CompTIA At A Crossroads


When John Venator stepped down in 2008 as CEO of the Computing Technology Industry Association, it came at a pivotal time for the trade group better known as CompTIA.

CompTIA had risen steadily during the late 1990s and early 2000s to become one of the most recognizable nonprofit trade groups for the IT channel through its technology education services and its vendor-neutral technical certifications. The organization posted record revenue in 2007 with $44.8 million in sales and an additional $66 million in assets, according to CompTIA's tax records.

But the following year a flood of changes hit the industry, from a devastating financial crisis that rocked the world economy, to a paradigm shift to cloud computing and off-premise IT services. In addition to grappling with a changing of the guard, CompTIA was forced to re-evaluate its value proposition to the channel and its chief revenue-generating business -- which are two different businesses and appear to be growing further apart every day.

The vast majority of CompTIA's revenue comes from vendor-neutral certifications such as the widely known CompTIA A+ certification for basic PC repair and maintenance. CompTIA bills itself as the world's largest provider of vendor-neutral certifications, with 1.5 million certification holders across the globe. According to CompTIA's 2011 tax returns, the organization reported $46.7 million in revenue last year, with $41.7 million in sales of CompTIA certification tests.

To be sure, the A+ certification still carries a lot of weight in the IT industry; top vendors such as Intel, Dell and Lenovo require A+ for all service technicians, and other vendors such as Microsoft and Hewlett-Packard accept A+ as credit toward their own proprietary certifications. In an exclusive CRN survey, 58 percent of approximately 100 reader respondents said someone in their organization holds the A+ certification; 87 percent said the certification is valuable to their business.

But as the channel continues to transition toward new markets such as cloud and virtualization and away from the declining PC market, some solution providers don't view A+ as a must-have certification. Ed Korenman, director of communications at FusionStorm, a San Francisco-based solution provider, served as vice president of marketing and communications at CompTIA from 2008 to 2012. Korenman said the association's channel education offerings serve a much smaller audience than the certification business, which is mostly driven by vendor, distributor and computer retailer tech support staff and PC technicians.

"We always looked at ways to tie the two parts together, and sometimes they did overlap, but in reality, they were two very separate businesses," Korenman said. "The reality today is a solution provider values vendor certs much more than CompTIA's."

Without a doubt, CompTIA is facing serious challenges as it implements controversial policy changes and works to remain relevant in a fast-changing IT industry.

A CHANGING OF THE GUARD

When Venator left the CEO post, CompTIA's board of directors decided to bring in an outsider to run the organization: Todd Thibodeaux, a longtime executive with another successful nonprofit trade group, the Consumer Electronics Association.

With Thibodeaux's arrival came several strategic changes for CompTIA, including a somewhat controversial move regarding the trade group's highly successful certification business. CompTIA had billed its certifications, including A+, as having no expiration dates and being valid for life. But in early 2010, the trade group announced that all CompTIA certifications would expire every three years.

The announcement was met with a flood of criticism from certified IT professionals who felt CompTIA had retroactively changed the terms and conditions of their exams. Feedback was so negative that CompTIA reversed its position and allowed all current certification holders to remain certified for life, while anyone taking exams after 2010 would need to get retested every three years to maintain their certification status.

As a result, 2010 saw a spike in certification revenue as more IT professionals rushed out to take CompTIA exams so their certifications would be grandfathered in under the old policy; CompTIA reported record $58.6 million in revenue, with $54 million coming from certification tests.

Thibodeaux said the change was driven largely by pressure from certification accreditation bodies such as the International Organization for Standardization (ISO) and the American National Standards Institute (ANSI), which have put a stronger emphasis on keeping certifications up to date. CompTIA certification holders still weren't happy, but the reasoning behind the change made sense, especially in the rapidly changing world of technology.

"We should have had this requirement from the beginning, but this was before my time," Thibodeaux said. "Our certification was one of the few out there at the time that was for life. And really, that's not a good practice."

Especially since the three-year certification limits could mean more revenue for CompTIA's biggest business. Certification holders who took exams in 2011 will have their certs expire at the end of this year, so that could mean even more certification-related revenue for the organization if holders decide to renew their certifications.

