Reaching the Top

By Frank Ohlhorst  |  Print this article Print

The paths to growth may vary, but growth is a must for solution providers with any hope of success.

There is an old saying in business: "If you’re not growing, you’re dying." The adage holds true for today’s crop of solution providers, who constantly feel pressure to evolve their businesses to adapt to the ever-changing technology landscape.

Evolution without growth, however, spells extinction for many businesses, and solution providers are no exception. Many are forced into evolving their businesses as a way to survive during turbulent times, losing sight of a more important goal—sustainable growth. This puts them at risk.

With some 105,000 solution providers currently in the United States, according to research firm AMI-Partners, growth can be a tricky proposition. Of course, growth is relative and limited by a number of factors that solution providers must master to expand their businesses successfully.

Figuring out how exactly to accomplish that is a big challenge. Even successful business owners will tell you there is no silver bullet, but rather a combination of factors, and perhaps even some intangibles, which lead a solution provider into a growth path.

"You should base and make your business model decisions on facts," said David Dadian, CEO of Powersolution.com, but he adds: "The final test for me, no matter what the numbers say, is my gut. Once you make the decision, you must forge forward and stay focused, but always remembering nothing is written in stone."

Powersolution.com was among a handful of IT channel standouts, such as Neudesic and Touchbase, who were asked by eWeek Strategic Provider to share their experiences in building strategies for sustainable growth—from the twists and turns of the road, to success, to the importance of acquiring and nurturing talent, to ongoing business assessments.

Widening gap
Powersolution.com, neudesic and Touchbase are part of a vast infrastructure of IT channel companies of various sizes—some small, some large and others that could be considered "just right." Breaking down this population reveals that a large chasm exists between small solution providers and the big players, and that thegap is growing.

Out of the 100,000 or so solution providers, only about 50 have revenue exceeding $1 billion, and that includes industry giants such as IBM Global Services and HP Services. Fewer than 250 solution providers have revenue exceeding $100 million, and the revenue numbers drop off quickly after that.

If the market were illustrated as a pyramid, a small minority of roughly 500 solution providers would inhabit the top, while the majority would make up the pyramid’s base, leaving a vast no-man’s land in the middle. What’s more, most of the larger solution providers were not grown from small businesses, but rather as spinoffs (IBM Global Services, Lockheed Martin, Siemens Medical Solutions) from larger companies, or via mergers and acquisitions (Level 3 Communications, BearingPoint, Atos Origin).

Frank Ohlhorst Frank J. Ohlhorst is the Executive Technology Editor for eWeek Channel Insider and brings with him over 20 years of experience in the Information Technology field.He began his career as a network administrator and applications program in the private sector for two years before joining a computer consulting firm as a programmer analyst. In 1988 Frank founded a computer consulting company, which specialized in network design, implementation, and support, along with custom accounting applications developed in a variety of programming languages.In 1991, Frank took a position with the United States Department of Energy as a Network Manager for multiple DOE Area Offices with locations at Brookhaven National Laboratory (BNL), Princeton Plasma Physics Laboratory (PPL), Argonne National Laboratory (ANL), FermiLAB and the Ames Area Office (AMESAO). Frank's duties included managing the site networks, associated staff and the inter-network links between the area offices. He also served at the Computer Security Officer (CSO) for multiple DOE sites. Frank joined CMP Technology's Channel group in 1999 as a Technical Editor assigned to the CRN Test Center, within a year, Frank became the Senior Technical Editor, and was responsible for designing product testing methodologies, assigning product reviews, roundups and bakeoffs to the CRN Test Center staff.In 2003, Frank was named Technology Editor of CRN. In that capacity, he ensured that CRN maintained a clearer focus on technology and increased the integration of the Test Center's review content into both CRN's print and web properties. He also contributed to Netseminar's, hosted sessions at CMP's Xchange Channel trade shows and helped to develop new methods of content delivery, Such as CRN-TV.In September of 2004, Frank became the Director of the CRN Test Center and was charged with increasing the Test Center's contributions to CMP's Channel Web online presence and CMP's latest monthly publication, Digital Connect, a magazine geared towards the home integrator. He also continued to contribute to CMP's Netseminar series, Xchange events, industry conferences and CRN-TV.In January of 2007, CMP Launched CRNtech, a monthly publication focused on technology for the channel, with a mailed audience of 70,000 qualified readers. Frank was instrumental in the development and design of CRNTech and was the editorial director of the publication as well as its primary contributor. He also maintained the edit calendar, and hosted quarterly CRNTech Live events.In June 2007, Frank was named Senior Technology Analyst and became responsible for the technical focus and edit calendars of all the Channel Group's publications, including CRN, CRNTech, and VARBusiness, along with the Channel Group's specialized publications Solutions Inc., Government VAR, TechBuilder and various custom publications. Frank joined Ziff Davis Enterprise in September of 2007 and focuses on creating editorial content geared towards the purveyors of Information Technology products and services. Frank writes comparative reviews, channel analysis pieces and participates in many of Ziff Davis Enterprise's tradeshows and webinars. He has received several awards for his writing and editing, including back to back best review of the year awards, and a president's award for CRN-TV. Frank speaks at many industry conferences, is a contributor to several IT Books, holds several records for online hits and has several industry certifications, including Novell's CNE, Microsoft's MCP.Frank can be reached at frank.ohlhorst@ziffdavisenterprise.com