Partner Profile: From Hardware Reseller To Reaper Of Recurring Revenue

Josh Justice, Southern Solutions

Josh Justice recently celebrated his company’s 10th year in business, and although Southern Solutions, based in La Plata, Md., has fared well during its first decade, it’s certainly not the same company Justice launched.

Southern Solutions went from being a local reseller that sold only Xerox printers and copiers to one of the printer vendor’s favorite success stories. After years of adapting to the market, the solution provider is more heavily focused on recurring revenue through its application development, managed network and managed print services.

Now, Justice said, Southern Solutions’ revenue has quintupled since 2010 and its workforce has expanded from four to 15. Even in the face of declining printer prices and margins, Justice said he expects the company to continue growing, thanks to a climbing share of recurring revenue business, which he said accounts for about 80 percent of all revenue.

He predicted that his recurring revenue business will reach a year-over-year growth record in 2016.

“When we built our recurring revenue business, we built it to grow,” Justice said. “IT services are really taking off this year … it is going to push revenue up even more this year than I thought.”

Another benefit from the growth in recurring revenue business? It now covers 90 percent of Southern Solutions’ bills every month before the company sells even one printer, Justice said.  

Justice said Southern Solutions made the switch to a recurring revenue model in 2009, when the price of printers began to plummet during the Great Recession.

“The prices rapidly dropped for equipment and we really saw the need to become a more stable company,” he said, “so we found ways to sustain and grow in that challenging climate.”

In 2010, the company added managed print and managed IT services, reorganizing its staff to provide managed networking services and contracting with Xerox to provide onsite managed print and supply fulfilment services for clients through one of Xerox’s MPS plans.

Eventually, Justice’s company grew enough to provide its own onsite managed print services, while still relying on Xerox for supply fulfilment. Southern Solutions also continued to offer more support for clients with remote network monitoring and the launch of an application development business.