But the move could also backfire, however; technicians unhappy with the status change may simply let their A+ certifications lapse. Thibodeaux acknowledged that possibility, saying the situation will "come to a head this year."

Former CompTIA executive Jean Alexander disagrees with the policy change. Alexander, who now serves as vice president of business development at the ASCII Group, helped develop and market A+ nearly 20 years ago. "We made A+ good for life to help get the certification off the ground and get vendor support because, up to that point, vendor-neutral certs weren't very successful," she said.

Alexander dismisses the policy change as more of a business decision than a technology move. "It's a money-maker -- think of all the people that took it recently that will now have to pay more money to take the baseline exam again," she said. "I know things change and technology evolves, but so do the people that work in the industry. If you're starting out at an entry-level position doing PC maintenance, chances are you're going to grow your career and get higher certs, so to have A+ holders recertify every three years just to keep that on their resume doesn't make sense."

While the A+ certification is one of the most pervasive in the industry, it's also focused on PCs (desktops and laptops), which are in decline and being overshadowed by tablets and smartphones. Meanwhile, the channel has continued to transition away from the PC and hardware reselling in general while embracing more lucrative areas such as cloud computing and virtualization.

Thibodeaux said he recognizes that challenge and is moving to address it by introducing new certifications and working mobile devices and BYOD trends into current certs. "CompTIA A+, our largest individual certification, has to include stuff about iOS devices and Android devices and tablets and how they connect to networks and all kinds of different things that you didn't have to worry about before," Tibodeaux said. "The PC is becoming less and less a part of that exam."

The issue for CompTIA, however, is that while the organization has introduced new certifications such as CompTIA Cloud Essentials, A+ is still the biggest revenue-producing certification. According to CompTIA's 2011 annual report, 91 percent of the organization's revenue came from certifications. And of that certification revenue, A+ accounted for 37 percent (followed by Security+ and Network+ with 26 percent and 13 percent, respectively).

Forty-four percent of the respondents in CRN's survey said someone in their organization holds the Network+ certification. Other CompTIA certifications, however, haven't gained a lot of traction, the survey indicated. About 28 percent of survey participants said they have an employee with the Security+ certification and just less than 21 percent said they have someone with the Cloud Essentials certification.

A DIFFERENT VALUE PROPOSITION

There was an even bigger change under Thibodeaux's leadership that amounted to an overhaul of the organization's value proposition to members. Rather than restrict CompTIA's educational offerings to its shrinking member base, Thibodeaux began opening up those services to nonmembers, free of charge. Today, solution providers can participate in free CompTIA educational offerings, either in-person or online, whether they're a member or not.

CompTIA currently has around 2,200 member companies worldwide, and approximately 90 percent of those companies are VARs, according to the association's 2011-2012 annual report. (By comparison, there are an estimated 180,000 solution providers in North America, according to CRN research).

CompTIA's new strategy, according to Thibodeaux, is to increase the organization's mind share beyond the base membership by tearing down barriers and paywalls to much of CompTIA's content. For instance, CompTIA now holds educational seminars at vendor and distributor events. Thibodeaux said the focus is less on gaining official paying members and more on raising CompTIA's profile outside its core audience with free content.

According to CompTIA's 2011-2012 annual report, the organization "shared CompTIA content at more than 75 industry events in 2011," with double that amount planned for 2012. But CompTIA's channel educational services aren't generating any real revenue for the organization.

"All of our revenue came from certs," Korenman said of his tenure at CompTIA. "Our channel operations didn't make any money. We did that stuff to help the channel."

Korenman, who was brought into CompTIA by Thibodeaux in 2008, said dilemmas such as this led to a lot of "soul-searching" within the organization. "There were questions like 'Who are we?' and 'What's our niche?' and those discussions were a big part of what we did while I was there and they're probably still going on today," he said.

