The solution provider pursues a multivendor approach in its quest to be sole-source supplier for customers.It’s a conundrum: Users want fewer IT suppliers, but their evolving computing needs demand products from a greater variety of sources.
So a customer either learns to cope with having to procure technology and services from various suppliers or seeks out one supplier that can handle everything. Logicalis wants to be that supplier, which explains why the $500 million Bloomfield Hills, Mich., solution provider has embarked on an acquisition spree in recent years. Logicalis’ goal is to strengthen its product and service portfolio to become the only provider of technology its customers need, say company executives.
“Customers like fewer suppliers,” said Logicalis CEO Mike Cox, who is taking over as chairman in March. “We understand exactly what the customer needs; we have to. Then we sell them exactly what they need, and we can do that because we have such a broad product portfolio.”
Logicalis is a premier channel partner for some of the industry’s biggest---name vendors, including IBM, Hewlett-Packard, Cisco Systems, EMC and Microsoft. Logicalis’ product roster brims with brands in multiple technology areas.
And that, of course, poses certain challenges, Cox said. Vendors prefer to work with partners dedicated exclusively, or at least primarily, to their brands.
“They’re looking at it from the perspective of maximizing their sales, their brand,” Cox said. “We walk a fine line that way.”
From the perspective of most customers, though, brand is secondary to their IT business requirements, Cox said. And that’s why channel companies that want to be a single source of technology have to embrace a multivendor strategy.
Of course, carrying product alone is not enough, so Logicalis has put a lot of effort into building a broad services portfolio that includes everything from application development and integration to security assessments to network design and configuration. The company also offers remote network monitoring and management out of its network operations center in Cincinnati.
In January, the company was to launch a managed services division. Through managed services, providers remotely take over some or all of their clients’ computing functions and charge them fixed fees for the service.
Logicalis boosted its services and consulting offerings with the acquisition in September of Computech Resources, a $35 million IBM Premier Business partner in Green Bay, Wis. Computech agreed to the sale because it concluded Logicalis had good intentions, said Ed Konopasek, former Computech executive vice president and now director of sales with Logicalis.
“They genuinely drilled into our go-to-market process and our territory management procedures,” Konopasek said. “We were convinced that they were a strategic buyer.”
Founded in 1999 through a three-way merger, Logicalis is a subsidiary of London-based Logicalis Group, itself owned by Datatec, whose holdings include IT distributor Westcon Group.
Logicalis’ U.S. operation has grown into one of the country’s largest solution providers, with more than 500 employees and the goal of closing 2007 with $750 million in revenue. Much of the company’s growth stems from its acquisitions in the last three years of three IBM VARs, one HP VAR and a services company.
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Cox took over as CEO in 2001 when Logicalis was marginally profitable. To reverse the company’s fortunes, Cox implemented a cost-cutting and restructuring plan that included layoffs. It was an experience he would rather not have to repeat.
“It was hard to let people go,” he said, adding that keeping the remaining employees motivated and inspired was no easy task, either. Today, instilling a sense of job security in employees is high on his list of priorities, along with keeping the company vendor-agnostic and continuing the acquisition spree. ´
