulting. In 2002, the company was renamed Bearingpoint. It was No. 40 on the 2009 VAR500 ranking.
IKON was the largest independent provider of document management systems and services until it was purchased in late 2008 by Ricoh, a manufacturer of office equipment, for $1.62 billion. It is the largest purchase to date for Ricoh. IKON had been under pressure to maximize shareholder value after layoffs and 11 consecutive periods of declining revenue. It was No. 96 on the 2009 VAR500.
Dell struck the deal to buy the Plano, Tex.-based information technology services provider on Sept. 21, 2009 — after years of considering the move. The $3.9 million deal puts Dell in an enviable position as both a hardware supplier and solutions provider. One big reason Dell may have chosen to act now and scoop up Perot is that Congress is set to appropriate some $36 billion dollars to spread the adoption of electronic medical records. Reportedly, roughly half of Perot's $2.8 billion in annual revenue is derived from health care projects. Perot came in at No. 51 on the 2009 VAR500 and at No. 46 on the 2010 VAR500, which will be it's last year on the list as an independent company.
Oracle agreed to acquire all of Sun for $7.3 billion last April — not long after talks between Sun and IBM broke down. The catalyst for the deal was Sun's Solaris operating system, which Oracle CEO Larry Ellison praised at the time, considering it "by far the best Unix technology available in the market," snubbing IBM's AIX version of Unix and Linux.
The deal was effectively about that crown jewel, and not about Sun's SPARC hardware or its services arm, which will simply meld into Oracle's to support Solaris. It was No. 27 on the 2009 VAR500.