Sirius Celebrates Journey From VAR to No 1 MSP

Sirius Celebrates Journey From VAR to No. 1 MSP

The top company on this year’s MSPmentor 501 Global Edition Worldwide Ranking provides a case study in employing growth by acquisition to add a first-class managed services operation to a value-added reseller. 

Folks inside the managed services division at Sirius had a sense that something special was happening last year.

The San Antonio, Texas-based tech reseller and services firm realized the fruits of some key investments in core areas, including cloud managed services, applications managed services and a doubling down on its global support structure.

Those moves resulted in steady double-digit revenue growth and a level of operational efficiency that landed Sirius atop the 2017 MSPmentor 501 Global Edition Worldwide Rankings.

“We’re excited to see the net results,” said Jay Johnson, vice president of managed services at Sirius. “While we did believe we were having a great (2016)…honestly, we had our heads down most of the year.”

Johnson
Johnson

Sirius Computer Solutions Inc., was founded in 1980 as a value-added reseller (VAR) and became a major channel player, leveraging key partnerships with IBM, Cisco and Hewlett-Packard, among others.

Seeking to break into managed services, Sirius acquired Omaha, Neb.-based competitor MSI Systems Integrators in 2010, creating a VAR with combined revenues at the time of more than $1 billion.

MSI had launched a managed services operation about six years earlier.

Best practices, people and tools

Under Sirius, the plan from the start was to invest as required to scale a first-class managed services operation with an international footprint. 

“The best-case scenario (was) how do we get better together,” said Johnson, who joined Sirius as part of the MSI acquisition. “The philosophy we talked about included best practices, best people and best tools.

“It really was accretive to both of our core businesses.”

Key to Sirius’ success in managed services, Johnson said, has been his own strong relationship with the company’s CFO.

“With any managed services business, often times there can be capital needs,” he explained. “We have a power cloud environment that is a leveraged cloud; that’s an investment.”

“Often times there is a return on the investment but that can take some time,” Johnson continued. “Making sure the CFO understands how the business operates is very important in the managed services space.”

“We need to make sure we have the right tools the right people and the right assets to be successful,” he added. “We’ve seen that with some of our competitors, who have tried to do this on a shoestring and they really don’t invest to be successful.”

Another critical consideration involved ensuring that the rapid growth didn’t disrupt the company’s ability to deliver excellent service.

“They said ‘we want to grow you but we don’t want break you,’” Johnson recalled. “That means, let’s make sure that we’re doing it in a controlled way.”

To accomplish that, Sirius conducted intensive employee training and doubled the size of its sales staff, adding seasoned professionals who focus exclusively on selling managed services.

Having salespeople with a rich understanding of managed services is vital because the sales cycle is much longer than that to which VAR sales pros are accustomed.

Reputation is critical  

In terms of technology, Sirius standardizes on the ServiceNow ITSM solution and uses a “wide variety” of remote monitoring and management tools.

The company partners with CA Technologies and writes – in house – significant portions of the software it uses.

Johnson offered a couple of thoughts to help drive success at IT services providers, large and small.

First, do only what you do well.

“Focus on your core competencies: What’s right smack dab down the middle of where you can be successful,” Johnson said. “MSPs get in the challenge of trying to stretch to be all things to all people.”

“You need to be solid and the reputation you have is critical,” he went on. “The moment you go sideways on the reputational situation, you now have jeopardized the rest of your business.

“There’s so much as stake. My advice is, make sure that what you do, you’re great at. When we add something to our services catalogue, it’s fully baked.”

The second suggestion is to ensure you’re ready to spend what it takes to do well in the market.

“What we found, it’s certainly worth understanding the investment to be good in this space,” Johnson said.

“Those that are willing to invest and put forth that effort, can succeed,” he added. “Folks that are kind of interested in dipping your toe, if you’re not willing to go all in, I wouldn’t go at all.”

 

Send tips and news to MSPmentorNews@Penton.com.

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