In-Depth
Cultivating Your Business
From organic growth to M&As to staying small -- our special report covers all the options.
Microsoft's revenues and profits surge
upward every year. A major engine powering that growth is the combined
efforts of thousands of partners, each with a different approach.
The following articles in this special report identify some best
practices for building your Microsoft partner business, both organically
and through mergers and acquisitions. We also look at the flip side: cases
when getting bigger isn't necessarily in your company's best interest.
You Can Grow Your Own Way
Companies have to find their own paths to expansion,
but lots of flexibility and a few best practices can make the road a lot
less rocky. By Lee Pender
Bill Korstad didn't build his company by the book.
In fact, in managing the growth of his firm from a boot-strap startup
with no venture capital funding in 1993 to an $8 million operation just
over a decade later, Korstad didn't rely on a book at all.
"If you were to look at a book of how this should be done, there's
probably some sort of formula to it," says the CEO and co-founder
of Boulder, Colo.-based Unitime Systems Inc., a Microsoft Certified Partner
and developer of enterprise time and attendance software. "The way
we did it, there was no formula."
Korstad isn't alone. The truth is that, despite the wealth of how-to
books available on the subject, if you ask 100 CEOs how they manage their
companies' growth, you're likely to get 100 different answers.
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Buying Your Way to Growth
Mergers and acquisitions can put your
company on the fast track, but making those moves pay off requires careful
planning and effective communication. By Paul Desmond
Solutions Consulting Group (SCG) Inc. wanted to expand into a new
geographic area in hopes of becoming more of a regional solution provider.
Intervoice Inc., already a big player in the market for voice self-service
solutions, was looking to gain additional critical mass and new product
technology that would give it a solid hold on the No. 1 market position.
And Astea International Inc. wanted to add an elite customer base and
some leading-edge technology to its field service management business.
Although their specific goals were somewhat different, all three Microsoft
Gold Certified Partners were focused on the same idea: growing their businesses.
And all came to the same conclusion about how to reach that goal: by merger
or acquisition.
In choosing the merger/acquisition route, each of these companies eschewed
the chief alternative: organic growth. You can certainly expand into a
new geographic area by adding personnel and sales people to drum up business,
but the effort will take time and money, and the losses you suffer before
you begin to break even in the new area will be a drag on overall company performance,
says Eric Gebaide, managing director for Innovation Advisors, a New York
City-based boutique investment bank that focuses on M&A activity for
midmarket technology firms, many of which are in the IT services and software
industry.
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They Might Not Be Giants
Staying small is an unconventional business strategy
-- but for some Microsoft partners, it's exactly the right choice.
By Anne Stuart
Grow or die.
That motto may not be carved into your company's cornerstone or embossed
on your business cards, but if you're like most organizations, it's your
real mission statement.
After all, it's a given that just about every company -- regardless of
age, industry and current size -- wants to get bigger. You could reasonably
argue that, in most cases, it's the executive team's duty to expand the
company as much and as quickly as possible.
But as business journalist Bo Burlingham describes in his new book, Small
Giants, many companies are getting off the growth treadmill. In
some cases, they simply postpone or slow down their expansion plans for
a while; in others, they decide to stay at a certain level indefinitely.
Whatever the timeline, such companies typically adopt the strategy so
they can focus on other business goals such as developing new products,
creating an ideal work environment or deepening their relationships with
their existing customers.
While the slow-growth (or no-growth) strategy may initially seem seriously
out of whack with Microsoft's own aggressively expansion-oriented culture,
some Microsoft partners say the approach works just fine for them. Following
are insights from several successful small partners who have consciously
chosen goals other than growth for growth's sake.
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