"We still sell traditional business solutions," he said. "We're not walking away from that business. But even if working with startups does not generate a lot of revenue, it is driving a lot of relevance for customers."

Dealing with startups is not without its risks, Coats said.

One startup that did not work out for Trace3 was FireScope, a Huntington Beach, Calif.-based data center monitoring and management software developer that Trace3 partnered with back in the vendor's early days. Coats said FireScope has great technology, but it just wasn't the best fit for what Trace3's clients were doing at the time.

"As an engineering company, we tend to focus on technology," he said. "We have since realized that the best technology does not always win. So we developed processes to look at things like a vendor's technology, structure, and the infrastructure to support the channel. It's a 360-degree look at potential partners."

Among Trace3's biggest successes with startups are three that Coats said have turned out to be great partners, including Nutanix, the San Jose, Calif.-based hyper-converged infrastructure leader; AppDynamics, a San Francisco-based developer of application performance technology; and Delphix, a Menlo Park, Calif.-based developer of technology for managing data for application projects.