Managed Services: The Franchise ApproachBy Jessica Davis | Posted 2006-12-19 Email Print
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TeamLogic IT, a franchisor of managed services for SMBs, estimates that 40 percent of its franchisees are conversions by conventional VARs.Some VARs looking for a quick entry into the fast-growing managed services space may be considering the purchase of a franchise.
That's the idea behind TeamLogic IT, a franchisor launched two years ago after founding company Franchise Services concluded, based on commissioned market research, that virtually all SMBs (small to midsize businesses) are struggling with technology.
Such business owners typically have no full-time IT person, or if they do it's a low-level employee who for the most part reboots machines when there is trouble, said Chuck Lennon, president of TeamLogic IT, based in Mission Viejo, Calif.
TeamLogic IT recently opened its 25th location and operates in 13 states, Lennon said. He estimates that about 40 percent of the company's franchisees are VARs that have converted their existing businesses.
One of the company's first franchisees falls into that category. Scott Chandler and Denise Trowell, both engineers, had started up their network consulting, installation, procurement and training business, Acornnet.com, in 1995 after spending years working for bigger companies.
"But we had difficulties growing much beyond a mom and pop business," Chandler said. "We wanted to do more. We both came from big industry, so there were a lot of tools that we were used to that we no longer had. TeamLogic had a lot of these tools."
And Chandler, 49, was also looking to create a business that would have more value when he sold it to retire, he said, noting that McDonalds would typically be valued higher than an unknown burger restaurant. He chose TeamLogic IT because Franchise Services, the company that launched TeamLogic IT, was also the parent company of popular franchise brands PIP and Sir Speedy Printing.
While the idea of getting into managed services didn't play a role in his decision two years ago, Chandler now considers the concept of managed services central to what VARs can offer to customers, he said. He said his partner's research has led to the creation of a Microsoft Exchange Server managed service now offered through TeamLogic IT.
"The concept of managed services is going to change computing," he said. "Managed Services is going to be the future. It's sneaking up on us whether we want it or not."
Lennon noted that TeamLogic IT's research showed that customers thought managed services would cost the equivalent of having an IT person on staffbetween $3,000 and $6,000 a monthan amount more than double the actual costs of the TeamLogic IT offering.
The lower-than-expected cost together with the need for a true security program ranked particularly high as a motivating factor for businesses in data-sensitive industries such as accounting, law and health care, he said.
"You could tell customers were absolutely frightened about security," Lennon said. "About 95 percent said they were backing up data, but when we started asking how often and where, they didn't know the answers."