Mertens Takes the Wheel at Sirius as Najim Steps Down

August 15, 2011 Alex Woodie

Harvey Najim has stepped down as CEO of Sirius Computer Solutions, the server reseller that he founded 31 years ago. Najim’s right-hand man, Joe Mertens, is now leading the $1.2 billion company, which started out as an AS/400-only reseller but has grown into IBM‘s largest solutions provider. Mertens plans no great changes for Sirius and sees continued growth through providing superior technical and managed services, and as well as more channel consolidation.

The powerhouse that became Sirius started in 1980, when the ex-IBMer Najim founded Star Data Systems. The San Antonio, Texas-based company initially was focused exclusively on selling IBM midrange servers, including System/36s and System/38s. But Sirius soon widened its horizons, and in 1992 it became an IBM distributor, a business that it sold to Western Micro Technology (now Avnet Technology Solutions) in 1997. The reseller part of Star Data became Sirius Computer Solutions.

Sirius soon started selling other gear, including IBM RS/6000 and Netfinity servers, as well as offerings from Dell, Hewlett-Packard, Cisco Systems, and VMware. While the company has maintained a focus on selling and servicing AS/400s and AS/400-related solutions, it was largely through the sales of other products that Sirius became the dominant provider of IBM gear.

Sirius Computer Solutions founder Harvey Najim has stepped down from day-to-day management of the giant IBM reseller, but will continue as the executive chairman.

In February 2001, Najim was given the IBM Lifetime Achievement Award, the highest honor that IBM bestows upon business partners. The list of awards that Sirius has won from IBM and reseller organizations is too long to include here. Suffice it to say, Sirius, under Najim’s leadership, became IBM’s biggest reseller and a major force in the North American IT market.

Najim began the transition away from day-to-day leadership of Sirius in 2008, when Mertens (who has a IBM Lifetime Achievement Award of his own) was named president and took over customer-facing sales and technical aspects of the company. Over the last three tumultuous years, Mertens has gradually taken a bigger role in managing the back-office side of the business. The announcement last week that Mertens would become CEO and president while Najim would become executive chairman was an expected formality.

Najim provided a steady presence in the assimilation of Omaha, Nebraska-based MSI Systems Integrators, the $350 million reseller that Sirius acquired in December. Now that MSI is part of Sirius, Najim felt comfortable leaving day-to-day matters in others’ hands. He leaves a company with 1,100 employees that will bring in between $1.2 billion and $1.3 billion in revenue for 2011. Najim will spend more time with his charity, The Harvey E. Najim Family Foundation, which is aimed at helping children’s charitable organizations in the San Antonio area. Najim founded the organization in 2006 with $75 million from proceeds from the equity investment that Thoma Cressey made in November of that year.

Mertens hopes to continue running Sirius in the same successful manner that Najim did.

“I joined the company in 1984. I have either been working for Harvey or with him that entire time,” Mertens tells IT Jungle. “Quite frankly, most of my business knowledge has come from watching him build this company and how he treats his employees, as well as our clients and partners like IBM. I just hope I can live up to the incredible job he’s done building this company.”

Joe Mertens was named CEO of Sirius last week, adding to his previous duties as president.

There are no big navigational changes in store for the Mertens-led Sirius. “Our focus has been, and will continue to be, focusing on clients, serving their needs. If we do that well we’ll continue to grow. We have certainly diversified over the years to meet those client needs better. At one time, we were just an AS/400-focused partner. As the industry changes, we’ll have to change with it.”

In the near term, Sirius is focusing its investments on building out its managed services and cloud offerings. This is an area where MSI acquisition will help. “The MSI acquisition gave us some capabilities that we did not have prior specifically around managed services, which gives us the ability to support our clients at an even deeper level,” Mertens says. “We think that [managed services and cloud] is where clients are seeing value today. Those firms that are ahead of that trend will find success.”

Mertens sees a big need for professional services–including managed services–among Sirius’ IBM i customer base. Sales of IBM i-based Power Systems are declining compared to sales of AIX-based Power Systems sales, he says, as many of the new applications that IBM i shops are putting in are running in AIX, Linux, or Windows environments as opposed to IBM i. “We are seeing very few clients move away from i/OS, but we’re seeing that many clients are putting new applications on either Intel or AIX kinds of environments,” he says. “So we see clients having lots of i/OS capacity. . . Our focus has to be to help them get the most utilization out the platform they have in place.”

That means lots of DB2 and WebSphere integration tools to hook core IBM i systems into new AIX, Linux, or Windows workloads that need to access DB2/400 data and RPG logic. It also means lots of managed services contracts to provide the trained and certified personnel to care and feed for IBM i environments, which is becoming increasingly hard for some companies to do themselves, he says.

“We’re seeing a lot of clients that are having difficulty finding good resources that have skills around the Power platform,” Mertens says. “So our managed services offerings are pretty strong relative to Power. It has allowed us to basically run those systems, all shifts, third shift, which really helps breathe some life in to those platforms. In many cases we’re not seeing the folks coming out of the universities with a lot of training around Power. It’s really more around Linux and Microsoft on Intel. So people need skills and that’s something we can bring to the table.”

Sirius’ managed service business is doubling every year, Mertens says. All types of contracts are drawn up, including full outsourcing of boxes at Sirius or partner data centers, managed services provided to a box residing at a customer site, or managed services provided to a box at third-party data center. Cloud is the future here, but customers are still hesitant with multi-tenancy and putting their most critical data into somebody else’s hands.

Whether it’s selling solutions or services, Mertens sees education and skills being the best weapons to survive and prosper in the VAR, which will continue to be super competitive and will continue to consolidate, Mertens says.

“We have a mantra here: ‘The best-trained army wins the war,'” he says. “We have over 4,500 technical certifications within the organization. We have won what IBM calls the Beacon Award for Overall Technical Vitality for three consecutive awards. Our focus is on skills and servicing our clients. That’s what it’s been, that’s what it will continue to be. I wouldn’t say there will be this upheaval or change as a result of this change of leadership. Because frankly we’ve been on this road together for a long time, and plan on staying on the road we’re currently on.”