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It’s been over 18 months since Applied Innovation became exactly that: Applied Innovation. Two years after the COVID-19 pandemic struck, with product and service diversification in the channel on full display like cherry blossoms in DC, the mega dealer decided a name change was in order. Applied Imaging no longer told the whole story—no, that needed to have managed IT services (MITS) represented as well as everything else not under the print umbrella.
Smart move.
Humans love to talk about potential. The potential of students entering college or graduates entering the workforce. The potential of athletes who get drafted higher than those with better skills at the current time. The potential of publicly traded companies. And it was this very thing, this word, this concept that grabbed me by the collar (total hyperbole, I rarely wear collared shirts) and hollered while I recently spoke with Casey Lowery, President of Applied Innovation.
During our half hour together, he said the organization not only had its best year financially in 2023 but did so in all business units. The Michigan-based dealer went from $118 million in 2022 to $157 million last year (Applied’s fiscal year ends in September). That’s an increase of roughly 25%—in part due to deferred revenue that was efficiently fulfilled, but more so thanks to strong organic growth. Applied Innovation acquired four dealers during the first year of the pandemic and have bought three more since, too.
Okay then.
Yet, with approximately 88% of the company’s annual revenue stemming from print, that remaining, smaller percentage was of more interest to me: the managed IT services (MITS) portion. And you don’t need to be an analyst or a mathematician to figure out that Applied can hit a 50/50 split of print/MITS if it realizes 38% growth in the latter. The “glass half empty” guy might classify that as your standard piano-on-the-back-sort-of lift, but the “glass half full” guy sees potential. Excitement. Something…new.
“One of our acquisitions in the past few years was for an IT firm,” Lowery said. “We’re more interested in IT, though we’d never rule out another print acquisition if the opportunity felt right. Right now, anything that fits into the parameters of the broad business continuity space, that’s where we’re at. Leads come in, and many of them are because of managed IT services. Around 22% of our 2023 revenue was due to net-new accounts, and many of those are because of IT.”
Yes indeed.
There are 18 mega dealers in the United States. Applied Innovation is a card-carrying member and shows no sign of slowing down. With so much potential around managed IT services and everything else beyond print, including digital transformation (DX) and artificial intelligence (AI), would anyone doubt them? I’m pretty sure the company will steamroll toward the $200 million clip before you know it, but I am definitely sure the company will not be changing its name again anytime soon.
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