Sun VARs Combine To Complement Businesses

Sun VARs Combine To Complement Businesses

Two Sun solution providers have combined into one in order to take advantage of each other's strengths and markets.

Versatile Systems, based in Vancouver, British Columbia but with nearly all of its business coming from the U.S. and the U.K., has acquired Sagent Solutions of Somerset, N.J., for an undisclosed sum.

Both companies were long-term partners of Sun Microsystems, of Santa Clara, Calif., and their principles first met each others years ago while they were employed by the vendor.

Versatile in its current form came about when the company acquired Perfect Order, a Mechanicsburg, Va.-based Sun solution provider, about two-and-a-half years ago. Part of Versatile's current executive team, including Bob Joyce, president of Versatile, and Oliver Poppenberg, executive vice president of technology solutions west, both joined the company from Perfect Order.

Versatile's main business comes from selling and implementing Sun solutions, and it also is a software developer.

Sagent had focused its business exclusively on virtualization, and worked with Sun's x86-based servers, Sun's Sunray thin clients, Sun's secure global desktop product, and VMware, of Palo Alto, Calif., said Ed Graham, founder of Sagent and now executive vice president of technology solutions east.

In the two years since Sagent was founded, it's business had grown to about $4 million, and it was on a run rate of $8 million to $10 million, Graham said. That growth came about in part because of a close relationship with Sun which walked the solution provider into many accounts.

It was that close relationship that made Sagent a Sun partner from the beginning, Graham said. "If I had went with someone else, I would have been a me-too partner," he said. "Instead, I doubled-down on my Sun relationship."

The acquisition, which closed on December 28 but was not unveiled publicly until this week, happened because Sagent had to grow, but was at a point when it could not do so with its existing resources.

"With Versatile, we could build scale and add complimentary solutions," Graham said. "Versatile has strong storage, security, and identity management solutions. For us to provide that, I would have had to further fund the business."

Versatile had been moving into the virtualization market, but decided to speed up the process by acquiring Sagent, Poppenberg said.

"In a lot of ways, it's easier to acquire than it is to build out," Poppenberg said. "Ed [Graham] was looking to scale out, and we had the backend to handle it."

Versatile is a profitable publicly-listed company. While sales in its most recently reported quarter, which ended Sept. 30, were down year over year, its gross profit increased by about 3 percent to reach $3.1 million.

Virtualization is the key to future growth, Poppenberg said. "Today, you either have to go for low-cost, low-margin business or high value-add business," he said. "We're doing the latter. We have about 60 consultants doing designing, implementation, architecture, security, and storage. Virtualization is the area where we want to grow."