The climb is not impossible

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.

This illustrates the difficulty of growing a smaller business into a behemoth. But climbing the pyramid is not impossible, as demonstrated by the experiences of some of the IT channel’s biggest companies—EDS (Electronic Data Systems), CSC (Computer Science Corporation) and SAIC (Science Applications International Corporation). Founded by individuals with very limited resources, all three now inhabit the pyramid’s top floor.

H. Ross Perot founded EDS in 1962 with a $1,000 investment. The company, which HP is planning to purchase, was sold to General Motors in 1984 for $2.4 billion. Today, EDS is the largest systems management and services provider in the United States, with more than $20 billion in annual revenue. Founded in 1959 by Roy Nutt and Fletcher Jones with $100, CSC reported $14.9 billion in revenue for fiscal year 2007. SAIC, founded by J. Robert Beyster, Ph.D., and a small group of scientists in 1969, posted $8.3 billion in revenue for fiscal 2007.

While EDS, CSC and SAIC have unique stories behind their paths to success, they share a common trait: Each traces its success back to individuals that were not "technologists" by trade. Perot was a top salesman for IBM, Jones was known as a marketing whiz, and Beyster was a research physicist.

They are the exceptions, since most solution providers are founded by technical people. The birth of the typical solution provider begins with an individual offering his or her technology-related expertise to a small group of businesses, friends, or associates and then slowly growing a customer base. Much like most small businesses, some 80 percent may fail within the first year. Others will grow slowly. A select few will expand quickly, but most eventually hit a growth barrier.

The path to success
Many solution providers may feel the challenges today are insurmountable, and so they forsake growth for survival. However, though they never may become an EDS or CSC, some are clearly on the growth track and accelerating. Their experiences may serve as inspiration for other small solution providers looking for sustainable growth.

Take, for example, Neudesic, a solution provider founded in 1991 by three partners—CEO Parsa Rohani, Vice President of Technology Tim Marshall and Anthony Ferry, the company’s vice president of sales and marketing. With reported growth exceeding 1000 percent in its most recent year, the company ranked 197 on the Inc. 5000 list of fastest
growing companies in 2007.

This kind of success owes to "careful planning and using a rock-star cast," according to Marshall. "It takes a small group of innovators to build the foundation and the ability
to articulate the business value of the offerings to prospective customers to
enable growth."

Another growth success story is Artech, founded in 1992 by Ranjini and Ajay Poddar, a wife and husband team. In fiscal year 2007, Artech generated more than $128 million in revenue with 2,100 employees at 19 service delivery locations throughout the United States, India and China. Ranjini Poddar, the company’s president, said sustainable growth is no accident.

"Although we didn’t feel there was a silver bullet to success, we had proved to ourselves that through aggressive sales, prudent financial management and day-by-day practical leadership, we would succeed," she said.

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