SMB Solution Providers See 2010 Sales Rebound

SMB-focused solution providers say they are seeing a sales surge this year with the economy on the mend.

Solution providers attending the 20th anniversary edition of the New England Technology Show run by SMB distribution power D&H Distributing say they are benefiting from an improved business and retail sales climate, a demand for more complex solutions and services, a server infrastructure and hardware refresh and a rise in internet security related business.

Computer Solutions of Keene, N.H. has experienced a 33 percent jump in sales in its business-based applications development and high-end networking business in the first six months of this year to $800,000, said Bruce Summers, a principal and COO of Keene.

At the same time, the company's retail business is up a whopping 45 percent in the first six months to $800,000, based on a sharp uptick in security-related business and hardware refresh, said Bill Stevens, retail sales manager for Computer Solutions of Keene. The retail business has also benefited from a move to Main Street in downtown Keene, which has increased traffic to the store, said Stevens.

Summers said the company's staff has increased from 10 employees to 16 employees with the increase in sales.

A turning point for Computer Solutions was hiring an office manager that has driven a strategic plan for the business. "Putting together that strategic plan was huge," said Summers. "We had been flying by the seat of our pants before we put that strategic plan in place."

Art Hendrickson, purchasing director for Small Dog Electronics, a Waitsfield, Vt.-based Apple specialist, said his sales are up five percent in the first six months of the year. But the Apple specialist is set to open in mid-September a store in the Mall of New Hampshire in Manchester, N.H., which is expected to drive additional sales growth. The company has 37 employees and is planning on hiring an additional 12 employees for the New Hampshire location.

"We're looking forward to pretty good growth," said Hendrickson. "If you run a retail store correctly and respond to people's needs and provide good solutions they'll come back to you."

Next: Benefiting From A Rise In Security Threats

Janette Movsesian, vice president of Microcosm Computers, a York, Maine-based solution provider, said business is up 20 percent in the first six months based on the increased business surrounding security threats. Microcosm is even getting referrals from sales reps at big box retailers unable to solve the malware and spyware issues, said Movsesian.

Ed Movsesian, president of Microcosm, credits the company's success to retooling the business based on what "our clients tell us they need." About 60 percent of the Microcosm's annual sales come from services, said Movsesian.

Francis Ferreira, president of Ferreira Group, a New Bedford, Mass. solution provider and managed services provider, said business is up about 15 percent this year with strong sales being driven by a server refresh with customers replacing aging servers and a hardware refresh with clients upgrading systems to Windows 7.

Ferreira Group's managed service business is also thriving with customers benefiting from the company's proactive services. In one case, the company was able to replace a motherboard on a law firm server on a Saturday night before the customer even knew the system was down, said Ferreira.

Jay Shah, vice president of Compu-Tech, a $1.2 million Wethersfield, Conn. solution provider, said his company's sales are up about 5 percent in the first six months of the year based in part on its move into VoIP solutions and telecom services. He said the VoIP-based phone systems have proved to be a competitive differentiator for Compu-Tech.

Mark Frisch, president of New England Digital Computers, a $10 million Middleton, Mass. system builder and systems integrator, said he has seen a slight uptick in sales in the first six months of the year. He expects continued improvement in the second half of the year but not without "some valleys" given the choppy economic environment.

D&H Co-President Michael Schwab said the Harrisburg Pa. distributor is also seeing sales growth. For the first three months of its new fiscal year ended July 31 sales are up 15 percent, said Schwab.

"I think it is because businesses today recognize if they are going to stay competitive in the future they can not neglect their IT infrastructure," said Schwab of the SMB market sales growth. "It is as simple as that. If you are going to be in business in the future you have to look at the opportunistic ways to invest in new technology."

Schwab said he sees a strong hardware refresh driven by Microsoft Windows 7 and Office 2010. He says that customers are moving to the new offerings not only because of improved performance but more robust security. "Don't underestimate the security aspect," he said. "People are recognizing that the new platforms are providing a level of security that did not exist before."