Fastest Growers On The VARBusiness 500


They range in size from $7.8 billion to $25 million in annual sales. The biggest have thousands of employees while the smallest have just a handful. Some are aggressively expanding into new areas, such as unified communications and managed services, while others focus on their core expertise of installing and networking computer hardware. Despite so many differences, these solution providers had one thing in common: In 2006, they all grew really, really fast.

MetaSolv (VARBusiness 500 No. 239) topped this list of "power movers" with an astounding growth rate of 259 percent. Undoubtedly, that's part of what attracted Oracle, which acquired MetaSolv in December. But even Uni-DataCommunications (No. 489), No. 49 on the fastest-growing list, increased its revenue nearly 50 percent--that's growth any business would envy.

Sustaining that growth is the next challenge for these companies. That will largely be determined by the vendors they select, the services they offer and the employees they hire.

San Francisco-based FusionStorm (No. 138) grew 93 percent last year, and CEO John Varel says that's no fluke. "I know we'll see that again this year," he says, predicting that 2007 sales will reach $400 million to $450 million. One of his biggest challenges is making sure FusionStorm's infrastructure and business processes keep pace with its growth. "We were set up as a $12 million company and now, in just a few years, we've become a $400 million company," he says.

How Did They Get There?
The reasons for their rapid growth are as varied as the companies themselves. In a few cases, acquisitions helped fuel top-line growth. Presidio's (No. 72) buyout of Solarcom (2005 revenue: $315 million) was one factor in its 222 percent growth last year. (For more, read our profile on Presidio.) FusionStorm bought government solution provider Jeskell, adding its $132 million in annual sales. But for most of the companies on the Fastest Growing list, the growth was organic.

At Global Technology Resources (No. 234), that means offering consulting services and solutions built around unified communications, VoIP, information security and wireless technologies, says GTRI sales vice president Monte Sjobakken.

Other fast-growing VARs found server consolidation and virtualization hot markets.

"Server consolidation in the last year has probably been about 80 percent of our business," says Christopher Regan, CEO of Regan Technologies (No. 365), who reports hiring eight VMware engineers between mid-March and mid-May.

And demand for data storage technology is driving growth for many solution providers.

"More than 50 percent of what we sell is storage-related," says Tom Sweeney, CEO of Incentra Solutions (No. 291), noting that the company is managing 2,000 terabytes of tape and backup storage and 600 terabytes of storage-area network capacity for its customers.

Some of the fastest-growing VARs are moving into managed services. While Incentra offers professional services in system assessment, design and implementation, managed services is the icing on the cake.

"The real differentiator is our ability to remotely monitor and manage enterprise-class IT infrastructures," Sweeney says.

FusionStorm offers solutions around a broad range of server, database, storage, security, VoIP, wireless and virtualization technologies.

"The glue to all that is our managed services and managed hosting services," Varel says, predicting that services-related revenue will double this year. "All our focus is on services now."

Services at FusionStorm are now pulling IT hardware and software sales, a sharp reversal from the days when product sales generated demand for services. Still, though, 80 percent of the company's top-line revenue still comes from product, with professional and managed services generating 20 percent of sales, Varel says. Incentra Solutions reports a similar 80-20 split, although Sweeney would like to see services account for 40 percent of sales. At Lilien Systems (No. 448), products still account for 90 percent of sales.

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