Weeks after the sale went final, Joe Popper reflects on the quarter century he spent running Computer Gallery, the reseller-turned-managed services provider he opened in 1990.

Aldrin Brown, Editor-in-Chief

April 8, 2016

4 Min Read
Final Sale  MSP Owner Reflects on 25 Years in the Business
Joe Popper recently sold Computer Gallery, a reseller-turned-managed services provider he opened in 1990.

If you’re a managed services provider (MSP), a reseller, or have a business of any sort in the IT channel, Joe Popper understands your world.

For the past quarter century, Popper owned and operated Computer Gallery, an independent reseller-turned-MSP in posh Palm Desert, Calif., just outside of Palm Springs.

At different stints, the certified Apple dealer boasted a glitzy clientele that included former President Gerald Ford and Frank Sinatra.

This year, Popper sold the business he built from the ground up, accepting an offer from a larger MSP that had come calling several times before.

Recently – a couple months into a six-month contract job assisting the buyer – Popper reflected on the lessons he learned during 25 years of ups and downs in the channel, as he slowly begins to consider life after Computer Gallery.

“It has been incredibly emotional,” Popper said of the time since he fully handed over ownership on March 1. “It’s an emotional rollercoaster, no matter what the circumstances are.”

Computer Gallery opened in 1990, after Popper lost his job in the IT department of a local hospital.

He secured financing from G.E. Capital and soon generated a brisk business repairing hardware, and as a dealer of Apple and Connecting Point products. About 10 percent of his revenue came from maintaining and repairing IT equipment for local organizations.

“The market was pretty good,” Popper said, adding that his company always hovered around a dozen employees. “You could still make pretty good margins on hardware.”

At the time, the Apple Macintosh was all the rage, and the machines were selling like hot cakes to local businesses and his many well-to-do customers.

But as the 90s wore on, Computer Gallery began to feel the pinch of competition, as companies like Staples, BizMart, Costco and other big box retailers began springing up, taking larger and larger bites out of the retail computer market.

Computer Gallery pivoted, moving upstream to focus more on sales and repairs for business customers. Products like high-end Macintosh graphics stations with multiple monitors sold well to customers like the local newspaper’s art department.

“The problem was margins were getting tighter and tighter,” Popper recalled. “And the Macs didn’t break that much.”

Then the Internet came along.

In very short order, Computer Gallery’s earnings from hardware were seriously squeezed. Each year, the firm had to move 30 to 40 percent more product, just to maintain the revenue of the year before.

Computer Gallery did find ways to increase sales and keep pace, but by the late 90s, it was clear something had to change.

Popper made another strategic shift. This time, he refocused the company on growing its managed services component and boosted the profile of a related business entity, JSP Consulting.

The reinvention got traction, and Computer Gallery’s managed services revenue climbed steadily.

Local businesses, already familiar with the brand, increasingly signed up to have the firm set up and maintain IT networks and equipment.

But adjusting to the new market focus was not without challenges.

Some business customers would send large equipment lists requesting price quotes and expertise for a proposed new IT project.

“It took us a lot of time and energy and then they’d take our list and buy it mail order,” Popper said.

It didn’t take him long to learn how to avoid getting cut out.

“We said, ‘we’ll give you the equipment list and here’s the design fee,’” Popper said, adding that he’d waive the design fee if the customer did the deal through Computer Gallery.

Last November, after several failed attempts, the owner of a 50-employee MSP again approached Popper about Computer Gallery. This time, Popper said, something was different.

“It’s deeply personal to each person,” Popper said, unable to point to a single reason. “For me, there was a number of personal and professional reasons that said to me, it was time.”

Negotiations quickly heated up and by the time he sent the buyer a Quickbooks file, managed services accounted for nearly 90 percent of Computer Gallery’s revenue.

From there, things moved swiftly. They reached a deal just after the new year, with little difficulty deciding on a price that both sides could agree upon.

“I felt the valuation was fair,” Popper said. “It wasn’t a low offer. It wasn’t a high offer.”

They began the transition on Feb. 1, and the new ownership assumed full control a month later.

Under the deal, Popper received an up-front check and an earn-out to be paid over 18 months. He also gets a salary under the six-month contract, after which he’ll decide whether to stay on or leave for good the company he created.

“I’m not the boss anymore, so how am I liking that? I have to decide that,” Popper said. “So far, there’s lots of it that’s positive.

“The other piece that I’m finding interesting is that it doesn’t matter how big the company is, the problems are the same,” he continued. “The size changes. The problems don’t.”


Send tips and news to [email protected].

Read more about:


About the Author(s)

Aldrin Brown

Editor-in-Chief, Penton

Veteran journalist Aldrin Brown comes to Penton Technology from Empire Digital Strategies, a business-to-business consulting firm that he founded that provides e-commerce, content and social media solutions to businesses, nonprofits and other organizations seeking to create or grow their digital presence.

Previously, Brown served as the Desert Bureau Chief for City News Service in Southern California and Regional Editor for Patch, AOL's network of local news sites. At Patch, he managed a staff of journalists and more than 30 hyper-local and business news and information websites throughout California. In addition to his work in technology and business, Brown was the city editor for The Sun, a daily newspaper based in San Bernardino, CA; the college sports editor at The Tennessean, Nashville, TN; and an investigative reporter at the Orange County Register, Santa Ana, CA.


Free Newsletters for the Channel
Register for Your Free Newsletter Now

You May Also Like