Focus Pays: Iteration2
It's not yet three years old, but Dynamics partner Iteration2 has two
U.S. Partner of the Year Awards under its belt, a tribute to its ability
- By Paul Desmond
- November 01, 2006
Less than three years since its inception in January 2004, Iteration2
is closing in on $30 million in annual sales, has more than 100 employees
and has not once but twice been named the Microsoft Business Solutions
Outstanding Partner of the Year for the U.S. To Mike Gillis, president
of the Irvine, Calif.-based Gold Certified Partner, those achievements
are largely the result of a single attribute: focus.
"Whenever you want to do better than you're currently doing, focus,"
he says. "Wherever you can, focus, focus." For Iteration2, that
means focusing on select vertical markets and being the best at delivering
Microsoft Dynamics solutions in those markets. It also means focusing
on the company's core corporate values every day, and its overall mission
to be recognized as the world's finest Dynamics partner -- a goal its two
Partner of the Year awards certainly indicate that it's on the way to
achieving. Winning those awards stems from focusing on being a good partner,
which involves getting strategic wins, turning them into references, and
sharing knowledge with partners in other verticals to collectively raise
the Dynamics tide and float all MBS partner boats.
Gillis has maintained his focus since he founded Iteration2 with two
colleagues -- Gary Peterson and Greg Carter, both now company vice presidents -- who
each had experience with JD Edwards enterprise resource planning (ERP)
software, either as JD Edwards employees or partners. Gillis was with
Systematic Systems Integration, a Microsoft partner that performed custom
application development to integrate with ERP packages from SAP AG, JD
Edwards (now part of Oracle Corp.) and others with Windows. After that
company was acquired in 2000, he took a few years of semi-retirement.
During that time, Gillis and his partners watched with interest as Microsoft
entered the ERP market, buying up companies such as Great Plains and Axapta.
"We knew there had to be a better way to do ERP, but you had to have
the application and infrastructure pieces to execute it," Gillis
says. "We decided to bet our careers on Microsoft."
Before he started Iteration2, Gillis attended the 2003 Worldwide Partner
Conference in New Orleans and was "captivated" with presentations
by partner- and Dynamics-oriented Microsoft executives such as Allison
Watson, Orlando Ayala and Doug Burgum. Perhaps most importantly, he also
attended the awards ceremony. "I wrote furiously the qualities of
the winners, what they did, how they helped other partners," he says.
"I took the awards ceremony speeches almost as prescriptive guidance
in how to build a top partner."
Headquarters: Irvine, Calif. President:
Line of Business: Microsoft Business Solutions
Annual Revenue: 2005: $20 million; 2006 forecast:
Growth Rate: 110% year-to-year, 2004 to 2005
Customer Base: Agricultural, residential construction,
field service companies, manufacturers
Clients: TASER International Inc.; Calence LLC;
Wonderware; NRPI; Growers Express; The Linc Group Inc.
Program Level: Gold Certified
Microsoft Competencies: Microsoft Business Solutions,
ISV/Software Solutions, Mobility Solutions
Microsoft Awards: Microsoft MBS Outstanding
Partner of the Year, U.S., 2005 and 2006; 2006 West
Region General Manager Award; 2005 Microsoft Winning
Customer Award; three Area General Manager Awards; two
Area Winning on Value Awards; one Area Marketing Excellence
Award; two Area Best Practice Awards; two-time President's
Club and Inner Circle Member
Among the chief lessons he took away from the awards presentation
was the need to have intellectual property that differentiates your company
in the market. "We knew instinctively that a vertical industry approach
was the way to go," Gillis says. But it was encouraging to hear Microsoft
harping on the same point -- and backing it up with useful education.
While Gillis and his partners had experience playing in vertical markets
that were already defined by JD Edwards, they had never done the market
analysis required to decide which vertical to target. "That's pretty
much a science and Microsoft helped teach us that science," he says.
That included attending a beta version of a Microsoft workshop on how
to make a vertical approach work.
First targeting Axapta software (now the Dynamics AX ERP suite), Iteration2
learned how to build a matrix that would identify vertical opportunities.
The goal was to find verticals where Axapta did not have a good natural
fit. "That's where we could build our value," Gillis says. "You
need to get out and build some functionality yourself and build some domain
expertise that will differentiate you in the marketplace."
