The ink hadn’t dried on our Top 100 list of VARs when it became obsolete.
Vitale Caturano, the Boston-based accounting firm, acquired the CoActive Consulting Group to move the operation up the food chain to about $5.5 million in annual sales, with $6 million the target for the year. AccuPointe merged with Software Solutions to give the Carolinas and Virginia a Best Software reseller with a staff of 30 and sales north of $3 million. Miami-based NextLevel Information Systems absorbed Apex, a CRM dealer in Chicago. NextLevel already had $3 million in sales.
Considering that the smallest firm in Bob Scott’s Top 100 Accounting VARs (published in Accounting Technology’s April issue) had annual revenue of $2 million, the temptation is to republish the list in the July issue, given the latest changes.
It’s tempting to write this off as a Version 1.0 effort. But that would miss the point that the reselling market is changing. The death of the small VAR has long been predicted. But many of them are already gone. Many one-time powerhouses are half of their size before the post-Y2K bust. The consolidation of the accounting software vendors and the emergence of Customer Relationship Management software as the hot item it was long believed to be have fundamentally altered the landscape.
CPA firms, their affiliates, or CPA consolidators nailed down seven out of the top 15 spots, with RSM McGladrey at No. 2. But I think that’s more artifice than anything because consolidators such as American Express and Century Business Systems just aren’t powerhouses and others lump a lot of higher-end software sales and consulting services into the same pot as the mid-market. McGladrey is the one CPA/consolidator that was a power in the mid-market before consolidation and remains a power.
Next year, things will be different. If the Interdyn Group truly becomes one firm, it will easily outstrip McGladrey, currently at $40 million a year, for the No. 2 spot. We can probably expect to see EYT, which probably topped $19 million with its acquisition of In2Gr8, and Tectura, which also is now beyond $40 million annually with its absorption of Sensible Solutions, move up the list. A couple of other consortia could also change this mix, including the Esta Group, which is owned by several Midwestern Exact Software VARs, and JourneyTeam, a conglomeration of 17 former RealWorld partners, largely now selling products from Microsoft Business Solutions. If these groups coalesce as individual companies, they will instantly becom ore important.
North of the border (not measured in the Top 100 VAR list), BDO Business Technology Solutions, a subsidiary of BDO Dunwoody, moved out of the CPA environment into the arms of Concentrix Technology Solutions just last week.
The more intriguing issue in any ranking of largely private organizations is how many have told the truth about the revenue. Asked “How many lied?” when presented with the VAR list, an executive at a major software vendor says “a lot.”
This has always been a problem for the Top 100 CPA lists. It’s always amusing that some of the big CPA firms report net revenue, and then someone tries to sneak into the ranking with gross revenue. And I seem to remember at least one CPA firm which gave one set of numbers to an accounting publication and submit another to the AICPA SEC Practice section )now known as the Center for Public Company Audits.)
The real importance of such lists is not that they represent “The Truth,” but that they are rather rough yardsticks to give an industry some way of measuring itself. These things are no more fixed than the location of water in a river. While we may not know the location of a particular drop of water, we can know the size of the stream.
