2006 VARs of the Year
The three "I's" of success are innovation, ingenuity and indomitability. The most successful solution providers are those who are pushing the boundaries of technical innovation in building holistic systems, devising and executing on business strategies and goals, and, of course, exhibiting sheer determination in propelling their businesses forward.
The VARBusiness VARs of the Year are solution providers that exemplify these principles. They are making strides to improve their businesses and business models, service their customers better and leverage their vendor relationships to raise the bar for themselves and their peers.
In this special report, VARBusiness recognizes solution-provider excellence in eight categories: Solution Innovation, Services Delivery, Custom Systems, Sales and Marketing Excellence, Business Ingenuity, New Ventures, Partnership and Value To Customer.
The editors of VARBusiness judged and selected the VARs of the Year from a broad field of candidates. Nearly 200 solution providers submitted entries or were nominated by their peer and vendor partners for the honors. The awards, now in their second year, were more competitive than ever. Selecting these eight standouts was like finding a superstar solution provider among a field of brilliant stars.
Judging eight solution providers as the best shouldn't detract from the excellence achieved by the other nominees in the VARs of the Year running. VARBusiness editors pained over the nominees, and went through several runs of judging to narrow the list to a core of superior players.
The VARBusiness VARs of the Year are more than just superior solution providers; they are role models and trailblazers for others to follow.
NEXT: VAR of the Year for Custom Systems
VAR of the Year for Custom Systems
Consider Jeffrey Najarian, the CEO of Starpoint Solutions in the heart of New York City, which won VARBusiness' VAR of the Year Award for Custom Systems. In the wake of the Sept. 11 terrorist strikes in 2001, with Ground Zero just outside his office windows, Najarian gave one of the toughest speeches of his life--though it wasn't the first time he'd pledged to employees that the company would survive.
Starpoint's story is, like many on this year's list, one of endurance and metamorphosis. Nearly 25 years ago, the company was hatched as a financial-services IT placement firm on the 75th floor of One World Trade Center. Ten years later, Starpoint had moved its offices just a few blocks but struggled for most of the next decade to make it through the financial sector's dismal downturn. Then 9-11 hit.
Despite devastating events all around the company, Starpoint has survived and is now a thriving technology-services firm with high-profile customers in several verticals. For instance, it recently built a major Web-development tool for a pharmaceutical giant looking to manage more than 100 different drug brands on a single IT platform.
Starpoint successfully delivered the solution--and wrapped up this year's award--by combining the company's core staffing strengths with custom application and enterprise-software expertise. "A big reason for our success has been the relationships we've made. That is what has given us the business we needed to survive," Najarian says.
Because the company was founded as an IT talent search firm, Starpoint has managed to pull in the right people to land and execute large custom solution deals that demand more than snap-together technology components, says Peter Melomo, Starpoint's executive vice president of application-development services.
"When we first went to the 'pharma' space, we brought in a couple of managers with pharmaceutical expertise and focused on e-commerce," Melomo explains. "Ultimately, on this proposal we offered off-the-shelf products and a custom application that lets our customer use a number of pre-developed templates and access a library of portlets," he says.
For instance, using Starpoint's system, the pharmaceutical giant can quickly create animations or videos that show how particular medications work within the human body. The application relies on BEA Systems' clustering technology and wraps in BEA's WebLogic service-oriented architecture software blended with technology from Oracle and Documentum, among other vendors.
Company officials realized several years ago that Starpoint would need sound scientific expertise to forge into the pharmaceutical industry and used IT staffing skills to build ties in Moscow and Kiev. "Now when we have work like this, we have five PhDs ready to work on the solution at a much lower cost," Najarian explains.
To customize their solution, Starpoint relied on developers both here and in the Soviet Union. "We were really able to use our offshore components to customize this solution," Najarian says.
Starpoint's survival instincts show through in its early quest for offshore expertise and in practical decisions, such as the company's move to branch out from its Wall Street roots to the pharmaceutical IT market that was evolving in neighboring New Jersey, says Najarian, who frequently reflects on 9-11.
"Our offices face Ground Zero. Many of us lost people we knew that day, and many of us were mad. There are only two things you can do when you are mad. You can stay mad or you can get through it by bonding together. We chose not to give up."
--Jennifer McAdams and Lawrence M. Walsh
NEXT: VAR of the Year for Business Ingenuity
VAR of the Year for Business Ingenuity: Doing IT Smarter
At the peak of the Internet boom in 1999, Do IT Smarter reached a crossroads. Business was humming along, but growth for the small San Diego-based VAR would require significant investment, just as the market was facing a downturn.
