BlueWater Communications' Three Keys To Outrageous Growth


BlueWater Communications ranks No. 1 on CRN's 2009 fastest-growing solution provider list, posting astronomical growth of 3,605 percent between 2006 and 2008. BlueWater's revenue grew from $1.9 million to more than $70 million, in two years. (The Fast Growth event is Oct. 21 in San Francisco.)

Channelweb.com asked CEO Bob Cagnazzi how, in a recessionary climate, the company pulled off such amazing numbers. He also discussed specific solutions that illustrate the company's success.

What is the key to BlueWater's success?

I believe a little luck always plays a part in any of our successes, but given that, I think the key to our success hinged on a few things we focused very closely on upon startup: 1. the team, 2. the solutions and 3. the target markets.

Let's start with the team.

When we opened BlueWater, we actually were way overstaffed, especially at senior positions. This was the plan. In my previous life I ran the North American operations for a global systems integrator and I believed the biggest impediment to our growth was people -- not just having enough, but having the right people in senior positions that understood the culture and were prepared to scale the business. We staffed BlueWater with senior people throughout the organization from day one, so they would be ingrained in the culture and the strategy as we grew and would enable us to scale quickly and still retain our core business principals.

So, therefore, everyone in the company would be fluent with your solutions philosophy.

From a solution standpoint, we focused on unified communications [UC] when we opened the doors, because we believe in the transformative benefits businesses can enjoy when implementing unified communications solutions. At the start, in 2006, many projects were focused on transformation, increased productivity and then operating cost reduction. Obviously, that changed over the years as the economy declined and reducing TCO became paramount.

We were fortunate that we have a very strong financial/business modeling practice that can help clients evaluate their IT investments from an objective basis to understand the short-, mid- and long-term impact on TCO. This practice has been key for us in developing client solutions. Additionally, about 24 months ago we acquired a small data-center-focused services organization that enabled us to quickly start a virtualization and consolidation practice. This has been our fastest-growing practice and is of particular importance now as TCO reduction is so critical to our clients.

Lastly, we recently were awarded the ATP for Cisco's new UCS server platform and we believe this solution further enhances our clients' abilities to reduce [operating expenses] and improve performance in the data center.

BlueWater's third focus is on its target markets. What are those?

Many of us spent a good deal of our careers working with Fortune 100 global clients. It was our belief that the midmarket had the same concerns as their F100 brethren, i.e. OpEx reduction, security concerns, the requirement for greater productivity, regulatory issues, complexity, etc, but did not have the same type of partners working with them. Our plan was to take an F100 approach, with consultants experienced in F100 solutions and methodologies developed for F100 clients, and tailor them to the midmarket, at a midmarket price.

This approach seemed to resonate with our clients and was, I believe, a key factor in enabling us to acquire new clients quickly and retain them over the long-term and has produced independent customer satisfaction ratings in excess of 4.9 out of 5 since startup.

Everyone I talk to says that customers are doing more with less, and the VARs/integrators that tailor solutions to help customers do that will win in the end. But what happens when the economy is flusher? How can companies help improve efficiencies now, but still offer cutting-edge technology when the tide turns?

I think OpEx reduction and cost containment are now just part of the culture and doing more with less will remain key. I further think that profits will continue to be pinched for many sectors of the economy for some time. Our job will be to help clients tap into new and emerging markets with solutions that maximize efficiency and still provide high performance. In short, consolidation and virtualization will remain important, UC from a TCO standpoint will remain important and will grow as businesses better integrate collaboration into their business processes. Video will also continue to grow because of the decreasing costs in this area and the ability to greatly reduce costs and improve collaboration.

As a unified communications provider, what can you say about the growth in this arena? What is propelling it? Do you see other burgeoning areas that look promising over the next two years?

UC will continue to grow and we will start to see the real power of a UC platform as more clients integrate collaboration into their business processes. Since applications and data storage will continue to grow, so, too, will solutions based upon consolidation and virtualization. And as I mentioned, video will continue to grow as well.