Focused Ambition Pays Off

Until last fall, O'Grady held an executive post at Siemens Business Services (No. 16), a fixture in the VARBusiness 500 billion-dollar club. He accepted the position of president and COO at Incentra Solutions (No. 347)--in large part, because of the company's potential and lofty ambitions.

Does O'Grady see Incentra someday rising as high as his former employer? In a word, "Absolutely."

In terms of revenue, Incentra is the top newcomer among a baker's dozen to debut on this year's VARBusiness 500. Each has made the vaunted list through aggressive, organic growth, M&A activity and solid partnerships with peer organizations and vendors.

Incentra is off to an impressive start in its journey to the top of the VARBusiness 500. After garnering $13.3 million in revenue in 2004, a series of acquisitions and overall expansion helped the company increase revenue to nearly $51 million last year--good enough to catapult the company from too small to make the list in 2005 to No. 347 in 2006. As other fast-rising solution providers will attest, an aggressive M&A strategy is one good way to scale the list, but it's far from the only one.

The Boulder, Colo.-based solution provider not only expanded its channel expertise in 2005; it learned the business almost from scratch. Founded in 2000 as a provider of enterprise-class managed storage services, Incentra, guided by sure-footed executives, realized over the past few years that it might have been leaving money on the table with many of its customers.

"If a potential customer wasn't interested in managed storage, we didn't have much to talk about," O'Grady says. "We made the decision that we were missing out on a significant part of the market, so we got into the systems-integration business to give us an opportunity to leverage our existing expertise."

Adapting to meet market needs may seem like an obvious business strategy, but many companies fail to incorporate new technologies and services, and then execute on them with an effective business plan and growth goals.

For Incentra, expansion involved ramping up its in-house network skills, but a complete retraining of the staff wasn't necessary. "Our value proposition is around managed storage, but because we do it remotely, we've developed extensive networking and security experience, and we also have to be pretty knowledgeable about servers," O'Grady says.

The new business helped Incentra's bottom line, but propelling itself into VARBusiness 500 territory required more assertive moves. In the past 12 months, Incentra acquired three solution providers: NST in Chicago, PWI Technologies in Washington State and STAR Solutions in San Diego. The deals served the dual purpose of expanding Incentra's channel expertise and geographic reach. The company now handles about 190,000 backup jobs, performs 200,000 restores per month and operates offices in most U.S. regions, and in London.

"We wanted to build reseller organizations in areas where we already had customers, and bring them more operational experience on services than you normally would get from a typical VAR," O'Grady says. "We still don't have coverage in the Northeast or Southeast, but we'll make more acquisitions."

NEXT: Cracking the list by means of geographic expansion.