Making the switch from reselling hardware to an all services business is much more than overhauling your business model. It's an identity overhaul.

That's why Alliant Technologies is launching a new brand on Thursday, CEO Bruce Flitcroft said.

By 2007, Alliant Technologies was a very successful VAR integrator. It won top partner awards for five major vendors partners that year, including partner of the year awards from Cisco and RSA. The company was exactly what a successful VAR integrator should look like, Flitcroft said.

However, Flitcroft said that Alliant Technologies knew that wasn't going to be the future of the industry. So, in 2008 the company took a big risk and dumped the successful VAR integrator business for a services only business with its own intellectual property offerings. Despite a period of internal turmoil to get there, Flitcroft said the transition was very much worth it. So much so, that the company launched a partner company, Red Forge, in September to use the tools and processes it developed internally to help other VARs make the transition.

Alliant's transformation required a major investment over three years, Flitcroft said. In the first two years, sales dropped almost 40 percent as the company stopped actively selling hardware.

However, after three years, the risk started to pay off. In the first 12 months, its Continuous Infrastructure Service (CIS) offering made $2.5 million in revenue. It wasn't a lot, Flitcroft said, but it started to ramp up quickly. The second year brought $9 million in revenue and this year the company expects to do $17.5 million. Next year, Alliant is projecting $64 million in revenue and its margins overall are higher than they ever were as a VAR integrator, Flitcroft said.

"We dropped ourselves into the pit," Flitcroft said. "We forced ourselves to climb out. We didn't stand on the edge and wonder. We took the leap. That was the hardest thing to do."
 

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