The VARBusiness 500 Reflect on the 90s

It's a sentiment that perfectly describes the channel, a continually growing industry that has seen sweeping changes in technology (i.e., the creation of the PC, network computing or the growth of the Internet as a corporate entity) as well as in business strategy (i.e., embracing a services model or the growth of consolidation).

And it's often hard to distinguish the two categories, since many technology changes were most important not for the specific solutions they provided at the time, but rather because they forced integrators and VARs to adapt their own business practices and strategies.

After all, it was new technology, say VARs, that inevitably made customers demand more from their VARs. And those new demands forced many integrators to transform themselves into "total solutions" providers, which in turn forced smaller VARs to look to one another for partnerships.

"Now you need to have partners," says Theodore Raffetto, president of network integration and outsourcing for Bell Atlantic Data Solutions Group (VARBusiness 500 rank: 82). "You are seeing a much more collaborative relation between business suppliers and providers and the linkage needs to much stronger than it was before."

Raffetto considers the shift in focus from systems orientation to PC-centric models as having a major effect on the channel. And he notes that the focus changed once again in recent years with the emergence of the networking trend. Other major changes that Raffetto sees include the increase in connectivity, the emergence of the Internet and dot com companies.

"There's an 80/20 change," says Raffetto. "If you look back 10 years ago, 80 percent of the traffic was inside the company's four walls, but with changes in connectivity it is really going the other way now."

"If it wasn't for the advent of the Internet and its ability to reach people in many different ways, we wouldn't be forced to think differently about business and what we should be doing. They want to know how they can implement e-commerce and e-strategies in business."

"We saw these trends coming and the movement from solely voice traffic to much more data-centric, which in turn caused us to pool all of our assets under a data solutions group," he says. "We focus ourselves on helping businesses that want to be e-oriented, whether its e-commerce or e-customer care or e-training. When it comes to doing that, there are questions of how do you build that infrastructure or how do you manage it from a network standpoint."

Raffetto says that in the past decade, there has also been a major shift in the corporate IT model as well. "You have seen the movement of the IT role from the back-office to be much more a front-office player where they are part of strategy and development of the company as a whole. Just look at the fact that a lot of companies that had CIOs went out and found someone else to do e-commerce for them. IT has become much more collaborative, because you really need to understand the business of it to understand the enablers in the IT area."

Brad Bishop, CEO of Avcom Technologies (VARBusiness 500 rank: 183), says the huge changes in technology and corporate structure over the past decade have positioned the VAR as a stable element amidst the chaos.

"The VAR is definitely the steady, always there part of the business," he says. "We're a very face-based business, and we're in the customer's facility, in the conference room, figuring out what the next design or next role they are going through. That role is very unlike all of the vendors and distributors and other parts of the marketplace."

Bishop adds that just as technology comes and goes, vendors and sales reps are continually changing. "They may think they are here forever, but trust me, in the last 10 years we have seen a lot of the favorite vendor who's not the favorite vendor four years down the road."

Even the customers themselves are changing. "Their MIS crews are changing every few years. We have become the ally for the board of directors of our customers, and that is a great place to be," Bishop says.

Mark Robertson, technology services director of Automated Concepts Inc. (VARBusiness 500 rank: 314), says industry trends have forced his company to change its model to embrace a more complete solution.

"ACI has recently stepped up its efforts as a VAR for imaging, document management and workflow products," says Robertson. "Our efforts in the past were focused on delivery, based on client business processes; this has continued, but we now offer a complete proposal, to include software licenses and system maintenance, as a VAR, based on each situation."

As Internet use has exploded, Robertson says ACI has also "matured its e-business service offerings that include a unique portal development strategy, which ties together traditional ACI competencies in data warehousing, legacy systems migration and business process reengineering."

Robertson says one of the most important trends he has noticed in the past decade was the move to create a repeatable solution.

"In the past two years, this seems to be a big trend," he says, "For example, with ACI, we strive to repeat a design process and tailoring of product set for different clients that reside in the same vertical market."

VARBusiness 500

Company Info

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Automated Concepts Inc. (www.autocon.com)

Headquarters: New York, N.Y.

CEO: Frederick Harris

Founded: 1966

Specialty: Designing and implementing technical solutions to meet clients' business objectives

1999 Revenue: $45 million

1999 VARBusiness 500 rank: 314

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Avcom Technologies (www.avcom.com)

Headquarters: Sunnyvale, Ca.

CEO: Brad Bishop

Founded: 1983

Specialty: Hardware and software solutions to handle enterprise computing

1999 Revenue: $91 million

1999 VARBusiness 500 rank: 183

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Bell Atlantic Data Solutions Group (www.ba-dsg.com)

Headquarters: New York, N.Y.

CEO: Joseph Farina

Founded: 1992

Specialty: A full service provider of advanced data networking products and services

1999 Revenue: $300 million

1999 VARBusiness 500 rank: 82