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Say what you will about the state of the macroeconomy -- Rick Marcotte is having a heck of a year. The president and CEO of DLT Solutions marked a major milestone in 2008, not only reaching the half-billion mark in revenue, $504 million to be exact, but also doing it a full year earlier than the goal Marcotte set when he took the top spot at DLT in 2004.
Reston, Va.-based DLT Solutions, which was founded in 1991 and does its channel business entirely in public sector accounts, enjoyed sales growth of more than 20 percent year over year in each of the past several years. It reported $340 million in sales in 2006 and $418.6 million in sales in 2007. Rigorous sales and marketing efforts drove growth, Marcotte said, and major investments in both marketing systems and processes -- "the blocking and tackling of the VAR business," he said -- kept it steady.
In 2008, for example, DLT used more than 1,900 separate demand-generation activities to build more than 26,000 sales leads for vendor partners. No one technique or activity stood out above all. The trick, Marcotte reasoned, is figuring out which one works right, then being adaptable enough to switch gears and re-assess a situation quickly. DLT Solutions uses business analytics to forecast lead generation, track results through to quotes and then, Marcotte said, adjust strategy accordingly.
"A technique that worked six months ago may not work right now, but may start working again in another month," he said in a recent Channelweb.com interview. "For example, Webcasts have gone up and down with customers over the last four years. At the end of the day, the technique that serves us best is being fast, flexible and responsive to the market and to our vendor partners."
With the economic decline wreaking havoc on VAR business in the commercial space, Marcotte has seen a number of his peers start to engage with government business -- in many cases, he said, having no idea what to do with themselves in the space.
"In essence, a lot of VARs focus on the commercial sector because it's easier. It's local, and the government market is no question a painful place," Marcotte said. "The price of admission is high. The patience is enormous and the procurement is tough. Public sector used to be the stepchild of markets, but that's changed as we've seen the commercial market really driven down over the past year. We are seeing many more entrants into the government channel due to the relative stability of the market."
What's changed most about government VAR business over the past decade or so, he suggested, was a better understanding by vendors of the rigors of government IT, and thus how to better leverage solution provider sales channels.
"Vendors are demanding more out of their partners. Mere 'fulfillment' days are over," Marcotte said. "We love that change since we were ahead of the curve in developing many true value-added business elements like a seasoned business development team, deeper technical expertise, a 24-hour service center, project management organization, exclusivity of vendors within a category, back-end systems integration and true collaboration in demand generation activities and reporting."
The No. 1 mistake Marcotte said he sees among public sector newbies is a failure to understand the government as a customer.
"Every dollar they [government agencies] spend is public knowledge. They don't have profit as a motive, either, and that generates different behaviors," he explained. "The funding mechanisms and speed are the biggest problem -- the government just doesn't have the same sense of urgency as you see in the commercial side."
Marcotte named storage efficiency, virtualization, data management, business process improvement and open source as big drivers for government VAR business in the present.
"The amount of data in government IT is huge, and you have to figure, all agencies are going to have to make big decisions about that information soon," he said. "It's also a perfect place for a niche. No one's going to come in there and unseat an Oracle database, but a smaller, niche player, if they have a tool that can access that database of information and provide useful information and analytics as a result, that's a pretty good play. You're going to be able to compete with Oracle if you have that play."