Spend Money to Make Money

Sean Burns is vice president of Business Development at Ahead the #2-ranked company on CRN’s Fast Growth 2011 list.

One of the biggest challenges in trying to grow any business lies in figuring out where to put your resources. At Ahead, a four-year-old data center consultant and integrator that logged $121 million in revenue in 2010, our first priority is hiring the best talent available. Our second – at a cost of $5 million and climbing – is an in-house technology lab where clients and prospects can see today’s virtualization, storage and cloud technologies in action.

We built our first-generation lab in early 2010 after seeing our revenue jump from $9 million to $32 million in the previous 12 months. Our goal with the lab was twofold.

First, it would enable our engineers to get their hands on the technologies we were selling, see how they work together, use that knowledge to design the best possible data centers for our clients, and help drive successful deployments that would in turn produce good references.

Second, having an on-site lab would allow us to give live demos to help sell our services. We would not only be able to educate our clients and prospects on the rapidly evolving technologies that are becoming essential components of the next-generation data center – with the ability to show each client the exact solutions and features relevant to their needs – but also showcase the expertise of the Ahead staff.

From both perspectives, mission accomplished. The lab is our best mechanism for making a complicated sale easier to comprehend and implement. Nine out of 10 prospects in our sales pipeline make the trek to our offices in downtown Chicago to see the "show." Today, that amounts to as many as a dozen visits per week.

Two-thirds of those sign engagement contracts with us shortly after the demo, shortening the sales cycle considerably and typically yielding a larger sale. It takes longer for the rest to get the funding to move forward, but the lion’s share of those prospects eventually turn into clients as well – all because companies are recognizing how an agile IT infrastructure can help them gain competitive advantage.

Likewise, our lab has become our competitive advantage. We have just launched a major lab upgrade that includes two new cloud-ready data centers in our Chicago headquarters, with the latest storage, compute, virtualization and network technologies from multiple vendors. And we will continue to update our infrastructure to be sure that we can show our clients the newest developments for the data center stack.

Clearly, the lab has played a pivotal role in our growth. The investment has been high, but it helped us quadruple our revenue between 2009 and 2010 and shows every sign of paying solid dividends well into the future.

Different VARs will have different needs, but the old adage that you have to spend money to make money seems to be as true today as ever. Growth requires risk. If you allocate your resources properly, you may be writing your ticket to a booming bottom line.

See Sean Burns' post from last Tuesday, Breaking Out of the Reseller Mold.