Over the past 13 years, Berbee Information Networks Corp. has evolved into a $390 million information technology provider that thrives by delivering cutting-edge solutions for its customer. Last September 2006, the Madison-based company was acquired by CDW Corp., a technology products and services provider based in Vernon Hills, Ill., for $175 million.
Just as his company’s role changed with the acquisition, Berbee chief executive officer Paul Shain’s role changed, as he added the title of senior vice president for CDW.
After a busy 2006, Shain is preparing for a promising 2007 both in the solutions Berbee provides for its customers and the company’s new status as a strategic business unit of CDW.
The two companies operate independently, Shain said, but look for opportunities to integrate CDW’s products and services with Berbee’s technology solutions to become a full-service company to customers.
“For us personally, I think the opportunity of our combination with CDW is really to do more for customers,” Shain said. “Historically, our company has sort of stopped at the data center. We did the high end infrastructure work and the application work but didn’t always have a mechanism or a capability to help a customer roll that technology out to multiple desktops. Being now part of the CDW Corp., we can easily extend and leverage many of the things they do on the procurement and deployment of lots of different pieces of technology to really provide the customer a complete solution.”
Berbee will also benefit from CDW’s national presence. Currently, Berbee focuses its business in six Midwestern states. Berbee has about 3,000 customers, whereas CDW services more than 350,000 customers. The acquisition will help Berbee open multiple locations outside of the Midwest in the coming years, Shain said.
The acquisition of Berbee came about because of the complementary business models, Berbee is a services-centric company, while CDW is a retail and transaction-centric company, Shain said.
“Our industry is consolidating very rapidly, and so we were trying to make sure that we were well-positioned to survive and thrive in a changing industry,” Shain said. “We felt this was a very good next step for our company and our customers and for our co-workers.”
Shain is also preparing Berbee to embrace three major technology solution trends in 2007: unified communications, server and storage virtualization and managed services.
“Our business model is pretty simple. We try to identify long-term trends that are going to be providing growth well above industry averages,” Shain said. “Those three are absolutely right down the middle of the fairway, and that is how we choose where we play in the marketplace.”
Unified communications includes the combination of voice over Internet protocol (VoIP) with advanced communications tools for internal and external purposes. The tools enable individuals and companies to communicate effectively without having to be face-to-face, including document sharing, Web conferencing, more cost-effective teleconferencing and instant messaging, Shain said.
“What is enabling this is technology from Microsoft in a big way,” Shain said. “Microsoft is launching a tremendously significant number of new products now, including a new operating system (Vista), an upgrade of all of the Microsoft Office suite of products and services, which are much more integrated than they have ever been before and provide a huge increase in productivity for the users.”
Server and storage virtualization is a fairly old practice but a relatively new technology trend because of the cost savings, Shain said. Virtualization enables users to run multiple servers and operating systems on one machine without affecting other applications.
“The real efficiency is that you can literally provision a new server for an organization in seconds,” Shain said. “If you have a business that has volatility in the amount of work that your computing environment needs at any given time, you can provision more capacity on demand.”
An example would be a retailer that has a high volume of sales on its Web site during the Christmas and holiday season, but does not need a high capacity server during the rest of the year, Shain said.
“They can increase capacity basically on demand,” Shain said. “It is a very cost-effective way of doing it, provides them much more flexibility than if they had to go out and buy another device, use it for three months and then have it sit there for the rest of the year and effectively not use it.”
The trend of managed services is the continuation of outsourcing but around the monitoring and maintenance of computer systems that can be done remotely. With managed services, Berbee can implement devices at a customer location but monitor and maintain the devices on a 24-by-7 basis within a Berbee location.
The advent of managed services gives business owners peace of mind because their devices are constantly monitored by IT professionals. The other advantage for business owners is that they can provide work/life balance to their IT staff, Shain said.
“A lot of companies are finding it difficult to find well-qualified people (for their IT staff), and the people they do find are not interested in working and getting paged in the middle of the night,” Shain said. “We can provide an extension of our capabilities into that customer’s location and provide those same services on a remote basis. It is a much better environment for our customers.”
Although Berbee is now owned by an Illinois-based national corporation, Shain said there are no plans to take the company out of Wisconsin. In 2007 and going forward, Berbee plans to do what it has always done.
“We have had great success,” Shain said. “We have been in a good industry that has been very high growth, we have been blessed with incredibly talented co-workers who have worked hard for our clients, and I think we are certainly pleased with the way the evolution of our company has worked out. But we still think there is a lot more ahead of us, so certainly not by any means is it the end. It is more the beginning of the next chapter.”
Paul Shain
Title: CEO of Berbee; Senior Vice President of CDW
Education: BBA and MBA from UW-Madison
Residence: Madison
Family: Married to Suzy
Hobbies: Reading, travel, biking, Badger sports
Berbee Information Networks Corp., A CDW Company
Location: 5520 Research Park Drive., Madison
Industry: Information technology
Number of employees: 900
Annual revenue: $390 million
Web site: www.berbee.com
