Decision Vision Episode 38: Should I Outsource My IT? – An Interview with Tony Rushin, Network 1 Consulting
Will outsourcing my IT increase my cybersecurity? What’s a human firewall and how does a managed services provider help me with this aspect of my IT? In this episode of “Decision Vision,” host Mike Blake explores these questions and much more with Tony Rushin, Network 1 Consulting. “Decision Vision” is presented by Brady Ware & Company.
Tony Rushin, Network 1 Consulting
Tony Rushin is a Vice President, Sales & Marketing, with Network 1 Consulting.
Network 1 Consulting is a 21-year-old, IT Support company in Atlanta, GA. They become – or augment – the IT department for law firms, medical practices and real estate & construction companies. Their IT experts can fix computers, but what their clients value most are the industry-specific best practices we bring to their firms. This is especially important with technology, along with regulations and cyber threats, changing so rapidly. They take a proactive approach to helping our clients use technology to gain and keep their competitive advantage.
For more information, go to the Network 1 Consulting website, or contact Tony directly by email.
Michael Blake, Brady Ware & Company
Michael Blake is Host of the “Decision Vision” podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.
Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.
Brady Ware & Company
Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.
Decision Vision Podcast Series
“Decision Vision” is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the “Decision Vision” podcast. Past episodes of “Decision Vision” can be found here. “Decision Vision” is produced and broadcast by the North Fulton studio of Business RadioX®.
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Show Transcript
Intro: [00:00:02] Welcome to Decision Vision, a podcast series focusing on critical business decisions, brought to you by Brady Ware & Company. Brady Ware is a regional, full-service accounting and advisory that helps businesses and entrepreneurs make visions a reality.
Michael Blake: [00:00:20] And welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic. Rather than making recommendations because everyone’s circumstances are different, we talk to subject matter experts about how they would recommend thinking about that decision.
Michael Blake: [00:00:37] My name is Mike Blake, and I’m your host for today’s program. I’m a director at Brady Ware & Company, a full-service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia, which is where we are recording today. Brady Ware is sponsoring this podcast. If you like this podcast, please subscribe on your favorite podcast aggregator. And also, please, consider leaving a review of the podcast as well.
Michael Blake: [00:01:01] Our topic today is, should I outsource my IT or information technology functions? And you know, I think this is a question that companies wrestle with quite a lot. In fact, I know companies that kind of do the IT two-step where they’ll insource it, and then outsource it for a while then. And then, thrilled to kind of bring it back, and then send it out again. And, you know, it’s really sort of the Texas two-step information technology style. And, you know, having been a business owner myself, I had to face that decision.
Michael Blake: [00:01:32] Now, as an anecdote, when I had my firm for a while, Arpeggio Advisors, our family at that time had started out as a Windows platform family. And then, something like three weeks into my trying to launch my company where my blood pressure was at a fairly high level, all of a sudden, my wife’s computer crashes and my oldest son’s computer crashed. Basically a race time when they can’t do anything and we’ve got to figure it out. And I’ve spent an entire day getting them back up and running, which I eventually did. But I said I’m just never doing that again.
Michael Blake: [00:02:16] So, on Saturday, I don’t know if Apple salespeople work on commission or not. But whoever—if they did, they made a lot of money on me that day because that day all the PCs are out. Macs were in. Never had trouble since. And this is not meant to be an Apple infomercial. I mean I do actually still have Windows machines for some things, but it’s indicative of how IT can be disruptive to a business, even if you’re a sole practitioner or even if you’re a home based business. That when you—when you’re infrastructure doesn’t work well, it is a real pain in the neck. It’s one of those things. It’s kind of like an umpire in baseball. You don’t notice and necessarily they do great. But boy, when they fail, you notice the heck out of them.
Michael Blake: [00:03:02] And IT is like that one. When your technology fails you, I can tell you from my perspective, I feel betrayed when my technology does not work. So, I feel like, you know what? I’m doing my my job. Right. Why is Apple, why is Microsoft, why is whoever not sort of holding up their end of the bargain? And so, the IT function in a company in the 21st century is every bit as important, if not more important than sales, than an accounting product delivery. You know, it’s right up there. But I don’t think that there’s as much controversy or consternation on whether or not to to keep that function or to outsource it or maybe if there’s, you know, identify kind of where that inflection point is, where you should consider that—you should consider that decision.
