They say you can’t go home again, but that is exactly what Nick Foster, the vice-president of SoftChoice, is doing as the de facto general manager of NexInnovations’ products and solutions business.
SoftChoice snapped up the remains of NexInnovations for $10 million. Foster worked for NexInnovations when it was known as ComputerLand for 11 years. On his first day back at the old office he was reunited with former colleagues who looked to him as a sort of saviour.
The deal to acquire the products and solutions assets of NexInnovations was sealed at 9 p.m. on Friday, Oct. 5. At 9:01 p.m., Foster was on the phone with NexInnovations staff to tell them SoftChoice bought the business and that job offers were on the way.
“It was quickly becoming a brown to black bananas scenario and you just don’t eat them when some other company was looking to grab accounts and sales people. It was like cherry picking,” he said.
Foster pointed out that these were job offers, not requests for interviews. SoftChoice wanted as much of the sales team in place if it had any hope of retaining the majority of the accounts.
Of the 107 NexInnovations staff that stayed on with SoftChoice, 65 of them were in sales. That is approximately 82 per cent of the sales team. With that, Foster and the combined SoftChoice/NexInnovations teams were able to retain more than 90 per cent of NexInnovations top-end customers.
Foster gave CDN an exclusive tour of NexInnovations offices and the integration process. Foster, along with former NexInnovations central sales manager Kevin Felton, discussed the integration plans among other things.
CDN: What is the integration plan for NexInnovations?
Nick Foster: Dave MacDonald asked me to come down and initially run it as a separate business for six months and for me to be the de facto GM. It quickly appeared to us that the six-month goal was unachievable. There were too many customers that did not want to do business with NexInnovations. We just bought the name, contracts and the certifications and authorizations; for example, Cisco’s gold authorization. Today, we take orders from those customers and we work with Cisco to transition that authorization to SoftChoice. We also bought the name so that no one else could use it and create confusion. The Computerland.ca Web site was very transactional and we are in the process of shutting that down and moving it to SoftChoice.com. Some of the SKUs on that site were out of date.
CDN: Why were you keen on retaining the sales team at NexInnovations first?
N.F.: It was important to us because they knew the customers and it would have been a great opportunity wasted. So we wanted to hold on to those who forged the relationships.
CDN: From there, what was your next step?
N.F.: The first order of business was to look back at a crazy week and get them committed to SoftChoice. Have people like Kevin (Felton) sign up, and the next step was to call on customers. We called everyone and the challenge was some of those sales people that left. Those accounts needed to be reassigned. About 80 per cent of the revenue was in less than 50 accounts. Nex had 600 customers overall.
CDN: What were some of the upsides for customers to stick with SoftChoice?
N.F.: Well, NexInnovations did not have any foreign customers. That did not surprise me. We knew that and it was an upside because now they can source products through our U.S. division, which NexInnovations was unable to do. Many customers thought that was good as two-thirds of our revenue is from the U.S.
CDN: What was the secret to retaining so many of the customers?
N.F.: NexInnovations focused on the large customer and it is not easy for them to switch. We said to them the same people that were here servicing your account are still here to do your business, but with the backing of SoftChoice. There was a certain comfort level with that for them.
CDN: What was it like for NexInnovations’ employees?
Kevin Felton: We found that the staff here at SoftChoice moved quickly on executing. They were fast on communications with employees and in front of the customer. The customer suffered with us under CCAA and they valued the things we did as an organization. I am glad we can continue the business on sound financial footing.
CDN: What do you think SoftChoice can bring to NexInnovations customers?
K.F. Licensing strength. As a LAR they bring more value than NexInnovations could. It is very complementary. NexInnovations was just flipping a piece of paper and did not have audit, asset and reporting on software assets as it relates to licensing. NexInnovations was strong on the product side.
CDN: Kevin, what was it like to be in that room and get the bad news from Hubert Kelly?
K.F.: It was like being at a funeral for a good friend. You could see that things were going on and that someone was going to purchase us. Most people were hopeful that it would have been sold. It was very quiet on the floor when we were told they laid everyone off. Therefore, it was a sad day and lots of people were impacted. You have people that worked through this whole thing and there was some tough slogging and we were all disappointed. All that effort trying to keep the boat afloat and it sunk anyway.