The Guardian Of The Network
Start-up Symetriq will generate $5 million in revenue this year by combining network performance monitoring with security.
There are many ways for VARs to make money in the security and networking markets. One way, and the one most resellers are familiar with, is buying hardware and software solutions and reselling them to end users. Smart resellers will normally tack on value-added services or integration with the sale to increase their margins. Still other VARs will find ways to wrap services around a specific product or solution to provide a monthly revenue stream. But how many VARs do you know of that actually refuse to sell hardware and software to their customers, instead letting customers use the equipment for free and collecting revenue from the services the solution provides?
My guess is not many, yet that is exactly the strategy of Kojo Benjamin Taylor, managing director of services provider Symetriq (Bloomington, MN). Symetriq was launched in early 2001 and this year expects to exceed $5 million in revenue. "We had the concept for Symetriq on the drawing board since September 2000," explains Taylor. "We saw an emerging need in the industry for professional services wrapped around network performance and managed security."
Bring Network Performance, Security Downstream
The idea behind Symetriq is simple. Large, enterprise-class companies can afford to dump upwards of $250,000 into a solution that will monitor network performance and other network traffic activities. On the security side, they can also afford to purchase vulnerability assessment technologies that cost in excess of $100,000. Unfortunately, small- to medium-sized businesses cannot afford that kind of up-front investment. The goal of Symetriq is to affordably provide network and security solutions to those companies.
The equipment Symetriq offers its customers is manufactured by other vendors and then tailored by Symetriq to meet each customer's individual needs. Symetriq supplies the equipment with no up-front cost to the customer. One solution Symetriq offers is called SymSage. SymSage is an appliance that is installed at a customer site and monitors every aspect of the network. SymScan, another Symetriq offering, provides security monitoring and vulnerability assessment services. "We do not sell hardware or software," stressed Taylor. "We provide them with tools and knowledge that help them to get the most out of their existing equipment and personnel [see sidebar article for more on the Symetriq pricing model]."
Security Without The Overhead
The first thing Symetriq employees must do is determine what services the customer needs. Customers then pay Symetriq a monthly fee based on the services they receive. "The customer is paying for the performance functions of the technology and the knowledge of our people and the ongoing services we provide," said Taylor. "In a small company, if security becomes an issue, the company can't afford to add another head to the payroll. So that additional responsibility for security is added to the workload of somebody who is already working 40, 50, or 60 hours per week."
Rather than spending $250,000 or more for a network monitoring and performance solution, companies with a small infrastructure can spend as little as $1,000 per month. A medium-sized company ($250 million in sales) might spend $5,500 to $6,500 per month for the solution and services.
When making a sales call, account executives are accompanied by a Symetriq analyst. "We sit down with the customer and determine what specific services they would find beneficial," said Taylor. "Those are the services we deliver each month. Whether the customer pays $1,500 a month or $6,500 a month depends on the services they need to support their operation."
One Symetriq customer is a small regional bank that decided to get into online banking and needed to insure its system was secure. A Symetriq analyst performed a security audit, pointing out how the network could be made more secure. Using the SymSage and SymScan systems, Symetriq performed real-time vulnerability analysis and intrusion detection. Now the bank's IT employees are made aware of any vulnerabilities or potential security breeches. Monthly meetings with Symetriq analysts give the IT staff the opportunity to ask questions about information on their reports, which can further be used to improve network performance.
Hire Certified Professionals
The analysts at Symetriq are clearly a key component of the company's success. Joel Helgeson, the company's director of networking and security services, has an MIS (management information systems) background and spent time at Cisco Systems (San Jose, CA) in both the routing/switching and security departments. Cisco is dominant in the networking industry, and Symetriq is one of its partners. Helgeson believes once a person understands networking according to Cisco, configuring anything else is cake. "We hire people who are seasoned network and security professionals," said Helgeson. "We usually require that they have advanced certifications such as the CCIE [Cisco Certified Internetworking Expert] or CISSP [Certified Information Systems Security Professional]."
Helgeson added that his analysts have demonstrated they have the experience and skill sets that would place them in the top 10% or 15% of their peers. Many have come over from the Big Five consulting firms. "A lot of these folks are tired of traveling and being billed out at $250 per hour while being paid less than $70,000 per year," he said. "We offer them the opportunity to hone their skills, reduce their travel, and work for locally based clientele. Our business model is to grow through local operations where employees can work in any number of locally based offices."
Dialing For Dollars
If the job of the analyst is to go on sales calls to identify customer needs and present solutions, the job of the Symetriq sales executive is to locate potential customers. Symetriq has identified several vertical markets that are a good fit for its solutions. Those markets are legal, healthcare, government, transportation and logistics, and education. "We make a lot of calls to try and penetrate those specific vertical markets," said Taylor. "Decision makers from those vertical markets participate in networking groups, and we work hard to become known in those groups. But our focus is definitely calling companies in our targeted vertical markets. Nothing beats a good 150 cold calls a week."
Another way to drum up leads is providing education and training via seminars. Symetriq offers security, networking, and wireless seminars in specific vertical markets. Some seminars are free while others might cost $2,000 for a three-day program. Symetriq analysts do most of the training. "The seminars give us credibility," said Taylor. "We exhibit at trade shows and provide educational seminars at them as well." Direct mail is used to reinforce a message to clients before a salesperson calls. Symetriq will also advertise in local business publications to reinforce its message.
Network Performance + Security = Sales
Although he believes his solutions are unique, Taylor does face competition. There are companies that provide network performance consulting and professional services. There are also companies wrapping services around security. However, few companies combine network performance and security into one solution. "Symetriq has always offered both networking and security solutions together," he said. "Setting up a voice over IP [Internet protocol] network is great, but what is it worth if it is not secure? To the same point, what is a wireless network worth if it's not secure?"
Symetriq often competes against Big Five consulting firms such as KPMG, Deloitte & Touche, and Ernst & Young. Taylor stated his company is actually modeled after a professional service firm like KPMG. "We can handle infrastructure optimization, security, and wireless, and a lot of the services we provide are on a scale of what the Big Five offer to Fortune 500 companies," he said. "We just provide that level of expertise to the small to medium businesses via an a la carte menu." Taylor noted that a client once said Symetriq is like IBM Global Services for the small- to medium-sized market. "That is what we want to continue to base our business model around," he said.