XChange 2014: Solution Providers Say Security, Cloud Is Sparking Big Sales Gains

Solution providers attending XChange 2014 in San Antonio this week say security and cloud solutions are driving big sales gains this year.

"The security IT business is booming," said Paul Karch, president and principal of Gardant Global, a Deerfield Beach, Fla., solution provider. "Security touches everything," he said. "You have to have it. If your solution doesn't have security, you can't sell it."

Karch said his security business is up a whopping 80 percent in the last several years. In the government market, strict security compliance like FedRAMP (Federal Risk and Authorization Management program) and FISMA (Federal Information Security Management Act) around cloud and client devices are driving solutions sales, said Karch.

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Carmine Taglialatela, Jr., vice president of business development for cyber defense and compliance for TecPort Solutions Inc., a Delaplane, VA. government solution provider, said his security business is up 20 percent in the last year and now accounts for 50 percent of total sales.

"We're seeing a high level of interest from clients interested in protecting everything they do," said Tagliatela, noting that education around security processes and policies is critical in preventing breaches. He said thin client solutions aimed at preventing employees from using thumb drives is helping prevent cybertheft.

Tagliatela said he expects a sharp rise IT spending from the federal government this quarter with IT budgets freed up by the end of sequestration.

John Krikke, vice president of Onward Computer Systems, a Burlington, Ontario, Microsoft partner, said a sharp increase in cloud sales including robust Office 365 sales is driving a 15 percent increase in sales for his company for 2014. The cloud computing revolution, he said, has resulted in a 30 percent annual compound growth rate for Onward in the last three years, he said.

"Business are transforming, moving to the cloud and we are benefiting from it," Krikke said. "Cloud is happening fast. Small businesses that were resistant to the cloud are now embracing it saying 'Let’s do it!' We are doing well with Office 365 and now we are adding [Microsoft] Azure [cloud infrastructure as a service]."

Krikke said the small medium business sale has moved from techies to line of business executives who are looking to solve problems quickly. "They just want to solve the problem," he said. "It has moved from a product sale to a solution sale to an experience sale."

Gaurav Patel, vice president of engineering for KloudData, said he similarly has experienced clients wanting their solutions faster. His business is up 175 percent, he said, in only the last three years.

"Long gone are the days as a solution provider where you could say, 'We have a software package you can use in the next three years,'" Patel said. "Everyone wants something deployed quickly. They ask for something to get them up and running in the next five weeks instead of five months."

Patel said in addition to security, "pre-built" solutions, including SaaS – software as a service – are major offerings for his company. He said his clients have shifted away from product-oriented requests.

"My sales have changed from being regular deployment to more solution sales," he added.

Mitch Miller, who operates his 18-employee operation Dynamic Computer Solution in Topeka, Kans., said his company has seen significant growth as well in the past three years. He estimated revenue has risen about 15 percent each year for the past two years.
"Our biggest products are VoIP phone systems and managed services," he said. "A lot of [our customers] don’t want to have an IT person on-staff anymore so they're outsourcing it."

Krikke noted he is looking forward to sharing and collaborating with his peers at XChange this week in Texas to find out what is working best for his peers in the field.

"This is a great place to listen to thought leaders to keep getting clarity around future direction," he said.

PUBLISHED AUGUST 17, 2014