Daly Computers Reaps Services Rewards

"Our service revenue will increase to account for 15 percent of total revenue, up from 5 percent last year," Yu says from the company's offices in Clarksburg, Md. "It's exciting for us. Our focus is going to be on high-end services and solutions. And [more services] means margins will increase."

So much so, Yu says, that even with stagnant revenue, the VAR, which focuses largely on the public sector, hopes to increase its staff by the end of the year. "We have 70 techies on staff. We may increase [that] by another 10 percent," Yu says.

Daly, an infrastructure services provider/systems integrator, sees the bulk of its action in storage and network design, migration work and outsourcing engineering services. It generates about 60 percent to 65 percent of its sales in state and local markets, about 20 percent to 25 percent in federal services, and the remaining 10 percent to 15 percent in commercial services.

"Our largest customers are state and local governments and education [entities] in the mid-Atlantic states," Yu explains. Nationwide, Daly holds more than 60 government and education contracts. Its newest public-sector contracts include more Virginia and Maryland state agencies, he adds.

Yu, Daly's owner, is the only CEO in the company's 15-plus years. His business has relationships with virtually all major tier-one tech manufacturers, with "HP and IBM constituting 60 percent plus of all orders," he says.

Looking ahead, Yu wants to grow the company's play in the federal homeland security arena. "We're not a big player there," he acknowledges. "Yet."

Daly Computers was No. 361 on the VARBusiness 500 ranking of solution providers.

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