EchoStor Raises Mike Johnson To CEO, Readies For ‘Explosive Growth’
‘We as an executive team knew we needed to evolve our executive leadership structure and leverage our strengths to keep up with our growth pace. We're on an aggressive goal of reaching $500 million in annual revenue over the next three years and continuing a pattern of 50 percent year-over-year growth,’ says Mike Johnson, CEO of EchoStor Technologies.
EchoStor has been on a fast-growth streak. The Hopkinton, Mass.-based solution provider has seen 50-percent annual growth for the past few years and expects that growth to continue, and in the process accelerate its current annual revenue run-rate of over $200 million to $500 million and more within the next three years.
Such growth, and such growth plans, do not come easily. And that is especially true of a solution provider which, like EchoStor, has no private equity backing and has yet to make a single acquisition.
For EchoStor, No. 260 in the CRN 2023 Solution Provider 500, that means a major reworking of its executive team. The solution provider this week made such a change by promoting from within its ranks a new CEO and a new president while appointing its co-founders, who previously held those roles, to now serve as co-chairmen of the board.
Mike Johnson, an 18-year EchoStor veteran who Monday was unveiled as the company’s new CEO, told CRN in an exclusive conversation that EchoStor reshuffled its C-suite to prepare for its next growth phase.
“We're on an aggressive goal of reaching $500 million in annual revenue over the next three years and continuing a pattern of 50 percent year-over-year growth,” he said. “Based on our research, things tend to break at the quarter-billion-dollar revenue mark or threshold, and we want to ensure that we have the right infrastructure in place to support and scale the business. And that really starts at the top.”
The new executive team will continue to focus on the company’s four main customer priorities, including data center modernization, networking and security, digital services around the ServiceNow platform, and cloud services with Microsoft and Amazon Web Services, along with managed services around those priorities.
Looking ahead, Johnson said, EchoStor continues to hire technical talent at a fast pace, and is also looking towards acquiring other solution providers as a way to accelerate growth.
There’s a lot going on at EchoStor as the company adjusts to a new management team. For a look at what Johnson had to say about himself, the changes in executive ranks and where the company goes from here, read on.
Define EchoStor today.
We're a very specialized solution provider. We want to be very good at what we bring to market. In the early days, we focused on data center solutions around virtualization, compute, storage, business continuity, and disaster recovery. And then we looked to expand in some different specialty practices. But as I said, we're a very specialized solutions provider or partner. That's one of the themes that I drill down to our team internally. Anybody can take orders. Anybody can be a vendor. But I think when it comes to our solution provider space, it's all about the value. We want to offer customers a turnkey experience for whatever technology we're bringing to market, including front-end architecture sizing, selling and fulfilling the project, managing it, and then rolling in a specialty delivery services team to ensure that the project goes smoothly. So regardless of what we're offering to our customers, and in aligning with our technology partners, we're a very specialized and focused organization. We're not one of these large national vendors that you log into a portal and order a server. We want to make sure that we're in the thick of it, whether it's hardware, infrastructure, cloud-based solutions, security, you name it.
Is EchoStor specialized in any particular technology areas?
Yes, our four pillars of success: modernizing the data center with hybrid cloud infrastructure, networking and security, our digital business built around the ServiceNow platform, and cloud services with our great strategic Microsoft and AWS partnerships. Across those four pillars, we focus on financial and operational excellence, and then layer our professional and managed services around each. And within each pillar, we have specialized practice leads and specialty folks, architects, dedicated project managers, and implementation folks. In the legacy world, those conversations were very siloed. There was a server conversation, a Microsoft conversation, a digital conversation, a network conversation. We see a lot of consolidation in the market. So we need to ensure that we can bring those conversations together while leveraging specialists in those areas for joint conversations and consulting efforts.
How about managed services?
We are also building out managed services geared towards each of those pillars. For hybrid cloud infrastructure, we launched backup-as-a-service and storage-as-a-service offerings with key partnerships with some of the vendors and hyperscalers. We've rolled out a managed service in our digital platform around remote admin as a service and technical advisor-as-a-service to give our ServiceNow customers a better customer experience and managed service experience. And on the cloud side, we've focused on what we call our cloud management-as-a-service, which is built around cost optimization or FinOps. We brand that as our Eva managed service offering.
You just took over as EchoStor’s CEO. What did you do before?
I’ve been with the organization for 18 years. The company was founded in 2005 and I was the first employee. And I've worked my way up through the organization in multiple roles, most recently the last three years as chief revenue officer during which we restructured and built out an amazing sales team of talented engineering folks and supporting operations folks and experienced some really tremendous growth.
Why the change in leadership now?
If you look at EchoStor over the last three years—explosive growth, top line revenue, geographic expansions, and some of the rapidly growing specialty practices that I mentioned—we as an executive team knew we needed to evolve our executive leadership structure and leverage our strengths to keep up with our growth pace. We're on an aggressive goal of reaching $500 million in annual revenue over the next three years, and continuing a pattern of 50 percent year-over-year growth. Based on our research, things tend to break at the quarter-billion-dollar revenue mark or threshold, and we want to ensure that we have the right infrastructure in place to support and scale the business. And that really starts at the top.