Michael Blake: [00:03:59] And so, as is often the case, you know, I’m not qualified to advise you on how to make that decision. So, I’ve brought in somebody who is qualified to help you make that decision. And joining us today is my friend Tony Rushin, who is vice president of Network 1 Consulting. Spending 30 years in high technology sales and marketing from IBM to startups, Tony brings his broad experience and business development marketing in IT business strategy to Network 1’s leadership team clients and partners. His passion is to help people achieve greatness and however they define it. And by the way, if your Atlanta Braves fan, you will appreciate this. He does run it out when the ball is hit into the gap in the outfield. Unlike some of our players here.
Michael Blake: [00:04:38] Network 1 delivers I-T managed services exclusively to businesses in Metro Atlanta. Since 1998, Network 1 becomes or augments the IT department for companies. Network 1’s IT experts fix computers for what their clients really values, the industry best practices they bring to the firm. It’s especially important with technology, along with regulations and cyber threats, which are changing rapidly.
Michael Blake: [00:05:02] With over 30 employees, Network 1 has built a culture that attracts and retains network and desktop professionals who know their stuff and have an outstanding desk side. Man, that is not easy to do. They find a fixed root causes instead of putting a Band-Aid on issues. Network 1 delivers proactive planning, so their clients avoid problems and gain competitive advantage. They’re not just a cost function. Network 1 is a fractional chief information officer, a support desk network engineer and everything in between. Tony, welcome to the program.
Tony Rushin: [00:05:32] Well, glad to be here, Mike. Thank you.
Michael Blake: [00:05:34] So many of us encounter outsource support when we need to fix our computer in sort of a robot vacuum. Is outsourced IT support simply hiring day from India. What does that look like?
Tony Rushin: [00:05:49] Well, no offense today from India, but if that’s all outsourced, IT support would be, there wouldn’t be much outsourced IT. So, it’s much more than that. But, you know, it can be confined to that, too. It really runs the gamut as far as what companies need, and then what they go out and get.
Michael Blake: [00:06:08] So, you know, what if a company happens to have a lot of people who are relatively computer uncomfortable, does that change the equation? Not every company necessarily has or needs people who are power users at every desk, right? Does that at all impact the decision on whether or not you should keep that function in-house versus outsourcing it?
Tony Rushin: [00:06:29] Great question. We’ve got 120 clients around Metro Atlanta. And I would say most of the users we support are relatively uncomfortable with technology and yet they still have a job to do. And their threshold for when they need help is much lower than that, power user often. And some of those that are uncomfortable with technology are also in some form the rainmakers. It could be a salesperson. It could be a managing partner in a law firm. And so, we haven’t found any correlation to whether or not you outsource to the how comfortable or uncomfortable people are with technology.
Michael Blake: [00:07:15] So, let’s back up. I probably should have made this the first question but too late. But there’s a term people hear a lot and I’m not sure they understand what it means. What—when we say managed services, what does that mean?
Tony Rushin: [00:07:27] Yeah. Managed services. It can mean something different to different IT support companies. What it means for Network 1, and in general I think we’re aligned with the industry, it’s the ongoing and always up to date services that are delivered by your outsourced IT company. So, what does that mean? And not all outsourced IT is—includes managed services.
Tony Rushin: [00:07:53] But, for instance, basic security. Well, that’s antivirus. Well, making sure it’s the latest version and it’s on everyone’s desktop or laptop. Well, that kind of infers that desktops and laptops need to be monitored to make sure that the latest is on there. It could be advanced security suite that’s got more tools and solutions in there to protect and prevent bad guys from getting in, but also detecting them when they get in. It can be managing a firewall. So, it always has the latest firmware and software involved in the company that is being managed on behalf. Never has to worry about it, never has to buy the hardware, it just gets supplied. So, think of it as baked in.