Rather than simply stay the course, Do IT Smarter chose an entirely different path--the company gave up serving end users in favor of becoming a managed-service provider serving other VARs. For its efforts, Do IT Smarter was the judges' choice for Business Ingenuity in this year's VARBusiness VARs of the Year Awards.
In 2000, the company was delivering break-fix and other solutions using a managed-service approach--in other words, charging customers monthly fees to run their IT shops. Most were small businesses with fewer than 200 seats. The inflection point came in 2003 when it was apparent that Do IT Smarter couldn't serve all its customers' needs and grow at the same time, says Do IT Smarter president Donn Begg.
"As our existing customers grew, we couldn't help but get pulled into areas where we didn't have coverage," Begg says. "So we started enlisting partners...That's when we decided to franchise our operation, for lack of a better term, and created the Instant MSP program."
It took about two years to take all of its processes, procedures and knowledge and deliver it so a VAR could offer the model to its own customers. The pitch to VARs: Instant MSP would be their back-end infrastructure, including remote systems monitoring, on-site administration, help desk and remote-backup-and-recovery services.
The company has since invested $500,000 to build the Instant-MSP infrastructure with remote-monitoring, e-mail security, remote backup and operational systems.
Partners can offer these services at a fee starting at $199 for five licenses. "We sit behind the scenes and provide greater capability," Begg says, stressing that the solution provider owns the client relationship.
The infrastructure lets a VAR with little IT background jump in. For instance, Delta Communication, a telecom systems reseller, has added IT service delivery to its portfolio, allowing it to offer existing customers new services.
"We can now get to market to two different prospects and use each of the services as a foot in the door," says David Rosenberg, Delta president.
--Jeffrey Schwartz
NEXT: VAR of the Year for Solution Innovation
VAR of the Year for Solution Innovation: ASAP Software -- An Intelligent Solution
ASAP Software, a Buffalo Grove, Ill.-based reseller of software, hardware and support services, discovered many of its customers lacked a deep enough insight about their software assets and needs to make intelligent IT purchasing decisions. While there were many IT asset-management packages, none provided the right information.
"It became clear to us that every time we had [to negotiate] a software contract, there were these missing pieces of information that were necessary," ASAP president Paul Jarvie says. "There were asset management and tools, but none talked about the things we were talking about."
Innovating was the answer, and ASAP took on the challenge of building an IT asset-management solution from scratch. eSMART enables CIOs and IT managers to monitor nearly every aspect of their infrastructure, ranging from hardware and software inventory, application-utilization rates, purchased and leased assets, and the tracking of lost and stolen devices. The application is powerful enough to track assets on large, distributed networks. eSMART also enables intelligent decisions on equipment and software purchases, planning and deploying upgrades and patches, faster audit and compliance efforts and an understanding of how employees use their infrastructures. The result is better licensing compliance, higher utilization rates, and faster management and maintenance cycles.
Supporting eSMART is ASAP's professional services, with which the solution provider helps its customers understand asset management, set up policies and processes and build metrics for using asset intelligence to make intelligent purchasing and project decisions. Asset intelligence also provides a powerful tool that helps ASAP and other software resellers and solution providers. Deep asset infrastructure intelligence expedites the needs assessment, IT planning and purchasing cycle.
ASAP, No. 50 on the VARBusiness 500, partners with many major software and hardware vendors including Hewlett-Packard, IBM, Lenovo, Microsoft and Novell. The development of a homegrown application shouldn't detract from its vendor partners, Jarvie says. eSMART uses and complements its partners' technology.
"We don't create .Net and C++, but we use those tools to create solutions for our clients."
--Lawrence M. Walsh
NEXT: VAR of the Year for Partnership
VAR of the Year for Partnership: True Blue To IBM
Rhett Daniel talks softly, but his message comes through loud and clear: "With IBM at our side, we're unstoppable." The president of Daniel IT Services has been familiar with Big Blue for some time now, but only in the past several years has he leveraged the vendor's full complement of resources and evolved into a full-blown, give-and-take ally.
In 2001, when Daniel IT was a fledgling 1-year-old VAR, the company's annual revenue was a mere $92,000. The projection for 2006 is $2 million. That might still sound like small potatoes considering the vast smorgasbord of VARs out there, but with such an impressive growth record--more than 2,000 percent over five years--Daniel IT has certainly earned bragging rights.
