Reseller revival

Dave Steeves’ story is a classic rags-to-riches and back to rags again tale. For the former Digital Equipment Canada executive who built the Burnaby, B.C.-based Steeves & Associates into a Top 100 VAR, the last few years have been unkind.Steeves, who started his business back in 1992, said a combination of things along with some bad decisions and bad luck brought down a company that was, at onetime, a high profile Western solution provider.
“I expanded into a new facility just when the market turned down (in 2001) and I could not work out a deal to restructure the lease,” he said.
The downturn in the IT economy was also a lot deeper and a lot longer than Steeves anticipated. Business dried up in B.C. for the company, and the change in the provincial government hit them hard. Steeves & Associates also had a lot of telecom clients and when that market went in the toilet Steeves’ lost more than 60 per cent of his business almost overnight.
“With the increase in overhead it was more than the company could bear,” Steeves said.

How it started
It wasn’t always that way.
The company grew at a rapid rate during the high flying nineties. Steeves & Associates was named one of the fastest 50 growing companies in B.C.
“We went from earning $100,000 to $400,000 to $2 million, to $4 million to $7 million to $11 million, and we were following the trend in the market,” Steeves said.
The company’s core competency at the time was in building local area networks. But the company wasn’t afraid to install metropolitan and wide area networks.
It also gained expertise with beta versions of Windows NT and Microsoft Exchange which it put to use in servicing early customers, and made a strategic bet Cisco Systems. Steeves also became a CheckPoint Software partner, which he said paid off handsomely.
One of the first VARs to develop Internet-based solutions, it also started promoting security with its customers well-before the market for anti-virus and firewalls exploded.
“We got on the Microsoft trend early on. We knew NT worked and we also had the enterprise consulting skills. Microsoft valued us as a partner and gave us good visibility and promoted us,” Steeves said.
With this Steeves & Associates grew its employee-base by 30 to 40 per cent each year. In the span of a decade (from 1992 to 2002), the firm went from two employees to 70 and enjoy 85 per cent compound annual growth before the company hit hard times.
“We had a solid business and a great reputation. If I did not make those moves we would not have had to go through all that pain as we did. We still would have had to make some layoffs because of the market. It was tough and I was an experience that I wouldn’t give to anyone,” he said.

Back to basics
At his lowest point, Steeves decided to take some time off and reflect. He left the business entirely and did some windsurfing.
Pondering the future, he realized he still enjoyed working in the computer business. He assessed his company’s strengths and decided to try to rebuild it.
“I did not have a big company anymore or a war chest. What do I do? Who did I know? What was I known for? So I decided to go back to being a network infrastructure company,” he said.
Steeves believed at the time that this had turned into a commodity market and wasn’t very original. Maybe, he thought, he should be in security.
The marketplace, however, knew Steeves & Associates as an infrastructure solution provider. At the same time, he said, IT was getting more complex as customers moved to a Microsoft infrastructure.
As Steeves began rebuilding his company, he decided to change the way it operates. He stopped reselling and instead focused on consulting and integration.
Steeves also went back to his original client base, the same clients that helped grow his the company.
Business is finally going well now, he said.
Through his ordeal, the only lesson Steeves said he has learned and wants to pass on is a simple one:
“Leases are debt.”

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Paolo Del Nibletto
Paolo Del Nibletto
Former editor of Computer Dealer News, covering Canada's IT channel community.
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