Grow Or Die Hard

Many solution providers staying put are slowly but surely dying. There is a seismic shift in the marketplace that CRN parent and keeper of the channel flame Everything Channel has with excruciating detail classified into one of three buckets: lifestyle business, moderate growth and hypergrowth. The place to be, obviously, is hypergrowth. That is where channel stalwarts are working hand in hand with partners to drive crucial midmarket sales—a still relatively under-penetrated and untapped market in terms of IT solutions.

Solution providers in hypergrowth mode are capturing the hearts, minds and purse strings of both customers and vendors. One good example of a hypergrowth solution provider firing on all cylinders is ePlus, of Herndon, Va., which recently held its three day national sales meeting at the Omni ChampionsGate in Orlando, Fla.

Growth is part and parcel of the ePlus culture. It's no mistake that the sales meeting theme was "Achieve." In what can only be described as an unforgiving market, ePlus grew sales 13 percent in its most recent quarter—to a robust $225 million. Net earnings, meanwhile, increased by a whopping 396 percent to $4.9 million. So why is ePlus firing on all cyclinders? Like all hypergrowth VARs, it is squarely focused on the right markets (midmarket) with the right partners (Hewlett-Packard and Cisco both had a huge presence at the national sales meeting and ePlus' sales with both players has soared over the last year). ePlus recently earned status as HP BladeSystem Elite, HP Services Elite and VMware Solutions Elite from HP. In addition, it recently earned Cisco Master Specializations in Unified Communications and Security.

One of the exciting things about being in that hypergrowth sweet spot is you are going to find vendors tripping over themselves to become strategic partners. Once you're in that position, you can get off what CEO Mont Phelps, of hypergrowth solution provider NWN Corp., calls the "starvation margin treadmill." "That's the margin level at which [you] have got to take the business down," Phelps said. "Right now there are too many folks out there on starvation margins."

He's right. There are going to be a lot of solution provider organizations that don't live to see 2009.

Grow or die. The choice is yours.

Are you busy growing or busy dying?
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