AI Growth And Acquisitions Ahead: Fulcrum IT Partners Aims To Hit $2B Sales Target In 2024
BY STEVEN BURKE
‘We want to be on the forefront of bringing actionable AI -- not just AI for the sake of AI -- to the market,’ says Fulcrum IT Partners Chief Strategy Officer Kelly Carter. “We will be a leader there!”
Fulcrum IT Partners aims to double revenue to $2 billion this year fueled by AI sales growth and an additional four to six acquisitions.
Fulcrum, which in January closed the acquisition of United Kingdom AI and data analytics pioneer Razor, is on the “forefront” of the AI revolution with sharp focus on building revenue-generating solutions for midmarket and small enterprise customers, said Fulcrum IT Partners Chief Strategy Officer Kelly Carter (pictured).
“We want to be on the forefront of bringing actionable AI – not just AI for the sake of AI- to the market,” she said. “We will be a leader there! What has been exciting for me about joining Fulcrum is we have the ability to move very quickly when we see these opportunities. We are not tied to a legacy type of structure. We are very focused on how do we become the leading solution provider of the future.”
The emerging AI solutions powerhouse is currently in the process of leveraging Razor’s AI talent to roll out AI solutions throughout the company’s network of 12 solution providers. “You’ll see us growing that AI business over 2024,” she said. “It’s a huge growth focus for us in terms of how do we bring that to all of the other Fulcrum companies and their customers.”
C.R. Howdyshell, CEO of Advizex, a Fulcrum IT Partners company, said Advizex customers are already benefitting from the Razor acquisition and the big AI investments being made by Fulcrum in the partner network.
“This is changing what we can do for customers in both the short term and long term,” he said. “I am thrilled that Fulcrum had the vision to make that investment in AI. AI is the most significant opportunity in my 20 years in the channel.”
Howdyshell said the Razor acquisition opens the door for Advizex, No. 123 on the 2023 CRN SP500, to build out its AI software and services business. That’s on top of an estimated $60 million AI infrastructure sales pipeline, said Howdyshell. “Razor allows us to bring additional value with AI software development services which is clear AI differentiation for Advizex,” he said.
Chris Miller, CTO of Advizex, said Razor has both breakthrough AI assessment and consulting services and unique “data acquisition” technology that is driving “business value” for customers.
“Everything they do is business value-driven and it is aimed 100 percent at where our customers are at,” he said. “They have this (AI) platform that we don’t have with any of our existing OEM partners and also the wherewithal to help customers figure out where to focus their time to get AI business value. They execute innovation sprints with customers to test out potential AI solutions. They fit us like a glove in terms of what their capabilities are and what we needed. On our side we bring the extended sales force and the enterprise sales force to bring the AI vision to reality. For our customers this means we are going to be able to bring them technology solutions for problems they have been trying to solve for years.”
Miller said he sees the Razor partnership opening the door for Advizex and other Fulcrum IT Partners companies to drive new AI solution opportunities for OEM partners that simply did not exist before.
“This gives us the AI expertise, tools, services,strategy and advisory consulting that the OEMs can’t provide in specific verticals where we have expertise,” he said. “We are building our own IP (intellectual property) that drives the need for OEM solutions on the backend. The channel has the opportunity to lead the AI era, but you need the expertise of a Razor to do that.”
As a CTO, Miller said he is “super excited” about the game-changing AI innovation that Razor is delivering to customers. “They are mostly engineers, when they are not out delivering customer value they are doing R&D and staying ahead of the curve,” he said.“It’s not just GenAI,” he said. “They are working with AR (Augmented Reality) and VR (Virtual Reality). They are building occupancy sensors that can be used to detect when someone enters a room or building. They have a lot of innovation going on!
Fulcrum Chief Strategy Officer Carter, for her part, said Fulcrum’s AI advantage is the ability harness the power of all the data that customers have within the organization to drive sales growth.
“We have all the systems that are compiling and mcollecting all this data within our customers,” she said. “With AI we can create a view on that data that allows them to see where they can accelerate the growth in their business. That is huge. Nobody is using the data that way in a traditional solution provider business. (Up until now) It has been more about supporting systems and creating efficiencies in the backoffice. We are taking that a step further today providing customers with real insights into how they can grow their own business from their own data.”
Besides the acquisition in January of Razor, which brought Fulcrum 50 AI technologists/data scientists, the holding company also recently acquired PayiQ, a cloud-enabled payment processing and intelligence platform, which expands Fulcrum’s footprint in vertical markets like retail; Nimbitech, a bespoke apps provider that leverages AI powered low code tools from the Microsoft Power Platform, and Reyt, a consulting company focused on building mobile and web applications in the sports, healthcare and well being markets.
Fulcrum is currently eyeing acquisition targets in the $300 million to $500 million range, several in the $700 million range, and also niche players with stellar talent in areas like cybersecurity and managed services, said Carter.
“We’re putting our money where our mouth is,” Carter said of the AI and data-driven, revenue-generating sales strategy being honed by Fulcrum and its partner companies. “That is huge,” she said. “You don’t see that happening in the channel today.”
Fulcrum made four acquisitions in 2023, closing out the year with $1 billion in total sales and 900 employees, up from 360 employees in 2022.
The potential for explosive AI sales growth makes it the “best” time for Fulcrum to build out its fast growing solution provider network, said Carter.
Because of how it structures deals, Fulcrum is able to attract hot AI and other tech talent that traditional private equity companies cannot win over, said Carter.
“We are an alternative to private equity whereas you are swallowed up by private equity and what they are doing,”she said. “Look at Razor, they are very much empowered by joining Fulcrum and will benefit from the success of the entire Fulcrum companies. I think that’s a little bit different model than traditional private equity. That does allow us to acquire companies that might not have otherwise been interested in selling.”
Carter said Fulcrum IT companies are “excited” about building a solution provider powerhouse of the future, whereas many partners feel traditional private equity is focused on cutting costs to extract maximum profitability.
Carter, a 28-year channel veteran and former chief financial officer of Ingram Micro Canada, said Fulcrum IT Partners is poised to be a leader in making the channel “more relevant” as AI reshapes the market. “That is very exciting to me,” she said. “I want to see a healthy channel continue. I want to see solution providers succeed. We will be a leader in that!”