To say it’s been a successful year for Softchoice president Dave MacDonald is being less than generous. It’s been stellar.
The company moved from a software reseller to a full-fledged VAR, grew revenues by almost $100 million, rolled out an asset-management service, became a major seller to
the U.S. federal government and formed a strategic partnership to move into the European market.
MacDonald attributes these successes to his staff, channel partners and vendors. “”When you consider the kind of growth we’ve had, you have to have great partnerships,”” he says.
The Toronto-based firm has a simple, but effective, philosophy: save customers time and money and reduce risk. When it moved into the hardware business, it applied that same philosophy.
“”Our decision to offer hardware was a customer-focused strategy,”” he said. Many of the customers who buy software from Softchoice are looking for help with their hardware needs, he said.
Customer survey
“”There was a lot of work behind the scenes to make it happen, but from our customers’ perspective we didn’t change.”” The company saw 200 per cent growth in its hardware business this year.
In a survey of 600 customers, 80 per cent of respondents said Softchoice saved them time and money. MacDonald attributes the high level of customer satisfaction to the company’s unique business model. “”We go out and call on customers face to face in the medium-size customer base (from 250 to 2,000 PCs),”” he said. “”A lot of our competitors do that over the phone.”” The company also invested in infrastructure across its 33 branch offices. When account managers talk to customers over the phone, they can generate a quote and render it immediately on the screen so customers can see it being built as they talk.
This model worked well in Canada and in smaller U.S. cities, like Portland and Indianapolis, but MacDonald recognized the need to put more resources into larger U.S. centres in order to compete with more established players.
“”In the U.S. there’s a lot of big players, and they’ve been in the business for a long time,”” he said. “”Ultimately we had to raise the level of our game.””
At the start of the year, the company brought six key branches up to optimal performance: New York, San Francisco, L.A., Houston, Atlanta and Chicago. “”We think we can make them $100-million branches on their own in a relatively short timeframe,”” he said. “”We’ve got that kind of share in the Toronto marketplace and we think we can do that in the six centres in the U.S.””
Those branches have grown at a year-over-year rate of 64 per cent, he said. In terms of overall growth, the company has grown 50 per cent in the U.S. and 23 per cent in Canada, and net income is up by almost a factor of five over last year.
And while Softchoice wasn’t on the radar screen in the public sector last year, it’s now a major supplier to the U.S. government. MacDonald knew that to become a serious player there he had to get into the government market. “”The U.S. government is the largest technology purchaser on the planet. You’ve got to recognize that’s a big buying opportunity,”” he said. “”We’re already No. 2 on the Washington Technology Fast 50 list based on our compound annual growth, so we’ve almost doubled the size of the business since we went into it two years ago.””
It did that through the acquisition of Santa Clara, Calif.-based Beyond.com Government Systems Group, which allowed Softchoice to jumpstart the process of becoming authorized to sell to Washington. “”We’ve also added a number of strategic departments including Homeland Security to our customer base,”” he said.
European move
Now Softchoice is moving into Europe. To do this it formed a partnership with European reseller PC-Ware, which has 70,000 customers there.
“”It’s about increasing our appeal with global enterprise accounts,”” MacDonald explained.
The partnership facilitates software purchasing and deployment for Softchoice customers in Europe and for PC-Ware customers in North America.
“”We feel in the short-term we need to be able to meet our customers’ needs globally but we want to continue to focus on productivity and effectively executing in North America and this partnership allowed us to do that,”” he said.
In the end, he added, it all comes down to Softchoice employees.
“”As a common denominator, no matter what we’re doing, it’s the people on the front lines dealing with the customers that make the difference.””
