Black Box CEO Trammel On Winning $10M Deal With 'Social Media Giant'

Winning The Deal

It was an up and down week last week for Black Box after a filing Monday with the U.S. Securities and Exchange Commission cast a pall over the company's future with talk of bankruptcy, restructuring and even seemed to question whether Black Box could survive beyond the end of the year.

That caused shares in the Lawrence, Pa. based company -- No. 42 on the CRN Solution Provider 500 -- to fall to their lowest level in at least a year as investors steered the stock price down to 75 cents per share. Then came news Friday that the company had won a $10 million contract with "a social media giant" to build out a 1-million-square-foot data center in Ohio, lay 100 miles of wiring, and ramp up to 70 workers on the project, which has a potential upside of $300 million in future work with the yet-to-be-named customer. Stock prices spiked on the news, up 113 percent to $2.03 per share.

CEO Joel Trammell told CRN the bid for the social media company build-out was in the pipeline when he was named CEO in November 2017. He talked about how Black Box won the deal and what it means for the company going forward.

How much time in your first few months did you spend on securing this deal?

I have not had to be super personally involved in that project. We've got a great team that has been able to drive that project. The advantage we had, of course, is the company was very familiar with our work previously. So they basically said, 'We want more of that,' which is much easier in the sales process than going in and trying to convince a company that you've never done business with that you're the best solution.

Can you talk about the previous work you've done for the company and how that helped?

So it was based on work we'd done for the same company in Sweden. They had a data center operation there that we had helped build and maintain so they thought that was their model for what they wanted to use to build out centers around the world.

What sort of work will you be doing in Ohio?

Infrastructure build-out, then there's a continuous operation part of it as well, as you go forward. Certainly, we've done a lot of large-scale deployments and rollouts. One of the things that differentiates us in the market is our national and international scale and the ability to provide a program management overlay function to these large rollouts.

A lot of people, I think, that we were probably competing against, were more local players looking at it on a local project basis as opposed to looking at it programmatically, across the whole series of build-outs that are expected.

It must have been gratifying being able to make the announcement about this bid, given all that happened last week.

Obviously, this company could have done business with pretty much anybody they wanted to do business with. They've chosen to build their own infrastructure and operate that themselves, for their own reasons and they thought we were in the best position to do that for them. We were certainly happy to make the announcement.

When do you start work?

We have already started. So there's a build phase and then there's an operations phase. I don't know what the exact completion date is, I don't have that handy, of the build phase.

In the statement, you said there's a potential for Black Box to see up to $300 million in work. When will you know if you are in line for that?

They're building multiple data centers starting every six months, those kind of intervals or multiple years, and so assuming we deliver, like we have in Sweden on this project, we anticipate regular new awards as new facilities are brought up.