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Having All The Bases Covered

All Covered knows small businesses.

The IT services company has been dedicated to the small-business market since its incorporation in 1997—and providing ongoing services to firms with 1 to 100 employees makes up more than three-quarters of its business.

“We are definitely focused on small business,” said Kevin Laughlin, CEO of All Covered. “Our average client is 25 to 30 desktops. That&'s the market that we&'ve been in all along and we intend to stay in. Virtually all of our clients are less than 100 employees, although we do have larger clients where we do some aspect of supporting their environment,” he said.

“There are roughly 2 million businesses in the United States with between 5 and 100 employees. It&'s an excellent market to operate in,” Laughlin said. When All Covered was started, the idea was to become a national operation, and the solution provider now has offices in 23 cities and annual revenue of $32 million—completely from selling services.

When working with a customer, All Covered does not resell hardware, software or equipment at a profit.

“With each client, we work with what their channel has been, and if they don&'t have a channel, we will supply that with one of our own providers,” said Todd Croteau, vice president and general manager of the Eastern region at All Covered.

The company will recommend hardware partner Dell if the customer doesn&'t already work with a reseller.

All Covered builds its reputation based on its ability to bring a wide range of specialties and technologies to the table for its small-business customers. With 286 employees scattered around the country, the company&'s consultants have a network to call upon when a customer has a need they can&'t personally fulfill.

“We have high-end Cisco people. We have Citrix expertise, mobile devices, BlackBerry—a lot of the things that large enterprises are going to have, we have internally. A lot of small businesses don&'t have that different of an infrastructure,” Laughlin said.

In a year, the solution provider services about 1,300 customers with whom it has an ongoing relationship and another 1,000 on an on-call basis. About 20 percent of All Covered&'s revenue comes from project-based work and the rest from its service relationships.

On-call customers are typically either too small to require recurring program services or don&'t have a great enough revenue stream that they want to incur recurring monthly IT charges.

For those customers, a broken server or a new employee who needs to be added to the network would merit a call to All Covered. The solution provider also is brought in to handle problems when a small company&'s IT staff is stumped.

In an emergency situation, All Covered can have someone to the customer site within four hours.

“It&'s like ER. We&'ll go out and help, and that&'s it. Some [customers] have been using us in that fashion for five years now,” Croteau said.

The bread and butter of All Covered&'s business, however, are its services customers. “Essentially we want to provide an appropriate balance between professional services and managed services to those accounts and owning the IT function of those small businesses,” Laughlin said.

Part of All Covered&'s evolution has been an expansion of its flat-fee managed service offering. “The first step was providing monitoring and then moving what was done in the field and on-site to off-site,” Laughlin said. The next step is centralizing its off-site managing operations at its headquarters in Redwood City, Calif.

Of its 1,300 services customers, so far All Covered has transitioned about 700 to a flat-rate program in which the solution provider remotely monitors customers&' systems. All Covered also provides help-desk services and e-mail protection in the form of antispam and antivirus solutions, as well as a desktop backup system.

For All Covered, a transition in its business model will mean transitioning staff and reorganizing. While monitoring is being centralized at the company&'s headquarters, Laughlin said he believes it will eventually move to a lower-cost area. As operations become more centralized, staff may be moved from branches to headquarters.

All Covered&'s success comes from two things: focusing on the customer and keeping employees happy, Croteau said.

“We have recognized that small businesses are people businesses. The types of people we have to have employed here have to want to be a trusted advisor. They have to have a strong value culture around doing the right thing,” Croteau said.

“When they call they get a live answer, and more than likely that person knows who they are. That&'s soothing for small businesses,” Croteau said.

Last year, the company kept 85 percent of its employees on staff.

“We have good retention so they [the customers] see the same people. There&'s a high level of consistency in their skills. All have prior networking experience,” he said.

Two-thirds of All Covered&'s consultants are Microsoft Gold Certified. “[Our customers are] not just hiring a company that has five people; they&'re hiring a company that has 180 consultants that can be leveraged if they have a particular problem,” Croteau said.

All Covered keeps track of its customer projects and interactions through a Web portal that customers can access to discuss projects with consultants and to pay bills. About 50 percent of its customer base is currently using the portal to communicate with consultants.

All Covered is looking to expand its partner network in the future.

“We obviously develop business locally by maintaining local relationships and so on, but one of the other things that our size and national presence allows us to do is to go to market through large national partners,” Laughlin said. “This is an advantage to the company [from a] growth prospects standpoint. It gives us the opportunity to go after large national strategic partners.”

So far, All Covered has partnered with Dell, Round Rock, Texas.

“Dell was looking for a services partner to provide assessments and project integration to small-business clients in multiple markets, and we are the primary source for their transactional segment,” Laughlin said.

Going forward, All Covered hopes to court customers whose small businesses may have multiple locations, like one Denver-based customer with 60 employees scattered in six offices around the country, Laughlin said.

“Those kinds of companies are a good fit for us because they fit into our sweet spot as an overall company as well as from an individual location standpoint,” he said.

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