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This year, 92 solution providers joined the list, down slightly from 113 last year, and they accounted for $25.1 billion in revenue. An additional 21 newcomers joined the 25 To Watch List, bringing in an additional $546 million in revenue.
The results of mergers and acquisitions made room for the newcomers, and 2009, as with previous years, had a number of high-profile companies come together. One year ago, Hewlett-Packard announced it would buy EDS, which ranked No. 1 on the VAR500 last year, for $13.9 billion. The deal catapulted the combined company's revenue 34.5 percent, to $22.4 billion, bringing it to the No. 5 slot on this year's list.
With the vendors added to the list, the top 100 ranked companies, not surprisingly, had far heftier revenue in 2008 than in 2007. But the trend extended through nearly every tier. How do solution providers do so well in the face of a lackluster economy?
VARs and their vendors must work together to present solutions at the "C" level, which leads to a robust pipeline and closing opportunities, said John Convery, executive vice president of vendor relations and marketing at 3MD/Denali, VAR 500 rank 263.
"In a down economy, customers look to Denali Advanced Integration for value, and solutions that drive the cost out for IT spend," he said. "They look to Denali for the expertise as an outsource option instead of hiring internally. Customers leverage our hundreds of certified engineers to take on a project or two, which leads to an overall IT consulting resource for them."
However, solution providers are not entirely immune to the peaks and valleys of the economy. VARs ranked 400 and higher had lower average revenue than last year, and the solution provider that ranked at 500 this year had lower revenue than the No. 500 company in 2008. In addition, companies between 300 and 400 had a much smaller average percentage of revenue growth than larger VARs. The economic slowdown has seemingly impacted the VARs in the lower third of the list more than those with greater sales.