Michael Blake: [00:08:40] And so, in effect, is it fair to kind of characterize managed services for the most part as just a turnkey solution to some IT operation that needs to happen?
Tony Rushin: [00:08:50] Yeah, great, great summary of it. Turnkey and but typically it’s also based on a menu. Hey, I need this, that and the other and I don’t need those other things.
Michael Blake: [00:08:59] Okay. So, I think—in fact, I know a question on a lot of business owners and executives minds. As you know, we both understand the importance of IT to an organization. Right. And when IT doesn’t work, an organization can stop dead. And we’ve seen, we’ve heard of those those things. How do you overcome as an executive this notion or the idea or the fear that if I don’t own my IT department, really own them, right, they’re employees and I can, I don’t know, yell at them or fire or throw rocks at them, whatever, right, that that just leaves me more vulnerable to a disaster?
Tony Rushin: [00:09:42] Yeah. You know, it’s great you do this podcast because you’re getting advisors in here that have some experience and yet some in your audience that own businesses will say, yeah, I hear that but I think I have a better way. And so, we don’t do too much to educate people. We let the marketplace educate them for them. What I mean by that is the common sense of one business owner might be, I need IT in-house and it could be going great because let’s say there are financial advisory company and they’ve got 15 people and they’ve got an IT guy. That’s good. He’s customer-oriented. He’s focused. He runs around. He helps fix issues. And then, he gets sick or he quits or he’s not so good and he’s spotty.
Tony Rushin: [00:10:36] That’s the education of the owner like, oh, wait a minute, he is who he is. And by the way, the dynamic of the marketplaces, if he is really good, and I say he because most of them are guys, then he won’t be satisfied forever at a 15 person financial advisory company. He’ll want colleagues. He’ll want more challenges, whatever it is. And so, if someone chooses to bring it in-house, it could work great. My guess is for a small size business, say under 50 employees, it will bite them in some way, in some form or fashion.
Michael Blake: [00:11:17] You bring up something I want to make sure that I talked about because I do think it’s important. You know what was not intended to create innuendo here, but I think size really does matter. Right? I mean, I think there’s a—is it fair to speculate on my part that there’s maybe a sweet spot where, you know, can an organization get so big that having outsourced IT just isn’t—at least entirely, is no longer practical and maybe even on the small end, right, outsourced IT may kind of even be overkill, right? If you only wanted two people and you know your way around a computer, maybe it should just kind of do that. Is that fair?
Tony Rushin: [00:11:57] It is fair. And I’ll talk in generalities because it’s different depending on the kind of business it is. Some are highly regulated. I use financial advisory as an example and some are less regulated for instance. In the marketplace over time—and Network 1’s 21 years old. I’ve been there almost 10 years. I’ve seen almost a physics of size and when they need certain IT support. And if you’re less than 10 employees or or less than 8, you can often get away with some kind of as needed IT support. So, the opposite of managed services. You simply pick up the phone and call somebody if you need their help, only when you have an issue. And sometimes that can be done internally if you got a smart guy. And hey, I’ll fix it for you, right.
Tony Rushin: [00:12:52] Sometime between 5 and 10 employees, if they’re doing it with a smart person in-house and they’re growing, they might say, hey, wait a minute, it’s better to have Sally get out there and get new clients than fix our computers, and she’s really good at getting new clients, for instance. And so, that’ll happen. And they’ll say, well, let’s get someone that can fix things when they break. Often at about that 10 employees standpoint up to say 50, they’ll say, hey, look, I need—it would be better if there was someone more proactive and all inclusive delivering these services, not just when my hair’s on fire. Because when my hair’s on fire, I need him here now. And you can always get him here now. Whereas if they’re fixing little things along the way, it can avoid the big thing.
Tony Rushin: [00:13:42] So, really, for companies less than 50 employees, but 10 to 50, we don’t find a lot of in-house IT people. They’re outsourcing everything. Somewhere between 50 and 100, typically, we see them get their first IT person and that can actually be worked really well with an outsourced firm. We love working with an internal IT person because no matter how good our support desk is and they’re really good, I mean, they get to every issue within on average, seven minutes.
