Managed services will play a strategic role for L7 in escalating customer growth this year, according to its chief.
The Western Australia-based services integrator recently took the wrappers off its Fixed Cost IT Management offering for IT and network management. Customers can choose the level of service required and pay a fixed price based on 1-3 year contract terms.
CEO, Matt Sullivan, said building market awareness and branding around its managed services was the key focus this year.
L7 management began crafting its managed services practice 12 months ago and has since built a Network Operations Centre, established a monitoring platform and developed smarts around specific market segments such as SMB. It now has 25 clients accessing varying levels of service, Sullivan said.
“With SMBs we’re more about being their complete IT department, but as you go further up, it’s more about niche outsourcing around security, voice, or Microsoft mail,” he said.
L7 provides managed services around networking monitoring, voice, security, mail and one- and two-level helpdesk support.
Sullivan said it was now working on storage implementation services.
“While projects are fantastic to win, from a forecasting point of view and in terms of risk mitigation, having managed services is a good strategy,” he said. “We’ve been doing really well with projects, but not taking them the next step and have been ‘losing’ out in that regard. It’s a long-term partnership with managed services.”
Sullivan claimed the economic downturn, along with increasing demand for compliance and cost and productivity efficiencies, would force many customers to analyse IT budgets and processes.
“I’d like to think we could transition all partners in some form – especially as everyone starts to re-evaluate their IT spend in this economic climate,” he said. “More and more customers are looking for ways to cut down and ensure IT spend is consistent every month.”
About 70 per cent of L7’s customer base is enterprise, with 40 per cent of services revenue coming from voice-related integration work, Sullivan said. Sixty per cent of total revenue in the last financial year was contractual. L7 has three divisions: Advisory services, integration services and managed services.
He claimed it chalked up a 120 per cent year-on-year revenue rise in the last financial year through organic growth. It employed 55 staff in the last 12 months, bringing headcount to 115.
Over the next 2-3 years, L7 will look to expand outside of WA and into the east coast, as well as South-East Asia. Sullivan hoped to have a NSW presence by the end of this year.
“We’re still bullish about organic growth – we are looking to reach $40 million turnover this financial year,” he said. “In our first half, we grew revenue 60 per cent year-on-year.” However, acquisitions that gave L7 access to niche markets or skills were also a possibility.
L7 is one of many tier-two integrators identifying managed services as a customer growth opportunity. ASX-listed integrator, ComputerCorp, has restructured its services division to standardise and expand its offerings nationally.
Ethan Group also recently launched a Virtual Infrastructure on Demand offering as part of its broader managed services suite.