IT Weapons sees Canadian small business as key in new round of managed services growth

IT Weapons has pursued an organic growth strategy since it was acquired to become Konica Minolta’s managed services arm in Canada. The acquisition of Calgary-based Continuity Solutions is designed to further that strategy in the small business space.

Ted Garner, President of IT Weapons

In September 2015, Konica Minolta Business Solutions Canada acquired Brampton, Ontario-based IT Weapons, establishing it as Konica Minolta Canada’s nationwide IT services division, and a key component within Konica Minolta’s global services strategy. The plan then was that this would be the first of a series of acquisitions, which would build IT Weapons into a services powerhouse in Canada for Konica Minolta. The strategy has changed along the way, but IT Weapons thinks it is still on track. They are looking to build it out further into the small business space with their recent acquisition of Calgary-based managed IT services provider Continuity Solutions.

Ted Garner, who has led IT Weapons since its inception in 2000 and continues to run it as President of IT Weapons, a Division of Konica Minolta, said that the company has built out significantly organically since they were acquired.

“We have matured, from a small business to a medium-sized business, and we have spread geographically to become Canada-wide,” Garner said. “It has taken some doing to get used to being a big piece in a much bigger plan. It was also scary to sell the company. It’s part of you. It’s not just books contracts and clients – and we were about 80 families then that relied on us for livelihood. Konica Minolta committed to do no harm to our award-winning, rare and enviable culture, and we are now almost 120 people.”

One of the pluses, as anticipated, has been the ability to draw on the resources of  Konica Minolta Canada.

“That puts another 150 sales people and 400 technical people at our disposal,” Garner said.

They also reworked their own organization and deployment of staff following their acquisition.

“We assessed what we had, determined who is more field services and who is IT. and we upskilled them when we had to,” Garner said. “This gave us the ability to operate as a national IT provider.”

When IT Weapons was acquired, Garner was hopeful that the Konica Minolta install base in Canada would provide a ready market for services, where the penetration rate had been very low. Things haven’t happened as planned, but Garner said that has actually been for the best.

“We have done a lot of business there, but not on the scale we thought we would have,” he said. “That’s a good thing. All Covered has been good at seeing how we fit, spending a lot of time on qualifications and defining what our sweet spot was instead of carpet bombing. We thought it would be tens of thousands of opportunities from the install base, but we narrowed it down. So we did get wins across the country, and have a significant revenue in every province.”

The acquisition is also broadening their services portfolio. Konica Minolta stressed their newer types of on-premises solutions at their 2019 Dealer Conference in March, especially their Workplace Hub.

“This has been a bit of an evolution for us,” Garner said. “Historically, we sold IT services. But there’s a lot of lot of forward-thinking things that the company now has access to. One of the first things that we did was go to Konica Minolta’s business innovation centre. We have looked at things like the Workplace Hub, ALICE [an automated receptionist] and Mobotix [intelligent video security] and we are all-in with the new technology. It is part of us. We are looking at how we can integrate them into a hardware-as-a-service solution. IT Weapons is always looking to turn resell and product into a service.”

New opportunities have developed on other fronts as well.

“All Covered [the U.S.-based arm of Konica Minolta services] purchased a VoIP company in the U.S. that brought more skills to our team,” Garner said. “Unified Communications is ramping up, as people are getting more comfortable with the video side. We are seeing an increasing play in connectivity, both wired and wireless. Public cloud has become a bigger deal too.”

IT Weapons’ market focus has also shifted somewhat since the acquisition took place.

“When we were acquired, we were quite different from All Covered,” Garner said. “We were more midmarket and enterprise, and All Covered then was very big in small business – two different markets. They have come upmarket to have more of a presence, and we have developed services for the small business world.

The acquisition of Calgary’s Continuity Solutions in March is intended to drive this small business presence more deeply.

“This was not a growth acquisition,” Garner said. “It was about skills. It brought in new small business skills that we did not have. With Workplace Hub coming, that’s important.”

Continuity Solutions, founded in late 2016, just has the one office, and while the company has been growing, the real catch is Ray Archer, who had been a Partner there. Most of the other employees at Continuity have been subcontractors.

“I knew Ray well from the past, and he is an entrepreneur who speaks technical sales and marketing and turning it into a service,” Garner said. “We had that, but more at the mid-market and enterprise. Ray is ‘everything small business.’

“When you look to acquire in this category of companies focused on serving small businesses, with most of these companies you are getting a super nerd and five clients that trust them,” Garner added. “Here we are getting a true entrepreneur who understands tech and sales and marketing. He also has a servant’s heart, and is still employee-minded from his previous gigs. We had everything we needed to expand in small business, except the content, and he is the content.”

Archer will play a key role in scaling up IT Weapons’ small business presence.

“He will help us define the roles, determine what we need to have, and we will staff up,” Garner said.

This is the first acquisition to augment IT Weapons since the initial acquisition, which was not the original plan.

“We were initially told that we were the foundation acquisition and that others would follow,” Garner said. “The slower acquisition pace was at my request. We wanted time, so we could fit everything into our sales focus coverage, evolve to national offices in every major city, and bring it all together into one national service-oriented team. We wanted to do it more organically because it’s harder smashing a lot of teams together to create one culture, and one of our assets as a company is that are very good at creating culture. Thankfully, Konica Minolta was behind this.”

Garner said that when IT Weapons was acquired, the belief then was that it would require acquiring eight companies in all to build out the national presence that Konica Minolta wanted.

“Instead we have acquired organically, and now have added Continuity Solutions,” he said. “This is a better strategy, a people-first strategy, and also didn’t require spending many millions to accomplish.”

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