SL Powers constructs managed services model with a robust hardware-as-a-service component.In a perfect world, Rory Sanchez would write his customers a check for the purchase of their IT infrastructure, then turn around and lease it back to them. But in the real world, the CEO and president of SL Powers is doing the next-best thing—a managed services strategy with a strong hardware-as-a-service component.
The West Palm Beach, Fla., solution provider has about 80 managed services clients that generate 80 percent of the company’s revenue, which was $5 million in 2006. Earning recurring revenue of $1,000 to $7,000 monthly per client, Sanchez is seeing the results of a decision he made in 2003.
“At that time, we were clear that we wanted to focus on delivering managed services to the extent that we would only bring in clients that offered a managed services opportunity,” said Sanchez.
The evolution of SL Powers has been slow, steady and on target. In 2005, 45 percent of sales came from managed services, and in the following year, half. At the end of 2007, the number was expected to be 56 percent, Sanchez said.
In August, the company bought Micro-Fix, a provider with a small managed services practice that Sanchez hopes to expand. With the acquisition, his employee count rose to 30.
Founded in 1995, SL Powers today offers customers an expanding menu of managed services, up from a single offering in 2006 called the Guaranteed Networks Managed Service Program, a soup-to-nuts plan covering management of user accounts and privileges, monitoring and benchmarking of network performance, patch management, security compliance, infrastructure monitoring, maintenance, and help desk services.
SL Powers in 2007 added GNCM (Guaranteed Networks Central Management) and GNPM (Guaranteed Networks Preventative Maintenance) programs, both designed to handle remote customer sites. GNCM monitors servers, responds to alerts and does remote preventative maintenance. GNPM watches a company’s servers, provides anti-virus and anti-spam protection, and cleans up Internet debris.
Vendors that SL Powers works with include WatchGuard, for its managed security appliance; Network Management Group, for DoubleCheck Email Manager; and Cymphonix, for Network Composer. All have appliance-based solutions. Sanchez buys the WatchGuard and DoubleCheck boxes, but other vendors, such as Cymphonix and Zenith Infotech, offer lease agreements. In either case, SL Powers gives customers the option of buying the appliance or paying for the hardware as part of monthly fees.
“We make three times the amount of money over three years if we rent the appliance to our clients versus selling it to them,” Sanchez said. “Then, if the box continues to run after three years, there’s even greater profit.”
Chase Rothe, channel development manager at Cymphonix, said SL Powers is at the forefront in managed services. “They’re one of the first companies who I’d say are a complete managed services provider and get it,” Rothe said.
SL Powers leads with managed services when approaching customers, and the small and midsize business market is listening because it increasingly views IT as a tool it needs but doesn’t necessarily want to manage, said Sanchez. “The SMB market sees value in engaging our services,” he said.
Sanchez said 90 percent of what his company needs to do can be done remotely over the Internet. And that drives down costs, since engineers don’t have to be dispatched.
For the two consecutive years West Palm Beach was hit with hurricanes and was partially under water, SL Powers was able to communicate and handle tickets for clients because the company’s servers are in an ultrasecure facility offering disaster recovery.
Not only has becoming a provider of managed services made SL Powers more profitable, it also better aligns the company with customer goals. “The better they operate, the lower our support costs,” said Sanchez.
Lynn Haber is a freelance writer in Norwell, Mass. She can be reached at lthaber@comcast.net.