The solution provider, which specializes in IBM's WebSphere Commerce offering, relies on IBM PartnerWorld for training, certification and support. In turn, IBM relies on Daniel IT, which writes and teaches software courses for WebSphere Commerce. The Athens, Ala.-based solution provider also co-authored Big Blue's redbook on migrating from version 5.1 of the application to version 5.6.
"Our practical implementation experience with WebSphere Commerce provides great benefits to the students," Daniel says. "We teach from real-world experience, not just out of the book. And we should know the book pretty well."
IBM's solutions comprise about 85 percent of Daniel IT's total revenue, and the partnership has allowed Daniel IT to penetrate high-profile accounts--Panasonic and Coca-Cola, for instance--that otherwise would have been inaccessible to a small-town VAR.
"At first, we were focused on the technical, or 'enablement,' benefits that IBM could provide us. They want their VARs to be as self-sufficient as possible," Daniel says. "But then we started exploring the sales and marketing aspects of a partnership."
Now Daniel IT is taking on the government space--and taking advantage of IBM PartnerWorld Industry Networks Public Sector Edge to market its solutions.
"We've been working with the State of Oregon E-Government Program, providing e-commerce expertise and applications that help the state provide Web-based services to residents and businesses," Daniel says. "IBM is giving us guidance so we can position our solution, GovernmentDirect, and go after the other 49 states."
--Michele Pepe
NEXT: VAR of the Year for Sales and Marketing
VAR of the Year for Sales and Marketing: FusionStorm Rolls In
VARBusiness has honored FusionStorm as a VAR of the Year in the Sales and Marketing Excellence category. While this is the first time it's been recognized for this, the aggressively growing San Francisco-based managed-service solution provider is no stranger to VARBusiness.
FusionStorm debuted on the VARBusiness 500 list in 2001 at No. 369 when it reported $63 million in revenue for 2000, ratcheting up 186 slots to No. 183 this year. But not all went so rosy in between. During the dot-com bust, the company's revenue dipped to $29 million in 2001. In 2002, revenue was as low as $12 million. By 2003, FusionStorm had fallen off the VAR500 completely.
Then, between 2003 and 2004, revenue growth exploded more than 260 percent, landing it No. 3 on sister publication CRN's list of fast-growth solution providers.
CEO and chairman John Varel credits loyalty for the increase. Little wonder. As an enterprise solution provider, FusionStorm goes very broad and deep, Varel says. In fact, the company offers solutions that run from disaster-recovery to network-infrastructure design to security services. And Varel is a visionary. His company offered managed services eight years ago, long before it was part of the IT lexicon. His tenacity has thus far paid off.
This year, FusionStorm will report $400 million in revenue from $180 million in 2005, partly due to the recent acquisition of Jeskell, which accounts for $130 million. The rest is in organic growth, according to Varel.
So, what's driving such astronomical growth at FusionStorm? One key initiative is the company's quarterly Client Advisory Councils that were initiated a year ago, according to vice president of marketing Josh D. Krasnegor. Held in Northern California, 15 to 20 of FusionStorm's best customers discuss an IT-related problem with CIOs from its partners, including Sun, Cisco and IBM.
It's not conducted as a product "push" but as a full interactive discussion. "They can trust us that we are bringing in a neutral platform. Customers don't want to be buffaloed or shanghaied into what they want or need," Varel says.
To date, clients that have participated have ordered more than $10 million in new products and services, according to the company. "Invoice per customer has doubled," according to Varel.
--Sandra L. Rufolo
NEXT: VAR of the Year for Services Delivery
VAR of the Year for Services Delivery: Agilysys Offers Its Hospitality
To win in services engagements, it often takes a wide variety of experience, technology skills and a breadth of offerings that can scale to fit clients while being repeatable enough to retain profitability. But most of all, services is about knowledge; knowledge of the customer's business and goals. When it comes right down to it, all the tech skills in the world won't do much good if a service provider can't help a business turn IT vision into innovation and growth.
Standing out in an impressive group of service providers in the Services Delivery category of this year's VARBusiness VARs of the Year is Agilysys. The Agilysys Enterprise Solutions Group ran the professional services and consulting table by delivering tailored solutions that combine custom software and services.
In vertical markets, Agilysys is giving retailers, and hotel and casino owners ways to cost-effectively manage business. The service provider has responded with a practice-based professional-services model founded on knowledge specialization that ensures each area of focus is led and staffed with experienced and knowledgeable professionals.
Agilysys impressed the VARBusiness judges with several business-intelligence engagements that leveraged deep insight into vertical markets and coupled that with fine-tuned technology that quickly paid dividends for the user.
