Capital Gains: Why NWN Is All Business When It Comes To The Cloud

Mont Phelps, CEO of NWN, has always prided himself on being a businessman first and a technologist second.

Phelps, who spent 27 years in the business trenches including 17 years at DuPont before starting NWN 16 years ago, has built the Waltham, Mass., company - No. 68 on the 2016 CRN Solution Provider 500 - into a $350 million solution provider by driving his team to live the mantra, "It's all about the customer."

It is that sharp focus on listening to customers combined with business savvy that has won NWN a loyal customer base who has turned to the company time and time again to help drive productivity increases and gain competitive advantages.

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It is no small matter, by the way, that the NWN leadership team includes President and COO Skip Tappen, a former Accenture partner, and Executive Vice President Dr. Jane Linder, former president of the management consultant The Progress Board. The point is the NWN team gets business and business transformation.

Phelps and his senior management team have from the start focused on building a $1 billion-plus business. That is why NWN sold a majority stake last year to private equity company New State Capital Partners. That deal is all about getting the capital necessary to grow the cloud business.

With that capital in hand, NWN recently launched a new entity called NCapital aimed at providing the financial muscle and technology know-how for customers to move to the cloud without making capital expenditures. NCapital is not a leasing play sitting on a balance sheet of a leasing company or financing company. With NCapital, NWN is funding, selling and supporting cloud services and solutions on its own balance sheet - opening the door for customers to embrace an operating expenditure-based cloud transformation with a trusted partner.

NWN, for example, recently completed a five-year wireless-as-a-service deal with a school district under the NCapital model with NWN owning the wireless network and infrastructure. On that deal, NWN was competing against competitors bidding against it with $5 million to $10 million capital-expenditure-based deals.

"[NCapital] is a huge game-changer," said Phelps. "What we have been able to do is to provide a solution that takes it off the customer's balance sheet, and we're doing it in a way that we are able to grow essentially in an unlimited manner. We could have done tens of millions of dollars on a lease basis. Now we can do hundreds of millions of dollars of that business with NCapital."

NCapital comes on top of myriad cloud investments NWN has made over many years including its fast-growing NCloud hosted VoIP service, which has been eagerly embraced by customers looking to get out of the clutches of telecom behemoths. Phelps says many competitors miss the forest for the trees by focusing more on technology than business. "With NCapital we are not just a technology provider," he said. "We are a business partner. That is the big ’aha' moment. If you just look at this through a technology lens, you miss the opportunity."

BACKTALK: Are you walking in your partners' shoes? Contact Steven Burke at [email protected].