Michael Blake: [00:14:16] Wow.
Tony Rushin: [00:14:16] But the person on site can beat that every time. Now, not if he’s helping Joe and Susie down the hall needs him at the same time.
Michael Blake: [00:14:26] Right. That just assumes a personal sort of waiting for the phone to ring and that phone lights up and all of a sudden-
Tony Rushin: [00:14:32] Yeah.
Michael Blake: [00:14:32] … you’re rushing up to that person, right?
Tony Rushin: [00:14:34] Yeah. But between that 50 and 100 people, they typically have a person onsite. And then, if they get to that issue where, hey, we have multiple people and you know, our IT guy can’t get to them all, they’ll often bring in someone like us and say, hey, look, is there a way we can streamline, so that they take what they can? But if it’s over their technology knowledge or if they’re flat out, you know, covered up with a couple different issues or you know what, the dang employee wants vacation once in a while, go figure, right. They’ll have a relationship with someone like us, a managed service company, and says, look, we want to escalate or we want to hand off whenever we need to. So, that’s about 50 to 100.
Tony Rushin: [00:15:19] And then, when you get multiple people in I.T., then they have colleagues, then they can internally go on vacation or go to a class and still have someone to back fill. And we find that typically when there’s more than 100 employees.
Michael Blake: [00:15:35] So, I think there’s an important point there that I want to make sure we highlight is that this choice may or may not necessarily be an either or. Right. It very well could be an and, right. You may have, you know, one IT resource that is captive. Right. But then some firm like yours might then be available to augment that. It could be as needed, it could be strategic, whatever. Right. So, maybe in some cases it’s a fault—you can have your cake and eat it, too.
Tony Rushin: [00:16:09] Yeah. Really, it ends up being managing the business risk and managing the ongoing productivity of the employees on a fundamental level. The business risk is I have one IT guy and he gets sick. He leaves, he goes on vacation, whatever. And, of course, Murphy says that’s when the bad things gonna happen. And you need help.
Michael Blake: [00:16:28] Absolutely.
Tony Rushin: [00:16:29] And if you wait till then to have this outsourced relationship, well, the company you bring in doesn’t know your system. And so, they’re doing the best they can. But at best, it’s triage learning the systems. Oh, was it documented? Oh, you don’t even know passwords. Well, then they’re hacking into your system.
Michael Blake: [00:16:48] Right. It’s like an emergency room visit.
Tony Rushin: [00:16:50] Exactly. Whereas if you do it when everything’s quiet, you’ve got your IT person, they’re part of the solution of bringing in the company. They’re actually even getting, hey, what’s my style? What’s the style of the person to work with? Do they work with me well? Then they’re part of the solution. And it works fine for when those emergencies come up.
Michael Blake: [00:17:12] So, you mentioned something else I want to make sure to underline, because I think one of the arguments somebody might have to maintain a captive IT resource is that notion that while I own most of the service, the response time is going to be instantaneous. Right. But, you know, that’s not necessarily the case. And if you work with the right partner, you may very well find that you get, you know, assuming it doesn’t necessarily need to be an onsite because most of these—most computer issues can be addressed remotely now that you aren’t necessarily making that sacrifice of responsiveness that you thought you might.
Tony Rushin: [00:17:47] Yeah, it all depends. It depends a lot on how customer service oriented is the person you hire. And, you know, people can be really good in interviews, and then you get what you get. But let’s say they’re great, you know, and they know their technology and they’re really customer service oriented. You still run into, oh, my gosh, the rainmaker’s on the road and his laptop failed and yet they’re addressing a server down issue in the other part of your company, they can’t do two things at once. But that’s part of the business dynamic. I think companies get there on their own, get their meaning. Oh, we need to augment the current person we have in site simply from enduring enough IT issues that, you know, the person can’t clone themselves.
