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Welcome back, KTI Kanatek Technologies

At first glance KTI Kanatek Technologies of Ottawa looks like a company that was nowhere and then skyrocketed to 47th place in the CDN Top 100 Solution Provider rankings

That’s misleading. The firm was not on the list last year because it did not want to participate, and also because it is a private company.But former Veritas Canada president Fred Dimson became KTI’s vice-president of sales and professional services, and things changed.

Dimson says he knew the value that the Top 100 list brings to its members and wanted the firm to participate this year.

Couple that with a great year in revenue, and suddenly KTI is a noticeable player in the IT industry.

Another reason for the company’s return to success was its shift from providing hardware to professional services and managed services. Dimson said these two moves drove revenue for the company.

KTI also provides customers with back-end support, but with a twist. It offers first and second line support from Symantec, which means a KTI support technician often answers the phone when customers call for help.

One of KTI’s service offerings is called Kanatek Data Protection Managed Services (DPMS). It’s about managing a client’s data backup and recovery services, on their behalf, on their premises, with their equipment.

Besides the shift towards services, KTI also helped itself with the addition of strong personnel.

Dimson joined KTI because he saw a fit. Dimson built Veritas Canada and he knew that one of KTI’s strength was its storage expertise.

“They have been in business for more than 25 years and that says something about them with all of the ups and downs in this industry. I also thought I could make an impact,” he said.

Selling solutions
Dimson added that KTI also diversified its product lines to handle more items. From there the company started to focus on deliverables and solutions.

“Instead of selling a box the same way other partners did, we developed a solution and delivered on that solution. This has lead to more business. It was an investment first, but now we are getting repeat business from clients,” he said.

More than two-thirds of KTI’s staff focuses on deliverables. Dimson calls them delivery engineers, and this approach has enabled KTI to differentiate itself in the market over the last five to seven years.

For the future, Dimson hopes to continue its growth spurt by furthering the company’s diversification. This will mean more new products and additional solutions. The goal, as he sees it, is for KTI to deliver end-to-end solutions for its clients.

Already some vendors have recognized KTI’s growth and its delivery approach and started to call them for help in certain accounts, Dimson said.

Acquisition brings firm’s debut
For some 20 years CMS Software, developer of enterprise resource management applications for manufacturers and distributors running IBM’s AS400/iSeries and Windows servers, plodded along largely on internally-generated growth from selling turn-key solutions either itself or through IBM partners.But a large pension fund’s suggestion two years ago that it consider venture funding led a deal that pushed the company onto this year’s Top 100 list and kudos as newcomer of the year.

The pension fund’s interest “got our excitement up about the possibility of growing through acquisition rather than organically,” recalled CMS chairman Rudy Joss.

At the beginning of 2006 it bought Mattec Corp., an Ohio developer of a Windows-based factor manufacturing execution application called ProHelp EPM.

That boosted its annual revenue to about $25 million a year, largely though IBM channel partners, good enough for 51st place on our list. Last year it wasn’t even included in the count.

Joss said the company is flattered by its appearance, figuring until now the list was only for large solution providers.

It may soon count itself as one of them, for last month – with the help of a private California equity firm – it merged with XKO Software of Britain of mid-range ERP systems with a large European customer base.

The combined companies will have an estimated annual revenue this year of $55 million, which will push CMS even higher on the list.

The deal pushed Joss higher, from being president of the company to chairman. The new CEO is Shawn McMorran, who held that post at XKO.

CMS was started in 1986 by Joss and three colleagues who wanted to create an IBM value-added reseller specializing in the company’s System 36 platform.

At the time Joss managed Big Blue’s VAR business. “I thought all the world needed in the reseller community was some IBM management,” he laughs. “It took me a while to learn how tough it was in the real world.”

By 1990 the company had developed an ERP system, then ported to IBM’s AS/400 platform, called CMS400 (now called CMSi5), and was concentrating on the manufacturing industry.

A $350,000 investment by the Ontario government that year allowed it to expand sales into the U.S., which, until the XKO deal, grew to account for 75 per cent of its business. Another 15 per cent of sales are to companies in China, Mexico and Europe, countries where it now has offices.

In 2000 the company took another leap by developing its application on Microsoft’s .Net platform. The resulting suite, called CMSm5 for Windows, includes financials, customer relationship management, manufacturing, distribution, enterprise reporting and employee management modules.

With XKO to diversify the lineup, Joss is pondering more acquisitions and hopes within five years to have revenue of $100 million.

The little DependableIT vans that could
While its fleet of vans on the road across Southern Ontario give DependableIT strong brand recognition, the heart of the Burlington, Ont.-based services company’s success is the people inside those vans.Getting its start in 1997 by providing contracted on-site technicians for Rogers Cable and Cogeco Cable, performing cable modem instillations and software configuration for residential customers, the relationship quickly grew to providing all on-site service work.

Expanding beyond its cable roots, a technical call centre was launched in 2001, and by 2002 DependableIT’s business included outsourced sales, outsourced call centre support, on-site computer service and small to large scale computer networking.

It was acquired last year by Creative Vistas, a publicly-traded Whitby, Ont. -based company which also has corporate security divisions.

Today, DependableIT has more than 450 employees. Troy Adams, manager of outside sales, said their dedication to service and support has garnered the company the success it has enjoyed recently.

“There is no concern about time to remedy or time to get the work done,” said Adams.

Instead, he said employees take a “we need to get the work done no matter what” approach.

It’s something that comes from the top down, he said, adding the management of the organization has put the highest focus on customer satisfaction.

“From my point of view, being in the managed services space for many years, the culture of this organization at the head office in Burlington is quite different from that of the rat race of the GTA (Greater Toronto Area) organizations,” said Adams.

Legacy business
As DependableIT has moved into managed services, Adams said the reputation their employees have built through the field install legacy business, not to mention the brand recognition of their fleet of vans, has made a big difference and given them a leg-up on the more established competition.

“When I visit new opportunities people have heard of us,” said Adams. “They’ve seen the name, and they almost immediately get a level of comfort and confidence that they’re dealing with an established organization.”

That reputation also helps potential customers get over some of the uncertainty of moving to a new solution provider, and the stress of leaving an unhappy situation for an unknown situation.

“We’re doing a good job, but if I was to walk in the door and they’ve never heard of me and they also have the stress of changing solution providers, it would be much more of a challenge for me as a sales manager to win as much business as we’re winning,” said Adams.

“I think the Rogers and the Cogeco origin of the business has been a huge advantage to the managed services side.”