Aloha, Groupware! VARBusiness 500 Season Is Here

Fruity drinks, sandy beaches and colorful leis await Mike Thompson and his team at Groupware Technology as they head to Hawaii to do a little celebrating. Thompson has had quite a year, once again, as CEO of Campbell, Calif.-based Groupware (VARBusiness 500 No. 431), and he's taking his team to Maui as a reward for hitting its revenue goals and continuing its momentum as a growing, successful solution-provider business.

Groupware, a darling of last year's annual VARBusiness 500, broke onto the coveted roster of top solution providers in the country with an astounding growth ratemore than 1,600 percent. The VAR's story is about how one executive and his entrepreneurial team succeeded in turning things around to create an IT powerhouse.

What's more, Groupware, which employs 21 and provides scalable network storage and system solutions, won the VARBusiness 500 Top Revenue Generator award for companies in the $20 million to $49 million range.

At one time, Groupware was a fledgling solution provider, taking in about $2 million in revenue a year. Then, in 2005, Michael Thompson and partners Scott Sutter and Anthony Miley acquired the company and began the turnaround. During his first year at the helm, as CEO, Thompson guided the company to more than $30 million in revenue.

In last year's VARBusiness 500 issue, Thompson said he would double Groupware's revenue yet again, and he came through. Thompson says preliminary numbers are coming in at just under $60 million in revenue for 2006, still very strong growth for a company building up from just about nothing. After the team returns from Hawaii and the tans start to fade, it will be back to work and focusing on growth in 2007 and beyond.

Thompson says it will be a challenge to manage profitable growth going forward, but that's what keeps him going. "We won't see as much growth in the next year based on several issues: Product prices continue to drop, and customers are doing more with smaller systems, which are getting more powerful and lowering the street price," he explains. "While the amount of systems we're moving will increase, top-line revenue won't be as significant."

To combat this glitch, Thompson says he's solidifying strategic relationships with his vendors to make sure he maintains his margins. He's also looking to add new offerings to the company's line card and create more bundled solutions. For example, he's adding an Oracle rack appliance to his solutions stack and bundling hardware, software and services around it.

"We're making the move to solution rather than point products and making sure our services are the differentiator," Thompson says. To ensure his solutions are best-suited for his client base, Thompson has reached out to his customers and asked them specifically what they need and where a trusted solution provider fits into the equation. He's built offerings based on the answers end users have given him. "Our customers define what our value is, and depending on the customer, the value proposition changes slightly," he adds.

NEXT: Investing in Cisco

Thompson is also making significant investments in the company's network and security practice with Cisco. He sees WAN optimization as hot right now and is positioning his staff and offerings accordingly. To keep up with growth, Thompson is also hiring new technical presales employees and business-development reps who will serve as experts for specific product lines.

"We've brought in an Oracle overlay rep who is attached to our Oracle number to help drive that business," Thompson says. These reps are focused on a single product line, and the sales team is compensated for getting them involved on account sales as well. In addition, Thompson is about to add another storage partner to his vendor mix.

In the end, Thompson sees continued growth for Groupware, with market expansion into new geographies. At the same time, the VAR plans to maintain its core competencies. "The next three years will be even better," he says.

Ultimately, Thompson hopes Groupware will climb to the top of the VARBusiness 500, "maybe in the top 150 range--as long as we're profitable," he says. But his people will continue to be top-of-mind.

"We want to continue to move up the charts, but more important is to appreciate our employees and be able to give back to them, like this trip to Hawaii," he says.

The 2007 VARBusiness 500 hits the stands June 11, but the entry process is already under way. Don't miss the opportunity to be listed as one of the country's top solution providers. Go to www.varbusiness.com and fill out an entry form today!