Sirius Acquisition Expands Coverage into Northwest

by Alex Woodie

Sirius Computer Solutions, which, the company says, is the world's largest reseller of IBM midrange servers, has recently extended its reach into Northwest United States with the acquisition of Symatrix Technology, a Beaverton, Oregon, IBM reseller with experience in Lotus and WebSphere development, storage, and high-availability solutions. The acquisition brings Sirius 73 new employees and a business, the companies say, had revenues of $33 million last year.

The acquisition of privately held Symatrix, one of IBM's largest resellers in the Northwestern states, was completed on October 1. Financial terms of the deal were not disclosed. Representatives for the two companies said geographical expansion for Sirius and consulting expertise were the key drivers in the deal.

"One of reasons the acquisition is such a good fit is we covered different areas," said Mike Madigan, a senior vice president of sales and cofounder of Symatrix. Sirius gains Symatrix offices in Seattle, San Francisco, Salt Lake City, and Hawaii. Sirius also has an office in San Francisco, and Madigan says he expects the two operations to be combined.

Besides geography, Sirius gains an experienced Lotus development team that won a Lotus Beacon award in 2001 for various Domino-powered projects. In October 2001, Symatrix opened one of the Northwest region's first IBM TotalStorage Solution Centers, where iSeries, pSeries, and xSeries users can go to learn about compatible IBM storage offerings and test integration. Symatrix also gained recognition earlier this for the rapid implementation of Vision Solutions' high availability software to ensure that a law enforcement database running on an OS/400 server was kept online during the Winter Olympic Games in Salt Lake City.

In terms of generating revenue, Madigan said, iSeries was the top-selling server at Symatrix, followed by pSeries and storage solutions, including tape and disk arrays. The xSeries practice at Symatrix is fairly young but has grown into a $2 million business since its inception, two years ago, Madigan said. Sirius has a very strong iSeries business and also sells pSeries and xSeries from IBM, as well as Unix servers from Sun Microsystems.

Madigan, who left IBM with Bill Arntz seven years ago to form Symatrix, said the company had been considering ways to increase revenue growth and take the company to the next level. "We looked up and saw Sirius several steps above us," he said. "It really is a good fit. I'm extremely excited about this." Arntz, who was president at Symatrix, takes the position of vice president of business development at Sirius.

John Flores, a spokesman for Sirius, said Symatrix's successful consulting practice and geographic locations were the key drivers behind this acquisition. The fastest growing segment of business for Sirius--which sees roughly 65 to 70 percent of its revenues from servers come from iSeries sales, and had total revenues of $215 million last year--is on the software side, particularly with Domino and WebSphere development, Flores said. There has been so much demand for application development skills that Sirius has had to pass consulting jobs on to subcontractors because it did not have enough consultants, Flores said. Before the acquisition, Sirius had 20 to 25 consultants. Symatrix employed close to 50. "We had sales skills, but we needed people on the bench to perform," Flores said.

One area of operation that the combined company will have to reconcile fairly soon is its affiliation with high availability business partners. Symatrix is one of the top business partners of Vision Solutions, which heavily featured Symatrix this August in the rollout of its new channel program, called the VIP Program, and a marketing program that goes along with it, called Xcellerate. Sirius, on the other hand, has very close ties to Lakeview Technology, Vision's top rival in the fiercely competitive market for OS/400 high availability software. In July 2002, Lakeview named Sirius its Partner of the Year for 2002, the third time Sirius has won the award that is given to the partner that generates the most revenue for Lakeview.

Sources say a decision will be made before the end of the year--and likely before the end of November--about whether Sirius will keep Symatrix's Vision practice, and about whether it will sell and support Lakeview's software. It is unusual for resellers to have partnerships with companies that compete in specific disciplines, especially for a reseller of Sirius's size.

Symatrix also had strategic software alliances with two other OS/400 software vendors in the Northwest: PowerTech Group, a Kent, Washington, vendor of security management software, and ADVANCED BusinessLink, a provider of Web application middleware headquartered in Kirkland, Washington. Flores said Sirius will continue to leverage those partnerships going forward.

Sirius, which has made several acquisitions in the last few years, is closing another deal, which will be announced soon, Flores said. "We're rocking and rolling."

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