Digital River And Incentra Solutions Follow Different Paths To Success
Whatever service a company needs in order to sell its products online, Digital River can provide, according to Ed Merritt, vice president of investor relations. The Eden Prairie, Minn.-based company develops, hosts and processes shipments (both physical and online), implements fraud protection and provides other services. The company doesn't actually own any inventory, but works with distributors such as Ingram Micro, Santa Ana, Calif.
"We operate on a revenue-sharing model," Merritt explained. "When our clients sell products, we make money, and technology is at the heart of everything we do."
The company has recently focused on providing more marketing services to its clients, such as site optimization, "to provide as many click-throughs as possible," Merritt said.
Digital River can go behind the scenes of a client's online site, Merritt said, and covertly steer traffic away to another location. For instance, a user can access a Web site, and get one view, while another user can also access the same Web site, which might have differences, such as various graphics. The sites are all under the same URL, but are tested against each other to find which has better traffic conversion.
The company's strategy is to stay global, which sets it apart from its competitors according to Merritt, with six international offices.
Another growth driver in this year will be an expansion into new vertical markets, Merritt noted, such as the gaming space, and also investing in new technology around the new verticals.
"The bottom line is: We want to sell your product," Merritt said.
Next: Incentra Solutions: Room To Branch Out For Incentra Solutions (2008 CRN Fast Growth 100 No. 13), expansion is the name of the game. The Boulder, Colo.-based management and professional services provider has been on an acquisition tear in the past few years.
"We're looking for well-run companies that support our vision and provide synergies," said president and CEO Shawn O'Grady.
In 2006, Incentra acquired Portland, Ore.-based Tactix Inc., for about $3.6 million. The company was the No. 1 reseller of Sun Microsystems products in Oregon. In 2007, Incentra also purchased Sales Strategies Inc., (SSI hubCity), for roughly $6 million. The Metuchen, N.J.-based company was a provider of data lifecycle management, information security, software infrastructure development and managed services solutions to midtier enterprises.
Incentra's largest acquisition to date was the August 2007 purchase of Santa Clara, Calif.-based Helio Solutions Inc. for about $10.3 million. Helioand#8212;the IT and secure data center solutions provider to midtier enterprises and Fortune 1000 companiesand#8212;had sales of about $75 million for the 12 months ended June 2007.
Both SSI and Helio began selling products they did not previously offer, including solutions from Cisco Systems, San Jose, Calif., Hewlett-Packard, Palo Alto, Calif., and Network Appliance, Sunnyvale, Calif. Incentra told CRN in March that SSI and Helio had also started to offer first call and professional services to existing customers, and gained additional pipelines to sell managed services to those customers.
O'Grady said Incentra offers a value proposition as a one-stop shop instead of acting as a niche player.
"As we buy VARs, we are increasing our portfolio of services," O'Grady stated. "We can offer complete solutions, which our customers prefer."
With additional resources from its acquisitions, O'Grady added that Incentra provides ongoing cost reductions, which is always crucial, especially in the current economic climate.