We examine the strategies and challenges faced by the most successful value-added resellers in the government market.
It’s probably no surprise to see the same large integrators on the annual Top 100 list of the largest government ontractors.
But companies such as Hewlett-Packard Co. (No. 7) and Science Applications International Corp. (No. 4) don’t achieve their success in a vacuum. Value-added resellers help boost the big companies’ revenues, and in the process, they create major business for themselves, earning them their own spots on the list.
Resellers have to work a little harder than their vendor partners to maintain those spots – or even improve their rankings – because they’re dealing with change on two levels. First, they must adapt to changes in the overall marketplace. Second, they must acclimatize to shifts their vendor partners make. To accommodate those situations, resellers say they must stay agile and on top of trends, federal mandates and their partners’ new products.
At Carahsoft Technology Corp., a government IT solutions provider that holds the No. 65 spot on this year’s Top 100, up from No. 74 last year, trends such as everything-as-a-service and cloud computing are a boon to business.
“We view these as accelerants to our business,” said Craig Abod, president of Carahsoft, which works with vendors such as SAP, VMware Inc., Symantec Corp. and EMC. “Our vendor and reseller partners and customers need us to be there with cost-effective solutions that support them as the technology landscape changes and evolves and new technology mandates are put in place.”
Iron Bow Technologies President and Chief Executive Officer Rene LaVigne said the company’s ability to predict trends such as virtualization and data center consolidation helped bolster the company’s business, earning it the No. 34 spot on the list. (Its former parent company, Apptis Inc., held that spot last year. Apptis Technology Solutions spun off into Iron Bow in January 2010.)
“Two areas that have been just explosive for our business are unified communications and collaboration,” LaVigne said. “From a collaboration standpoint, we are one of the largest, if not the largest, players in the space doing video implementation. That stems from a robust relationship with Tandberg and Polycom [Inc.] as well as Cisco [Systems Inc.], and with Cisco’s acquisition of Tandberg [in 2009], it pushed us even further down the line.”
Cisco is Iron Bow’s largest partner, but it also has relationships with Dell Inc. (No. 19), HP, EMC, NetApp and McAfee Inc.
The ongoing market transformation in terms of government agencies not owning technology in the as-a-service scenario is still volatile, LaVigne added.
“It brings about a new economic model into play,” he said. “I don’t think there’s a one-size-fits-all, particularly in the federal government space. There will be lots of customized situations that folks will be looking to leverage.”
At Mythics, focusing on a single partner gives it a specialist’s edge, said Gary Newman, the company’s chief operating officer and executive vice president. The company is an Oracle Partner Network Platinum member, Oracle GSA Schedule Holder and Oracle value-added reseller that claimed No. 72 this year, up from 85 in 2011. Still, Oracle’s recent strategies have left Mythics racing to keep up.
“Over the last few years, they’ve purchased 80 or so different companies all with slightly different technology,” including hardware, which is a whole new realm for both Oracle and Mythics, Newman said. “We really are trying to stay ahead of the curve in terms of understanding the technology and being able to sell the technology.”
In the tech world, change and adaptation to it are nothing new, said Terri Allen, who joined DLT Solutions as executive vice president of sales in December. Neither are federal budget constraints and the need for government customers to do more with less.
“We know IT architectures are becoming increasingly more complex, the threats against our customers and their data are growing each and every day, and all these requirements are expanding while their budgets continue to get tighter and more constrained,” Allen said. “These challenges are not necessarily different. Challenges are getting more complex while the adoption curves are getting smaller.”
DLT nabbed the No. 88 slot on this year’s list, up three notches from 2011.
The challenges may be many, but so are the resellers’ approaches for meeting – and overcoming – them.
Carahsoft, which crossed the $1 billion revenue mark last year, seven years after its founding, is seeing growth in its cloud, virtualization, cybersecurity and big data business.
“We are expanding our business units, in many cases doubling the staff and support we make available to our customers and partners,” Abod said. “Scaling in terms of new hires, training and related infrastructure in advance of anticipated demand has been a mainstay of our strategy.”
Early bets have helped DLT stay ahead of the game, too, said Brian Strosser, senior vice president of the company’s corporate sales and strategy. “We established a cloud advisory group led by our chief cloud technologist, David Blankenhorn, who has organized this team of business and technical resources to help our government customers navigate the cloud,” Strosser said. “With government initiatives such as Cloud First [and] Shared First … we feel that DLT is well positioned to help our government customers with these challenges.”
In the past year, Mythics stood up a technology innovation center in Chantilly, Va., to help customers understand Oracle Engineered Systems. “We think that will be a major factor in us being able to demonstrate Oracle products over the next few years,” Newman said.
Other companies are turning the focus inward. Iron Bow, which is nearing the $1 billion revenue mark, is shifting its business model based on its growing size. “We don’t sneak up on folks any longer. We’re on everyone’s radar. We’re on large systems integrators’ radar, we’re on competitive radars,” LaVigne said. “There’s no more sliding up and stealing something because folks weren’t paying attention to you. A billion dollars gives you that connotation of being pretty big, yet we’re only 350 [employees].”
The common theme among the resellers is that whether the fine-tuning happens outwardly or on the down-low, progress depends on it.
“Those who don’t change or continue to evolve their business models are just not going to survive in this environment,” Allen said.