DLT's Marcotte Sees Sales Grow, Readies Stimulus Strategy

Say what you will about the state of the macroeconomy -- Rick Marcotte is having a heck of a year. The president and CEO of DLT Solutions marked a major milestone in 2008, not only reaching the half-billion mark in revenue, $504 million to be exact, but also doing it a full year earlier than the goal Marcotte set when he took the top spot at DLT in 2004.

Reston, Va.-based DLT Solutions, which was founded in 1991 and does its channel business entirely in public sector accounts, enjoyed sales growth of more than 20 percent year over year in each of the past several years. It reported $340 million in sales in 2006 and $418.6 million in sales in 2007. Rigorous sales and marketing efforts drove growth, Marcotte said, and major investments in both marketing systems and processes -- "the blocking and tackling of the VAR business," he said -- kept it steady.

In 2008, for example, DLT used more than 1,900 separate demand-generation activities to build more than 26,000 sales leads for vendor partners. No one technique or activity stood out above all. The trick, Marcotte reasoned, is figuring out which one works right, then being adaptable enough to switch gears and re-assess a situation quickly. DLT Solutions uses business analytics to forecast lead generation, track results through to quotes and then, Marcotte said, adjust strategy accordingly.

"A technique that worked six months ago may not work right now, but may start working again in another month," he said in a recent Channelweb.com interview. "For example, Webcasts have gone up and down with customers over the last four years. At the end of the day, the technique that serves us best is being fast, flexible and responsive to the market and to our vendor partners."

With the economic decline wreaking havoc on VAR business in the commercial space, Marcotte has seen a number of his peers start to engage with government business -- in many cases, he said, having no idea what to do with themselves in the space.

"In essence, a lot of VARs focus on the commercial sector because it's easier. It's local, and the government market is no question a painful place," Marcotte said. "The price of admission is high. The patience is enormous and the procurement is tough. Public sector used to be the stepchild of markets, but that's changed as we've seen the commercial market really driven down over the past year. We are seeing many more entrants into the government channel due to the relative stability of the market."

What's changed most about government VAR business over the past decade or so, he suggested, was a better understanding by vendors of the rigors of government IT, and thus how to better leverage solution provider sales channels.

"Vendors are demanding more out of their partners. Mere 'fulfillment' days are over," Marcotte said. "We love that change since we were ahead of the curve in developing many true value-added business elements like a seasoned business development team, deeper technical expertise, a 24-hour service center, project management organization, exclusivity of vendors within a category, back-end systems integration and true collaboration in demand generation activities and reporting."

The No. 1 mistake Marcotte said he sees among public sector newbies is a failure to understand the government as a customer.

"Every dollar they [government agencies] spend is public knowledge. They don't have profit as a motive, either, and that generates different behaviors," he explained. "The funding mechanisms and speed are the biggest problem -- the government just doesn't have the same sense of urgency as you see in the commercial side."

Marcotte named storage efficiency, virtualization, data management, business process improvement and open source as big drivers for government VAR business in the present.

"The amount of data in government IT is huge, and you have to figure, all agencies are going to have to make big decisions about that information soon," he said. "It's also a perfect place for a niche. No one's going to come in there and unseat an Oracle database, but a smaller, niche player, if they have a tool that can access that database of information and provide useful information and analytics as a result, that's a pretty good play. You're going to be able to compete with Oracle if you have that play."

Next: DLT's Full-Court Stimulus Press

With regard to one of the hottest public sector opportunities out there, DLT Solutions has taken substantial initiative regarding the American Recovery and Reinvestment Act (ARRA), devoting an entire Web resource center to understanding the stimulus and helping both vendors and agencies maximize their opportunities through DLT.

It's an unusual step, at least among solution providers, as it has often been vendors, distributors or government agencies themselves that have come out with stimulus resources for VARs to use, not the other way around.

"What we decided to do was first, actually read the bill -- no small task. [Then], develop a 'mapping' of our primary vendors' products to the identified products and agencies within the bill," Marcotte said. "Then, analyze the bill and projects to identify and quantify the sub-elements of each major program. [Then,] provide our vendors access to the information to enable them to prioritize their ARRA targeting and opportunity assessment."

"The feedback has been stronger than anticipated," he added. "There are many requests for more information and questions from government people, contractors, reporters, vendor partners and a variety of constituents as a result of our search engine optimization efforts."

The next phase of its stimulus outreach, Marcotte explained, will be to present it on the road to vendors' public sector sales teams, and then establish "tiger teams" with vendor sales groups to identify the best ARRA-based opportunities.

It'll be that kind of laser focus applied all over the business, Marcotte reasoned, that will propel DLT to the $1 billion mark.

"Don't forget what got us here -- a maniacal focus on the blocking and tackling of the VAR business," he said. "We will raise that bar every year, and look for expansion opportunities with our existing vendor partners to go deeper."

Earlier this week, Marcotte was named as a finalist for the Ernst & Young Entrepreneur of the Year 2009 Award for the Greater Washington region. Winners will be announced June 18, but the mention is one more reflection of the esteem in which DLT is held in the government IT community.

"DLT Solutions has been a strong public sector partner for many years," said Jim Russell, Symantec's vice president of public sector, in a statement. "DLT has made large investments in their technical expertise, sales training, and engineering support for the complete Symantec line of products and solutions. We have a high degree of confidence in their ability to support our government customers with their storage and security IT requirements."