VAR Offers Leasing, Asset Disposal Services To Other VARs

That message so appealed to David Klauser, president and CEO of Gravity Data Systems, Oakbrook Terrace, Ill., that he not only decided to partner with Irvine, Calif.-based Insight, but shut down his company and went to work for Insight, bringing along three of his employees.

"I had venture capital money available," Klauser said. "But I thought, 'Do I want to do this on my own or tie in with someone else?' Then I found this company and found them able to sustain the growth I need."

For Klauser, who now serves as Insight's area director of sales for the northern United States, becoming a part of Insight means being able to bring new financial and asset management services to many of his 150 clients.

"I realized I could do a lot more for my customers and have more fun with Insight," he said. "And I'm humble enough to admit I can do a lot more with Insight than by doing it on my own."

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That is the kind of feeling that Insight hopes to replicate with smaller solution providers across the country who cannot offer those services on their own, said John Ford, Insight CEO. "We'd love to talk to VARs about the opportunities," he said.

Those opportunities include Insight Financial Services, which currently has over $300 million worth of IT assets in its portfolio and which last year generated revenue of about $110 million. The company also includes Insight Systems Exchange, which helps customers dispose of their used equipment, as well as a solution provider arm, Insight Integrated Systems, with annual sales in the $40 million range.

For Insight, the three businesses actually help each other. For instance, its solution provider arm can identify leasing opportunities for the leasing arm and bring older IT equipment sources to its asset disposal arm. The leasing arm can identify sales opportunities for the solution provider side and dispose of off-lease equipment with the asset disposal business.

Matthew Neally, senior vice president and director of national sales at Insight Integrated Systems, compared having a sister organization specializing in leasing to being a professional services arm to companies like Network Appliance, the solution providers largest vendor partner.

"NetApp is not geared towards supporting small- and midsized businesses through the channel," Neally said. "Internally, they don't have the resources for it. We're trying to convince them to move some of their direct services to us, and put more of their own services to supporting smaller partners."

Insight's strategy is to talk to customers about the right way to acquire IT assets, whether it's a purchase or a lease or whether its through Insight or another solution provider, said Joe Healy, senior vice president and national sales manager for Insight Financial Services.

"It brings credibility to a solution provider that has a partner that can bring our kind of strategy," Healy said. "If we see a hole we can fill, we absolutely want to talk to the VAR."

Partnering with other solution providers is one way to grow Insight's financial and IT asset disposal business, Ford said.

"Insight has no issue with not competing with another VAR," he said. "We encourage VARs in the $8 [million] to $12 million range to work with us. If it's a $20 [million] to $25 million VAR, maybe they will get a little paranoid. But I'm not going to go to Atlanta and set up an office to take someone's business."

Klauser said Insight is hoping to encourage solution providers to work with Insight in bringing creative financing to their customers. "I know the smaller VARs in Chicago," he said. "I'm not threatened by them, and they aren't threatened by me. If they get a deal, we can help with financing."

Healy also said smaller solution providers can work bring Insight for financing and asset disposal help without worrying about losing customer control. "I respect who brings us to the dance," he said.

Nealy said Insight has been in discussions with a few small solution providers about possibility of acquiring them, but so far has not done so. He said the company has no plans to expand by acquisition, adding to the channel consolidation trend.

And while a small solution provider working with Insight should not expect to be acquired by Insight, anything is possible, Ford said. "Working with smaller VARs is a great way for us to grow our business, and a great way for a VAR to get to know us," he said.