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November 18, 2002

L. A. Business Journal Names Key Fastest Growing Private Company
In its Special Report dated November 18, 2002, titled L.A.’s Fastest Growing Private Companies, the Los Angeles Business Journal named Key Information Systems the number one fastest growing private company of 2002.

Key Information Systems, Inc., a systems integration company providing corporate infrastructure architecture for business continuity and storage solutions, has been named the single fastest growing private company in Los Angeles County. Such a ranking is often an early indicator of future accomplishments on a wider scale.
The announcement was made at the Beverly Hilton Hotel at an event sponsored by the L.A. Business Journal. Lief Morin, President, and Pete Elliot, Director of Marketing, were on hand to accept the award, a Tiffany Hall of Fame Bowl.

An article in the L.A. Business Journal on November 18, 2002, titled Computer Services Built on Old Fashioned Shoe Leather stated:

“The proof is in the results. With only 32 employees, Key Information generated $34 million in revenues last year, selling hardware, software and services to small- to mid-size companies. The 1,600 percent rise from revenues of $2 million in 1999 puts Key at the top of the Business Journal’s growth list, besting its closest rival by 642 percentage points.”

”The irony of Key Information’s success is that the company isn’t pursuing growth for growth’s sake. It limits its product offerings to the International Business Machines Corp. hardware and software platform, reasoning that it can better serve its customers if it specializes than by branching out to other vendors.”

“The company has landed some major customers, including Guitar Center Inc., fruit marketers Bear Creek Corp. of Medford, Ore., and CR England Inc. of Salt Lake City, North America’s largest refrigerated truck carrier.”
Founded in 1995, Key has distinguished itself by extending its high availability infrastructure solutions to the new internet economy. "We deliver a complete range of offerings including professional services, education, maintenance, and IBM Global Financing." Key integrates your business strategies with infrastructure engineering to deliver affordable and scalable solutions for today's fast-paced business environment. Clients range in size from internet start-ups to Fortune 500 clients.

Key’s bottom-line formula: "We design and protect architectures that make your business more profitable."

Text from the Article:

Computer Services Built on Old Fashioned Shoe Leather
By ANTHONY PALAZZO
Staff Reporter

Key Information Systems is an unlikely pick to be at the top of the Business Journal's list of 100 fastest-growing private companies.

For one thing, it's a technology company, and everyone knows that corporations aren't spending money on technology anymore.

Growth: Pete Elliot, left, directs marketing while Lief Morin, center, with Paul Holcomb, oversee Key Information Systems (above right).

In addition, it's hitched its star to a single major player in the tech industry one whose stock is down by 31 percent in the past year.

And while much of Key's industry, selling and servicing computer equipment, has migrated online in recent years, the Woodland Hills company takes a conspicuously old-fashioned approach. It sends out representatives to meet with customers who could easily buy their equipment sometimes $500,000 worth over the Internet.

There are many people who want to do business on a face-to-face level, said Lief Morin, president of Key Information. They want to shake somebody's hand, they want to look them in the eye and say, Hey, is this product going to work? They want you to look them back in the eye and say, Yes.

It's true now, it was true 20 years ago and I believe it's going to be true 20 years from now, Morin said.
The proof is in the results. With only 32 employees, Key Information generated $34 million in revenues last year, selling hardware, software and services to small- to mid-size companies. The 1,600 percent rise from revenues of $2 million in 1999 puts it at the top of the Business Journal's growth list, besting its closest rival by 642 percentage points.

The irony of Key Information's success is that the company isn't pursuing growth for growth's sake. It limits its product offerings to the International Business Machines Corp. hardware and software platform, reasoning that it can better serve its customers if it specializes than by branching out to other vendors.

During the dot-com heyday that was a very tempting prospect for us, Morin said. Some of Key Information's customers did acquire machines built by IBM rival Sun Microsystems Inc., for example. we could have had opportunities to sell that. We made a conscious decision not to. The reason is, we want to focus on our core business: selling, installing and servicing IBM product.

