Montreal-based NetSuite solution provider ERP Guru has expanded its business in the U.S. with the purchase of Glenview, Ill.-based MD Technical Resources, a fellow NetSuite VAR.
The companies are already integrated, and MD Technical chief Mike Davis takes over as the new chief of sales for the U.S. Midwest at ERP Guru. And that’s precisely what drove the acquisition, said Martin McNicoll, president of ERP Guru.
For McNicoll, whose business has been built across Canada and the U.S., acquiring smaller, locally focused VARs gives them room to grow in new areas. And for regional VARs, McNicoll believes becoming part of a larger organization helps add economies of scale – letting the larger parent organization take care of the technical details while local team members focus on regional sale and marketing.
“We’ve got a critical mass and it makes it easier for them to just go out and sell,” McNicoll said. “For small VARs, the technical side is always a problem. It’s difficult for them to get to the point of getting a professional services director or operations manager to build that part of the business.”
Although it’s new to the Midwest, ERP Guru is no stranger to the U.S. with offices closer to its Montreal headquarters in New Hampshire and Massachusetts. Although McNicoll said he founded the company with the idea of running a local business in Quebec, the U.S. market is too large to ignore, particularly as McNicoll says he’s waiting for the “Canadian market to wake up to SaaS.”
Still, getting into the Chicagoland region wasn’t in the plans for this year, he said, with the focus being on building up the lucrative East Coast business. “The Midwest just kind of happened,” he said with a laugh.
It happened in large part because of the small, close-knit nature of the NetSuite partner community, where McNicoll says everyone knows each other very well. This particular deal, he said, came about through a member of ERP Guru’s Boston office, a well-connected former NetSuite employee. A happy coincidence, as it were.
“We’re not going out and trying to acquire people,” McNicoll said. “It’s more a marriage than a hostile takeover.”
Still, it might not be the only marriage for ERP Guru. While McNicoll stopped short of declaring an all-out acquisition strategy, he said that buying into smaller regions and letting local people focus on building the business while centralizing technical services makes a lot of sense, particularly after its attempt to grow organically into Vancouver fizzled. It takes advantage of the strengths of the central organization (resources and technical skills) and the local VAR (contacts and experience in the local business community.)
And although the MD Technical merger is still a recent memory, McNicoll already has a next target in mind – Washington, D.C.
“We’re still scouting the area, but we’ve met some people,” he said.