IBM VAR Adds Security Focus With Solution Provider Buy

Sensing the time is right to expand both its technology and geographic reach, Solutions-II, an IBM hardware solution provider, has acquired the assets of Blue World Information Technology, a Vancouver-based IBM solution provider with a security focus.

Solutions-II's business has focused mainly on servers and storage and related offerings such as disaster recovery, with a majority of its revenue coming from hardware, said Todd Bowling, president of the Littleton, Colo.-based solution provider.

"However, we've been trying for the last two years to be less of a hardware reseller, and get into more solution sales," Bowling said. "We want a mix of hardware, software, and services."

The acquisition of Blue World will help. Three years ago, hardware accounted for 75 percent of Solutions-II's revenue, but that number should drop to 60 percent by year-end, Bowling said.

More importantly, Blue World gives Solutions-II a strong IBM-centric security focus.

Solutions-II has been selling IBM security software to address external threats, and offering some related services including penetration testing to help customers identify vulnerability.

With Blue World, however, the solution provider now can offer customers more advanced technology including Tivoli Access Manager and Tivoli Identity Manager, known in the IBM world as TIM/TAM. Blue World also brings Solutions-II IBM's Single Sign-on product line.

"TIM/TAM and SSO focus on internal threats," Bowling said. "There are lots of services around this. You see a lot of cases in the news where customers lose data. That can cost customers a minimum of $1 million to fix, not including what they lose with their brand image."

Solutions-II first noticed Blue World about a year ago when that company won IBM's highest partner award, Bowling said.

"We went out to seek the best IBM partner in security," he said. "It's not a long list. It's still a new business in IBM. We went to IBM's Beacon award program in 2006, where Blue World won. That's when we reached out to them. This has been a year in the making."

All 10 of Blue World's employees will stay with Solutions-II, including Michael Roy, president of Blue World who will become Solutions-II's security practice manager, Bowling said. Now that the acquisition is done, Solutions-II's sales force is being trained to offer security with the solution provider's other offerings.

With Blue World, Solutions-II now has three major business practices. The first is virtualization to help customers with storage and server consolidation. The second is business continuity, including backup, recovery, and disaster recovery. And the third is now security.

About 85 percent of Solutions-II's business is with small and midsized businesses, a part of the market ripe for Solutions-II's three business practices, Bowling said. "They still have the same needs as enterprise accounts, just at a different scale," he said.

Blue World also gives Solutions-II its first international foothold, adding Vancouver to its list of offices which also includes Littleton, Colo.; Salt Lake City; San Antonio, Texas; Seattle; and Las Vegas.

Looking forward, Bowling said he is not looking to be acquired. However, he said, he wouldn't rule out other acquisitions in order to scale his business.

Until this acquisition, Solutions-II's growth was being fueled by a program under which it hired recent college graduates and gave them a year of intense training, Bowling said. In the first group, two of the three original "students" graduated and are now working at Solutions-II. In the second group, six of the original eight "students" are still learning, are expected to be in the field in January. Next year, Bowling said he is looking to bring in 10 grads for training.

Blue World is not Solutions-II's first acquisition. It acquired Vista Computer Technology in Salt Lake City for its geographical location. The entire employee roster, including two of the three previous principles, still work with Solutions-II, Bowling said. "They were a typical VAR, mostly hardware and few services," he said.

A CRN report late last year found an acceleration of solution provider acquisitions this year as vendors, service providers, and other VARs look to beef up their channel expertise.