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CHANNEL OUTLOOK: MEDIUM DOES WELL

Friday, Jan 07 2011
News and Analysis
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The inverse of the statement that the big do very well is that the small do really badly. And while the market may not be rigidly delineated along those lines, it’s clear that small VARs are looking for safety. However, it’s probably more accurate to say, the mid-size do well, because there’s some talk that the giant VARs aren’t as strong. But in the in-between category is a company like Atlanta-based Ibis, whose owner, Andy Vabulas, reported that it had a 30 percent increase in revenue for 2010, around $17 million. Two factors stood out: the addition of Dynamics AX, whose higher price points are going to raise revenue if you can sell, to the previous lineup of Dynamics GP and CRM. The other was “basic blocking and tackling.”

Another Dynamics VAR, Carrollton, Texas-based Aztec Systems had “our best year ever,” according to CEO Andrew Levi, whose company sells Dynamics GP/NAV/SL and CRM and RMS. That company was expected to close 2010 with $8.1 million in revenue. Factors cited by Levi included fewer competitors which balanced out the fewer deals. “Small guys are folding left and right,” he said. And the other factor was similar to Vabulas’ comments about executing the basics. That includes pumping money and effort into marketing. “We pulled out all the stops in getting creative,” he said. On the Sage side, there aren’t as many VARs in the $5 million to $15 million category and the reports sound more like “OK” than “great” when describing 2010 business. But in a similar way to the impact of Dynamics AX, Sage’s X3 application is raising revenue expectations. Jeff Roth, CEO of SWK Technologies of Livingston, N.J., said his company had several X3 deals in the pipeline. SWK has also become an X3 developer.
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