VAR 100 Jockeying for Position

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There’s a fight in the middle of the pack of “Accounting Technology’s” VAR 100 list to reach a size that makes survival more likely. Tectura and Columbus IT Partner still rank 1 and 2, as they have since this ranking began in 2004.

But RSM McGladrey rose to a solid No. 3 as its revenue moved up with the revenue for ePartners continuing down.

Much of the change came from acquisitions in 2006 and 2007.

Partner Insights

Macdonald Consulting was purchased by Blytheco; MicroAccounting Systems, was bought by the MIS Group and Information Systems Management picked up the Arizona operations of BCS/ProSoft. But the M&A story was more about VAR 100 members purchasing smaller organizations to enter specific cities or vertical markets.
The MIS Group, which counted only the December results for Micro Accounting in its $30 million for last year, will have the benefit of the $8 million MAS sold in 2006.

The VAR 100 remains overwhelmingly comprised of Microsoft resellers, with 14 handling only the Microsoft Dynamics line, including the top five. But the Sage channel is moving up, with four VARs selling only Sage products, up from two in 2006.

None handled QuickBooks Enterprise Solutions in 2006, but Intuit had not started a channel program for its mid-market accounting package then. This year, four made the list: one Dynamics reseller, one Macola and two Sage.

Revenue of the No. 100 firm increased slightly, with $3.7 million compared to $3.52 million last year. The threshold may have crossed $4 million if some of the resellers who did not provide information on which to estimate revenue had participated.

Including Sage’s Timberline resellers also impacted rankngs, as many have spread into the traditional ERP market, and it seems likely that next year’s selection will show the impact of other non-traditional players, such as Deltek.

The Rand Group, a Dallas-based Dynamics reseller, has made one of the largest jumps among those on the list the last three years, jumping from No. 84 in 2006 to No. 38 this year. It moved into Austin last year and is entering the Chicago market.

Regional expansion was a big trend in 2007. Many VARs became multi-regional organizations. Few operate in all regions of the country, but Laguna Hills, Calif.-based Blytheco is the closest. Fewer American dealers seem to be operating abroad than in 2006, however.

VAR 100: The Selection

Companies that were picked for inclusion in the VAR 100 list sold mid-level accounting software packages and were selected based on their status on Dec. 31, 2007, unless otherwise noted. In a few cases, pro forma results were used.

Virtually all companies listed here are privately held and they provided revenue figures. If they declined to disclose this information, “Accounting Technology” made estimates based on staff size, adjusted for such factors as the price range of products offered. Companies were asked to explain any anomalous changes or reports of revenue that appeared to be unusual on a per-employee basis.

Companies that did not respond to requests for information were not considered for selection regardless of past performance or vendor awards.

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