On The Straight & Narrow

Laser-like focus on building servers for a very specific niche market while settling on a single vendor as the primary source for key components has paid off for system builder DTR Business Systems.

And while building a total of 1,078 servers, 104 desktops and five laptops in 2006 will never get a company like DTR on the top of anybody's list of large system builders in terms of volume, its business of assembling servers to order for small ISVs grew fast enough for it to grab the No. 2 spot on CRN's list of White-Hot Performers for 2007.

"Our focus is to offer a lot of value to a handful of customers looking for value," said Rene Beltran, executive vice president of DTR, Walnut, Calif. "It's a cleaner channel when you focus on a group of guys willing to pay a little more for value."

DTR's customer base consists, for the most part, of ISVs with revenue of less than $10 million yearly, with many of them in the sub-$5 million space, Beltran said. "These companies aren't going to get the service they need from larger companies," he said.

Instead, they've grown to depend on DTR and its 20 employees to custom-build servers to be resold along with their applications. And as a result, some of them have been working with DTR for upward of 20 years, Beltran said. "They are a built-in repeat business," he said. "Our model was never meant to make us the biggest company in the world. From the beginning, we focused on verticals."

DTR does that by keeping everything as simple as possible for its ISV customers. It starts by making sure its ISVs get the right hardware platforms for their applications regardless of whether they are looking for a one-off server or multiple servers with a consistent hardware configuration over several years. "They don't want to mess with the hardware," he said. "You just can't throw the hardware over the fence."

The system builder also enables its ISVs to load their applications on new DTR servers via the Internet so that DTR can drop-ship the servers direct to their customers.

DTR builds servers almost exclusively based on Intel motherboards and server chassis and has been doing so for the past four years. But it was not an easy decision for the system builder to move away from lower-cost components.

"When we migrated to Intel motherboards, our salespeople complained about the prices," Beltran said. "Then when we migrated to the Intel chassis, they were ready to revolt. But when customers saw the quality of the Intel chassis, they didn't want to go back."

One customer that has stayed with DTR is Mindware, a Goodyear, Ariz.-based software application developer.

Archie Tucker, owner of Mindware, said his company has been depending on DTR for several years for servers that may not be on the cutting edge of technology but are mission-critical for his customers.

Tucker said he typically orders the server with the operating system and application pre-loaded by DTR for drop-shipping to the customer, and then he travels to the customer site to handle the installation and all the related networking.

"We use DTR because they're convenient," he said. "Before, we'd order a server from a company like Acer, get it here, configure the operating system and application and ship it to the customer. DTR makes it easier to get the server and all the components from the same source."

Scott Rockower, vice president of GMS International, a Cresskill, N.J.-based developer of software for freight forwarders and customs brokers, has been working with DTR for six years and appreciates DTR's service to GMS's customers.

"DTR also works with the users, the phone company and the Internet company to take care of all the setup," Rockower said. "If I work with companies like Dell, I'd have to contract a third-party company."

Rockower especially appreciates how quickly DTR can drop-ship servers and handle the configuration remotely, even with GMS' Unix-based applications.

"The end user gets the box and says, 'I can't believe you just installed Unix in my office. With Dell, it can take 45 minutes just to do Windows," Rockower said. "I can then tell the customer, 'OK, we're done with everything.' And the customer says, 'What are you talking about?' "