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Good Customers Make Good Neighbors
Anexinet (No. 416) took a more direct route to the VAR500. Last April, it merged with another VAR,Virtus Partners, which resulted in a company twice its original size. The combined companies had complementary skill sets and zero overlap in customers, which has helped propel cross-selling opportunities, said Diego Calderin, president of the East Norriton, Pa.-based VAR.
"It was a way for Anexinet to quickly get into virtualization and it was an easy entree into each other's customer base," Calderin said. "[Virtus] had close relationships with HP and VMware. On the services side, we added Oracle and Metastorm."
Anexinet has developed what it calls a "near-site development center" model that has proven to be successful. When the solution provider wins a project, it opens a satellite office "across the street" from customers, Calderin said. "And we do that on our nickel. It's given us a leg up on our competition," he said. Anexinet includes the near-site office in its proposals, which customers appreciate, he said.
In many cases, the challenging economy often has provided Anexinet with plenty of office space to choose from, Calderin said.
"We can grab a sublease very quickly. We move out like a M*A*S*H unit and we can use it as a springboard to look for other customers nearby," he said.
The solution provider also has its own "innovation center," a lab where engineers can figure out what works together and closely examine the components of cloud computing and social networking in a replicated business environment, Calderin said.
"It's like R&D for midmarket companies that can't afford to do that. We can do a quick demo of apps working," he said.
Combining Onshore With Offshore
For Achievo Corp. (No. 199) the key to success has been a combination of offshore software development in China working with local project managers and other employees based in the U.S. and Europe.
"Instead of having to deal with H1B visas and having people fly in, we hire locally for the front-end piece of the work, the project manager, the architect, and so forth. It helps with and with the management of the project," said Douglas Louie, director of global marketing at the San Ramon, Calif.-based company.
China has lower labor rates than India (not to mention the U.S.), so Achievo is able to bid very competitively for projects and keep in constant communication with customers locally, Louie said.
Custom software development accounts for about 85 percent of Achievo's revenue, with about 20 percent coming from IT services, Louie said.
"We have some customers that may have three to five folks working on something. There's a 4-to-1 cost advantage of working in China," Louie said. "We can have four times as many engineers, which leads to higher productivity and immediate cost savings. In this economic environment, customers can do more with less."
Some Achievo customers made knee-jerk cost-cutting moves last fall when the economy fell down. Now that the dust has cleared, they're finding they have less staff -- and pent-up demand.
"They either cut their budget or reduced staff. With us, they find they can get four times [the staff]. Smaller companies and private startups are also looking to stretch cash and their issue is time to market," he said. "We can get an application up and running for a company in four weeks after they signed. It's incredibly flexible for them."