The Doyle Report: After 30 Years in Business, MTM Executives Ruminate on the Past, Present and Future of Channel

Written by doylet
November 8, 2017

Adding more value, managing alliances and more in this edition of The Channel Futures Podcast.

If you’re old enough to remember 1987, then you probably recall the year’s important milestones. “Black Monday,” the single biggest stock market collapse since the 1920s, shook financial markets in 1987. In the same year, the Minnesota Twins won their second MLB World Series title and millions of television viewers watched the miraculous rescue of “Baby Jessica” McClure, the toddler who fell into an abandoned well in Texas and lie trapped for 58 hours.

The top grossing movie of the year was “Three Men and a Baby.” And the largest corporate entity in the U.S., according to Fortune, was General Motors—and by a wide margin.

Nineteen-eighty-seven was also the year that Micros-to-Mainframes (MTM) opened its doors for business in Congers, N.Y. At the time, it re-sold everything from mainframes to desktop PCs to floppy disks. In 1993, the company went public and traded under the symbol MTMC. Not long after, it acquired a managed services provider and diversified its business model.

In the 2000s, the company began acquiring fellow reseller and service organizations, expanding is geographic footprint and customer base. In the Northeastern U.S., it became a sought-after place to work. “President’s Club” winners were routinely celebrated at lavish company events and MTM garnered award after award from Citrix, Trend Micro and others.

Then the bottom fell out in 2007 and 2008. In a brief span, the company’s sales fell by roughly half to $150 million. With MTM and other solution providers struggling, management took the company private once more. In June 2015, MTM was acquired by longtime investor Columbia Partners llc.

With new investment and new leadership, MTM regrouped, focusing on cloud services, virtualization, security and managed services. This month, MTM celebrates 30 years in business. In an interview with CEO Marcus Holloway and COO Brian Coffey, I asked what sustains MTM, how it differentiates itself and what its prospects are for the future. The conversation amounts to a treatise on the past, present and future of the channel.

MTM CEO Marcus Holloway

Not surprisingly, the key to MTM’s success, Holloway and Coffey say, is the level of service it provides to customers. What is more, Coffey says, MTM considers its customers to be both the organizations it sells to and the vendors that it represents.

“By paying attention to both those customers we keep a keen eye on transitions in the industry. [We] never get bleeding edge, but we certainly try to stay at the forefront of what our customers’ needs are,” says Coffey. “Looking in hindsight, it doesn’t seem that hard or that clairvoyant.”

In my interview with Holloway and Coffey, I asked them to reflect on the different eras they have competed in, specifically when were things easy and when were they a grind. Holloway said the period when MTM executed on a plan to grow via acquisition using private equity was “the best of times.”

Before the commoditization of basic IT services, “there was a lot of excitement around new entities being merged into the MTM business,” says Holloway. Conversely, when the economy tanked in 2007, things got rough. Holloway was not at the company at the time, but guesses it was the worst of times for MTM.

Unlike others that took on additional debt or launched massive new practices during the recession, MTM made small investments on the services that it already had and focused on cost reduction. This buffered the company against bad bets.

Today, MTM is poised to enjoy a “very positive part of our history,” says Holloway. The company has a new balance sheet, a new set of owners and a highly motivated management team. It also has a better handle on its costs than in recent years, and is preparing to launch new digital services to end customers. What is more, MTM maintains deep and longstanding ties to key vendor partners including Cisco, Citrix and Microsoft.

With regards to partnerships, Coffey says it is important for digital product and service providers to not overindulge in any one vendor’s technology portfolio. If you invest into everything a vendor offers, he says, your costs for certification training, technical support, sales engagement, etc., spiral and your complexity soars.

MTM COO Brian Coffee

MTM COO Brian Coffey

MTM’s survival and growth plan has revolved around the following elements: get close but not too close to key vendors, move up the stack in terms of value offered to clients, and create internally developed intellectual property. The latter includes AnywhereApp, which MTM introduced May 2017. In a nutshell, AnywhereApp is aimed at small and mid-market businesses “that have grown frustrated by IT service providers forcing pre-packaged cloud solutions that did not meet the custom needs of their cloud, digital transformation, and mobility strategies.” The latter, of course, is from the company.

But check out what Vikram Ghosh, managing director of Service Providers & Cloud programs at Citrix says about the technology: “The AnywhereApp service by MTM is a great example of Citrix partner innovation that delivers compelling value for businesses.”

As MTM turns 30, Holloway says he is excited that the company has transformed from a mere reseller of other companies’ technologies and services to a true provider of homegrown digital services. That, he adds, should propel the business forward well into the future.

“We’re not giving on products and reselling other people’s services, but our aspiration is to be a true services company over time,” sums Holloway.

For more on MTM and the company’s view on the past, present and future of the channel, listen to this edition of The Channel Futures Podcast: “Greatness, Three Decades in the Making.”

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