2006 VARs of the Year

VARBusiness has honored FusionStorm as a VAR of the Year in the Sales & Marketing Excellence category. While this is the first time it's been recognized for this, the aggressively growing San Francisco-based managed-service solution provider is no stranger to VARBusiness.

FusionStorm debuted on the VARBusiness 500 list in 2001 at No. 369 when it reported $63 million in revenue for 2000, ratcheting up 186 slots to No. 183 this year. But not all went so rosy in between. During the dot-com bust, the company's revenue dipped to $29 million in 2001. In 2002, revenue was as low as $12 million. By 2003, FusionStorm had fallen off the VAR500 completely.

Then, between 2003 and 2004, revenue growth exploded more than 260 percent, landing it No. 3 on sister publication CRN's list of fast-growth solution providers.

CEO and chairman John Varel credits loyalty for the increase. Little wonder. As an enterprise solution provider, FusionStorm goes very broad and deep, Varel says. In fact, the company offers solutions that run from disaster-recovery to network-infrastructure design to security services. And Varel is a visionary. His company offered managed services eight years ago, long before it was part of the IT lexicon. His tenacity has thus far paid off.

This year, FusionStorm will report $400 million in revenue from $180 million in 2005, partly due to the recent acquisition of Jeskell, which accounts for $130 million. The rest is in organic growth, according to Varel.

So, what's driving such astronomical growth at FusionStorm? One key initiative is the company's quarterly Client Advisory Councils that were initiated a year ago, according to vice president of marketing Josh D. Krasnegor. Held in Northern California, 15 to 20 of FusionStorm's best customers discuss an IT-related problem with CIOs from its partners, including Sun, Cisco and IBM.

It's not conducted as a product "push" but as a full interactive discussion. "They can trust us that we are bringing in a neutral platform. Customers don't want to be buffaloed or shanghaied into what they want or need," Varel says.

To date, clients that have participated have ordered more than $10 million in new products and services, according to the company. "Invoice per customer has doubled," according to Varel.

--Sandra L. Rufolo

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