Large customers

The company has landed some major customers, including Guitar Center Inc., fruit marketers Bear Creek Corp. of Medford, Ore., and CR England Inc. of Salt Lake City, North America's largest refrigerated truck carrier.
If they had carried a number of product lines and supported a number of lines, it would have really diluted their ability to service for sure, said Brian Wyatt, information systems operations manager for CR England.
And service is a big deal.

Three and a half years ago, Wyatt met Key Information's director of marketing, Pete Elliot, at a trade show. CR England, already using IBM equipment provided by a competitor to Key, was looking to upgrade its disaster recovery system using a product that Key Information was selling. It also was looking for a higher grade of service.

It's always easy to go out and buy a product, but knowing that you've got a company that will come up and install your product, train you on it, provide all the support and service, that was our primary need, Wyatt said.

An important goal of CR England was to minimize shutdowns of its existing computer network while the upgrades were installed. CR England's dispatchers and customer service representatives rely on the network to keep track of information about deliveries, scheduling, truck location and the like, 24 hours a day.
There's just a plethora of data interchange that goes on, Wyatt said. Whenever we had to do any maintenance, hardware upgrades, we were impacted severely. From the beginning, Eliot and others at Key Information impressed Wyatt with their dedication to finding out what CR England's needs were. The relationship grew from there, Wyatt said .Though Morin describes himself as a typical computer geek, his own experiences reinforced a belief in the primacy of shoe-leather sales calls.

He started out in the early 1990s as an independent computer service technician, working with a number of sales agents who would place him with clients. When his biggest agent left the area, the agent's boss offered him the job. Morin knew the clients, so he said he'd give it a try.ìI did that sales thing for about seven years, enjoyed it, did fairly well at it, Morin recalled. In 1999, I was working for a company and I said, I really think I can do this on my own.íî Morin joined forces with Bruce Franklin, who founded Key Information in 1995 and has since left the company. The other partners bought him out, and Morin said the two are still friends.
Bruce had started Key in í95, and had operated it as his company, Morin said. I said, Hey, I think we can do this together and we can build this from here.îí

Their business got a boost in late 2000, when a number of colleagues who had initially demurred from joining Morin and Franklin reconsidered. Now there are five partners, all active in various roles, including Morin.
The company that they were working for had some unfortunate events occur, and we all decided that it would be a great thing if we could all join forces, Morin said.

Benefits to IBM link

The link to IBM has benefited Key in a more serendipitous way. Through the technology downturn, IBM's market share has gained in all its most important business segments. IBM does have its own services division that focuses on larger companies. But in recent years, as IBM puts additional emphasis on the market for small- to-medium size businesses, it relies more heavily on resellers such as Key Information to reach them.
IBM defines the middle market as companies with 100 to 999 employees. It sees it as a $12 billion opportunity for technology sales, and it is growing by 14 percent per year twice as fast as the rest of the technology market, according to a recent report by AMR Research.

IBM also has a product offering that fits the typical growth pattern of smaller companies. It offers Wintel systems featuring the Microsoft Windows operating system and Intel microprocessors, which are favored by the smallest companies, which can later be stepped up to IBM's proprietary mid-range servers, such as the A/S 400, or even to a mainframe architecture.

Companies that rely on Dell Computer, for instance, for their Wintel needs, can more easily switch over to IBM as they grow than, say, Sun Microsystems. I think (IBM has) it right, better than Hewlett-Packard, better than Sun. They have a road map for the future, and they have the leading edge technology that users are looking for, Morin said. As long as that remains true, Key Information likely will continue to grow. In the short term, Morin plans to consolidate recent expansions to make sure they remain profitable.

His careful hunt for talented hires will continue over the next several years, he said, helping to grow the company selectively with additions that bring longstanding experience and industry relationships.
I don't want to get 30 new green sales reps and hope that it works, he said. That is not a great strategy for winning.

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