Several years ago David Mackie was working in a high-level team of network designers dreaming up strategies and architectures for large government departments - large, high-impact projects with long price-tags attached.
But the project "half-way to a data centre" eventually collapsed under the weight of politics surrounding vendors, products and end-user needs.
"Large environments are like aircraft carriers, they can't come about in their own length," says Mackie. "I have spent large slabs of time working in teams to deliver solutions which could effect huge change only to have them still not be realised after four years."
The experience motivated Mackie towards his "dream mission" of building an SMB integration and support services provider covering regional ACT including the Eden Monaro and Riverina districts.
And so in 2002 Synergistic Network Solutions was born, partly as a company for Mackie's contracting to the Federal Government but also as an SMB-focussed reseller working on competent design, deployment and support.
"in SMB I saw the opportunity to solve business problems for companies where we were dealing directly with the owners and truly solving the problems they have, not the ones we hoped they had," says Mackie.
"Synergistic was not an accidental name and the management buzzword was not my intent. I really do believe that we build better networks when the customer participates even if they are just thinking honestly about their actual requirements."
The dream has proven harder to realise, partly because government work has been such a lucrative and easy distraction.
This may be about to change thanks to the Gershon report, which has had a profound effect on the business - seven of his 11 staff have converted contract roles to public service jobs.
"So perhaps it really is time to focus effort on our commercial opportunities, but it is so hard not to take the easy sale and have that certainty of revenue [from government]," says Mackie.
While SMB managed services could eventually provide the same level of certainty as contracting to the government, the first step was working out how to get there.
Synergistic's customers are used to too high a level of service for the price they are currently charged, according to Mackie.
He used his background as a systems designer to set up his customers' PCs to refresh to a standard image every time they have a problem, which has sharply reduced the number of persistent issues and consequently call-outs.
"You can't justify a contract to manage an environment costing between $5000 to $12,000 when they are accustomed to stability and high levels of availability for say $2000 to $3000. Moral to the story - you need to either have high volumes of clients or strive for mediocrity."
Mackie has concluded that he can only sell a recurring revenue managed services contract to a new customer, but this just presents another dilemma - how to make the sale.
"I'm curious [as to] how you get people to sign a managed service contract initially. You're expecting a guy to spend tens of thousands of dollars with a guy they've never met who doesn't have a [known] track record."
The easiest way to build trust is do a couple of break-fix jobs, and that puts you back in the conundrum surrounding your old customers.
Now that the Gershon report has whittled away at his full-time staff, it is even harder for Mackie to give up his own contracting work - he is currently playing a leading systems design role for a large department.
"I've painted myself into a corner again," he says. "I think we are in the same boat now as we were" when Synergistic was founded. But this time round, Mackie is making a concerted effort to improve the business on several fronts with a business plan - of sorts.
"Since I don't have all, well actually any, answers my plan is to work hard to continue to over-service our current clients, build the cash reserve so I can devote time to build sales and train up staff in our own brand of service delivery."
The first priority is trying to wind back his contracting to three days a week, and hopefully down to one.
Instead of expensive hires he wants to bring on apprentices who don't already have a fixed way of doing things and are open to adopting the family-business culture, of which Mackie speaks passionately.
Mackie is also "McDonaldising" and writing out all the processes that until now were in his head so the company can add staff without needing to micromanage them.
The company's sales pipe has relied on word of mouth, but this year it is trialling Yellow Pages online and the print version in Canberra.
Synergistic is also doing some door-knocking plus a referral system based heavily on a successful program from an overseas SMB consultant.
Mackie has extended the hours of his SMB business to 7am to 6pm, now works Saturdays "so we can do more of a transition than 'the contract's over, so now what'. I've done that way too many times."
Mackie is also very active in the reseller community. He ran the Windows infrastructure group in Canberra for four years and is on the committee of the SMB IT group.
He writes his own blog (which is peppered with a line from his favourite TISM song, "You're only five yards from a f****wit") and participates in half a dozen Yahoo groups about tech support or specific vendors.
The networking has led to contract work for Sydney resellers whose customers have opened Canberra offices. Mackie says he offers good work for a good rate for five members of the Sydney SMB IT group.
"So if it is hard why do I want to build success in SMB?" asks Mackie. "Honestly, it is a satisfaction issue. It's a good thing to be able to say, how about you worry about your [customers] and let me worry about your computers. This is really quite satisfying."
Management
Synergistic has evaluated a number of management platforms, although Mackie says that because they rebuild PCs to a standard image "we don't have to worry about the PC part of it so much".
