In the 15 years since ChannelPro-SMB magazine debuted in March 2007, the channel—and the IT industry—have experienced a lot of changes. We decided to touch base with four people who were featured on our cover during that first year, find out what they’re up to now, and get some of their reflections on the evolving channel.
Cindy Colonna
Then: President and owner of IT solutions provider Team Technology, a woman-owned Matthews, N.C.-based business Colonna co-founded in 1997 as a staffing firm that had added a vertical focus on the distribution industry, primarily selling Microsoft Dynamics NAV-based custom solutions and services.
Now: Retired and traveling the country on bicycle via Rails-to-Trails routes with her husband. Colonna sold her 20-person business in 2014 and stayed onboard for two years to help with the transition. “I worked with a mergers and acquisition company in Charlotte and found a wonderful fit. The new owner was just great; we had an instant connection. I needed somebody that wanted to continue the business and grow it and still take care of the associates. …that was also very important for me.”
The Changing Channel: “Microsoft was taking the direction of the software that we sold, the Dynamics NAV, [and] started moving that towards a software-as-a-solution or subscription-based model, so we had to kind of move that way as well. That takes a lot of time, and it takes volume to be profitable … We had to understand and learn the cloud industry, which was very different than on-premises software.”
Challenges: “Microsoft was our biggest vendor. They were constantly changing the business model of the partnership model, who you dealt with, so that was always a challenge.”
Advice and Wisdom: “You need a business model. You need to understand what it is that you’re building, and you need to realize that you can’t do it all. Do you need to surround yourself with people that are successful at other areas of the business? You know what your skill set is. You need to make sure that the other areas are covered. … We had a lot of fun starting out. I think maybe not knowing what we were doing so much was probably a good thing.”
Aaron DeMatteis
Then: Vice president, Northshore Technological, an IT solutions provider in Erie, Pa., that DeMatteis co-founded in 2003, with an emphasis on the medical vertical.
Now: As consultant and CTO, DeMatteis continues to steer the 11-employee business, which now concentrates on branded hospitality companies along with the legal vertical. “You have to play your part in innovation to keep fresh and continue to maintain the relationships that you’ve built up and not become stale. So, what we’ve been doing throughout the last 15 years is basically focusing on that and really learning as a growing company, what to say ‘no’ to.”
The Changing Channel: I would say one of the ways the industry is changing is that there’s more governing bodies, so the last you spoke with us, we were a very medical-heavy company. Well, HIPAA came in and we still have a lot of those clients today, but it’s very hard to get a bunch of new or old doctors to be on board with paying for this stuff out of pocket. So, a lot of them have been joining up with bigger hospitals. So, we got into the legal market.
Challenges: When a vendor partner “focuses on the development of certain things that aren’t as important to us.”
Advice and Wisdom: “I’d probably just say relax. I missed a good portion of my 20s, just thinking that if I was spending any minute doing anything but work, we were going out of business. … The clients don’t pay, but enough clients do pay that you’re able to get by. … A lot of the tenets I started my business with I still hold dear to me today, so I wouldn’t change any of them. If I started my business again today I would do it exactly the same way I’m doing it today. I just wouldn’t be so afraid of it to end so quickly.”
Michael Cocanower
Then: President of itSynergy, an IT solutions provider in Phoenix, a company he founded in 1997.
Now: Continues to grow itSynergy at a steady average of 9-10% year over year. “Our use of metrics to grow the business today is certainly much greater than it was even back then [in 2007]. … but [we’re] also developing metrics that are predictive rather than reactive, which is particularly challenging.”
The Changing Channel: Cybersecurity has become such a much larger focus for companies like ours, and we have certainly evolved along with the industry in that. There are products there today that I don’t even think existed back in the 2007 time frame. But not only have we added a lot [of products], but that’s also where a lot of our continued adds and growth come from.
Challenges: With all the industry consolidation, “the net result for us as the partner is it’s becoming a lot more difficult to integrate best-of-breed tools and have them work together with all of the other tools that we have in place. … Do I want to have a bumpy road and a life of difficulty trying to figure out how I’m going to overcome the lack of integration between these tools? Or do I just want to resign myself to live completely inside [a vendor’s] stack … I’m not happy about having to make that choice.”
Advice and Wisdom: “Start a company in another industry. I do not feel today that managed services companies are being compensated appropriately for the amount of risk that they are taking. I don’t want to give the impression … that I don’t enjoy the industry, that I don’t enjoy the people. Certainly, it’s been profitable for me. So, I don’t regret what I did. But at the same time, if somebody came along tomorrow and offered me whatever my magic number is to just walk away, I would do it.”
David Cieslak
Then: Principal at Arxis Technology, a financial software reseller and custom developer in Simi Valley, Calif., that Cieslak co-founded in 1994.
Now: Chief cloud officer and executive vice president at RKL eSolutions, which Cieslak merged his 25-person business with in 2018. “RCL was a Sage [accounting and business management software] reseller. They had some of the same services we had, but they also were missing some pieces … so the benches were very complementary, the culture was very complementary. When we came together, we created an organization that’s now over 100 people in 22 states.”
The Changing Channel: “Probably over the last 15 years most all generalists have become far more targeted and vertical market focused. Rather than everybody in the pool we now have swim lanes. … I think everyone is anxious to play to their strengths and not spend a bunch of time where they know it’s …not going to be as profitable.”
Challenges: “We definitely have had [software] publishers enter and exit the mix as they have changed their [channel] focus organizationally. They had a team; they said we’re committed and we’re all in. … And at some point, they’ll have team members transition and … ultimately, they just all but exit the space and …we’ve made all this investment. It’s something you’re always mindful of. What is their commitment to a channel strategy?”
Advice and Wisdom: “You’ve got to, at least early on, develop a pretty broad knowledge base, but in somewhat short order figure out what you want to be not just skilled at, but highly skilled at. … I sometimes get a chance to speak to young people and the question comes up, ‘If you were to do it all over, would you do it? And I said I absolutely would; that I loved the journey. It’s been a blast. I have fun every single day still.”
Image: iStock