Michael Blake: [00:18:36] So, I would have to imagine that you’re having many more conversations about cyber security now than you were, say, 10 years ago, 5 years ago, right. So, how does—how do concerns about cyber security impact that decision of outsourcing IT functions? On the one hand, I could see an argument that’s well, again, if I have this captive asset, I own it, it’s ostensibly a closed cycle that should be nominally more secure. On the other hand, maybe it’s by outsourcing your brain and expertise, you could not possibly afford to hire cause cyber security experts are—they’re as well paid as a senior software engineer, if not more, at this point. Where do you kind of fall in that? Where—how do you kind of look at that, that many decision within the decision process?
Tony Rushin: [00:19:27] Yeah, great question. I don’t think overall it really affects the fundamental of do I outsource or do I bring it, have it in-house. What it has done—and really we’ve seen the acceleration rapidly in the last three years, you know, where cyber security, it’s gone from reading about it in the newspaper like, oh, it happened to someone else, to people—oh, it happened in my company or my next door neighbor’s company and I know him personally and I think that’s what’s accelerated it.
Tony Rushin: [00:20:00] You kind of set it up really well with if it’s that single in-house person and you’re keeping them really busy, how much time do they have to do that proactive. Hey, what new solutions are in the marketplace that might protect us better? Do they have colleagues already in-house that they can pick up the phone and just have a brainstorm sounding board conversation about, hey, we got this bad malware, how did you guys prevent it? It’s hard to find that really tactically good computer broke, fix it fast, person. And have that same person be that strategic, always looking forward, hey, what’s on the horizon? What do the bad guys do and what do the good guys do and what solutions should I be looking at? Oh, I should bring it in and vet it and do a pilot on it. Oh, wait a minute, this guy’s computer broke. That’s where I have to spend my time. And that’s the reality of what that single shingle person is involved with. And so, it ends up driving more people, I think driving more outsourced I.T.’s conversations, whether you keep that internal person and if he’s good, you should or whether you simply want to outsource all of it.
Michael Blake: [00:21:15] So many companies now are also using cloud services or putting all their data up in the cloud, whether that’s One Drive, Dropbox, something like that. Does that impact a need to—does that impact at all kind of the decision as to whether or not you outsource versus keep in-house, given that by definition, when you’re putting your data in a cloud, you’re already taking a step to outsource anyway, right?
Tony Rushin: [00:21:41] Yeah. Yeah. And a lot of things that are bundled into that, you know, cloud solution are what a company like us would do if you had it running on a server internally, meaning the servers in that cloud solution if you picked a good one, right. Not one that’s really in someone’s basement, but, you know, Microsoft or, you know, Office 365 or something like-
Michael Blake: [00:22:10] Josvpn.com.
Tony Rushin: [00:22:12] Right. They’re going to have redundancy built in. They’re going to have backups built in. And they’re going to make sure that everything is designed in a way where the application is not going to go down. Or if it goes down, it’s gonna be minutes and, you know, like that, not two days. So, all of that is a real big step up where we find that people—I mean you still need—you still have users and you still have them. I mean, I’ll flip it around, ask you question. Do people still go to the wrong websites?
Michael Blake: [00:22:47] All the time.
Tony Rushin: [00:22:47] Do they still get tricked by that e-mail, that phishing e-mail, and they might click on something?
Michael Blake: [00:22:53] You better believe that.
Tony Rushin: [00:22:55] Do they still forget to run the updates when their computer says run these updates?
Michael Blake: [00:23:00] Especially with Windows, I think many people actively avoid it.
Tony Rushin: [00:23:04] Yeah, because then, you know, you got a reboot or hey, the update might cause a problem.
Michael Blake: [00:23:09] And takes a minute.
Tony Rushin: [00:23:10] Takes a minute. So, it’s the user issues that are still the same. In fact, maybe they’re more complicated because you’re not going to pick up the phone if Office 365’s not working right and call Microsoft and actually get a response.
Michael Blake: [00:23:23] Right. Not unless you’re a really big user.
Tony Rushin: [00:23:25] Right.
Michael Blake: [00:23:26] Or you’ve really paid for their Cadillac plan, which they will sell you. Right. But then are you really saving anything, right?
