How Arterian Went from Lifestyle Partner to Growth Partner
With effort, a little prodding and help from peers, Jamison West took a "one-man band" to a 30-person firm. His company, JWCS, acquired two other Seattle companies in the last year and relaunched July 1 as Arterian.
- By Scott Bekker
- July 01, 2011
Microsoft will often refer to its partners as if they belong in one of two camps: lifestyle partners or growth partners.
The prototypical lifestyle partner is the IT pro who has built a comfortable business for himself with perhaps an employee or two and is earning a decent living working as many or as few hours as he'd like to fit around his family life. The growth partner, on the other hand, is focused on increasing revenues, improving profits, adding staff, expanding markets and gaining share with the constant goal of becoming a larger company. The definitions are fluid. A stalled growth company can become an unintentional lifestyle company. Some lifestyle companies grow very fast.
Occasionally, a lifestyle partner will have an "aha" moment and make the conscious decision to transform into a growth partner.
For Jamison West that moment happened in 2006 at an SMB Nation conference. West had started his Seattle-based IT practice in 1995. "It was kind of a one-man band for the better part of 10 years. I was just going around doing break-fix work," West said.
To cope with extra work in 2005, West hired an administrator and another tech. But at SMB Nation, he met Arlin Sorensen, founder of the Heartland Technology Group, which specializes in peer-to-peer business planning for small IT services companies.
"I did a 180 in my head around reactive time and materials versus managed services," West said. "At that time, I had a conversation with my family about lifestyle or grow the business."
With his family's support secured, West incorporated Jamison West Consulting Services (JWCS) on Jan. 1, 2007 and converted nearly all of his clients to managed services contracts. By June 2010, he had about 10 employees and started talking to Cogent Growth Partners, an Atlanta-based M&A advisory firm focused exclusively on the IT and managed services space. "For two days in a row, I talked to them," West said of Cogent, which charges a monthly retainer and earns a success fee when a deal closes.
A day later, he was talking to his colleague Brad Benner, founder and principal of X-BAR, a local 5-person company that had built his business models and pricing almost identically to West's. "I went back and told Brad [about the conversations with Cogent], and he said, 'Well, I'm first,'" West said.
"I did a 180 in my head around reactive time and materials versus managed services. At that time, I had a conversation with my family about lifestyle or grow the business."
Jamison West, Founder, Arterian (formerly JWCS Inc.)
That deal closed on July 1, 2010. Through organic growth, the combined company had increased to 20 people by the end of the year. On March 1, West closed another deal to acquire Titanium Ant Inc., a 15-year-old enterprise consulting services firm in the Seattle area with nine employees.
"Now we've got roughly 29, 30 folks," West said. "We've tripled in a year."
The company is now structured in three departments. The managed services department consists primarily of JWCS and X-Bar staff, and the professional services department is mostly Titanium Ant staff. A third account management department, built from the JWCS core, is focused on Virtual CIO services. "Often, even in an 80- to 90-person company, they don't have a CIO," West said of the opportunity.
Combining three companies provides a deep bench of Microsoft expertise. JWCS was a Gold Certified Partner and Small Business Specialist. Titanium Ant brought membership in the U.S. VAR Champions Club and the Cloud Champions Club. The pooled resources equate to silver competencies in Desktop, Identity and Security, Midmarket Solution Provider, Server Platform and Volume Licensing.
And the company has done it without taking on massive debt. "We didn't pull credit for either acquisition," West said. "With Cogent Growth Partners, it can include any mix of equity, down payment, guaranteed cash over a period of time or cash based on revenue over a period of time. We're able to mitigate a lot of the cash issues because only some of that cash is up front."
Growth also means outgrowing the name. The JWCS moniker that made sense in the "one-man band" days is creaking under the weight of the acquisitions. On July 1, in an event at the Microsoft Store in Bellevue Square, JWCS launched a new name for the combined company -- Arterian.
The name comes from the Latin root word for "artery," and the name is designed to be suggestive of building a path for technology and systems.
Scott Bekker is editor in chief of Redmond Channel Partner magazine.