Hartford Business Journal

26 Hartford Business Journal • October 19, 2020 • www.HartfordBusiness.com Cooperative Systems grows through acquisition, market demand By Matthew Broderick Special to the Hartford Business Journal E arly last month, Wind- sor's Cooperative Systems, a managed-IT services provider, purchased Man- chester-based Fandotech, including its employees, client base and data center. If the global pandemic has decimat- ed certain sectors of the U.S. economy, it has been a boon for established IT firms like Cooperative Systems, as employees for many clients have tran- sitioned to remote working, provid- ing an additional need for IT support, security and expertise. The move also reflects an acceler- ating trend of mergers and acquisi- tions in the IT sector, as providers look to expand capabilities that are increasingly in demand. According to market research by Valuates Reports, global managed ser- vices are expected to grow by nearly 10% annually over the next five years, with the sector's revenue reaching $309.5 billion in 2025. Cloud-managed services are estimated to increase by 50% over that time span. That projected growth reflects the value that businesses are placing on IT expertise in a digitally connected world with increased concerns about cybersecurity, says Scott Spatz, president of Cooperative Systems, which serves a New England-wide client base. Spatz says the growing complexity of IT systems, includ- ing servers, networks, cyber- security protections, data backup and disaster-recovery systems, are driving more businesses to out- source their IT needs. "Unless a company can integrate those [functions] all together, it won't have the intelligence and in- formation to know what's going on [with IT] efficiently," he said. That integration has been a key differentiator with clients in heav- ily regulated markets — like health care, manufacturing and financial services — that have fueled Coop- erative Systems' growth since its founding in 1993, Spatz said. The Fandotech purchase has in- creased the company's revenue by 60% and its employee base to 37 workers. He notes his firm's standardized, yet flexible, suite of services — including IT policy and procedure documents to satisfy regulatory requirements — al- lows Cooperative Systems to provide added value to clients and scale its of- fering, which Spatz sees as a competi- tive advantage. Michelle Coppola, chief operat- ing officer of Manchester-based insurance brokerage firm Northeast Brokerage, points to the evolving regulatory environment and her firm's multiple locations among the reasons her company transitioned its IT needs to Cooperative Systems nearly 10 years ago. "We need our team supported with hands-on technical support to keep them functional and not worried about hardware and software [con- cerns]," Coppola said. "Our [IT support] has made that possible especially as all our employees worked remotely." That peace of mind is something that is harder for small to mid-sized companies to achieve with a one- or two-person in-house tech team, Spatz said. He notes that managed-IT person- nel often provide a greater level of expertise because they confront and learn from IT issues — including cybersecurity risks — across mul- tiple sectors, which enables them to proactively customize solutions to clients' potential needs. But it's not just traditional ser- vices like monitoring and tech sup- port that are driving Cooperative Systems' growth, Spatz contends — it's also about understanding, and planning for, a client's future technology needs. As technology systems become an increasingly essential component to driving businesses' bottom lines, client management and customer communication, having a high cali- ber expertise is a value add. "We want to help clients think through the next three, five or 10 years to make sure they have a proper technology plan to [meet] their business's needs," Spatz said. "We are discussing [those needs] regularly with clients." Long-term planning Spatz is also thinking about his own company's growth strategy. He says Cooperative Systems' re- cent acquisition — which increased its client base by more than 50% — was a key component to expanding its infrastructure capabilities with a long-term goal of doubling revenue over the next eight to 10 years. "Our new data center and [Fando- tech's] established cloud practice allows us to scale our business more than ever before and drive more cost-effective solutions for our clients," Spatz said. And as companies — and their re- mote workers — look to weather the pandemic and plan for tech-driven business necessities, the managed- IT boon is likely to continue. COMPANY PROFILE Cooperative Systems' management team — (from left) Joe Bucceri, Bob DeLisa, Steve Martocchio and Scott Spatz — at the company's Windsor headquarters. Scott Spatz, president of Cooperative Systems, is helping lead his company's aggressive plan to double revenues over the next eight to 10 years. PHOTO | CONTRIBUTED PHOTO | CONTRIBUTED

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