Tony Rushin: [00:23:31] Right.
Michael Blake: [00:23:32] You know, I want to go back to those questions you just asked because they’re so important. You know, speaking of spear phishing attack, a friend of mine who was a CFO fell prey to a spear phishing attack and lost her job.
Tony Rushin: [00:23:52] Wow.
Michael Blake: [00:23:52] Within two days, gone. Right. Now, I do not believe it was her fault. The organization had never trained her or anybody to recognize spearfishing. There are no policies, rules, procedures, right? Yes, there’s human error. But to me, that was human error that was set up by an organizational failure to be prepared. So, my question for you is, beyond kind of the nuts and bolts of of keeping a machine running and keeping software update and so forth, can an outsourced IT function, if it’s not you, maybe somebody else, also help kind of establish those rules, procedures, create awareness? Because the end of the day, you do still need your end users to be smart about this thing.
Tony Rushin: [00:24:37] Yeah, and it’s interesting. The biggest weakness in any network is still the human firewall.
Michael Blake: [00:24:44] Yeah.
Tony Rushin: [00:24:44] It’s that person. And you hit the nail on the head. Well, how do you make that human firewall more secure? It’s through education. It’s through training. It’s through—and not one time events. Right. It’s like, hey, security is important. And that’s the day that you hired him, and then you never talk about it again. Well, that doesn’t work.
Michael Blake: [00:25:06] Right. This isn’t sensitivity training. OK, just kidding, just kidding, hold your e-mails.
Tony Rushin: [00:25:11] Right. So, the—first of all, we, as the outsourced IT or any outsourced IT can influence the leadership of the company to take security seriously and make it part of their employee handbook, make it part of their regularly ongoing employee training. But at the end of the day, if they don’t—if the leadership doesn’t step up to lead it and say this is important and this is what we’re doing, we can only influence, right.
Tony Rushin: [00:25:51] But let’s say it is a company that they care. It’s like, look, I want this to care. Then, yeah, we can advise. Well, then here are the steps, the processes, the training that you should incorporate into your culture. And here’s the frequency at which you should do it. So, I think most companies that are like us and helping those smaller companies can at least advise, influence, give some examples of processes and procedures to put in place to raise up their security. And solutions are put in place. If they need—if they’re in a regulated industry and they need something more robust than you’ve got those paid as much as a software developer kind of people that are consultants to put whole company assessments in place around security, physical and online security and put, you know, really extensive processes and procedures in place.
Michael Blake: [00:26:53] I mean, that—yeah, and that security space has has evolved into sort of the neurosurgery, I think of the IT world. Partially because I’m glad about the regulations, because, you know, financial statement, audit rules are now directly addressing this. Right. Your data security. In my world now, you know, I am—although badly I am now asking customers, not customer, I’m asking clients, why appraise their business? What are they doing about data security? How many records do they have that are potentially exposed, right, to do business in Europe where GDPR becomes effective or in California where their roles become effective? Because I don’t think that if you’re—if you ignore that, you’re really missing a big potential risk, right?
Tony Rushin: [00:27:38] Yeah.
Michael Blake: [00:27:39] So—but it’s become so specialized that, you know, if you’re a generalist, you just can’t cover it, right. And if you’re really sensitive, if you’ve got high sensitivity, that maybe another IT function that needs to ultimately be outsourced and just part of the cost of doing business. Right?
Tony Rushin: [00:27:56] Yeah. And the good news is. When you look at the tools of the technology that’s available to also help protect and prevent and detect security breaches, in this day and age, they are very affordable for small businesses. And especially if they outsource because what they also get the benefit of, let’s say with us, is a 50 person company pays a 50 person price for whatever licenses they might get of Cisco umbrella that protects them way out on the Internet side, or Huntress Labs, which is a cool piece of software that doesn’t protect you. But it always scans to check and detect if something made it through because something’s going to get through no matter how good your protection is.
