Leto outlines GTSI service strategy

James Leto, the newly installed president and chief executive officer at GTSI, plans to sharpen the company’s bidding focus, expand small-business partnering and possibly reduce the number of vendors it represents.

In an interview this week, Leto provided an outline of his strategy for expanding the company’s reach into services and high-end solutions. The key elements include being more selective in submitting bids and proposals and pursuing small-business alliances more aggressively, he said.

The former head of Robbins-Gioia and integrator PRC has been on the job a few days. In mid-February, GTSI announced that Leto would succeed Dendy Young as president and CEO. Young remains chairman of the company.

Leto said the company will look for deals with a higher engineering service content, rather than commodity-oriented indefinite delivery, indefinite quantity buys.

GTSI will step up its small business partnership efforts as well, he said.

“In many cases, pushing further into services is going to require that we partner with a lot of small businesses,” Leto said. He said that some contracts with the high services content that he wants to see also require teaming with small-business primes. The company is talking about appointing a manager who will focus on building small-business partnerships, he added.

But as GTSI expands services, it won’t abandon its traditional reseller business, Leto said. “We can’t walk away from the market,” he said.

GTSI offers products that government customers have grown accustomed to ordering through such vehicles as the Army's Information Technology Enterprise Solutions contract, he said.

However, Leto said, GTSI will probably reduce the number of vendors it represents. Right now, that number is about 1,500. But vendor relationships are costly to maintain, he said, with the reseller responsible for tasks such as maintaining inventory balances and updating pricing tables.

Recent alliances suggest GTSI will emphasize specific solution areas in its relations with product vendors. GTSI’s pact with Silicon Graphics Inc., for example, will focus on 64-bit Linux solutions in the high-performance computing sector.

Leto said recent discussions with Cisco Systems have centered on high-end solutions for both IP telephony and wireless communications. He noted that all the major hardware vendors look to companies such as GTSI to represent high-end solutions in targeted markets.

Overall, GTSI’s service business doubled in 2005 over 2004 levels, a trend Leto says he expects to continue this year. He said the company’s leasing business has provided one area of rapid growth, noting that some customers prefer leasing a large technology solution as an alternative to capitalizing it.

GTSI’s solutions pursuit will be organized into distinct practice areas with vendors aligned to the appropriate lines of business, Leto said.


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