Matthew Beesley (pictured centre back) is facing a problem many resellers would envy. His business, Premier Network Support Management (PNSM), needed to sustain a 35 percent yearly growth rate to keep his best employees, who started out with him four years ago.
“If we don’t grow quickly enough we don’t create the opportunities and that means you risk losing your good staff,” says Beesley, managing director of PNSM.
Beesley started out in 2006 as many a reseller has done before, advertising as a sole trader in the newspaper for home PC repairs. Then two customers who owned businesses asked him to work on their office machines as well. Word of mouth kicked in and within eight months Beesley had four staff him and had outgrown his garage.
“My wife got sick of four strangers rocking into my garage every morning at 9 o’clock,” Beesleysays.
In 41⁄2 years the company has grown to 16 staff working from offices in Sydney, Brisbane and Melbourne. Beesley attributes the success of the business to customer service.
Consulting sales have grown strongly, particularly in support of business applications such as CRM, because Premier Network always takes on any IT issues as its own, Beesley says.
“I don’t ever use that line that it’s not our problem. Customers love it because they just have to ring one number and we’ll contact the software accounting guys and get it fixed. The software companies really like it because they have had so much experience in the past where they blame the IT company and the IT company blames them. “If they buy it through us then the blame lands squarely on our shoulders.”
The reseller has forged strong relationships with software vendors as a result, including Attache, SysPro and Manusoft. If a troubleshooting call to the vendor is only 15 minutes then it’s generally at no charge. However, often Premier Network will be called on-site to accompany the software vendor’s technician to help identify the problem. “At the end of the day the customer doesn’t care who’s fault it is, they just want it fixed,” Beesley says.
How did Beesley move from fixing PCs to running a business?
“I ask people who know,” Beesley says, and that often includes his clients. One is an accountant who gives advice on how to deal with problems. In the past six months Beesley took advantage of a small business mentoring service run by the government and a representative visits him once a month.
To this point all Premier Network’s marketing has relied on word of mouth. “We are not even in the Yellow Pages but we are still getting calls all the time,” Beesley says. However, as turnover has risen the three-year average 35 percent growth rate has fallen to 20 percent.
Beesley is revamping the website by posting references, “almost a blog of customer experiences”.
“Part of that is getting brand recognition. It’s really letting people know that we’re there and there are lots of people that are happy with us,” Beesley says.
He is also moving the business into a new direction, managed services. Half of Premier Network’s business already comes from higher-margin services; managed services should drive that percentage higher.
While it may be more efficient, Beesley is keen to avoid the loss of customer interaction of his on- premise repair service.
“We have seen a lot of [reseller] companies switch to managed services and [lose] a lot of customers because they have lost that face- to-face time, when you’re running out in the car to fix a problem.
We still want to be a business that has a regular face-to-face relationship with the client. We don’t want to be someone who sits in the data centre and takes phone calls all day.”
Beesley has already experimented with cloud services, with mixed results. Premier Networks’ “SLAM Australia” service (the acronym stands for server location and management) accounts for less than 10 percent of turnover.
“I’m having to argue for weeks with clients to give cloud a go and they’re just not interested,” Beesley says.
“I am not convinced that cloud is the be-all and end-all that I keep reading about everywhere else.”
SLAM consists of a virtualised Windows environment running terminal services from a “pretty hefty” SAN and server blades. The equipment is housed in a telco- grade data centre with four levels of redundancy.
Premier Networks subleases the infrastructure to clients and sells unlimited Microsoft licensing, unlimited support and backup imaging through the SAN for $90 a user a month. “It’s always significantly cheaper. It would be a third or less of ongoing costs of having infrastructure in-house. But despite that, people seem to prefer having their own infrastructure.
“I think the reason is that they lose control. If they have their own infrastructure and the IT company pisses them off they can say, ‘I own my box, get stuffed, I’m going to get someone else to do it’.
“In the cloud you are handing over your data and relying on them to care for it as much as you would care for your own data. I think it’s a big leap for SMBs because many have been burnt and they don’t want to be left with someone wrecking their data.”
Beesley gives as an example a close and trusted friend who had mentored him over 10 years who was also a customer. Beesley quoted him $270 a month to supply all Microsoft applications to his friend’s four employees, almost $4000 a year.
“I argued with him for over a month. At one point we asked him if he wanted his DNS hosted with us as well for $10, and he said here it is, the start of all these additional costs and it’s going to go up and up. I said, it’s not.”
Finally Beesley sent over one of his technicians who quoted a $25,000 server and network for five people, including terminal server, Small Business Server and a backup system. The friend bought it.
“He could have been on SLAM for six years and never paid another dollar for his entire IT infrastructure. For someone who I’ve known for 10 years it just blew my mind, and that day I said let’s just go back to selling equipment and the consulting that goes with it.
“We’ve got the cloud and if 80 percent of customers read that it’s a good thing, because they’ve read an article in the Sunday Tele, then we’re ready for them.”
Premier Network has developed expertise in VPNs and terminal services, which form the core of many solutions. Its speciality is getting multiple sites to run efficiently.
“That’s where we win the business nearly every time,”Beesley says. “We’ve spent so many years now doing these solutions where they have a head office and five branches around Australia and the branch offices can’t get their data in real time or the sales force can’t get their emails.”
A vanilla solution would be an SBS terminal server, Cisco routers and an MPLS network from Pacnet. “It’s nothing expensive but we’ve seen a lot of other IT companies come in and say you need bigger pipes, or a data accelerator or some expensive technology. We are able to use what they’ve got and just make it run better.”
Premier Network is very tech- focused. Apart from two developers and two administrative staff, the remaining 12 employees are technicians. There is no sales department; instead, the reseller relies on its technicians to spot opportunities on customer sites and recommend solutions.
“Some techs are better than others. Some generate lots of work and some none at all,” Beesley says.
He is rolling out Enable to underpin the monthly maintenance program on which the managed services are based. He hopes this will free up the technicians with better sales skills to spend more time inventing solutions and recommending products, and passing the manual work to the other technicians.
Beesley doesn’t plan to hire any more techs; instead he is looking for management and administrative staff. He spends a lot of time doing human relations, customer relations and marketing. “They are not my strength at all. I’m a tech,” he says. However, he feels he is not quite big enough to afford full-time people in those areas. He thinks he would need to reach 25 or 30 staff before employing full-time marketing, HR or business development.
Dedicated sales, on the other hand, looks like an extravagance to this small reseller. “Every sales person is going to cost $100k plus car and all mod cons. Because there is a six-month lead time you might find in 12 months they have not made a sale,” Beesley says.
He’s open to poaching someone. “If I could find someone for that role I would be the happiest person. It would free me up too. A lot of the new stuff I’m lugged with and I’m so busy doing other things. The strike rates would be much higher.”
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