Tony Rushin: [00:28:51] Well, those things for a 50 person company might cost them, say, $40 per computer per month. Well, a company like us will buy 2000 nodes for all our clients, and then we’ll offer it to our clients for $10 a computer a month. Plus, by the way, you know, we’ll get an alert when something happens and we’ll dig into it. You don’t even have to know about it. So I wanted to bring in costs because it’s important. These solutions typically start with big companies. And then, over the years, more competition comes in or that same company will develop a price point that is very palatable for small businesses.
Michael Blake: [00:29:37] And interestingly enough, I see the same thing, but from a different angle. I see that also occurring because small companies, most of them at some point would like to be bought by a larger company. And I have seen deals get stopped dead or at least get dragged through the mud and prices go down because the larger acquirer that does have kind of “best practices”, I think they do. Right. And they’re reaching down into this small company that is farther behind. Right. And it’s like trying to buy a house and you realize you’ve got to put a million dollars to get up the code and the deal can fall apart.
Michael Blake: [00:30:18] So, you know, I think a best practice for many companies is to make your IT as best practice as you can afford if you want to be acquired, because an information officer will say, look, this is too risky.
Tony Rushin: [00:30:33] Right.
Michael Blake: [00:30:33] Either they’ve got to go through and get a real grown up IT audit and a clean bill of health from your national firm or it just doesn’t make sense. An Exhibit A was the Verizon Yahoo! deal. Right. I remember when Verizon bought Yahoo! a while ago. And in the middle of that deal, they discovered a breach and it shaved billions of dollars off the acquisition price. I mean that’s an extreme example, but it happens all the time.
Tony Rushin: [00:30:57] Yeah. And I want to play off that a couple different ways. And in your example, it doesn’t mean the small company has to spend big company money. I mean, at the end of the day, you have to be more secure than your neighbor, just like physical security with your house.
Michael Blake: [00:31:13] Run faster than the other guy when you’re running from there.
Tony Rushin: [00:31:16] Exactly. And so, no one’s asking them to, you know, spend what Yahoo! or Verizon spent. In fact, no matter how much they’re spending, they can’t keep themselves safe. So, if the bad guys want to get you, they’re going to get you. What you want to do is button down things, so when they knock on your door from a cyber standpoint, oh, no one’s home. Go to the next. I checked the windows, can’t get in and they quickly go to the next. And so, you don’t have to spend that kind of price. You just have to pay attention to it appropriately.
Tony Rushin: [00:31:51] And going back to outsourcing, if you’re a single small business, you may not know what’s available out there in your price point or what are best practices without overspending for a company that’s 40 people. Whereas a company like us has one hundred and twenty clients that are that size and we work in there all day. And by default then because we earn a living doing this, we understand what best practice is or what’s appropriate and what’s available for that sized company.
Michael Blake: [00:32:23] Now, correct me if I’m wrong. If I’m not mistaken, a lot of your clients are law firms and accounting firms.
Tony Rushin: [00:32:30] They’re law firms and financial advisors.
Michael Blake: [00:32:31] Financial advisors, okay.
Tony Rushin: [00:32:32] Yeah, not quite accounting firms.
Michael Blake: [00:32:34] So, is that because those kinds of firms tend to lend themselves better to outsourced IT than do others? And are there other kinds of firms that say, you know what, this kind of firm probably really needs to just have staff in-house?
Tony Rushin: [00:32:51] So, way back in our history, 21 years, our founder married an attorney and the daughter of an attorney. So, it’s not rocket science why we got law firms at the beginning. We got referred in by people that knew our-
Michael Blake: [00:33:05] Right. Fair enough.
Tony Rushin: [00:33:06] And then, we built enough reputation there for being good. We call it that side manner to be able to explain things to an attorney or their staff that wasn’t tech talk and to be empathetic and to be responsive. And so, we got more law firms and attorneys. So, truth be told. Now, are some better outsourced than others? No, pretty much we find across the board any business can benefit from it. The ones we found actually—I say any. The ones that don’t seem to be quite as good a fit is that technology company that part of their offering is delivered through technology that’s facing for their client.
