Stepping up the chart by using services

It’s been a banner year for the other company on our list with ‘nex’ in its name.

Nexxlink Technologies of Montreal moved from 15th to 11th place among the country’s top solution providers, crediting a shift several years ago to services with its swift boost in revenues.

This year has been

“”a turning point in Nexxlink’s history,”” said Robert Courteau, the company’s president and CEO, who took the job three years ago after a term as CIO of Westbourne Inc. Before that he had a 13-year career with IBM Canada.

While Westbourne was being sold to a French company, he ran into Nexxlink board members who told them of the firm’s strategy of shift away from relying on hardware sales.

They asked if he was interested in heading the company and leading that transformation. He was.

In fiscal 2001, when he joined, Nexxlink had $63 million in revenues, of which $11 million came from services. The next year that jumped to $17 million, $25 million in 2003 and $55 million last year.

It looks like this fiscal year (which ends next July) services revenue will come in around $75 million.

That’s due in part to deals he’s done with CGI Group, buying its ERP software and related business as well as CGI’s technical support services division.

In exchange the systems integrator has taken a 34 per cent share of Nexxlink.

In that period it has moved from a 60-40 split in hardware-software sales to services being 60 per cent of its services.

Nexxlink offers everything from consulting and outsourcing to application development.

“”Our strategy is to be a one-stop shop for the mid-market,”” said Courteau.

Lofty goals

The purchase of CGI’s custom-built Omni enterprise resource management applications — which CGI inherited from its purchase of Cognicase — is one way in which the company has sought to diversify its portfolio. Customers are focused in municipal, health, manufacturing/distribution/ retail and small enterprise markets.

The company’s goals are lofty: To grow triple revenue to $300 million in three years through organic growth and acquisitions. Courteau hopes to go on a $50 million a year buying spree.

The CGI partnership will be another aid: Under a seven-year deal it is the preferred technical services and infrastructure procurement provider for CGI’s largest customers.

The one weakness is that 80 per cent of Nexxlink’s revenues come from Quebec customers, although it has seven offices across the country. It hopes to boost cross-Canada business, and is also looking south.

In February it signed a deal with a Michigan-based gardening chain to use Omni. “”If we have some consolidation we may have to open a U.S. office.””

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Jim Love, Chief Content Officer, IT World Canada

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Howard Solomon
Howard Solomon
Currently a freelance writer, I'm the former editor of ITWorldCanada.com and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including ITBusiness.ca and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times. I can be reached at hsolomon [@] soloreporter.com

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