Avcom Ceasing Operations

Avcom, a $100 million Sun Microsystems solution provider, is ceasing operations according to a release on the company's Web site.

The Sunnyvale-based solution provider is preparing to sell its business units and assets, with further details to be released Tuesday, according to the Web site.

Avcom, a 20-year-old privately-held company, stopped accepting new orders Jan. 31, but will continue to ship and invoice all existing orders and complete any open services engagements, according to Brad Bishop, president and CEO.

The solution provider is ceasing operations because it cannot run the business at "break-even at best" according to the release. It also cites depressed demand for high-end solutions, the over distribution of IT products and services, falling margins and "the vendor's failure to value and reward the high investments required to be a successful VAR," according to the release.

Avcom ranked No. 212 in VAR Business's VAR 500 with $117 million in revenue, down from $322 million in 2001.

"The value of Avcom's engineering, architectural, sales, ERP/SFA and marketing talents is not protected enough by the vendor community who thrives off Avcom's efforts. Until the IT marketplace matures to a point where the ill ways of the channel are repaired and those systems integrators who create incremental IT solutions are sufficiently rewarded for their investments of sweat and equity, the road ahead will be paved with minimal, if any, return on brand," according to the company.

Added Bishop in the release: "We have worked very hard to maintain the high standards required to be authorized to sell and support products and IT solutions from Sun Microsystems, Veritas, Cisco, Oracle, Hitachi Data Systems, and other leading manufacturers and developers. Unfortunately, the costs associated with maintaining these high standards, weighed against the eroding revenues and low margins, make it impossible for us to continue to deliver the quality of service our customers have come to expect from Avcom."

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