Systems Made Simple, a solution provider launched in 1991, spent the first dozen years or so of its existence providing a broad range of products and services to an even more broad range of customers. Too broad, CEO Ron Fishbeck admits today. "We would do anything for anybody," he says of the company's approach.
The result was that by 2003-2004 the company's growth had plateaued at about $2 million and the owners were frustrated. Then Systems Made Simple, Syracuse, N.Y., became involved in a couple of government health-care-related contracts and, after some analysis, realized the potential of the health-care IT market.
Ten years ago the decision was made to focus exclusively on health-care IT.
Today, Systems Made Simple will record sales of about $334 million this year after a two-year (combining 2012 and 2013 revenue) growth rate of 265 percent. That's good enough for the solution provider to rank No. 7 on this year's Fast Growth 150 list, CRN's annual ranking of the fastest-growing solution providers in the IT industry.
[Related: Fast Growth 2014: The Top 25]
The 150 solution providers on this year's Fast Growth list had average annual revenue of $48,295,100 (based on 2013 revenue) and recorded an average two-year growth rate of 102.6 percent. Collectively, they racked up sales of nearly $7.25 billion in 2013. In addition to highlighting the channel's high achievers, the Fast Growth 150 offers a revealing snapshot of what's happening in the solution provider realm.
Take this year's triple-digit average two-year growth rate, for example. It marks the first increase in several years, up from just short of 88.95 percent average growth among the solution providers on last year's list. That number has been falling since the depths of the Great Recession: The average growth rate of Fast Growth companies was 171.6 percent in 2012 and 187.0 in 2011.
The Fast Growth ranking also demonstrates the dynamism of the channel. Ninety-four of this year's Fast Growth companies are new to the list—almost 63 percent. Cumulus Global, this year's No. 1 solution provider, recorded two-year growth of 689.5 percent.
Churn is also a hallmark of the list given that big companies tend to drop down the list or even drop off altogether as maintaining double- and triple-digit growth becomes almost impossible. That's what makes companies such as Cloud Sherpas stand out. The Atlanta-based solution provider was No. 1 on last year's Fast Growth list with a two-year growth rate higher than 672 percent. While it has dropped to No. 4 this year, its two-year growth rate of 438 percent remains impressive.
"We're still traveling on the basic path we laid out for ourselves," said David Northington, Cloud Sherpas CEO, in an interview. "We're not surprised at our growth."
Last year seven companies had revenue greater than $500 million—the highest revenue bracket—but only one solution provider was in that category this year. And only 14 companies were in the smallest revenue bracket ($1 million to $4.99 million) of this year's Fast Growth list, less than half the number (29) in that bracket last year.
Every company on the Fast Growth 150 has its own story about how it got there. And the factors and company attributes behind that growth vary widely among them—there's no one secret formula for success.
But there are some common elements among many, if not most of them. Many have embraced cloud computing and managed services, along with the new business models that go with them, even as they continue to sell and deploy IT products under the "traditional" reseller model.
Next: Seeing A Pattern