Forsythe Continues To Grow Revenue, Earnings, With Focus On Client ROI

Forsythe Technology is reporting strong revenue and earning growth thanks to a focus on providing a complete range of products and services.

Forsythe, based here, is a privately held company which has released its yearly financial report for the past several years, and 2001 was no exception.

For calendar 2001, Forsythe reported revenue of $691 million, up about 10 percent from the $625.8 million reported in 2000. Earnings for 2001 were $34 million, up 8 percent from the $31.8 million reported the year before, company executives said. Forsythe currently has a customer base of about 3,000 companies, up about 20 percent from the end of 2000.

Main growth areas for Forsythe were in overall networking and storage in 2001, said Eva Losacco, president of Forsythe Solutions Group, the product and consulting arm of Forsythe.

Last year was challenging, Losacco said. While 10 percent revenue growth is strong, the company has been averaging a 29 percent compound annual growth rate since 1996, reflecting a new conservatism in how clients are spending their IT dollars, she said.

"Customers are focused on mission-critical spending, looking for ways to keep their applications up and running," Losacco said. "Their big focus is on ROI. They kept away from the 'nice to have' products and spent on things like server consolidation and backup and restore."

As customers tighten spending, Losacco said it will become more difficult for smaller solution providers to prosper or even to survive in the future, unless they develop specific types of expertise clients are demanding.

"I really wonder about the $15 million to $30 million resellers," Losacco said. "In this environment, you need to be attractive to the customer. We have invested heavily in consulting and other expertise and a focus on customer issues," she said. "Customers are looking for somebody with experience, who have done what they are looking for before. I don't know how smaller VARs can develop or acquire that kind of expertise. It's very difficult for them at that size to develop the capabilities customers are looking for."

For 2002, Forsythe is expecting both revenue and earnings to grow by 10 percent, said Losacco, assuming there is no major economic or political impact which would cause another major pullback in spending. "But I don't see us going back to the 35 percent growth of the past," she said.