Tony Rushin: [00:33:52] Think of Amazon when they were really little. Well, when they were really little, they’re structured the same way as they are now and their technology was really client facing. Click here and go on and order a book. Well, if you outsource the IT support for that, you may not—that’s a critical function to their business. Those critical functions or the family jewels, if you will, you typically want to have in-house. So, that’s not quite a fit. But any others, we haven’t seen the correlation.
Michael Blake: [00:34:29] So, what does—what are the economics of outsourcing IT typically look like? And what I mean by that in a more specific way is, is pricing typically done on a monthly retainer? Is it on a per incident basis, done on an hourly basis, some other basis? How does that typically work?
Tony Rushin: [00:34:53] Yeah. Well, the good news for that small business owner is it’s a highly competitive marketplace. In Metro Atlanta alone, there’s over 800 IT support companies.
Michael Blake: [00:35:07] Wow.
Tony Rushin: [00:35:07] Yeah.
Michael Blake: [00:35:08] I thought I had competition.
Tony Rushin: [00:35:09] That’s a real number. And now, granted, 780 of those 800 are one, two or three-man shops. But the good news is that business owner, you brought up examples, you know, is it on a monthly retained basis, is it per incident, is it this or that? The answer’s yes.
Michael Blake: [00:35:26] Got it.
Tony Rushin: [00:35:26] You can find a provider that works with any of those models.
Michael Blake: [00:35:31] And what about you guys? Is it—do you find that you kind of tailor your pricing to the particular needs and wants of that customer as while? Do you sort of have—or do you have kind of a more of a fixed model?
Tony Rushin: [00:35:44] It’s both. We have three different basic plans, and then we have these managed services that, oh, you don’t need the advance security suite in your environment. Okay, don’t get that. Or you don’t need the the backup and recovery with disaster recovery built into it or at least it’s not at your price point. Great, let’s not do that. So, it’s some of both smorgasbord and fixed plans.
Tony Rushin: [00:36:10] We, in particular, won’t take a client that merely wants to call us when their hair’s on fire. That’s the as needed only. However, we’ve been around Atlanta for 21 years. So, if we find someone or if someone’s referred to us and say this is the kind of plan I want, we’ll simply say, well, that doesn’t fit us but we know two people that are really good at that. And would you like their names. Yes, we would. All right. Go call them. We found—we—I’ve been there 10 years. And for the first three years of me being there, we tried to serve both kind of client and we found we simply couldn’t because our monthly retained clients are where we put all our resources. And then, that person with their hair on fire calls and it’s like, do we take this engineer off this client that pays us every month? No, of course, we don’t. And then, we’d never be responsive enough for the hair on fire guy.
Michael Blake: [00:37:00] Right. That makes sense. And it would be like working at, you know, at a car company. And they have this assembly line, that’s their model, and then all of a sudden the CEO wants a custom car built, right? It would break everybody. Right. You wouldn’t get a very good custom car and it would disrupt the entire assembly line, too. Tony, this has been great. We’re running out of time, so we’re gonna need to wrap up. But if somebody wants to contact you with questions about this decision, how can they do that?
Tony Rushin: [00:37:31] Yeah, a lot of ways to contact. It’s trushin, R-U-S-H-I-N, @network1consulting.com. And that’s the numeral 1. So, that’s long the first time you type it. You know, just put me in as a contact. You can find me on LinkedIn, Tony Rushin. We’ve got a website. You know, we do tweet and we do Facebook. Personally, I’m not on those too much cause our—I’m on LinkedIn mostly cause that’s where business people are.
Michael Blake: [00:37:56] Right.
Tony Rushin: [00:37:57] Yeah.
Michael Blake: [00:37:58] Well, good. Well, that’s going to wrap it up for today’s program. I’d like to thank Tony Rushin so much for joining us and sharing his expertise with us. We’ll be exploring a new topic each week. So, please tune in, so that when you’re faced with your next business decision, you have clear vision when making it. If you enjoy these podcasts, please consider leaving a review with your favorite podcast aggregator. It helps people find us, so that we can help them. Once again, this is Mike Blake. Our decision—our sponsor is Brady Ware & Company and this has been the Decision Vision podcast.
