Rising Stars' Rebound Rocket

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Michael Thompson wants to drive his way to the channel kingdom.

A true entrepreneur, he took the risk, but it was hardly a no-brainer decision. Circumstances in his life--his pregnant wife, Renee, was one month away from the birth of their first child (a son)--kept that what-about-job-security bug buzzing in his ear.

"Great opportunity; difficult timing," Thompson says. "But this was a chance to get the keys to the kingdom and also drive the car."

After nine years of working for others in the channel, go-getter Thompson relished the opportunity to run his own company, especially one such as 14-year-old Groupware, which was on the verge of closing its doors and needing serious resuscitation.

Thompson and his partners--Scott Sutter, vice president of sales, and Anthony Miley, vice president of strategic operations--sealed the deal to acquire the company in early 2005. The terms of the buyout remain undisclosed, but Thompson says the trio assumed and eliminated Groupware's existing debts and began their tenure cash-flow-positive.

And here's the kicker: Groupware is the top-growing solution provider of the 2006 VARBusiness 500. Under Thompson's stewardship, the company leapt from $2 million in revenue in 2004 to more than $30 million in 2005, a 1,624 percent increase. The company projects its sales will double by 2006 to about $60 million.

"My biggest challenge in 2005 was [that we were] growing so fast that it scared our creditors, and I had to do all I could to prove I could sustain growth," says Thompson, who now employs 21 staffers. Almost all of them are new.

Just how did the company achieve such a remarkable turnaround? It was a combination of factors both obvious and intangible, say Thompson and witnesses to the metamorphosis.

Groupware's executive team has been focused on diversifying its technology base, taking on storage and databases, and expanding its vendor-partner roster, teaming up with Cisco Systems, Oracle and Symantec (Veritas). The team credits much of its success to mining a massive customer database that languished for years at the company. They used the database as a foundation for returning to former clients with a new message and new offerings. It paid off, landing them several major deals that boosted annual sales, including one with Magma Design Automation. The company has also been aggressive with marketing and branding--tools often overlooked by solution providers--while investing heavily in an engineering team that provides presales technical support and solutions selling.

"Mike's organization provides technical expertise and guidance to the customer throughout the sales process," says Nina Taneja, Sun Microsystems' channel account manager for Groupware. "Having that strategy and understanding what a customer is trying to accomplish give [Groupware] the notoriety with customers that they aren't just there to sell product and leave."

NEXT: How Groupware's approach differs from other VARs.