Economic firewall
IT service firm finds itself recession-proof
By MARY SUE IAROCCI

 

A successful Port Chester-based IT service consulting firm has found its industry to be recession proof after 12 years in business.

“Everybody needs computers,” said Wayne Libonati, president of Performance Connectivity Inc. “Does it really matter what the economy is? You still need your computer to do your job.”

The company specializes in managed services, also known as remote fixing.

“On the managed service end, we’re way up year after year,” said Tim Kennedy, one of the founders who works on developing and maintaining relationships with customers. “Customers are finally comfortable with that arrangement. Five years ago people were more comfortable with a warm body on site. Now people are more comfortable with the technology,” Kennedy said.

They are also value-added resellers (VARS), meaning if hardware breaks down, they buy the parts, fix them and resell.

“When the economy is good people buy new products and when the economy is bad people fix their old products,” Libonati said. “What we did notice is it affected our clients big time. We watched clients go out of business, but our bottom line wasn’t affected at all.”

Everything is prepaid; Libonati compared it to the way a lawyer would do it with a retainer “block time.”

A client can purchase 10 hours in advance, like a bank account, sign a contract, retain their services.

“It’s cash flow for us, and for them, they don’t need to worry about getting hit with a bill,” Libonati said. “If they’re on a managed-service contract, we have a very good idea of what a small business network takes to manage. We’ll give them a flat rate which encompasses everything.”

They also service computer networks, as well as firewall, connectivity devices, the servers, work stations, printers or “anything considered a computer product we cover, implement and sell.”

The company started with four founders; Libonati was the first engineer hired.

“When we first started there was no such thing as Dell,” Libonati said. “Then when Dell came along it made it almost impossible to compete in that area.”

Libonati said the engineers were box builders, meaning they fabricated their own computers, branded them and sold them.

Around 2001, “We took a hard look at the way we were doing business,” Libonati said. “So we kind of adopted a managed-service mentality way before there was such a thing as managed services. For us, we knew it as regular maintenance.”

Libonati said the company’s client base of small to medium-sized businesses find it too costly to hire their own IT staff.

The company chose Port Chester mainly for its proximity to the train station.

“We do a lot of work in the city, so we needed that quick access,” Libonati said.

Libonati said most managed service providers have started up within the last two years, “so we’re kind of like the grandfathers around here.”

And, unlike companies that profit when something breaks, “our whole existence is to make sure people’s machines run well, that’s how we make money,” Libonati said.

“We’re members of the managed-service provider alliance,” Libonati said, noting the organization has about 2,000 members. “The IT industry as a whole is not regulated, so this particular organization was form to kind of help guide the industry.”

Libonati said total service revenue was up 15 percent over the last 12 months up more than 106 percent compared to the same period the year before “Our bottom line revenues are up 226 percent in the last year,” Libonati said.

Advice for others?

“Know what’s going on in the industry and talking to your clients,” Libonati said. “I’m very big on ‘let me not guess what the client needs.’ Let’s take their recommendations and make ourselves better.”

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