Merger of VARs Peak And UpTime Expands Opportunities

A couple of Oklahoma solution providers have decided that big is better. Tulsa-based Peak Methods and Oklahoma City-based UpTime merged their operations into a new entity, Peak UpTime, with the aim of increasing their ability to provide a wider range of services and pre-empting competition from larger out-of-state competitors.

Peak UpTime will be under the direction of Gordon Martin, president of the combined company, who until the merger was president of Peak Methods.

UpTime is the sixth company to be assimilated into the entity now known as Peak UpTime, the first version of which was founded in 1983 as Apple dealer Computers Associates in Norman, Ok. It was known as DigiCore until July 2006, when it changed its name to Peak Methods.

Martin, who joined Peak Methods in January after a couple years at EDS as vice president in the global communications outsourcing service line, said the consolidation of several smaller companies into today's Peak UpTime stems from the way the Oklahoma market has changed over the years.

"The big guys -- the EDSs, IBMs, ACSs -- may have a bit of business with the Fortune-500 companies in the state," he said. "But the small and midsize businesses are served by a fragmented group of solution providers. Yes, they do great work, and get things done."

However, Martin said, those smaller companies need to partner with each other on bigger jobs. "But when they get connected as a single company, it relieves them from the pressure of running the business, and lets them spend more time on customer solutions," he said. "I unencumber them from the burden of payrolls and similar things, and let them focus on what they like to do: serving their clients."

Combining smaller resellers into a larger solution provider also helps foster better vendor relationships, Martin said. "You have to reach a certain scope and scale to take advantage of and leverage vendor relationships," he said. "And increasing our geographical reach opens new opportunities with our vendor partners."

With the merger, Peak UpTime is probably the biggest Oklahoma-based solution provider, with ATandT being its biggest competitor in the state, despite the two being partners in a variety of ways, Martin said. Other competitors include such out-of-state solution providers as Presidio, which in mid-March acquired Solarcom to become a nationwide, $800-million mega-VAR and which itself is a combination of several smaller solution providers.

In addition to Oklahoma, Peak Uptime also serves customers in Texas, Louisiana, and Kansas. Martin said the company will continue to expand in areas not served by solution providers. "Dallas is well served by channel partners and direct manufacturers, but Midland or Waco or Tyler or Texarkana are underserved," he said.

Next: Peak UpTime Looks To The Future

Martin, who refused to discuss terms of the merger agreement, said Peak UpTime is currently looking at about a dozen other solution providers that could be consolidated into his company, including companies from one-man shops to fairly big competitors.

Peak UpTime currently has no plans to be acquired, but anything is possible, Martin said. "It depends on the wishes of the owners," he said. "It is not currently a stated intent. But it depends on the market. Never say never. The fact is, markets expand and contract and consolidate. Depending on needs, we'll act as needed."

Merrill Likes, who until the merger was president of UpTime, said the merger was a good marriage. "We don't have much in common, except security and networking," Likes said. "Peak focused on VoIP and application development, and we focused on storage an infrastructure."

As such, the two had very complementary businesses. "A lot of customers asked us for help with areas we weren't able to offer, especially application development," he said.

The timing was good as far as UpTime's personnel were concerned, especially the operations staff, which is usually where personnel are consolidated in a merger, Likes said. "Resellers have to consolidate," he said. "The main effect here is in accounting and operations. We can better use our people to focus more on sales. Fortunately, one of our operations staff recently got married and is focused on starting a family, and another was ready to semi-retire. So the timing was good."

The merger came about when a vendor partner, who neither Martin nor Likes would specify, suggested the two talk to each other earlier this year, Likes said.

"One of our vendors recommended trying a blind date," he said. "We've been in casual conversations for months. But in the later part of September we started kissing and hugging more."

On October 1, the two actually merged. However, the paperwork wasn't finished until late last month, Likes said. "October 1 was my 35th wedding anniversary," he said. "I missed it. But my wife understands. She's in retail. She knows things gotta get done at certain times."

Likes, who is 60 years old, said he was ready to semi-retire. However, he said he is not leaving the business. "I'll focus on special projects like GSA," he said. I'll be hanging on for 10 years. It's in my contract."

At any rate, Likes said, changes in the market mean business should be handled by people less conservative than him. Referring to 47-year-old Martin, he said, "There are younger guys who can hustle more than I can. You have to be in your 30s or 40s now to do this. I'm too conservative. You gotta go out on a limb sometimes."