Moving away from break-fix

Savvy information technology consultants in northern Nevada are feeling the effects of the recession, but not in the way you might think.

Some are enjoying growing revenues as businesses in their target markets look for ways to cut costs and improve efficiency in today's challenging environment.

Tim Averill says his business, Averill Consulting Group Inc., has grown by 200 percent in the last two years. That's since Averill shifted focus to providing managed services the full scope of IT services at a flat monthly rate.

"In the next year or two I think we'll be a company to watch," he says.

A growing number of small- and medium-sized companies are looking to outsourcers to provide managed services a buzzword in technology circles today. Managed services represent an evolution in IT, a departure away from the old fix-it-when-it-breaks model.

"It's a holistic approach," IQ Technology Solutions President Steve Cerocke says. "Managed services provide the ability to be more proactive to maintain systems...Today if your email goes down you're out of business. The old break-fix model is not working for business today."

A number of advances in technology have come together in the last several years enabling consultants to offer managed services to small- and medium-sized businesses at a reasonable cost, Cerocke says.

Among them is the capability to monitor technology 24/7 from a remote location. Sophisticated remote monitoring systems provide IT consultants with a constant stream of information about every aspect of how their clients' systems are doing.

Say, for instance, a client's disk drive is getting close to full. The remote monitoring system detects the problem and sends an automatic alert to the consultant, so the issue can be addressed before it causes any problems, such as a slow-down in the system.

"We know when things are going south before the client does," Averill says.

Cerocke says his business has always grown, even in the recession.

"We've been ahead of the curve in developing a total IT outsource solution," he says.

The recession has forced companies to look for ways to improve efficiency, and for some that has meant downsizing IT departments and outsourcing the work. Cerocke says some of his clients have been re-engaging with the firm to take on larger shares or all of IT functions.

"This remote management is becoming more of the norm, and the downturn has just brought it to a head," he says.

On the other hand some companies cut back on outsourced IT services to save money, Sierra Computers Chief Executive Officer Darren McBride says.

Some clients, McBride notes, deferred maintenance and a few even backed off managed services as short-term budget-cutting moves. But maintenance can be deferred for only so long.

"We've seen that come back to bite people," he says. "We're now busier than we've been in 12 to 14 months."

Erlach Computer Consulting, meanwhile, serves a number of firms in construction, engineering and architecture among the hardest hit industries in the recession. But President Tim Erlach says his firm actually saw a bump up in demand as a result.

Any type of change even downsizing in an office creates a need for short-term IT work, such as reconfiguring the e-mail system after someone leaves or setting things up after a move to smaller offices. The key words, though, are "short-term."

Amid the troubled economy, Erlach's firm hired a sales person last fall, and it's narrowing its focus to clients that want a more proactive approach to IT. The firm is also targeting clients in industries that are thriving in today's economy.

"I think if you go out and hustle, there's always work," he says.

Of course anytime there are layoffs IT people are often the first to go. As a result, a growing number one-person IT shops pops up.

Sole proprietorships vary widely, from sophisticated IT experts who work out of professional offices and leverage services by partnering with other providers to folks who run computer fix-it services out of their cars "trunk slammers" as they're known in the industry.

McBride says more one-person shops have been advertising IT services on Craig'slist in the last couple of years.

"I hear a lot of my peers sort of dismiss trunk slammers as a phenomenon," he says. "I actually see them as a threat."

Taken as an aggregate, McBride says one-person shops handle a large share of IT business.

Of course every IT outsourcing business starts out small, and some of the sole proprietorships that are getting started today will grow.

But Averill says many come and go and he doesn't compete in the same space as, say, a recently laid-off junior IT person who's just hung out a shingle and offers IT services at $40 or $50 an hour.

Averill, meanwhile, sees further growth potential for his business in coming years as he goes after a new vertical market, which he declined to disclose, and continues the focus on managed services, which provide clients with top-tier solutions at a predictable cost.

"What we're trying to do is commoditize IT," he says.