There are more accounting software resellers performing well of late than over the past few years, but the ones that continue to excel are doing so more through the range of services they offer, rather than via straight software sales or even acquisitions.

What's more is that the true "Killer VAR" - the one that continues to outperform most others and exceed their own numbers regardless of economic conditions - may not even want to be referred to as VARs.

These days, many of the top performers in the accounting software world see themselves as business consultants with technology expertise, rather than as sellers of licenses and products.

This isn't to say that software sales do not factor in to making a Killer VAR, nor does it necessarily preclude a top ranking in the Accounting Today VAR 100 (released last month). But increasingly what is defining the exceptional resellers is their ability to adapt, expand their offerings, seize acquisition opportunities where applicable, and sell services as well.

 

Adding products, services

Clients First Business Solutions

Holmdel, N.J.

It's never easy to represent competing accounting and ERP brands, especially with companies hesitant to make any new technology investments, yet Holmdel, N.J.-based Clients First Business Solutions has accomplished this task and more. The firm not only increased its already rich product line over the past year with the addition of Epicor, but saw its overall revenue rise by 10 percent to $14.1 million.

Clients First, which also represents ERP products from SAP, Microsoft Dynamics and Sage, claims that its ability to simply remain focused on its clients' individual business needs has been the key to its exceptional growth, according to chief executive Sheldon Kralstein.

"Our strength lies in understanding the challenges and issues facing medium-sized enterprises. We believe in building relationships for life and in giving all our clients the undivided attention they deserve as we're also building success for our clients, and we do it one project at a time," said Kralstein. "The challenging economic environment has been felt by the entire industry, and Clients First is no exception. We have focused our efforts on identifying opportunities with real and tangible business pain, and worked on showing the business value for a new or upgraded solution in terms of ROI, improved efficiency, improved customer service, and gaining a competitive advantage."

 

RSM McGladrey

Minneapolis

Another firm that saw dynamic year-on-year growth, and is no stranger to carrying multiple accounting and ERP product lines, is the tech consulting group of national accounting firm RSM McGladrey.

The firm has been a top VAR for years, and in the current economy it found that expansion of product offerings - cloud-based in particular - as well as consulting and technical services were the keys to its success.

Having significant financial backing did not hurt either, according to Jonathan Caforio, national leader of technology services at McGladrey. "Providing more than a single platform or product helped us with some of the growth we experienced, as well as having our people trained. Also, the ability to really provide value after the fact, whether it's [business process outsourcing] or [IT outsourcing] services," he said. "We are doing better now because we have the dollars behind us and can capitalize on opportunities as they are happening, rather than after the fact. I want to be larger and more relevant to our client base."

McGladrey's tech consulting group is still positive about ERP sales and overall growth in this area of its practice, but is also seeing further attention from clients wanting cloud-based solutions, and its alliances with most of its key vendors are growing in importance as well. McGladrey has long represented products from Sage and Microsoft, adding in Deltek and, more recently, SAP, Intacct and NetSuite.

"Over the last 12 months, McGladrey has been about creating value around the ERP system, and when I think about growth it's the solution-minded approach that wins out," said Bill Kracunas, technology practice leader for McGladrey's East region. "Even with the emergence of cloud solutions such as NetSuite and Intacct, Microsoft is also creating more value for our clients."

 

All about the cloud

Demand Solutions Group

Los Gatos, Calif.

There is little doubt that the cloud, or Software-as-a-Service, is the future of accounting and ERP products for businesses and CPA firms alike, and many of the top resellers have already begun to take advantage of it. In the case of Demand Solutions Group, the firm built virtually its entire practice around representing SaaS products - NetSuite in particular - and over the past year has seen its revenue grow to $4.7 million in 2010, up from $2.8 million in the prior year. The firm is clearly seeing a shift in businesses' thinking when it comes to ERP, particularly among technology-centric clients and companies simply looking to reduce IT overhead costs.

"There seems to be an increase of activity in the high-tech sectors and the medium-to-large-sized companies are definitely showing a lot of interest in the cloud," said DSG principal Todd Fitzwater. "The concept of 'cloud' has also matured. Where once we had to convince customers that they should consider the cloud, we are now regularly being asked to come tell them about our solutions. It is rare anymore for a search to be done and not include at least one cloud-based solution. In fact, in the CRM market no one looks at anything except cloud. The ERP market is now showing significant signs of acceptance as well."

Fitzwater added that larger software vendors such as SAP and Microsoft speaking about or offering some version of cloud software has lent more validity to the concept of the cloud and ERP, which he claims will only positively impact his business.

 

Tribridge

Tampa, Fla.

Also familiar to top VAR rankings is Tampa's Tribridge, which is seeing a large shift to cloud computing services - so much so that last year the firm launched a cloud services division to deal with customer demand.

Tribridge, which has represented Microsoft Dynamics products during its entire 13-year tenure, has seen a steady increase in revenue over time, and its most recent spike was due in part to interest in its hosted ERP services. The firm can deliver any Dynamics ERP product via its Concerto solution, and sees revenue from being able to do so growing in the future.

"When we look forward, the things that are going to drive our growth are the cloud and industry IT that we developed, such as things we build on top of the ERP we sell," said president and chief executive Tony DiBenedetto. "The combination of us developing niche solutions and the cloud will mean 35-40 percent growth for us. We are also eyeing some key acquisitions, too, targeting some companies that make sense to us."

 

Growth by acquisition

Net@Work

New York

Many of the top VARs achieved their status through years of strategic purchases and mergers, and that trend does not appear to be abating anytime soon. One firm that has clearly taken advantage of an acquisition strategy has been New York-based Net@Work, which due to its 2010 purchase of Seattle-based Sage reseller Forepoint LLC became a national firm.

Even amid the worst of economic times, Net@Work continued to see revenue climb due in large part to its buys, yet co-founder Alex Solomon attributes the firm's success to more than just its penchant for purchasing.

"A big part of our growth is not so much from acquisitions, but cross-selling to those acquisitions," said Solomon. "Our document management, CRM and HR have all been big, and we have rebuilt our inside sales to focus on x amount of customers to better understand the needs of those specific customers. Each sales person also has a vertical plan, and our close ratio has gone way up over the past few years."

Armanino Consulting

San Ramon, Calif.

Notable purchases have also had a positive impact on Armanino Consulting, which bought Fullscope West (also known as 1 Source Solutions) in August 2010, allowing the firm to expand its already successful Microsoft Dynamics business by adding in a Dynamics AX practice. In addition, the firm also nearly doubled its revenue between 2009 and 2010 due in part to the acquisition, but partner-in-charge Tom Mescall doesn't give all the credit to its purchasing power either.

"It boils down to two things we've done in the last 2.5 years. We questioned ourselves [as to] what kind of consulting firm do we want to be, and the second thing is that we will not provide a consulting service without a technology component," he said. "We have been aggressive, but we also invested in areas such as Dynamics AX, business intelligence, budgeting, planning and forecasting through a relationship with Adaptive Planning. Ultimately your main cost is your people. It's difficult to make the right investments and I think we've done a good job of making those investments in the last couple of years."

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