So we're pretty thrilled to elevate our co-founders John Dooley and Scott Trinque to co-chairmen of the board and continue to maximize their value and experience. They'll continue to advise on corporate strategy and financial operations and technology. For example, Scott will provide valuable insight to our core technology partners on their partner advisory boards and councils. And John will continue to drive M&A opportunities and some of our core corporate sponsorships. At the same time we also elevated some of our key executive leaders who have been really critical to our growth and culture over the history of the company, and most importantly, over the last three years with our tremendous growth. And that really starts with me. For 18 years I’ve known our business, our partner ecosystem, and our customers extremely well. I have an innate ability to build the right teams and leadership structure to succeed. And I'm really good at motivating our team and building trust within the organization.
There were other leadership changes, right?
We appointed Anthony DiLallo to president. Anthony's been with the company for 13-plus years and he was our COO [chief operating officer]. Mark Baxter was elevated to chief revenue officer to shore up the executive leadership in the next phase of the expansion. And we've got an amazing team of leaders in sales, finance ops, and technology. Some are long-tenured veterans of the company. And there are a number of fresh faces to bring some fresh outside perspective. This puts us in a great place to support the growth projections.
Has EchoStor always had separate president and CEO roles?
That's been the case since its inception. John [Dooley] was previously the CEO and Scott [Trinque] the president. We really wanted to focus on the CEO role as the innovator, the strategic mind of the organization, somebody with the ability to sustain the growth and trajectory of the company. And with my abilities and my history with the organization, that was the right fit. And they looked for Anthony to execute on the goals set by the CEO.
You mentioned building towards an annual revenue of $500 million within the next three years. What's the current revenue?
We're approaching about $200 million. It wasn't easy to get there, but we've grown 50 percent year-over-year the last three years. We're about halfway there. With the team in place today, to be honest, we can get there with some small enhancements and changes along the way. But we have our sights set on $500 million.
Is acquisition a part of your growth strategy?
It is. The solution provider market today has two different types of partners. You've got traditional regional partners, your boutique shop, that is generally top-heavy in terms of ownership, selling to clients with one or two really tech savvy sales and technical folks. But it's very top-heavy in terms of their customer base with a few top talents across sales and engineering. Generally, I see those partners tend to plateau around the $30 million, $50 million, $80 million range. Inversely, you have national partners who have generally grown through private equity and acquisitions. That can be a good thing and a bad thing. Getting that quickly to the billion-dollar mark and above can be somewhat fragmented. I think sometimes the customer experience can suffer. You're going for quantity and not necessarily quality.
I think we're somewhere in the middle. I don't think you often see a regional partner organically grow into the mid-tier of $200 million or $300 million or $500 million. We are certainly in growth mode. … We have to continue to double down on geographic expansion.
EchoStor’s geographic expansion so far was done organically, right?
Organically. I think you have to continue to look for and acquire top talent, which can yield incredible results from sales and engineering efforts and bring new customers into EchoStor. I think we've made over 50 hires over the last 24 months. So really incredibly talented folks with some great customer relationships. … We’re doubling down and going deep and wide in our customer base, and then finding new opportunities with customers that may start with security and may not be as a result of our history in the data center. But acquisitions are 100-percent on our roadmap. We're talking to a few organizations now. We’re very selective. How do they roll into the EchoStor ecosystem and the platform of services and solutions we offer? What is the culture look like? What does the DNA of the employees look like? First and foremost, we're not going to acquire and then just fold them in. We want to look for the right profile of solution providers with relationships that align with our offerings. So between geographic expansion, talent acquisition, and potentially some small acquisitions along the way, I think we have a great recipe to get closer to our $500 million goal and accelerate that journey quicker.
Has EchoStor made any acquisitions in the past?
We have not made any acquisitions.
Does EchoStor have outside investors?
No outside investors, no private equity. Our focus on financial and operational excellence shores up the back-end infrastructure. Being profitable gives the opportunity to grow organically and make some pretty significant investments along the way. So we're big on continuing to grow, being profitable, reinvesting, being profitable, reinvesting. We're doubling down on that mission. It may not get us to a billion as fast as private equity-based solution providers. But with the right culture, the right team, the right technology alignment and offerings, I think we can get there at a pretty quick clip.
What are your strategic priorities for 2024?
Our executive team has a clear message internally, which is S-Squared, C-Squared, and E-Squared. Simplify and standardize, communicate and collaborate, and elevate and execute. We have to internally and externally have the same culture, the same go to market. We have to simplify and standardize our offerings. Again, we’re not a solution provider that just sells 1,000 products and offerings. We want to be specialized in what we're bringing to market. We want to make sure we're collaborating and communicating with the voice of our customers, our partners, our internal contributors and leaders, in how we're going to go to market to support our customers. For us, it's all about the customer experience in the engagement model. …
One of the key agendas for next year is doubling down on what I call our three-to-one and twelve-to-one engagement model. So three-to-one internally means three engineers to every salesperson. We want to have a boatload of incredibly talented engineers, architects, and delivery folks support one enterprise-caliber account executive or client executive. And twelve-to-one externally means we want 12 EchoStor resources touching one customer at any given point in time. We've been in the thick of the trenches with our customers through the good times, the successful projects, the high fives, and the business outcomes in some pretty tough events. We've gone through some terrible cyber attacks or ransomware attacks with our customers where we've had to assemble a team of 10, 20, or 30 engineers and architects working around the clock to rebuild servers, et cetera. When things are good, things are good, and when things are bad, we're here for our customers. …
We’re keeping our eye on the technology landscape with AI and RPA [robotic process automation], along with cloud-based services and security. Security is huge out there. How do we continue to build it out it and move towards a zero trust framework, which is part of our security go-to-market. Cloud security, segmentation, identity protection, and secure web gateways are just some of the go-to-markets that we're looking at in the security space. I think security is going to be a massive growth engine for us.