5 Companies That Came To Win This Week

For the week ending Aug. 2, CRN takes a look at the companies that brought their 'A' game to the channel.


The Week Ending Aug. 2

Topping this week's roundup of companies that came to win is Apple which, after three losing quarters, finally managed to get revenue in the win column this week. The company posted modest gains, but gains nonetheless, including growth in its services business.

Also making the list is solution provider superstar CDW, which found a way to outdo the stellar growth it experienced last year. CEO Chris Leahy gave investors some insight into the company’s M&A strategy, revealing that CDW is always looking for acquisitions.

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Not everyone in the IT industry was making smart moves this week, of course. For a rundown of companies that were unfortunate, unsuccessful or just didn't make good decisions, check out this week's 5 Companies That Had A Rough Week roundup.

Apple Earnings Back On Track

Apple Tuesday reported that overall revenue for its third quarter of fiscal 2019 ended June 29 climbed year over year—marking the company's first revenue increase in three quarters.

It wasn't a big jump—revenue was up 1 percent from the same quarter a year earlier, reaching $53.81 billion. But it still showed the strength of Apple's Mac, iPad, services and wearable businesses at a time of diminished demand for the iPhone.

The Mac and iPad portfolios have received heightened attention from Apple thus far in 2019. For Mac, the company has unveiled updates to all three of its MacBook Pro models, along with refreshes to the MacBook Air and iMac, and a major redesign of the Mac Pro.

For its fiscal third quarter, Apple reported that Mac revenue rose 10.6 percent to $5.82 billion. The company is "very happy" with the results, CEO Tim Cook said during a quarterly call with analysts. The MacBook Air and MacBook Pro, in particular, saw "strong performance" during the quarter, Cook said.

Cupertino, Calif.-based Apple also saw surging growth in its wearables, home and accessories business during its fiscal third quarter, up 48.2 percent year over year to $5.53 billion, and continued momentum in services revenue, up 11.3 percent to $11.46 billion.

CDW Reports Strong Second Quarter, Charts M&A Path

It was Chris Leahy’s second earnings call as CEO of the massive solution provider that she took over in January, and did she ever deliver. The company reported revenue of $4.6 billion for its second quarter ended June 30, an increase of $444 million compared with the same quarter last year, on the back of strong performances from every division, Leahy said.

“Our double-digit sales increase was driven by excellent results across all five of our U.S. channels, each growing high single digits or better,” she told investors Wednesday. “U.S. customers remain focused on client devices to meet growing needs from full employment, as well as refresh, driven by older equipment, new use cases and new security features. At the same time, customers continue to modernize their IT infrastructure and adopt more flexible architectures.”

Leahy said Vernon Hills, Ill.-based CDW is “looking constantly” for M&A targets.

“We are in the market. We're looking constantly; we are proactive. We tend not to be reactive, as you know,” she told analysts. “The way we think about it from a strategy perspective is kind of pretty straightforward. Two things: expand our solutions capabilities or extend our services capabilities. Those two things plus geo expansion, that's essentially how we think about M&A.”

Microsoft Bolsters Azure Data Offerings With Acquisition Of BlueTalon

Data governance and security are significant concerns for businesses, organizations and government agencies moving to a cloud computing architecture. Microsoft, Redmond, Wash., made a savvy acquisition this week that will enhance the data security and data governance capabilities of the Azure cloud platform.

Microsoft acquired BlueTalon, a Redwood City, Calif.-based developer of software that removes "blind spots" in data security while also providing improved visibility and control of data. Adding the technology to Azure will provide IT management with centralized data governance while ensuring that the right people have access to the right data, according to Microsoft Azure executives.

Azure is a critical component of many cloud migration and digital transformation projects. Adding these data governance and security capabilities to the cloud platform is a winning move by Microsoft.

Fortinet And SD-WAN, A Winning Pair

Fortinet executives said the company capitalized on its SD-WAN cost and performance advantage to land six SD-WAN deals greater than $1 million in the second quarter.

The Sunnyvale, Calif.-based platform security vendor said its FortiGate next-generation firewall product is dominating the SD-WAN market, with interest fairly evenly spread across Fortinet's low-end, midrange and high-end FortiGates, according to CFO Keith Jensen.

The SD-WAN surge has also driven interest in other Fortinet Security Fabric products, Jensen said, with about 70 percent of SD-WAN deals having a services component in the mix. And since FortiGate is part of the FortiOS operating system, customers can rely on an integrated single box covering both security and SD-WAN networking that's easy to manage, said Ken Xie, Fortinet's founder, chairman and CEO.

"We feel we have a much better, broader and more advanced approach," Xie told Wall Street analysts Thursday. "We see a huge potential going forward."

Xie chalked much of Fortinet's advantage in SD-WAN up to the company's proprietary ASIC chip, which he said gives the company a leg up in price. In order to address the security needs around SD-WAN, Xie said many competitors have resorted to adding computing power or having multiple boxes, both of which come at a high cost.

MSP Logically Acquires Sullivan Data Management

Portland, Maine-based MSP Logically is acquiring Sullivan Data Management in a move that expands the company’s presence on the East Coast.

“What started us on this journey was looking at the market, looking at consolidation and deciding whether we were going to lead or be led,” Logically CEO Chris Claudio told CRN. “We’ve decided that we’re going to lead and be part of the consolidation and be a platform for what we are doing now. The private equity world has woken up to the fact that MSPs, good ones, are actually really good businesses if they’re run right, if they have a good business model.”

Claudio said two examples of MSPs run right are Logically and its acquisition, Sullivan Data Management. The Yorktown Heights, N.Y.- based company works with public customers as well as nonprofits, which aligns well with Logically’s customers, Claudio said.

“They have a great business,” he said. “They have great clients. They have a great leader in [CEO] Glenn Sullivan. We really like their business model, but the geography was a key factor there,” Claudio said. “New York is a great market. It’s north of the city a little bit, so it’s not in the heart of Manhattan, with heavy competition. But it does get us into the New York market.”