Toronto-Based Scalar Decisions Inc., a provider of IT infrastructure solutions to Canadian enterprise is widening their presence across the country with their recent acquisition of a major stake in Vancouver-based XSM Systems Inc.
XSM is a privately-held company that provides IT infrastructure to Western Canada.
Their professional services practice focus’ on data availability, enterprise management and business continuity.
The acquisition, which took place in August of this year, will mean a larger distribution network for Scalar and improved efficiency for manufacturers and OEMs, said Paul Kerr, CEO of Scalar Decisions Inc.
“The advantage of growing national is economies of scale for manufacturers,” Kerr said.
“We have better buying relationships with our partners than smaller localized companies. OEMs will find it easier to work with one solution provider with customers across the country rather than speak with several small providers.”
The company will also be able to expand their portfolio of expertise providing customers with improved solutions to their IT problems.
“Customers often associate credibility with size and scope. There are a lot of similar businesses in the Canadian market place but very few on the national level, increasing the scope should give us this edge.”
The amalgamation process started about a year ago, when he met XSM President Ron Tonts at a conference. Kerr said the advantages of acquiring XSM with skilled staff and existing customer relationships would be more advantageous than trying to expand alone.
“Buying XSM gives us an early start to the market,” Kerr said. “I think there’s a lot of uncertainty with the market this week but we see great opportunity.”
Ron Tonts, founder and president of XSM Systems Inc said the types of solutions Scalar and XSM provide are in high demand.
“We expect a lot of new business opportunities because the solutions we focus on are becoming front and center.”
For Tonts, the advantages of merging with Scalar include improved solutions for customers, bigger representation in the marketplace, growth opportunities for employees and economies of scale.
The company’s expertise in various areas of infrastructure optimization means they are better together than apart, on a national scale, Kerr said.
“XSM had been doing a lot with data recovery out in Vancouver and we’ve had a lot of success here with data de-duplication and infrastructure optimization. That means if a customer wants more information on data de-duplication and is in Vancouver, Scalar has the resources and expertise to send someone out there and vice versa.”
Their business practices also had a lot of similarities, he said. Scalar and XSM are both technology-led organizations that focus on solving tougher IT problems.
“Both of us are value companies with a greater ratio of technology workers to sales individuals than the average volume company with 300 people sitting in a call center trying to push products.”
And Tonts said there will be no new changes to either company’s goals. “We will continue to be a technology-based company that leads with technological expertise, building our own reputation through merging with Scalar.”
Their plan for fiscal 2009 is simple, Kerr said, patience.
“Our real goals are integration of brand, leveraging relationship with OEMs, bringing disaster recovery solutions east, bringing data solutions east and west and hoping to increase our business. We don’t want to rush in our first year.”