Take for example Agilysys' business-intelligence efforts in the hospitality industry. Project success for an impressive list of end users proves Agilysys has found a delivery model that brings to bear all of its vertical expertise. And while customized tools are important, the most important feature of the hospitality solutions, according to customers, remains Agilysys' expert advice, consulting and services.
"We were impressed with the support and guidance from Agilysys throughout the entire process," says Rich Hawkins, director of materials management at The Breakers Palm Beach (Fla.). "From initial consultation through implementation to ongoing support, Agilysys has proven processes and experienced personnel to ensure rapid ROI."
"This award symbolizes for Agilysys our ability as a solution provider to build and offer specific, relevant solutions that effectively align with our clients' business needs," says Bob Bailey, executive vice president at Agilysys. "In the coming years, we look forward to continuing our growth pattern, both organically and through acquisitions, enabling Agilysys to bring new solutions to the marketplace."
--Chris Gonsalves
NEXT: VAR of the Year for Value To Customer
VAR of the Year for Value To Customer: The EBS Group Delivers
"That which is measured gets done," says Scott Jenkins, managing partner at Lenexa, Kan.-based The EBS Group. That mantra and a month-and-a-half of extensive talks with his customer is what won the company this year's VAR of the Year award in the Value To Customer category.
The customer, Burns and McDonnell, is an engineering, construction and environmental and consulting services firm with more than 20 offices nationwide and greater than 1,600 employees. It was in desperate need of a role-based employee business-intelligence portal for information across multiple back-end systems to be efficiently circulated and stored.
Jenkins and his team took the customer's needs to heart and held interviews with more than 50 of Burns and McDonnell's high-level managers. "We wanted to gather all of their pains around improving employee productivity and the data that would be important to being able to do work more effectively," Jenkins says. Some of these bottlenecks included content slowed by large e-mail transmissions or printed reports that weren't easily consumable.
The EBS Group ultimately delivered an Oracle Fusion middleware solution. The end result centered around Oracle Portal, Oracle Business Intelligence Discoverer platform and Oracle Collaboration Suite. The solution provides single sign-on; role-based access to data integrated from systems such as Oracle Financials, Human Resources and Projects; and business content from knowledge repositories. The data warehouse and views for each role and function were then applied.
The first phase of the project addressed the project-management teams, which is where the money comes from. "They need the information and data presented to them in key performance metrics rolled up to them as red, green and yellow," Jenkins explains. This measurement through color coding is vital to seeing which projects are going along well (green), might need some attention (yellow) or need immediate attention (red) in some form or another. The project-manager phase was successfully launched this past summer on time and on budget, while another 30 role-based initiatives will be launched all the way down the line to cover all business areas.
--Cristina McEachern
NEXT: VAR of the Year for New Ventures
VAR of the Year for New Ventures: Wading Into New Waters
Since the husband-and-wife duo of Tom and Lezlie Gallaway founded Technologent in 2002, the IT solution provider has grown by leaps and bounds--bringing in $61 million in revenue in 2005 and landing at No. 307 on the VARBusiness 500 list last year.
The company's areas of expertise include data-center architecture, storage and data-management solutions, enterprise Web services, identity-management software, desktop-mobility technology and infrastructure management.
Now, at a time when many solution providers are just trying to weather the storm, Technologent is wading into new and uncharted waters. The company this summer launched a new division of its business dedicated to providing IT solutions solely for the telecommunications industry. Since its inception three months ago, the new telcom practice has brought in $700,000 in incremental revenue, and Technologent is predicting a $20 million run-rate for the division in the 2007 calendar year. The company also plans to expand its customer base to include five tier-one accounts in the telecom industry in 2007.
The new venture was the brainchild of Andrew Schmoller, director of sales for the telco division, and Chris Ciborowski, director of engineering. Both executives say their past experience in the IT industry gave them the know-how to help telcom companies develop and manage large-scale IT infrastructures.
Schmoller formerly handled large enterprise accounts for Sun Microsystems, while Ciborowski held engineering positions at co-location provider Exodus Communications and later at British telco, Cable & Wireless, which acquired Exodus in 2001.
Technologent is now looking to expand its telcom practice on a nationwide level.
"We don't look at this as a hit-and-run kind of opportunity. We're putting a long-term investment into this industry," Schmoller says.
While Technologent doesn't have a one-size-fits-all solution for the telcom industry, it's drawing on its partnerships with IT vendors such as BEA, Oracle and Sun Microsystems to develop best practices in helping telcom companies architect and manage their IT infrastructures.
"We're working with vendors and partners that understand the crux of the problem regarding the proliferation of information," Ciborowski says.
--Shelley Solheim