THE CRN FAST GROWTH solution providers that specialize in public-sector business range from multinational integrators to regional specialty VARs. But if there's one thing they all agree on, it's their laser focus on the sector's unique dynamics that is helping them grow their business in this tough economy.
Granted, that type of focus is crucial no matter what the economic climate, but this year, both the relative "safety" of public-sector VAR business -- at least compared to many crumbling commercialside verticals -- and the IT opportunities presented by the American Recovery and Reinvestment Act (ARRA) are sending plenty of prospecting solution providers into public sector for the first time, hoping to get a taste of "that stimulus thing."
However, that's not how it works.
"When the stimulus was announced, a lot of companies jumped on it, but you can't just parachute into public sector. This is not a marketplace where you can just drop in and say, 'Hi,' " said Todd Brinegar, chief marketing officer of Presidio Inc., a Greenbelt, Md.-based solution provider. "I had a call from someone just the other day who told me how another provider called them up and said, 'How do we get into this public-sector business? We heard all about the stimulus and we're really excited.' You have to be proven. You have to continue to prove yourself."
Presidio's focus on particular verticals such as state, local and education (SLED) and health care has led it to craft tailor-made solutions for customers in those verticals. Presidio also has leveraged vendor and distributor stimulus outreach to improve its command of ARRA-related opportunities.
Cisco Systems Inc. and Ingram Micro Inc., for example, have partnerships with Grants Office, an organization that collects and distributes information on public-sector grant opportunities and offers training on grant writing and development. Presidio works through Cisco and Ingram Micro to help customers "scope and scale their networks to take full advantage of ARRA money," Brinegar said.
One of Presidio's most recent clients is the City of West Palm Beach, Fla., for which Presidio restructured its network infrastructure and telephony systems using virtualization to move from a PBX and cabling structure to an IP-based environment.
According to Chuck Osteen, communications manager for the City of West Palm Beach, Presidio's implementation has realized it savings of $700,000 in cabling costs alone. To a public-sector customer such as Osteen, if a solution provider doesn't have a real understanding of all the dynamics at work -- from budget crunches to procurement options to grant opportunities -- that solution provider "doesn't exist, as far as I'm concerned."
"Every employee in city and government right now is fighting for [his or her] job," Osteen said. "If I make a mistake with what I'm buying, I don't have a job. I spend a lot of money, and believe me, I've thrown out AT&T and some real big guys in the past because they haven't delivered."
Being laser-focused, however, doesn't mean scrimping on investment opportunities. According to Craig Abod, president of Carahsoft Technology Corp., Reston, Va., Carahsoft's continued investment in its publicsector sales and marketing arms has helped its growth continue. Carahsoft also hired grant writers to help match its public-sector customers to lucrative ARRA grants.
"Strategically, we've been incredibly successful at growing our existing partnerships and establishing new ones to address the public sector's demand for virtualization, green IT, security and open-source products," Abod said.
On the federal side, times aren't exactly easy, either. But solution providers such as Toano, Va.-based SDV Solutions Inc., a service-disabled veteran-owned VAR that does 100 percent of its business through the federal government, has continued to add capabilities. SDV earlier this year launched its Global Support Division, which enables it to serve federal facilities that are, to use industry speak, OCONUS (outside the continental United States).
"We started out as a pure box-pusher and, with margins shrinking thanks to more competition and credit markets changing, we looked at our business model last year and successfully moved into the services arena to have it be complementary," said Michael McMahan, SDV's CEO. "We have only 10 account managers, and we don't even cover the whole federal government. But we're a small company that goes directly after one market business and to be able to add OCONUS services has opened a lot of doors for us in federal. You can't be everything to everyone in public sector; it just doesn't work."