As the 2014 VAR 100 catered to increasingly sophisticated customers requiring equally complex consulting services, this year's Killer VARs all played to their greatest, customer-serving strengths.
Emerging from the pack of impressive technology consultancies and resellers, these VARs are notable for their impressive growth or recent ascension to the list. Fueling their success are clear, foundational strategic plans, investments in the future of the cloud, and a little bit of educated improvisation.
Not so traditional
Top 5 firm McGladrey's technology consulting practice reported more than 46 percent growth in revenue over last year, which principal and national ERP/CRM leader Steve Ems credits to not being a "traditional VAR."
Instead, McGladrey aims for diversification and flexibility in client relationships, going beyond mere selling and implementation of their software portfolio, which includes NetSuite and Microsoft Dynamics.
"Products are a means to meet particular business needs and objectives, which is our approach in dealing with clients," Ems shared. "We have the subject matter expertise."
While finding these experts continues to prove challenging, as it has for all resellers, McGladrey has made a more concerted effort to "hire young, smart" consultants that they can train and certify to join a pool of talent that grew 27 percent this year.
It's a group that also expanded in breadth of knowledge, as McGladrey recently combined its technology and management consulting practices into one holistic unit. "They meet with clients and cull the true value out of the system, the business process implementation, strategy, execution, product management," Ems explained. "All those things create a solid team approach."
The assimilation has not been without the typical growing pains, which Ems views pragmatically. "It's less of a challenge and more of an opportunity, the integration of the technology management consulting team into the traditional ERP deployments," he said. "The individuals who are part of management consulting are a phenomenal group of people with unbelievable industry experience."
Leveraging their knowledge with Dynamics CRM and NetSuite's cloud offerings, these teams have recently targeted private equity prospects in an initiative that McGladrey started three to four years ago. "On the technology side, over the last year and half, we've had some solid traction," Ems said. "It's an area where we've worked on the brand and created awareness around the services and depth of capabilities as private equity groups look for single-source companies to manage various proposals."
McGladrey's suite of services come from significant, and continued, investments in the cloud, as a longtime, award-winning Microsoft Dynamics partner, and a three-year partner with NetSuite (which named McGladrey its 2014 Worldwide Solution Provider Partner of the Year). McGladrey continues to add new capabilities, like infrastructure as a service, private cloud hosting, and cloud-based financial advisory and accounting services.
"We're also looking to Microsoft for cloud strategy going forward, and not just ERP," Ems said, outlining a future that remains strong in strategic vision but adaptable in execution. "Going forward, it's critical to keep on the path with a defined strategy and executing on it. ... We [also] have flexibility, as we continue to evaluate new options as it relates to overall services and product offerings. ... I'm more excited about today and the future."
NexTec Group's growth over the past couple of years, including a 34 percent reported revenue increase in 2014, has outpaced the historic 15 percent revenue increases that the Gold Certified Microsoft Dynamics and Sage partner experienced in the previous 10 to 12 years, according to co-founder and president Eric Frank.
He credits NexTec's vertical strategy, primarily with its large food industry customer base, for that success: "It's an interesting time in the [ERP mid-market]. For a long time people were talking about wanting deeper, more vertically integrated solutions, and resellers and consultants focused on that area. For the past few years we've re-oriented to be focused on these verticals, working in manufacturing and distribution."
Specifically, Frank continued, NexTec has leveraged its domain knowledge to both align solutions to, and enhance them for, the food industry. "We have the knowledge and have developed add-on products in the food industry that at the end of the day are helping us win big deals," he shared. "It's always been a relevant part of our client base, but in the last two to three years we've put a strong strategic emphasis on making it one of the core areas we focus on."
The most recent solution, developed over the last 18 months, is an automation platform for the radio-frequency identification tagging that food industry clients do in their manufacturing and distribution facilities.
At the same time, NexTec has tracked significant growth in its Microsoft and Sage CRM practices over the last three years. "In that area, we see enormous opportunities for customers to do better with the solutions they have," Frank explained. "It's a macro trend, of a lot of people using CRM, but not using it very strategically or effectively. There's an insatiable demand for people to help them with that trend."