To fill out the matrix, the company analyzed criteria such as how many
existing ERP software companies had deep penetration in each vertical,
the viability of the hardware and software platform those companies employed,
and their financial viability. Its first target turned out to be produce
companies, particularly those that chop, cool and package produce, such
as for packaged salads. Only a couple of players had deep penetration
in the market and both were built on aging software platforms, which put
the future of those players in question.
"We took the foundation things like financial, supply chain and
customer relationship management, then built deep vertical industry functionality
on top that is specific to the grower business," Gillis says. For
example, for each of their crops, growers typically have multiple investors,
and reconciling their investments can get complicated. Iteration2 software
also addresses issues such as inventory tracking and cooler management,
tailoring them to the produce vertical.
Using the same matrix approach, the company has since expanded into two
additional verticals: field service and residential construction. Each
of its markets is highly localized, giving them natural protection from
off-shore competition, which helps give the markets long-term viability.
The verticals are also largely regional, making it simple for Iteration2
to identify potential customers and harder for competitors to find them.
The results have been impressive. "We went from zero sales
to close to $30 million of forward-looking sales, and over $20 million
in the previous 12 months," Gillis says. "And we have more than
100 people. We have a lot of momentum."
Much of that momentum he attributes to Microsoft's "People-Ready"
marketing campaign. "It's everywhere. You can't open a Fortune, Business
Week, Business 2.0 or any of those magazines without seeing People-Ready
or Dynamics advertising all through it," he says. The campaign is
making it difficult for anyone considering ERP not to look at Dynamics,
Gillis says. As a result, the Iteration2 pipeline is growing faster than
ever, with more deals coming through to close.
The ability to keep up with that ever-expanding pipeline requires speed,
which is the company's real differentiator, Gillis says. Crucial to maintaining
speed, he says, are recruiting and retaining the best people and sharing
"We work like crazy on creating the coolest place to work, and that
leads to good retention of people," he says. Toward that end, the
company throws four family-oriented events per year, including a company
picnic and holiday party, as well as four staff-only events where people
can get to know each other better. Employees are also encouraged to continually
go after more advanced Microsoft certifications. "We have 100 people
who are becoming 100 experts," as Gillis puts it. In fact, a commitment
to personal and team growth is one of the guiding principles, or, as Gillis
puts it, "Pillars of Strength," upon which the company was built.
Team members who know and like each other are also far more likely to
share knowledge. "Friends share information better than knowledge
management systems," Gillis says. After any given meeting at Iteration2,
a flurry of e-mails and phone calls will go back and forth with staffers
sharing information. While Gillis maintains that's the best way to share
knowledge, he acknowledges it has limits in terms of scalability. So the
company also employs systems for sharing knowledge, such as Web sites
for each project, which take advantage of Microsoft collaboration tools.
The company also has subject matter expert groups devoted to specific
topics. "Sharing knowledge seamlessly is something we work on all
the time," Gillis notes.
in a Name
The name Iteration2 stems from the fact that the company
represents a second go-round in the career of each of
its founders. For President Mike Gillis, it's his second
time being a Microsoft partner, while Gary Peterson
and Greg Carter each previously worked for ISVs.
Winning awards is likewise never far from Gillis' thinking. "Our
mission is to be recognized as the world's finest Dynamics partner. Not
just to be the finest partner, but to be recognized," he says. "That's
what the awards do -- make us a recognized industry leader."
What does it take to be named U.S. Partner of the Year two years running?
Closing deals certainly helps. "Get strategic wins. Make them referenceable,
then share those references with other partners so they can create strategic
wins," he says.
He also advises would-be award winners to communicate openly with Microsoft
about ways to improve its partner program. Iteration2, for example, has
successfully lobbied Microsoft to deliver more and deeper video-based
training and has worked with Microsoft to create and refine some vertical
industry marketing programs. Microsoft is now running a series of vertical
campaigns throughout the United States that are much like those first
prototypes, Gillis says.
"So get in a leadership position, help make the program better,
and make sure that [you] keep growing, getting more customers and more
people involved in the success of Dynamics," he advises. Doing those
three things better than other partners do leads to winning Partner of
the Year awards, Gillis says.
Part of making the program better involves openly sharing information
on what works and what doesn't. "It's important for us to share so
we can all be more competitive, so we can beat SAP all the time and beat
Oracle all the time," he says. "We have to get out there and
carve out our own niches and show the world just how good [Dynamics] is.
They can't know unless we show 'em."