The channel isn't really CompTIA's core audience anymore, Korenman said, and the organization is still in the process of finding its niche. "CompTIA has some brand recognition with a core [group] of smaller VARs, but very few solution providers today know who CompTIA is," he said. "It's in a much stronger position today than it was before Todd's arrival, but I don't know if CompTIA can ever be the kind big, influential channel organization that it's trying to be."

In CRN's survey, while approximately 56 percent said CompTIA provides a valuable relationship to their business 43 percent said it doesn't provide them value.

Ken Klika, director of networking services for BCG Systems, an Akron, Ohio-based solution provider, said part of the reason that channel trade groups like CompTIA have fallen out of favor with solution providers is because they haven't kept up with the rapidly changing times. "Years ago, you had a lot of trade groups out there offering help with the transition to managed services," Klika said. "But today, there aren't those same resources for markets like cloud."

Michael Goldstein, president and CEO of LAN Infotech, a solution provider based in Fort Lauderdale, Fla., agreed, saying trade associations like CompTIA aren't on the cutting edge of technology. "By the time CompTIA was documenting the changes due to cloud computing," Goldstein said, "I was already there."

REDUCING MEMBER FEES

The final major change within CompTIA involved a staple of American trade associations: member dues. CompTIA's revenue from dues has fallen steadily over the years. In 2007, Venator's last full year as CEO, the association recorded $2.3 million from membership fees. Last year, that figure fell to just $1.1 million. But Thibodeaux said that decrease is by design.

"We've lowered our dues dramatically," he said. "If you're a large company today, say a big vendor or distributor, your CompTIA dues are only $5,000. And when I first came in, they were much higher."

Solution provider dues, meanwhile, have been cut to just $20 a month for small businesses. Thibodeaux said he wants to lower the barrier of entry to CompTIA, and reducing dues won't hurt the organization because they aren't material to bottom-line revenue.

In contrast, Venator said he believed in maintaining the value of being an official CompTIA member, and that reducing the price of admission, along with giving education services away to nonmembers, would never have flown during his tenure.

For the most part, both current and former CompTIA officials agree the changeover from Venator's team to the new regime was relatively smooth. But there were some areas of friction. "A lot of people were let go during that time, and it was coming during a big shift for the organization and it was difficult for a lot of people," Korenman said. "Everything was being rebuilt, in some cases from scratch."

A former CompTIA official who wished to remain anonymous said the transition period was mostly uneventful but that there were disagreements and "isolated episodes," particularly when it came to some longtime CompTIA executives being abruptly replaced by new faces. "Todd came in and cleaned house," the source said. "In some cases, he didn't communicate those changes very well with his employees and constituents."

The source said Thibodeaux was well liked and respected by most CompTIA staff and board members, but that his management style was less personable than Venator's. That difference, the source said, may have made some of the bigger changes harder to swallow for both CompTIA employees and members, especially during such a challenging period for the IT industry.

Like the rest of the industry, trade associations have experienced a significant amount of consolidation over the past 10 years. And being a dues-paying member of a trade association doesn't quite carry the weight it once did.

"I absolutely see less interest in being part of industry trade groups today," Pat Taylor, president of the North American System Builders Association (NASBA), said. "CompTIA is the premier IT education organization in the country, in my opinion, and I have tremendous respect for what they've accomplished. But it's a lot more challenging today."

Taylor, who's spent the last several years revamping NASBA from a system-builder-focused group to a broader channel organization, said it's becoming harder every day for trade groups and channel associations to stay competitive, and it's not for a lack of trying -- or a lack of need. "I don't think trade groups like CompTIA are necessarily becoming less relevant today," he said. "The IT industry changes so much and what was true 10 years ago or even a couple years ago isn't true now. So we need trade associations because it's their duty to speak the truth and let vendors and distributors and businesses know what the channel is and what it needs."

Venator acknowledges the realities of today's IT industry, saying it was a challenge even in his later years to recruit channel startups with younger entrepreneurs who weren't familiar with CompTIA and may not see the value in joining a nonprofit trade association. "I know what going through change is like. You have to be nimble," he said. "As long as you as an organization add value, you'll succeed. But that value proposition changes."

PUBLISHED MARCH 25, 2013