Creative Disty Program Makes Small Resellers Look Big

By 2003, Bill Bowmer knew his business, Aero-Tech Communications, was in trouble--big trouble. The voice and data networking solution provider's revenue had tumbled from a high of $4.8 million in 1998 to $3.2 million in 2003. But that was just the beginning. Located in Michigan, where the economy was tanking and Aero-Tech's base of manufacturing customers was drying up, its annual sales continued to plummet year after year, all the way down to a mere $300,000 in 2006.

"The business was lost," says Bowmer, president of the 21-year-old company.

But thanks to a creative alliance promoted by Tarrytown, N.Y.-based Westcon Group and Nortel Government Solutions, Aero-Tech is back from the brink and poised to rebound this year. As of May, sales at the VAR have reached $500,000 and Bowmer expects to surpass $1 million by year's end.

The company's recovery is predicated on a shift in business models. No longer selling solutions to manufacturing firms and other commercial customers, Aero-Tech now sells into the federal government market after qualifying for a program run by the Small Business Administration that sets aside procurements and other funding for so-called small disadvantaged businesses (SDBs), many owned by minorities, women or disabled veterans.

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As a distributor, Westcon has taken an active role in pointing its partners that qualify as SDBs--such as Bowmer, who's a services-disabled veteran--to the federal program. Westcon provides guidance throughout the process of applying and garnering the SDB certifications, and then internally offers those partners special credit options, training and technical support through its ConvergencePoint SMB program. The goal is to make it easier to land federal projects, such as the ongoing one Bowmer has inked with the Michigan Army National Guard.

"We provide the tools for small partners to win big in the federal marketplace," says Stuart Schwartzreich, director of federal business for Westcon Group North America. "Many integrators want the small VARs to be the sub on these deals. We want them to be the prime."

Schwartzreich says that, remarkably, only a fraction of the money available through the federal program for SDBs is being tapped; there's an estimated $14 billion earmarked for the program, but less than $5 billion has been accessed. This untapped opportunity prompted Westcon to direct its own VAR partners to the initiative.

As part of this effort, Westcon has partnered with Nortel Government Solutions to open up that entity's professional services resources to its SDB-qualified government resellers, which is a way to "make a small partner look very big," Schwartzreich says. The Westcon VARs that participate must be Nortel-certified partners as well.

"Under the Westcon model, Nortel is our foundation vendor," Schwartzreich says. "Our strength is in the voice marketplace, so we identified with Nortel and wrapped most of our programs around the Nortel product strategy."

So far, Westcon has 55 solution providers in the program and estimates that the addressable market of partners could be in the vicinity of 1,000.

Since getting involved with the program in 2006, Aero-Tech has been awarded a number of projects for the Michigan Army National Guard, including installing backup systems and emergency switches as part of the funeral plan for the late former President Gerald Ford. In addition, the company has just upgraded two National Guard armories with Nortel voice messaging and VoIP equipment and has three pending quotes for significant fiber and wiring upgrades to various armories across the state, according to Bowmer.

In each of those deals, Bowmer used the engineering services at Nortel and financial assistance from Westcon to win contracts that normally would be out of reach for a company the size of Aero-Tech.

"This has helped save our business," he says. "What this program does is give you an opportunity you won't get on your own. The National Guard isn't going to come to us without Nortel and Westcon."