Lawrence Walsh

Tidal Waves

May 07, 2007

The countdown to the VARBusiness 500 is ticking away quickly, and we already have exciting news to report: The freshman class of this year's VARBusiness 500 is a record size; 113 new companies will join the list this year thanks, in part, to a change in our methodology.

After examining the composition of the VARBusiness 500 and reflecting what it means to be a "VAR," the VARBusiness editorial team decided to remove the vendor services arms from the list, opening nearly 40 slots for new companies. Between that, a handful of companies falling off the list and an aggressive year for mergers and acquisitions, the VARBusiness 500 will have more companies joining the list than ever before.

The vendor services arms in 2006 represented more than $120 billion in revenue, or 32 percent of the combined value of the VARBusiness 500. With that kind of money being taken out of circulation, you would think the cumulative value of the 2007 VARBusiness 500 would plunge from last year's high of $378 billion.

Surprise! This year's VARBusiness 500 has a combined value of nearly $349 billion -- just $29 billion off 2006. When the vendor services arms, which will make up a separate list this year, are taken into consideration, the whole VARBusiness 500 universe is worth more than $450 billion.

While VARBusiness opened more slots on the 500 with the methodology change, it's still tough making the list. The threshold for making the list rose to nearly $25 million, up from last year's threshold of $21 million. And there are more billion-dollar companies this year than in year's past.

Here's how the VARBusiness 500 revenue bands breakdown:

• $25 million to $49.9 million: 29%

• $50 million to $99.9 million: 25%

• $100 million to $499.9 million: 28%

• $500 million to $999.9 million: 6.2%

• $1 billion to $4.9 billion: 8%

• $5 billion to $9.9 billion: 2%

• Greater than $10 billion: 1.5%

The health of the channel is directly related to the strength of the VARBusiness 500. As these numbers show the VARBusiness 500 is getting stronger.

VARBusiness will publish the full VARBusiness 500 list and analysis on June 11 (online and in our print issue). The companies making the list will be honored at the VARBusiness 500 Conference and Awards, June 11-12, at the Marriott Marquis Hotel, Times Square, New York City. For more information about the event and to register, go to www.varbusiness.com/var500invite.