Milestone Takes the Networking Route

Remarkably, Milestone, a networking VAR founded last June in Parker, Colo., is on track to make more than $3 million in sales in its first year. With just $1,000, Kappes and co-founder Kevin Wiley got a hosted Web site, a T1 line, some office equipment and some legal advice to help start the business, which began in Kappes' basement. Perhaps even more surprising, Milestone is succeeding despite not partnering with many of the networking market leaders such as Cisco and 3Com. "We're knocking down six figures in sales monthly," Kappes says. "Granted, this is nothing compared to the big dogs out there, but, for us, it's extremely exciting."

The two co-founders felt their previous jobs weren't fulfilling enough and decided to start their own business to get more hands-on control with not just the technology but their own futures. "We wanted to control our own fate. We had good jobs, but there was no guarantee they'd be around in a few months," Kappes said.

Wiley and Kappes are network veterans, having worked at Fore Systems and Marconi Communications. The two originally wanted to take a narrow approach their new business, selling routers and switches to specific small and midsize businesses. Things didn't turn out quite the way they expected. For one, they found IP telephony solutions and managed voice and data services were more popular with their customers, which now range from state, local and federal government customers to commercial clients of all sizes.

In addition, Milestone took an alternate route with its technology partners, staying away from networking leaders such as Cisco and 3Com and instead joining such vendors as Shoreline Communications, Extreme Networks, and Netscreen. "We didn't want to sell Cisco and some of the other market leaders. Cisco VARs are a dime a dozen in our area," Kappes said. "So instead, we found a really great partner in Shoreline and got into IP telephony."

Kappes also says he has no problem being a startup in the competitive market of networking solutions. "One of the advantages of being small is that we don't have a lot of overhead so we don't charge as much as larger companies," he said. "We're quicker, we're more agile, and we're hungry."

Curious about those entrepreneurs taking the plunge? Coming May 26 in VARBusiness Magazine: "A VAR Is Born."