One candidate was Xenos Infotech, an Indian call centre that puts an agent on staff to share the load.
"I don't see us using that because I believe they are cutting my grass. If you are going to do a services business, do one. If you're going to resell one, just drop boxes - make a decision and run with it," says Mackie.
Microsoft's decision to pull System Centre Essentials out of Small Business Server has left Kaseya as the market leader in terms of ease of management, says Mackie.
Kaseya is not the cheapest on the market because they always try to sell a minimum 1000-seat block, says Mackie, although he adds the three-year pay-off period does help.
There are companies that sell hosted Kaseya services which rent the program on a per-seat basis, such as the US's Secure My Company and the UK's Bull Terrier.
Mackie says he knows "a couple of local guys" in Sydney and Brisbane who sell spare licences on their Kaseya services for as little as $4.50 per endpoint - a considerable discount on the US$10 rate from international providers.
These Kaseya resellers have written contracts promising renters that their customer base remains private, and will set up a sub-admin account.
This means the Kaseya licence holder can see all his tenants' customers, but does not give him access to their passwords.
Kaseya Australia says this practice contravenes the terms and conditions of the original licence.
Mackie says the current load is manageable but if Synergistic's customer base doubled he would want single-pane-of-glass management using a Kaseya hosted service. "And then when it made sense I would buy the 1000 licences."
Being caught stealing: the break-fix dilemma
Most problems with a PC can be resolved by wiping the hard drive and re-installing the operating system and applications, returning it to the pristine state in which it first arrived.
The easiest way to do this is by restoring the PC to an image of its standard operating environment, a process that can take just 15 minutes.
"If you're touching someone's PC and it takes more than the rebuild time, are you really stealing from them? I think you are. I'm married to a woman who believes that if it sounds like stealing it probably is," says Mackie.
Restoring PCs from images brings a huge improvement in uptime, as the process can be configured to occur every time the computer is rebooted without on-site or remote assistance from a technician.
It also dramatically reduces maintenance costs for the customer and therefore billable hours for the reseller.
"If you're charging an hourly rate to fix PCs where a reimage would fix in less time than it would take to drive there, you have to question what's best for the customer," says Mackie.
Synergistic uses Microsoft Steadystate, a free application that reboots to the same configuration every day. Another program is Deepfreeze, but SMB consultants in the SBS user group are often unaware of either software.
Mackie says the reaction to imaging PCs is generally positive but that some don't know how to do it and don't want to spend the money to go and learn.
"People need to learn some tradecraft. In the SMB space a lot of people know a bit about computers but they're not on the leading edge all the time because they are running a business, and running a family, and they don't necessarily devote their time to learning things that will make their and their customers' lives easier," says Mackie.
The Sydney SMB user group is running a build day around Small Business Server 2008 to teach resellers best practice techniques.
Mackie says the loss in break-fix revenue will force resellers like Synergistic up the solutions stack and to larger customers who use Windows Essential Business Server - ideally at the 75-300 user mark.
"As you go up the stack you have less customers but better customers because they certainly understand what IT means to them," says Mackie. Small businesses see IT as a cost and use their teenagers or cousins to fix their computers.
"I'm competing with a guy who will do it for dinner. We go down to $120 for people we like, but that's expensive compared to dinner."
Contractors in the house
There are two aspects of government contracting - the big tenders handled directly by the Dimension Datas and Data #3s, and the work handed out to professional service providers, or PSPs.
The PSPs are individuals who fill roles that would otherwise be filled by a public servant, such as help desk, server rollout and third level support.
Companies like Synergistic give these contractors an administrative home by managing insurance, payroll, billing and salary sacrificing.
The contractors avoid having to pay payroll tax of 8 percent, from which Synergistic is also exempt as long as its payroll is under $1.5 million.
A recruitment company places the contractors in tenders and Synergistic takes a 3-5 percent cut of the contract rate, passing the rest of the income on to the individual. Effectively they are "staff in name only", says Mackie.
The total value of this service amounts to between $30,000-$50,000 of Synergistic's revenue and last year up to three-quarters of its staff, most of whom have converted their contracting to full-time roles in the public service in response to the Gershon report's recommendations.
"As I lose those guys I have to look for more people and as the market contracts there are more companies providing that service," says Mackie. "But it's not really where we want to be taking this business."
As Synergistic adds offices in Young, Cooma and Bega its full-time employee count will rise, reducing the room under the $1.5 million payroll cap.
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