NexTec is careful, however, to not follow every hot software trend. "There's lots of talk about Software-as-a-Service, and people picking up new products, and publishers shifting to new technologies," Frank continued. "It's disruptive for many competitors."
Of equal distraction can be finding talent, or "always chasing the same set of people the person next door was chasing." NexTec has adapted by bringing in people from outside the industry and investing a few years into their training and mentorship, which even as the market continues to evolve, remains one of NexTec's "core values."
Following the dotcom bust of 2001, Steve Jones and Jeremy DeSpain put their faith in the cloud when founding Explore Consulting -- when the term didn't yet exist.
Web-based technology appealed to chief executive officer Jones and chief operating officer DeSpain for its development flexibility, an advantage that they continued to exploit in becoming a NetSuite partner two years later.
"We bet on a good pony, with a lot of valuation for the future of our business, and have been loyal to NetSuite," Jones explained. "We haven't chased down SAP or Intacct. That strategy has been a good one for us."
While Explore's customer base, initially small start-ups and early adopters, increased rapidly as the gospel of the cloud spread, business has boomed even more for the last five years as adoption becomes standard, with a 49 percent increase of reported revenue this past year.
The reseller has also capitalized on NetSuite's maturation over the years-where Explore once courted customers transitioning from QuickBooks, they now seek bigger companies moving from larger on-premise solutions. That business continues to be fruitful enough for Explore to trim some of their consulting efforts and focus more intently on their NetSuite practice, which currently occupies 80 percent of their work. It has also landed the reseller numerous distinctions, including being the only NetSuite VAR to make the President's Club every year, and being named NetSuite 2014 Americas Solution Provider Partner of the Year.
Particularly attractive to Explore is NetSuite's two-tier ERP model and expanding ecosystem, according to Jones, especially as these larger customers engage in the current merger-and-acquisition frenzy. "They realize the value of a nimbler cloud environment when mergers and acquisitions are growing," he shared.
"A lot of customers, in a short two-year period, have had a major acquisition, and a lot of industries are involved in that right now. It's good for us, the notion out there of an ecosystem that people are understanding can be very nimble, with a full financial system ERP."
Continued success, Jones explained, will rely on "our ability to keep hiring people in a two-to-five-year hiring cycle, to lead initiatives, and to be able to keep up with the demand with competent resources and support them ongoing," he added, "It's been another record year for us and we're barely halfway through it. We're aggressively hiring this year, so you will see our numbers increase next year."
Selective and successful
Long Beach, Calif.
Size is central to Ignify's strategic plan, which landed the Microsoft Dynamics partner on the VAR 100 for the first time this year.
According to its chief executive officer, Sandeep Walia, the reseller achieved 36 percent revenue growth this year, based in large part on a continued targeting of enterprise-level customers. While it was already what Walia described as a business "sweet spot" for the reseller based on the executive team's prior experience with larger deals, this customer base became even more essential when Microsoft released Dynamics 2012, which subsequently became Ignify's "strongest area."
With the larger engagements come more robust implementation teams of 25 to 30 people, which include project managers, solutions architects and business analyst teams. Structure and communication are critical for these teams, Walia stressed, with Ignify's project portals serving as a linchpin of their success.
Equally vital is continued training, which the reseller provides through its in-house Ignify University, available in eight countries. "We have consistent training for new team members, along with the Microsoft training," Walia shared. "External training is too varnished - we wanted unvarnished training ... peer-to-peer. With implementation, you expect to have issues. Varnished training tells you the perfect scenario, but an implementation doesn't work that way. ... Though both [our training and guide-book training] co-exist together."
Ignify looks at three criteria when evaluating a potential customer: revenue, size and industry (retail and consumer goods are its top two verticals). With 120 current customers and plans to add about six to eight new Dynamics AX customers every year, Ignify is selective. "We are growing our business, adding on fewer customers but focused on bigger customers and projects - it's a different strategy," Walia said. "We say no to a lot of deals."
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