XChange: Solution Providers Predict Record Growth In 2018, Expecting Biggest Sales Bang Since The Dot.com Boom

Luis Alvarez, president and CEO of Alvarez Technology Group, Inc., a Salinas, Calif., managed service provider, says that in 17 years in business he has never seen a bigger sales pipeline.

"It feels great," said Alvarez in an interview at the XChange Solution Provider 2018 in Orlando, Fla. "We are seeing across the board growth. It's the best we've seen in 17 years. It's the right time. Everything is coming together. We're expecting growth of 30 percent or more."

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The last time there was such an ebullient mood among technology buyers was in the mid-1990s in the midst of the dot.com boom, said Alvarez. "What we are seeing now is a huge innovation wave driving the greatest sales growth and technology boom since the dot.com era," he says.

Alvarez is one of many solution providers at the annual show predicting record sales in 2018. Several partners said the big sales growth is being propelled by managed cloud and security services.

Alvarez Technology Group, for example, is branding its own suite of security services called iSafe. "Customers want a third-party brand they can trust," said Alvarez of the iSafe service, which incorporates a wide range of vendor offerings including Cisco's OpenDNS, Webroot, Sophos, and eFolder.

Rich Kay, CEO of thinQ Technology Partners, a Reston, Va. managed service provider, said he is expecting a record year with as much as 50 percent sales growth to $15 million. "Customers know they need innovative technology to be successful today," said Kay.

Among the strongest growth drivers for thinQ, which is sponsoring NASCAR racer Dylan Lipton as part of its managed services marketing offensive, are Hewlett Packard Enterprise blade servers.

Kay said his HPE DL380 business is strong and HPE's Synergy composable infrastructure is also starting to gain traction. ThinQ is also seeing strong growth with Cytracom VoIP and 6Connex, a virtual event technology vendor.

Kyle Wentworth, founder and CTO of Fusion IT, a Grand Rapids, Mich., managed service provider, said he expects 30 percent sales growth this year after completely revamping his company's managed services offerings. "We are doubling down on clients that want to be at the top of our pyramid," he said.

Fusion IT expects to bring on board 70 to 100 new managed services customers in 2018, up from 46 in 2017. "The managed services model is kicking into high gear," he said.

The biggest technology driver is business customers demanding the same kind of cutting-edge technology they are getting on the consumer side, said Wentworth.

Michael Goldstein, CEO of LAN Infotech, a Fort Lauderdale, Fla., solution provider, said he is also expecting a record sales year with overall sales growth of 30 percent.
LAN InfoTech's SonicWall security solutions are growing at a 40 percent clip. "Our sales growth in the first two months of the year is the fastest out of the gate I have seen in 20 years in business," he said.

The biggest SonicWall sales driver for LAN Infotech: a firewall-as-a-service offering that is priced per site, said Goldstein. The operating expense subscription sales model is helping drive the SonicWall sales growth, he said.

In the cloud market, Goldstein said he is also seeing strong Microsoft Azure and Office 365 sales growth.

"Customers know that great technology produces big gains," said Goldtstein. "It's going to be a great year."

Don Gulling, president and CEO of Verteks Consulting, an Ocala, Fla., networking solution provider, said the company's first quarter sales performance is the best he has seen in 21 years in business. "In 2017, everyone was worried about everything," he said. "Now in 2018, people are getting on with their lives and are taking out their wallets and buying."

Gulling said he is seeing the biggest sales growth from Mitel VoIP and WatchGuard security solutions. "Customers were holding off on VoIP because it's a big expense and they are buying now," he said. "With security, customers are more paranoid about breaches than ever and are reevaluating their vendor partnerships."

Furthermore, he said, RapidFire, a security assessment tool, is opening more doors than ever before for Verteks.

"I just bought a new office and I am building a new house," said Gulling, who is in the process of hiring three additional employees at his 26-employee company. "That's how confident I am about in 2018."

Jennifer Follett contributed to this story