Sarcom Shifts Focus, Reduces Long-Term Debt

"The mission of this company has changed along with the entire VAR or systems integrator community," said Sarcom CEO Rick Mills. "We've continued to migrate toward the advanced technology areas in our industry."

Sarcom, based here, is now focused on storage, security, mobile and wireless infrastructure solutions.

Mills said his biggest challenge in the past year and a half was increasing the company's equity base and reducing the debt incurred from Sarcom's acquisition of 10 companies from 1997 to 2000.

"The company had a debt infrastructure at the holding level that just didn't make sense," Mills said. "So we exchanged a substantial portion of that debt for equity." Today, he said, Sarcom's total long-term outstanding debt is $10 million.

The company also reduced its workforce to 1,500 from 1,850. It expanded some locations and closed others and now operates in 54 markets in North America.

A key part of the strategy, Mills said, was slashing Sarcom's vendor roster.

"We've narrowed the window dramatically to [fewer than 40 suppliers," Mills said. "We are now focusing on core partners in creating greater value."

Sarcom's vendor roster includes Microsoft, Hewlett-Packard, EMC, Cisco Systems and Veritas Software.

Don Foster, vice president of partner sales at Veritas, Mountain View, Calif., said Sarcom fits perfectly with Veritas' partner strategy.

"Sarcom has really reorganized the whole culture and strategy for its sales force that allows them to focus on solutions-oriented vendor products, which

is what Veritas sells," said Foster. "They've stepped up, and we've been pretty pleased with the results."

Foster also said Sarcom's geographic reach makes the company an attractive partner. Growth areas include the West Coast and the Southeast, Mills said.

Mills said the company's change management services are one of its fastest-growing service areas. To that end, Sarcom has assembled a specialized boutique of about 150 people focused full-time on this area, he said.

"The management team here has created a very successful culture in a short period of time," Mills said. "Now we look forward to growing our business."